yet another party (“C”) for certain losses, the original indemnitor A will not be required to indemnify the original indemnitee B for its obligation to indemnify C unless the indemnification provision between A and B contained express language providing coverage for, or “passing through,” B’s contractual liabilities to third parties. In Sumrall v. Ensco Offshore Co., the Fifth Circuit analyzed a contractual indemnity provision that included language specifying the indemnitor’s intent to indemnify the indemnitee for obligations “whether arising in … tort” or “contract” and further included language that broadened the scope of indemnity to include “all claims … of whatsoever nature or character … whether or not caused by the … legal duty” of the indemnitee. The Fifth Circuit held that, based upon the specific inclusion of “contract” claims and the use of broad language covering claims “of whatsoever nature,” the indemnity provision required indemnification for the indemnitee’s contractual obligations. In Foreman v. Exxon Corp., however, the Fifth Circuit determined that the indemnity provision at issue contemplated indemnification only for “all claims, demands and causes of action … for injury to or death or illness of persons … in any way resulting from the willful or negligence acts or omissions of Contractor ….” Thus, because the indemnity language at issue failed to make specific reference to Contractor’s contractual indemnity obligations, no such indemnification was provided. Gross Negligence and Punitive Damages. When viewed as a particular subset of claims for which indemnification may or may not be provided under the particular law governing the contractual indemnification provision, issues concerning indemnification for gross negligence and punitive damages are often at the forefront.
do not join the Crown court in condemning contractual agreements that provide for indemnification of gross negligence for the additional reason that we believe this is a matter better left to the legislature or the ruling of our Supreme Court.” Maritime Law. In the recent decision issued in connection with the Deepwater Horizon incident, District Judge Carl Barbier of the Eastern District of Louisiana held that, under maritime law, indemnification for gross negligence is enforceable and not void for public policy considerations. At issue was whether BP was contractually obligated to indemnify Transocean with respect to pollution claims in light of the parties’ contract that provided, in relevant part, that BP: SHALL PROTECT, RELEASE, DEFEND, INDEMNIFY, AND HOLD [Transocean] HARMLESS FROM AND AGAINST ANY LOSS, … FOR POLLUTION … SPECIFICALLY WITHOUT REGARD TO NEGLIGENCE OF ANY PARTY OR PARTIES AND SPECIFICALLY WITHOUT REGARD FOR WHETHER THE POLLUTION … IS CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OR FAULT OF [Transocean]. An adjacent provision broadly defined the scope of the parties’ indemnity, which applied to the specific indemnity provision concerning pollution at issue: THE PARTIES INTEND AND AGREE THAT THE PHRASE “SHALL PROTECT, RELEASE, DEFENDANT, INDEMNIFY AND HOLD HARMLESS” MEANS THAT THE INDEMNIFYING PARTY SHALL … INDEMNIFY … THE INDEMNIFIED PARTY … FROM AND AGAINST ANY AND ALL CLAIMS … WITHOUT LIMIT AND WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF, INCLUDING …THE NEGLIGENCE OF ANY PERSON OR PERSONS, INCLUDING THAT OF THE INDEMNIFIED PARTY, WHETHER SUCH NEGLIGENCE BE … GROSS …. Based upon the language of the parties’ indemnity provision, Judge Barbier concluded that BP was required to indemnify Transocean for its own gross negligence, and that the conflicting public policy considerations of freedom of contract and a reluctance to encourage grossly negligent behavior did not preclude such indemnity. Importantly, however, Judge