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The knock-for-knock agreements in the offshore sector under the United States and Norwegian law. : The problem of gross negligence and wilful misconduct.

Mielcarek, Patrycja
Master thesis
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Thexknock-for-k ... atesxandxNorwegianxlaw.pdf (390.1Kb)
Year
2012
Permanent link
http://urn.nb.no/URN:NBN:no-33010

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  • Nordisk institutt for sjørett [274]
Abstract
The thesis presents the main aspects connected with the knock-for-knock clauses used in the offshore sector and focus on how these provisions are treated in the United States (US) and Norwegian legal systems.

The knock-for-knock agreements are very often used in the offshore business but despite of the wide application of those formulas, the particular mutual indemnity clauses may be interpreted differently in various countries – it concerns especially their enforceability in the case of gross negligence/wilful misconduct of one party. If a responsibility regulation includes a full exemption from liability for tortfeasor even in the case of his gross negligence or intentional act, this may come into conflict with the principles like fairness and reasonableness. This problem is the main issue analysed in this thesis where the various censorship in the US and Norwegian legal system are presented together with the various arguments that are submitted in their favour. Norway and the US were chosen, because these two countries have nowadays very strong position in the offshore business and they have developed specific solutions concerning enforceability of mutual hold harmless clauses.

At the beginning, the short introduction concerning relevant tort and insurance law is given since these two branches of law are closely connected with the problem of knock-for-knock agreements.

Then, the general characteristic of the knock-for-knock clauses is presented. In this part, the general rules concerning construction of mutual hold harmless formulas as well as indemnity and insurance issues are discussed.

Afterwards, the advantages and disadvantages of such provisions are presented.

In the last two chapters the enforceability of the knock-for-knock provisions in the US and Norway are analysed in detail. In the context of the US legal regime the main focus is put on the different solutions included in the anti-indemnity statutes in Texas and Louisiana since law of these two states will apply the most often to the offshore contracts in the US waters and the very specific limitations concerning the knock-for-knock agreements are included in their anti-indemnity statutes. In the Norwegian context the main problem is the enforceability of knock-for-knock clauses in the context of general contract law. In this part the enforceability of the mutual hold harmless provisions is analysed with reference to the NL 5-1-2 and the Norwegian Contract Act section 36.
 
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