Provisional Remedies and Interim Relief in Oil & Gas Arbitrations - Chapter 19 - Leading Practitioners’ Guide to International Oil & Gas Arbitration

Author(s):

David Haigh

Joanne Luu

Page Count:

48 pages

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Published:

August, 2015

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

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I. INTRODUCTION

What is it about a typical oil and gas dispute that may give rise to

the need for interim relief? The answer is found in the dynamic

nature of the business of exploiting oil and gas assets. Energyproducing

properties and licences to explore them are invariably

time-, operationally- and price-sensitive. Such assets cannot remain in

limbo for long and parties whose interests depend on their efficient

exploitation require timely remedies to their differences. When such

disputes arise, it would usually be nonsensical simply to “turn off the

tap” until they are resolved.

Oil and gas disputes are further complicated by the commercial

nature of the relationships and investments involved. Investors and

joint venture partners often involve arms-length participants,

including foreign entities and, in some instances, state entities. Such

investments are nearly always substantial, long term and subject to

volatility in pricing and currencies. In these sorts of relationships,

prompt access to a neutral arbitral forum is usually preferred over

local judicial remedies. Seeking provisional measures from an arbitral

tribunal in many instances may well be the only practical mechanism

available to deter parties from undermining the arbitral process.

States, for example, when left to their own devices, are occasionally

tempted to wield their sovereign powers to gain tactical advantage or

even imperil the very subject matter of the dispute. The risk of such

consequences is dire. Potential interim relief in oil and gas disputes

is, therefore, at the heart of the application of the rule of law to

international commercial and investor-state relationships.

Balancing the sometimes urgent need to preserve the very subject

matter of a dispute on an interim basis with the equally critical need

for an eventual fair and impartial determination of the merits of a

dispute is a challenge fit for the gods, to which international

arbitrators may only aspire to respond justly. The exceptional

dynamism of energy subject matter and relationships only makes

such balancing all the more challenging.

This chapter discusses provisional measures in the context of

international oil and gas arbitrations. It seeks to provide a foundation

from which to navigate the subject of provisional measures while

providing examples from energy disputes, where possible. In

particular, this chapter discusses:

• Provisional measures, generally

• Provisional measures under various arbitral rules

• Legal tests for granting provisional measures;

• Types of provisional measures granted in energy disputes
• Enforcement of provisional measures