August 29, 2018 / 3:00 PM / 21 days ago

Petrobras to appeal Dutch ruling favorable to U.S. oil firm Vantage

SAO PAULO (Reuters) - Brazil’s state-run oil company Petroleo Brasileiro SA (PETR4.SA) said on Wednesday it will appeal a Dutch court ruling related to the suspension of a drilling contract with U.S.-based Vantage Drilling Co (VTGDF.PK).

FILE PHOTO: A Petrobras gas station is pictured reflected in a car window in the outskirts of Sao Paulo, Brazil July 31, 2018. REUTERS/Paulo Whitaker/File Photo

Petrobras said it was informed that a Dutch court had granted a request by the U.S. oil services company to seize shares of two subsidiaries, among other assets.

“The company will seek all legal measures to overturn the arbitration ruling and to defend its position,” Petrobras said in the securities filing.

A spokesman for Vantage said the company is confident the court would uphold its decision, as the U.S. company “seeks to protect the integrity of the arbitration award and hold Petrobras accountable for its improper actions.”

Petrobras said in the securities filing that Vantage’s arbitration proceedings against the company relates to a contract that was canceled as part of “Car Wash,” a corruption investigation into payment of bribes in exchange for contracts.

Petrobras said the Vantage contract was awarded “by way of corruption” according to the findings of the investigation.

In 2016, Petrobras executive Jorge Zelada was sentenced to 12 years and two months in jail for corruption and money laundering after he was convicted for unduly awarding Vantage a contract in 2009.

Petrobras had notified Vantage in 2015 that they had terminated the contract, claiming Vantage breached terms. Vantage then filed an arbitration claim against Petrobras for “wrongful termination.”

On Wednesday, Petrobras repeated the contract was made “through corruption.”

In July, an international arbitration tribunal ruled that Petrobras owned $622 million (478.39 million pounds)to Vantage for breach of a 2009 contract.

Reporting by Alexandra Alper and Ana Mano; editing by Jonathan Oatis and Susan Thomas

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