The U.S. Court of Appeals for the Fifth Circuit recently reversed an earlier ruling of a Houston federal court that threw out a case against Vicinay Cadenas, the manufacturer of underwater tether chains, over an alleged defective marine chain brought by Petrobras America Inc. and certain underwriters at Lloyd’s London.
In 2012, Petrobras and certain underwriters of its construction all-risks insurance policy initiated the case against Vicinay in the U.S. District Court for the Southern District of Texas asserting negligence, products liability and breach of implied warranty claims. In their federal lawsuit, Petrobras and Underwriters contended that in October 2007 Vicinay’s underwater tether chain broke just after being installed to secure Petrobras’ piping system for oil production from the Outer Continental Shelf of the Gulf of Mexico. In addition, Petrobras and Underwriters alleged that when the chain ruptured, it caused the pipeline riser and related equipment to collapse to the sea floor, severing the connection between the wellhead and the surface thousands of feet above. Petrobras asserts that it has incurred $400 million dollars in damages.
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