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Heavy Penalties Send Tough Message To Other Defendants
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The Deepwater Horizon Spill litigation process took a significant step towards compromise and reconciliation, when Mitsui & Co’s, MOEX Offshore, accepted to pay $ 90 million dollars in settlement money to the US and five states, Alabama, Florida, Louisiana, Mississippi and Texas.

At the time of the spill, MOEX Offshore was a minority investor in the lease for the Macondo well. The $90 million settlement is the biggest civil penalty ever recovered under the Clean Water Act.


The agreement requires MOEX to pay $45 million in civil penalties to the US and about $ 25 million to the five states. Apart from this they will also pay $20 million for land acquisition projects. In return the US has pledged not to sue with respect. The parties involved said that they “have agreed to mutually dismiss with all prejudice all claims that the parties brought, or could have brought, against each other.”

In return for the settlement, “the U.S. will provide MOEX Offshore and their affiliates, directors and other related individuals with a covenant not to sue with respect” to other possible civil and administrative penalty claims.

Attorney General Eric Holder said that, “This landmark settlement is an important step – but only a first step – toward achieving accountability and protecting the future of the Gulf ecosystem by funding critical habitat preservation projects.”

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The Deepwater Horizon Oil Spill was one of the world’s worst manmade environmental disasters. The ecological disaster occurred owing to the explosion of Deepwater Horizon Rig, in April 2010, which drilled on the BP-operated Macondo Prospect. The explosion was so powerful that it left 11 men, working on the platform, dead. Moreover, oil flowed continuously from a sea-floor oil gusher for a 100 days.

The Deepwater Horizon Drilling rig sank owing to the explosion and 4.9 million of barrels of oil, spilled into the sea, contaminating 665 million miles of coastline, and killing marine life and damaging their habitats. This lead to a worldwide outcry resulting in the filing of hundreds of lawsuits against the London based BP and its partners.

The proposed settlement is subject to a 30-day comment period and is awaiting final court approval. Moreover, it does not affect the government’s claim against other defendants in Deepwater Horizon and there could be a series of similar agreements with the US as lawsuits approach a trial set for February 27, 2012.

The first of the settlements, seemingly large, could pale into insignificance and seem trivial as the final settlements are likely to run into billions of dollars.



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