Business

BP cannot claw back 'excessive' gulf spill payments

The Deepwater Horizon burns Image copyright AFP
Image caption Eleven men were killed aboard the Deepwater Horizon rig when it exploded on 20 April 2010

BP will not be able to recoup any payments it made in compensation for the Gulf of Mexico oil spill, a judge has ruled.

The oil giant has challenged claims amounting to hundreds of millions of dollars, which it says were inflated and illegitimate.

But a federal judge has ruled that the company must stand by the payments.

BP had argued that nearly 800 business had received excessive payments under a flawed funding formula.

"BP disagrees with today's decision and will appeal it," company spokesman Geoff Morrell said.

"We asked the court, as a matter of equity and fairness, to order the return of excessive payments."

No clawback

One construction company hundreds of miles inland was paid $13.2m (£8m). BP says it deserved no more than $4.8m.

A company selling animals and animal skins received $14m more than it should have, according to BP.

However, US District Judge Carl Barbier in New Orleans ruled that the compensation already paid could not be clawed back.

The courts have previously agreed that the formula used to calculate compensation payments was flawed and had resulted in over-generous payouts.

BP had hoped that would mean that the payments made before the rules were tightened could be revisited.

But the original compensation deals included an "individual release" clause ensuring there could be no future court action to alter the payments.

The company has paid more than $42bn so far since the disaster in 2010, which killed 11 men and spread oil over seafood grounds, coastal marshes and beaches.

BP originally expected the payouts to reach $7.8bn.

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