Dispute Resolution in Oil and Gas Contracting - Essay Example

? Dispute resolution in oil and gas contracting Task Dispute resolution in oil and gas contracting Introduction Disputes vary intheir classifications, for example, the classic public law dispute includes the maritime boundaries. Secondly, there are the typical state-investor disputes, which include disputes about oil plus gas trading contracts, offshore construction, pipelines, redetermination, the exploration and exploitation contracts. To resolve these disputes, there exist different opinion and approaches that dissimilar parties apply. These approaches include cooperation, mediation, resolution and arbitration. Arbitration Arbitration refers to conduction of reserved, concluding and obligatory disagreement tenacity afore an unbiased hearing1 (p.235). The tribunal authority comes from the parties’ agreement on overcoming their argument through mediation. Various statute and international conventions reinforce this approach making it to be a preferred method in determining cross-border viable disputes. This approach has many benefits associated to civil litigation because it is enforceable, malleable, unbiased, reserved, and personal and the involved parties select their preferred arbitrator. UK is the most conspicuous Centre, which applies arbitration in dispute resolution. Most of the UK parties involved in disputes agree on their disputes decided in accordance with the enacted law by the Arbitration Act 1996 6(p.159). This Act has been operational in UK since 31 January 1997. In disagreement resolution amid the oil and gas contracting, an arbitrator has permission to rule a substantive jurisdiction. According to the Arbitration Act 1996, all the parties involved in oil and gas dispute have a prospect to file all their cases in order to avoid unnecessary delays and find resolution to their problems. The arbitrator has fundamental tools, jurisdiction and powers to accomplish his/her responsibilities efficiently. Purpose of arbitrator’s dominion is beneath either the Arbitration Act or the arbitration guidelines. According to the arbitration act 1996, the arbitration reports should succumb in a concluding writing article on the contract among the parties. The agreement offered before the arbitration is in writing in order for it to be confirmation before both parties and the arbitration. On confirmation that the contract is an applicable statute, all the jurisdiction authorities are of consideration to the arbitrator13 (p.682). The Arbitration Act underwent some changes thus providing the arbitrator with powers to rule according to his/her individual authority. This boosted the arbitrator’s supremacy because previously, parties challenged the arbitrator’s jurisdiction through forwarding the case to the court, which restrained the arbitrator from proceeding with the ruling. This led to different unwanted expenses and delays in the proceedings until another rightful authority is in place to continue with the hearing. To resolve this, the experienced arbitrators welcomed the statutory approach, which significantly promoted the manner of conducting arbitration progression11 (p.33). According to the Act, the arbitrator may decide on substantive jurisdiction whether there is a lawful agreement or not, whether the hearing is appropriately established or not and whether the type of troubles acquiesced to arbitration is in agreement with the arbitration contract or not 11(p.33). Considering the above three, the situation where there lack lawful mediation contract, the Act states that such matters lack both the arbitrator and the arbitration so, whoever decided on the validity of the agreement was not the required arbitrator; therefore, that person who decided had no permission to make verdicts. Upcoming of such situations leads to the problem at hand be solved by the court and the ruling of the case derived from the statute and not arbitration agreement. Under section 30 (1) (a) of the Arbitration Act 1996, Arbitrator’s power to claim whether he/she has powers comes from the statute. Secondly, it is on the application of tribunal constitution. If the contract is lawful but it is inoperative or in acceptable, it leads to conclusion that the tribunals pursuant involved in formation of that agreement is improper because the filing of arbitration notice was without any dispute, or the dispute is not according to the arbitration clause though this may result from errors in procedures. Finally, if the matter is under the arbitration agreement, the arbitrator gets the power to decide if the matter submitted to him/her is under the relevant negotiation arrangements 4(p.72). In ruling on substantive jurisdiction, the arbitrator uses two approaches, firstly, he uses the “in an award as to jurisdiction” and secondly, he uses “in his award on the merits”. The “in his award on the merits” focuses on the substantive disputes available in the case. In deciding the approach that he/she will use in ruling, the arbitrator observes the rule under section 30 of the Arbitration Act 1996, which says that the ruling should avoid any form of delay and unnecessary expenses. When the authority rules that he/she has the control, then the case continues until resolution of the disputes prevailing amongst parties 12(p.32). Arbitration clause validity From different uncertainties concerning the weight of an arbitration passage, the arbitration Act of 1996 confirmed that any challenge to the validity of substantive agreement between the parties would be arbitrator’s task to make decisions. Arbitration clauses entail one feature of agreement between the two involved parties in dispute, in this case is the oil and gas contractors. Here, both contractors in the agreement body identify the law that supports substantive provision of the stated agreement through the law clause 7(p.251). According to the Arbitration Act 1996, this law is the “proper law of contract”. Both the gas and oil contractors will decide whether to use the domestic laws or the international laws. The statutes denies the the gas and oil contracting the authority to enjoy the unfettered discretion while choosing the appropriate law of the contract. Instead, the statute undergoes restrictions from the public policy concerns, inter-temporal laws and the conflicts that emerge in laws 2(p.611). According to the Arbitration Act 1996, in order to promote the validity of arbitration clause, the international arbitration law should understand that arbitration clause is different from its contract, which implies that the clauses are separate and independent on their own. Consequently, this will positively influence the arbitrators’ decisions because most international and national conventions conflict in their laws contributes largely to misleading verdicts 8(p.100). Jurisdiction derived from the arbitration clause Vital fragment of the arbitration clause is whether the clause invents a solution to the matter in dispute. Most of the decisions made in jurisdiction depend on the language used and the clause. In the dispute concerning the oil and gas contracting, the written clause on the matter mentions all the details that with contract agreement between the oil and gas contracting. Alternatively, the clause can choose to apply for claims that do not surpass specific amount or those that consist of information opposing the legal disputes. According to the statute, the arbitrator’s jurisdictions rest on clause language of the arbitrator and his/her attitude towards the arbitration 3(p.27). Different courts differ in their willingness to apply for the entire arbitration clause required to meet the ruling terms. According to most ruling courts in the UK, the arbitration clauses apply for disputes that end on completion of the work or contract in the case of oil and gas contracting. Although arbitration should specialize in resolving problems, complains from different contractors dealing with the oil and gas contracting in UK that arbitration bid mistakes 10(p.43). The Arbitration Act 1996 This act reaffirms and advances the law relating to arbitration pursuant to an arbitration agreement in order to enhance other requirements concerning arbitration, arbitration awards plus the linked arbitration purposes. The main purpose of this Arbitration Act 1996 is to obtain reasonable solutions to different disputes using impartial tribunal approaches, which avoids postponements and expenses involved in ruling. The Act states that the dispute parties here, the oil and gas contracting should be free to decide on the approach in their dispute resolution. Finally, the Arbitration Act 1996 protects the arbitration decisions ruled by the arbitrator from the court intervention9 (p.178). The Arbitration Act allows the disputant parties in this case, the oil and gas contracting to be able to appeal to the court about the matter concerning the law or concerning the problem that created the dispute. If the treaty party denies the disputants from appealing, the disputants are free to appeal about the law question but with permission from the court. In this case, the oil and gas contracting parties should persuade the court by explaining to it the importance of their appeal. Here, the arbitration appeal is capable of ruling any appeal but it will be very hard and complicated for the court to pass the appeal. Here, the appeal court resolves on any decision, send the disputants to arbitrator for rectification of the case or direct the arbitrator oh how to conduct the case. Finally, the court cannot decide on the award if the disputants will appeal the award again or if the arbitration will apply for the disregard of the appeal5 (p.378). Conclusion Arbitration is the conduction of secluded, concluding and compulsory disagreement resolution before a neutral tribunal. This process has a long history in UK and other developed countries; therefore, it will be of advantages if the arbitration process takes place in such countries by using experts thus mitigating the issues arising from biases and corruption. Most developing countries are behind in arbitration matters because they lack enough experts who can handle the problem in a rightful manner. Implementation of suitable governing law plus advisable dispute determining mechanism is very important in contract functioning because it will enhance better methods in resolving issues. Reference List 1. Bantakas I, Peterson J, Suleimanov M. Oil and gas law in Kazakhstan; national and international perspective. Kluwer Law International; Netherlands: 2004 2. Born BG. International commercial arbitration. Volume 2. Kluwer International; Netherlands: 2009 3. Harris B, Planterose R, Tecks J. The Arbitration Act 1996; A Commentary. John Wiley & Sons; England: 2007 4. Jenkins J, Stebbings S. 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