SECURITY of PETROLEUM INVESTMENTS: the ROLE of DISPUTE RESOLUTION

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SECURITY of PETROLEUM INVESTMENTS the ROLE
ofDISPUTE RESOLUTION

• a presentation by
• HEW R. DUNDAS
• Chartered Arbitrator DipICArb
• International Arbitrator Mediator
• President CIArb
• to the
• Cámara Industriales de Comercio
  Ecuatoriana-Británica
• 9th July 2007

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OVERVIEW of PRESENTATION

• Introduction
• Oil Industry Agreements
• Dispute Resolution Clauses Options
• Domestic/International Disputes
• Oil Gas Industry a Special Case ?
• Conclusions

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OIL INDUSTRY AGREEMENTS

• State/State
• Joint Development Zones
• State/OilCo
• e.g. PPL/PSC/PSA
• OilCo/OilCo
• e.g. JOA/SPA/FIA etc
• OilCo/Contractor
• e.g. drilling/construction contracts
• Contractor/Subcontractor

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DISPUTE RESOLUTION OPTIONS

• Litigation
• Arbitration Domestic/International
• Mediation/Conciliation/Other ADR
• Application in Oil Gas Industry
• Advantages and Disadvantages

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LITIGATION

• Difficulties of Litigating
• Local Laws are they adequate ?
• Courts Good, Bad and Ugly
• Litigation against States
• Timescales - long and VERY long
• Finality
• Enforceability
• Costs

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INTERNATIONAL COMMERCIAL ARBITRATION (1) -
OVERVIEW

• What Is It ?
• Profusion of Relevant/Applicable Laws
• Institutions and Tribunals
• Finality
• Enforceability
• Security for Both Parties

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INTL. COMM. ARBITRATION (2)PROFUSION of LAWS

• Law of the Contract
• Law of the Arbitration Agreement
• Law of the Arbitration (Lex Arbitri)
• Law governing Capacity of Parties
• Law of Seat (Lex Curiae)
• Law of Place of Enforcement
• Other Potentially Applicable Laws

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INTL. COMM. ARBITRATION (3)SOME KEY LEGAL ISSUES

• Arbitrability
• Capacity
• Substantive vs Procedural Laws
• Arbitrations against States/State Immunity
• Enforceability
• Public Policy Exception (NYC V(2)(b))
• Protectionism

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INTL. COMM. ARBITRATION (4) INSTITUTIONS

• UNCITRAL
• ICSID/NAFTA/ECT
• ICC/LCIA
• CIAM
• Other Regional Institutions eg CIETAC/AAA
• Chartered Institute of Arbitrators
• Other

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INTL. COMM. ARBITRATION (5) PROCEEDINGS (1)

• Party Autonomy
• Ad Hoc vs Institutional Arbitration
• Choice of Lex Arbitri
• Choice of Rules/Institution
• Choice of Tribunal
• Choice of Seat
• Relevance to Security

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INTL. COMM. ARBITRATION (6) PROCEEDINGS (2)

• Choice of Language Procedure
• Common vs Civil Law Cultures
• Communications
• Disclosure
• Ethics
• Tribunal Issues
• Relevance to Security

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INTL. COMM. ARBITRATION (7)AWARD ENFORCEMENT

• Appeals
• Jurisdiction
• Procedural Failures
• Issues of Law
• Exequatur
• Enforcement
• New York Convention 1958

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INTL. COMM. ARBITRATION (8)NEW YORK CONVENTION

• Recognition of Arbitration Agreements
• Enforcement via NYC58 Court may refuse
• Art. V(1)
• Capacity/Invalidity
• Failure of Due Process/other Procedural Failure
• Outwith Jurisdiction
• Award Not Binding/Set Aside at seat
• Art. V(2)
• Dispute not Arbitrable
• Award Contrary to Public Policy
• Court MAY, not shall, refuse enforcement
• Enforcement other than via NYC58

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INVESTMENT ARBITRATION

• Private Investor vs State/State Entity
• Nature of Arbitration Agreement
• BITs/MITs
• Washington Convention/ICSID
• NAFTA
• Energy Charter Treaty
• State Immunity

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ALTERNATIVE DISPUTERESOLUTION (1) - OVERVIEW

• What is ADR ?
• Why ADR ?
• Relationship with Courts
• Compulsory or Voluntary ?
• Court Support of
• The Process
• The Outcome
• Qualifications and Training

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ADR (2) FORMS of ADR

• Executive Negotiation
• Early Neutral Evaluation (ENE)
• Private Mini-Trials
• Adjudication, DABs DRBs
• Mediation/Conciliation
• Med-Arb, Arb-Med, MedExDet
• Arbitrediation
• Other/None of the Above

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DISPUTE PREVENTION DISPUTE MANAGEMENT

• Prevention
• Corporate Culture
• Co-Operation what do YOU Want
• Conciliatory Approach
• Local Customs/Culture/Mores
• Management
• Dedicated Task Force
• Expertise technical/litigator
• Decision-making

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CONCLUSIONS (1)

• Prevalence of/Preference for Litigation
• Wide Range of Dispute Resolution Tools
• Arbitration Best Overall Package for Both
• Oilmens Decisions Best for Oily Disputes
• Difficulties with Judge or QC Arbitrators

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CONCLUSIONS (2)

• Muchas Gracias for
• your ATTENTION
• this morning