DSBD Subsea v Petroleum - Case Summary

DSND Subsea Ltd v Petroleum Geo Services ASA [2000] BLR 530

Contract – Economic duress – Misrepresentation – Termination

Facts:

DSND entered into a memorandum of understanding varying the terms of the agreement with PGS, after DSND was found to have a made a misrepresentation in their original agreement. PGS then cancelled the agreement, claiming that DSND had breached the terms of the agreement by making false representations and forcing PSG to sign under duress. DSND argued that PSG had not validly terminated the contract, as there was no duress and that there had been no misrepresentation, although DSND had agreed to a variation. PGS claimed they had validly terminated the agreement after DSND had breached the terms of their main agreement by misrepresentation.

Issues:

The issue was whether the representation made by DSND led PGS to sign the agreement and whether that amounted to duress.

Held:

The appeal by PGS was dismissed. The court found that the misrepresentation had not led PGS to sign the agreement in the first instance and that there had been no evidence that any duress had occurred. Further, there has been no conduct or breach of the agreement that warranted the notice of termination to be issued. The case of Dimskal Shipping Co SA v International Transport Workers Federation (The Evia Luck) (No.2) [1992] 2 A.C. 152 was distinguished as the breach of the contract had been caused by duress which was clearly evidenced and proven. There was no evidence of duress that could be found and the agreement was signed under fair terms without misrepresentation.