Public Lands: Outer Continental Shelf Lands Act; Admiralty Law Master Services Agreement: Indemnity Provision

摘要

Energy XXI is the operator of an OCS well. It and New Tech entered into a Master Services Agreement (MSA) which governs work ordered by Energy XXI on the OCS well. In January 2009, New Tech was engaging in a recompletion project on the Energy XXI well when a workstring became stuck. Energy XXI then expended around $9 million to recover the workstring and complete the project. It filed this claim under the MSA asserting that New Tech was grossly negligent and breached the terms of the MSA. New Tech filed a counterclaim asserting that Energy XXI had failed to indemnify New Tech under the terms of the MSA. Both parties move for summary judgment on the claims and counterclaims. The court initially resolves the issues raised by New Tech's summary judgment motion on its counterclaims. Energy XXI asserts that the MSA's indemnity clause does not apply to claims for gross negligence or breach of contract. A preliminary issue is the applicable choice of law under the Outer Continental Shelf Lands Act (OSCLA). Under certain circumstances federal courts apply admiralty law and under other circumstances they apply the law of the adjacent state. There is a three factor test to determine which law to apply: 1.