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DISPUTE RESOLUTION in the INTERNATIONAL OIL & GAS INDUSTRY a presentation by HEW R. DUNDAS Arbitrator, Mediator and Expert Determiner DUNDAS ENERGY SERVICES
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OVERVIEW of PRESENTATION Introduction International Disputes Forms of Dispute Resolution Oil & Gas Disputes A Case Study Conclusions
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CASE STUDY: CATS DISPUTE CATS - North Sea Gas Pipeline Capacity Reservation by 3 rd Party User Send Or Pay Obligation; £45m paid Fall In Gas Price – Contract Uneconomic High Court/CoA/House of Lords Did the Subsea valve work ? Was CATS “Available “ ? £100m at stake; £8-12 million legal costs
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INTERNATIONAL DISPUTES Difficulties of Litigating International Commercial Arbitration Substantive & Procedural Laws Institutions and Tribunals Finality Enforceability New York Convention 1958
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FORMS OF DISPUTE RESOLUTION Litigation Arbitration Domestic/International Expert Determination ADR Applicability to Oil & Gas Industry Advantages and Disadvantages
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FORMS OF ADR Mediation/Conciliation Executive Negotiation Early Neutral Evaluation (ENE) Private Mini-Trials Med-Arb and Arb-Med Adjudication and DRBs None of the Above
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CURRENT ISSUES Industry Preference for Litigation Failure to Grasp ADR Expert Determination Composition of Arbitral Tribunals The Lawyers’ Involvement Macho Management/Lawyers
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CASE STUDY: CATS DISPUTE CATS - North Sea Gas Pipeline Capacity Reservation by 3 rd Party User Send Or Pay Obligation; £45m paid Fall In Gas Price – Contract Uneconomic High Court/CoA/House of Lords Did the Subsea valve work ? Was CATS “Available “ ? £100m at stake; £8-12 million legal costs
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CONCLUSIONS You Cannot Afford Macho-Man BAO’s Legal Fees = 3 UKCS Wells Dinosaurs Still Survive Oil Industry Myth (1) - Certainty Oil Industry Myth (2) - $000,000s Oily Decisions for Oily Disputes Lord Hoffman is NOT an Engineer
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