BP will stop paying some damage claims under the 2010 Gulf of Mexico oil spill settlement, after an appeals court agreed that the oil giant may be covering ‘fictitious’ payments to businesses.
On Wednesday, a split 2-1 jury of the 5th US Circuit Court of Appeals in New Orleans said the administrator of the payoff program was approving millions of dollars of payment based on what BP called a flawed interpretation of the settlement deal reached last year.
It ordered US District Judge Carl Barbier, who in March had approved administrator Patrick Juneau’s damage evaluation methods, to reconsider his decision and make sure that the claims covered are legitimate. The judge was also told to bar payment of certain claims until the review is over.
The appeals judges however upheld another Barvier ruling, which in April dismissed BP’s lawsuit against Juneau.
“This decision throws a huge monkey wrench into the settlement and it could well save BP hundreds of millions in settlement payments,” Carl Tobias, a law professor at the University of Richmond specializing in the federal judiciary, told Bloomberg. “It’s going to create a real mess.”
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