Originally from Leading Arbitrators' Guide to International Arbitration - 2nd Edition

Preview Page 

I. INTRODUCTION: SPECIFICITY OF RISK AND DISPUTES AND CONTEXT OF THE OIL, GAS AND ENERGY INDUSTRIES

This contribution is about international arbitration in oil, gas and energy. The majority if not most conference presentations on that theme do not in substance treat oil, gas and energy arbitration as something distinct or different from international commercial (or investment) arbitration for large projects. Mostly, international commercial arbitration is discussed in conferences for prospective users from the oil, gas and energy industries and at best such discussions are sometimes illustrated with examples from disputes originating in these industries. My contribution therefore focuses on the question of whether there is sufficient distinctness of oil, gas and energy arbitration and what such distinct features are.

In this comment, I will try to identify and discuss those issues that are specific, i.e. that occur more frequently in oil, gas and energy arbitration and which give it a special, characteristic flavour that occurs less frequently in other forms of commercial and investment arbitration. The first observation one has to make is that oil and gas and energy disputes occur frequently both in international investment arbitration and in commercial arbitration; it has not yet been established if such frequent occurrence is more or less than the share of these industries in cross-border transactions and the global economy would suggest. The second is that only some types of transactions in these two industries (oil and gas, electrical energy) seem to be clearly specific. There are disputes in the industries about construction, sales and transportation/shipping which probably call for a rather normal application of commercial law and are not particularly specific. Gas and sometimes (power plant to industrial consumer) electricity is often sold on the basis of long term sales contracts; here, questions of adaptation (with respect to indices used, internal adaptation mechanisms) may have a certain specificity. Such specificity appears exclusively to be a matter of the substantive law, to be taken into account in the merits phase of an arbitration rather than procedure, though industry expertise will often be called for, as it will be in disputes in other industries.