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Energy market fight against $470mn claims judgement

  • Publish Date: Posted over 7 years ago

A judgement that would mean the upstream energy market would pay a claim worth $470mn is being fought against by the market. The appeal involves the Danish Maritime and Commercial High Court's decision in December that 24 insurers involved in the Norwegian oil company Noreco's all-risk policy should pay $470mn for damage caused to the Siri oil platform in 2009. The largest owner of the policy is Farrell Syndicate with a 10% stake. Other insurers on the policy include, XL Catlin, Gard, AIG, JLT, Talbot, Axis, Lancashire, Liberty, Markel and Zurich. Noreco is weighing up whether to sell a portion of the pay-out to claims farmers which will see $200mn being transferred to Norwegian investment company Awilhelmsen and US hedge fund sponsor QVT Financial. This move has caused controversy in the market and is one of the reasons the insurance market is fighting the claim. Noreco claimed against the Siri platform event for loss of production but this was rejected due to the belief that damage was caused by a design-related fault not covered in the policy.