NU Online News Service

Transocean Ltd. has filed a petition under the federalLimitation of Shipowner's Liability Act of 1851 to limit itsliability for the Deepwater Horizon oil rig explosion to less than$26.8 million.

Transocean, which owns the rig, filed the petition in the U.S.District Court for the Southern District of Texas in Houston, underthe federal Limitation of the Shipowner's Liability Act.

The act stipulates that liability for the owner of a vesselcannot exceed the amount of the vessel "and her freight thenpending."

Transocean's complaint asks that liability be limited to thevalue of Transocean companies' interest in the Deepwater Horizonrig and its freight, including the accounts receivable and accruedaccounts receivable as of April 28, 2010. Transocean said theentire value of its interest does not exceed $26.7 million.

In a statement, Transocean said, "[O]ne of the primary goals ofthis filing is to consolidate in a single court many of thelawsuits that have been filed following the Deepwater Horizoncasualty to initiate an orderly process for these lawsuits andclaims before a single, impartial federal judge. The filing alsowould establish a single fund from which legitimate claims may bepaid."

Transocean said it and its subsidiaries currently face more than100 lawsuits filed in multiple states and courts. The company, inits petition, asks the Texas federal court to issue an injunctionrestraining certain lawsuits underway against its companies in anyjurisdiction other than the Southern District of Texas.

The company noted that the filing does not impact lawsuits filedunder the Oil Pollution Act of 1990.

John Nevius, an expert in environmental insurance coverage atthe law firm of Anderson Kill & Olick in New York, saidTransocean appears to be attempting to "take the offense" in anattempt to control its liability. He said the company is facing asituation that could involve whether it and its subsidiaries areviable going into the future.

Speaking to the likely success of limiting liability under theLimitation of Shipowner's Liability Act, Mr. Nevius said, "Itstrikes me as an uphill battle."

He added, however, that regardless of whether Transocean issuccessful, this process may result in claims against the companybeing consolidated under one Texas court. Streamlining claims inthis manner, Nevius said, may be more important than gettingstatutory relief from liability.

He said consolidating the claims may allow Transocean to "get ahandle on the process."

Nevius also noted that Transocean's actions seem to be at theurging of its insurers. Indeed, the company said in its statementthat it is acting on instruction of its insurers, "and in order topreserve insurance coverage."