Houston wins US$500 million case for Spanish client Vicinay Cadenas

Press release - Firm July 26, 2018

Our Houston office won a complete defense victory for Spanish client Vicinay Cadenas, S.A., the world's leading manufacturer of chains and accessories for the offshore industry. In 2009, a chain manufactured by Vicinay was installed on an underwater oil and gas facility in the Gulf of Mexico owned by Petrobras America Inc. In 2011, the chain broke and Petrobras's facility was damaged. Petrobras claimed to have incurred over US$500 million in property damage and economic losses as a result of this incident. In March of 2012, Petrobras sued Vicinay in a federal district court in Houston, alleging that the Spanish chain maker was 100 percent responsible for the incident due to a "forbidden" repair weld made on the chain during its manufacture.

The six-year-long case was extraordinarily complex, with over a million documents having been produced between the parties, more than two dozen oral depositions having been taken, and approximately one dozen expert reports having been submitted. Three federal judges had presided over the district court proceedings at various times. Moreover, on three separate occasions, interlocutory appeals were made to the US Court of Appeals for the Fifth Circuit, and one certiorari petition was made to the US Supreme Court. The case has produced multiple related proceedings in Spain and Brazil. Trial in the US proceeding had been set for September of 2018.

However, on July 24, 2018, US District Judge David Hittner dismissed Petrobras's entire lawsuit on Vicinay's motion for summary judgment. In his written order, Judge Hittner adopted our team's argument based on a contract that Petrobras had made with non-party Technip USA Inc. to construct the offshore facility. In the construction contract, Petrobras prospectively released and waived all claims against Technip's subcontractors that might arise out of or in connection with the construction of Petrobras' offshore facility. Agreeing with our argument, Judge Hittner found that although Vicinay was not a party to the construction contract, Vicinay was Technip's subcontractor and, thus, an intended third-party beneficiary of Petrobras's contractual release. Therefore, Petrobras' claims against Vicinay were barred by the contract and had to be dismissed.

The team was led by Mark Baker and includes Kevin O'Gorman, Carter Dugan, Denton Nichols, Nicole Lynn and Caroline Domino (Houston). Jonathan Franklin, David Kearns (Washington, DC) and Katherine Mackillop (Houston) advised and represented Vicinay in related appellate proceedings.