Paragon in $31m rig damages battle with Jindal

Vol 20, PW 11 (23 Feb 17) People & Policy
     

Names have long held mystical significance in many cultures: in the Babylonian Talmud for instance a name change can prevent an evil fate.

But for Jindal Drilling the name change of a rig it once managed could cost it $31m! This is the amount Jindal's former client US driller Paragon Offshore is suing for in the Delhi High Court where the next hearing is on April 19. Bankrupt Paragon filed the Delhi court petition in December 2016 after it was awarded the $31m in an arbitration case by the High Court in London last November.

Paragon had wanted to export and re-import rig PARAGON-L1112, formerly known as Noble Ed Holt in May 2015, to comply with Indian law, after finishing one ONGC contract and before beginning another three-year contract, also with ONGC. But Paragon was refused navy clearance after rig manager Jindal submitted documents on its behalf with the rig's new name Paragon-L1112, creating confusion.

Export clearance was delayed beyond May 15, 2015 forcing Paragon to miss the demobilisation deadline before monsoon rains. This had the knock-on effect of causing the rig to miss ONGC's October 15, 2015 mobilisation deadline.

As punishment, angry ONGC forced Paragon to slash its day rate from $81,806 to $53,049. Paragon has been forced to approach the Delhi High Court, despite the London award, because Jindal is an Indian company with most of its assets in India.