Serving as the Chairperson in International Commercial Oil & Gas Arbitrations - Chapter 24 - Leading Practitioners’ Guide to International Oil & Gas Arbitration

Author(s): 

Murray Smith

Page Count: 

14 pages

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1 PDF Download

Published: 

August, 2015

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Originally from The Leading Practitioners' Guide to International Oil & Gas Arbitration

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I. INTRODUCTION

 

The chairperson in a commercial oil and gas arbitration has two

important mandates beyond ensuring that the result is fair and just.

Those two mandates are to control costs and to keep the case on the

legal rails. Owing to the large sums involved in international oil and

gas arbitrations and the frequent inclination of the arbitrating parties

or their counsel to take a “no holds barred” approach to preparing

and arguing their case, these objectives can be difficult to attain.

 

While all members of a tribunal share the responsibility to

regulate the conduct of an arbitration, the ultimate responsibility falls

to the chair to ensure that the proceedings meet procedural and

substantive law requirements in the venue of the arbitration, conform

with applicable law requirements under the contractual documents

and comply with international arbitration law requirements for the

enforcement of the award. The buck stops at the chairperson to

ensure that the tribunal remains within its jurisdictional envelope.

The chairperson must propose and oversee the setting of procedural

guidelines and compliance with those guidelines as well as ensure the

fair and efficient conduct of the evidentiary hearings. The

chairperson must ensure that the members of the tribunal remain

independent and impartial throughout the proceedings both in

respect of dealings with the parties and in respect of dealings

amongst the tribunal members inter se. The chairperson will generally

organize the writing and delivery of the final award, all the while

making sure that neither the proceedings nor the final award are

vulnerable to attack for excess of jurisdiction or a denial of due

process.

 

The first step for the chairperson is to examine the arbitration

agreement and the underlying substantive contract to determine the

correct procedures to be followed. The contractual documents set

out the marching orders for the tribunal. Many oil and gas

agreements will contain specifications on arbitral procedure and rules

for substantive dispute resolution. There will invariably be a choice

of law clause. Profit sharing clauses will often include a requirement

for reports from accountants. Pricing provisions found in LNG and

Gas Sales Agreements will contain formulae for price setting and

adjustment. These provisions are paramount and must be followed

by the tribunal. With the exception of laws of mandatory application

from which there can be no derogation—such as anti-trust laws—the

specific contractual agreements of the parties on procedural and

substantive matters will trump statutory provisions or otherwise
applicable common law.