Везде
Mutual Compensation of Losses Based on the “Knock-for-Knock” Principle in Common Law Countries
Table of contents
Abstract Estimate Publication content
References Comments
Share
QR
Metrics
Mutual Compensation of Losses Based on the “Knock-for-Knock” Principle in Common Law Countries
Abstract
PII
S1991-32220000622-3-1
DOI
10.61205/jzsp.2024.1.6
Publication type
Article
Status
Published
Authors
Anton Kalyakin 
Occupation: Postgraduate Student
Affiliation: Russian Foreign Trade Academy
Address: Moscow, Russia
Edition
Volume 20 No. 1
Pages
150-161
Abstract

The article discusses the contractual condition on mutual compensation of losses (indemnity), known in Western literature as “knock-for-knock”, which is common in the field of exploration and production of oil and gas on the continental shelf. This condition is found in contracts that are subject, as a rule, to English or American law. Due to the involvement of foreign drilling and service contractors in the development of offshore projects in Russia, the application of this condition is noted in contracts subject to both Russian law and foreign law, but executed on the territory of Russia.

The subject of the research is the institution of indemnity as the basis for using the “knock-for-knock” condition in English law, as well as the characteristic features of the “knock-for-knock” condition and the peculiarities of its application by the courts. Attention is focused on the decisions of English and American courts on disputes related to the application of this condition. Along with this, the positions of Russian and foreign researchers on the problems of indemnity are analyzed. The objective of the research is to analyze the features, practice of application and existing restrictions for the application of the “knock-for-knock” condition in the legal environment of its origination, the results of which are useful for the development of Russian contract law, considering the inclusion in the Civil Code of the Russian Federation of Art. 406.1 on compensation of losses incurred in the event of the occurrence of the circumstances specified in the contract.

The formal-legal method and technical-legal analysis were used for the preparation of the article.

As a result of the study, the common features and peculiarities of the interpretation and application of the “knock-for-knock” condition were identified, herewith the importance of standard proforma contracts in its distribution and application was noted, as well as the restrictions on its application were identified using the example of the law of Great Britain and the United States. The author comes to the conclusion that this condition is part of the global industry practice, as well as a convenient and widespread way to reallocate the civil liability of participants in oil and gas offshore projects.

Keywords
compensation of losses, knock-for-knock, liability, limitation of liability, risk allocation, indemnity, damages, negligence, damage, hold harmless, loss, oil, gas, accident
Date of publication
26.02.2024
Number of purchasers
8
Views
137
Readers community rating
0.0 (0 votes)
Cite Download pdf
1

References



Additional sources and materials

1. Egbochue Ch. Reviewing “Knock for Knock” Indemnities Following the Macondo Well Blowout. Construction Law International, 2013, vol. 7, iss. 4, pp. 7—14. 
2. Johnson A. Indemnities in Offshore Construction Projects — Do Not Be Shocked by “Knock for Knock”. Construction & Engineering Update. Squire Patton Boggs. Autumn 2016. 3 p. Available at: https://www.squirepattonboggs.com/~/media/files/insights/ publications/2016/09/construction-and-engineering-update-autumn-2016/construction-and-engineering-update-autumn-2016.pdf. 
3. McKendrick E. Contract Law (Palgrave Law Masters). 11th ed. Palgrave, 2015. 440 p. 
4. Neuberger N., Meade R. Knock-for-Knock Indemnities: Risk Allocation in Offshore Energy Contracts. Bracewell. 28 April 2022. 8 p. Available at: https://bracewell.com/insights/knock-knock-indemnities-risk-allocation-offshore-energy-contracts. 
5. Redfearn R. Jr. Oilfield Anti-Indemnity Acts and Their Impact on Insurance Coverage. Insurance Journal. 22 August 2005. Available at: https://www.insurancejournal.com/magazines/mag-features/2005/08/22/59583.htm. 
6. Roberts P. Petroleum contracts. English Law and Practice. Oxford University Press, 2013. 448 p. 
7. Saraceni P., Summers N. Reviewing knock for knock indemnities: Risk allocation in maritime and offshore oil and gas contracts. Clifford Chance. 15 October 2015. 4 p. Available at: https://www.cliffordchance.com/briefings/2015/10/reviewing_knock_ forknockindemnitiesris.html. 
8. Soyer B., Tettenborn A. (eds). Offshore Contracts and Liabilities. Routledge, 2020. 514 p. 
9. Yanci H. Effects of Recent Insolvencies in the Offshore Oil and Gas Industry on the Efficacy of Knock-for-Knock Provisions. National University of Singapore. Centre for Maritime Law Working Paper 18/02. March 2018. 40 p. Available at: http://law.nus.edu.sg/wps. 10. Anurov V. N. Indemnity in oil service contracts. Moscow, 2016. 232 p. (In Russ.) 
11. Arkhipova A. G. Indemnification of losses in the new Russian Civil Code: “for” or “against”. Civil Law Review, 2012, no. 4, pp. 158—183. (In Russ.). 
12. Dragunova T. V. Concurrent liability in contract and in tort in commercial disputes. Vestnik ekonomicheskogo pravosudiya Rossiyskoy Federatsii, 2020, no. 12, pp. 91—161. (In Russ.) 
13. Sannikova L. V. Indemnity in common law countries and in Russia. Perm University Herald. Juridical Sciences, 2016, no. 4, pp. 440—450. (In Russ.) 
14. Segalova E. A., Satyrov Z. I. Indemnity and recovery of losses as instruments of contract risk allocation under Russian and English law. Vestnik arbitrazhnoy praktiki, 2021, no. 1, pp. 75—88. (In Russ.)

Comments

No posts found

Write a review
Translate