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CONFLICT MANAGEMENT OPTIONS FOR INTERNATIONAL ENERGY/POWER DISPUTES

CONFLICT MANAGEMENT OPTIONS FOR INTERNATIONAL ENERGY/POWER DISPUTES. 2 ND NATIONAL SEMINAR ON ENERGY AND NATURAL RESOURCES 18 TH AND 19 TH NOVEMBER 2003. INTRODUCTION. CONFLICT MANAGEMENT – THE PROCESS OF DEALING WITH OR CONTROLLING A GIVEN CONFLICT. TYPES OF DISPUTES.

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CONFLICT MANAGEMENT OPTIONS FOR INTERNATIONAL ENERGY/POWER DISPUTES

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  1. CONFLICT MANAGEMENT OPTIONS FOR INTERNATIONAL ENERGY/POWER DISPUTES 2ND NATIONAL SEMINAR ON ENERGY AND NATURAL RESOURCES 18TH AND 19TH NOVEMBER 2003

  2. INTRODUCTION • CONFLICT MANAGEMENT – THE PROCESS OF DEALING WITH OR CONTROLLING A GIVEN CONFLICT

  3. TYPES OF DISPUTES • MARITIME BOUNDARY DISPUTES • OIL AND GAS TRADING CONTRACT DISPUTES • OFFSHORE CONSTRUCTION DISPUTES • PIPELINE DISPUTES • EQUIPMENT DISPUTES • QUALITY DISPUTES • MATTERS OF JURISDICTION

  4. NOTE • NEED OF THE CLIENT IS OF THE UTMOST IMPORTANCE • CONTRACTUAL TERMS MAY BE RENEGOTIATED • WHERE RENEGOTIATION PROVIDED FOR IN THE CONTRACT THE TERMS NEED TO BE PRECISE

  5. AVAILABLE OPTIONS • LITIGATION • ARBITRATION • ALTERNATIVE DISPUTE RESOLUTION • MEDIATION • CONCILIATION • MINI-TRIAL • EXPERT DETERMINATION • WATCH OUT FOR LIMITATION PERIODS

  6. LITIGATION • QUICKLY BEING OVERSHADOWED BY ARBITRATION AS A VIABLE OPTION • NO PROVISION IN CONTRACT FOR CONFLICT MANAGEMENT • PARTIES AGREE TO LITIGATE • ONE PARTY INSISTS ON LITIGATION • UNDERTAKEN AT EITHER FEDERAL OR STATE COURTS

  7. THE FEDERAL HIGH COURT • ONE JURISDICTION • CIVIL PROCEDURE RULES 2000 • ACTION COMMENCED IN DIVISION WHERE CONTRACT PERFORMED OR DEFENDANT RESIDES OR CARRIES ON BUSINESS • ACTION COMMENCED BY ISSUANCE OF • WRIT OF SUMMONS • ORIGINATING SUMMONS • ORIGINATING MOTION • PETITION

  8. STATE HIGH COURTS • TERRITORIAL AND JURISDICTIONAL LIMITS • JUDICIAL DIVISIONS IN EACH STATE • LAGOS – COMMERCIAL NERVE CENTER • CURRENT RULES OF COURT IN LAGOS STATE • HIGH COURT OF LAGOS STATE CIVIL PROCEDURE RULES 1994

  9. HIGH COURT OF LAGOS STATE CIVIL PROCEDURE RULES 1994 • ACTION COMMENCED IN DIVISION WHERE CAUSE OF ACTION AROSE OR DEFENDANT RESIDES OR CARRIES ON BUSINESS • FOUR JUDICIAL DIVISIONS • LAGOS • IKEJA • IKORODU • BADAGRY • ACTION COMMENCED BY • WRIT OF SUMMONS • ORIGINATING SUMMONS • ORIGINATING MOTION • PETITION

  10. HIGH COURT OF LAGOS STATE CIVIL PROCEDURE RULES 2003 • ACTION COMMENCED BY • WRIT OF SUMMONS • ORIGINATING SUMMONS • ORIGINATING PROCESS MUST CONTAIN • STATEMENT OF CLAIM OR AFFIDAVIT • ALL DOCUMENTS TO BE RELIED UPON • LIST OF WITNESSES TO BE CALLED • SWORN DEPOSITIONS BY ALL WITNESSES • WRITTEN ADDRESS IN SUPPORT OF ORIGINATING SUMMONS

  11. 2003 RULES • PRE-TRIAL CONFERENCES • SCHEDULING • STRICTER RULES CONCERNING AMENDMENTS OF PLEADINGS AND ADJOURNMENTS • IMPLEMENTATION THE DECIDING FACTOR AS TO ITS SUCCESS

  12. LITIGATION • FOREIGN DEFENDANTS CAN BE SERVED OUTSIDE NIGERIA IF CAUSE OF ACTION FALLS UNDER SITUATIONS SET OUT IN FEDERAL AND STATE HIGH COURT RULES • THE LOSING PARTY CAN APPEAL ALL DECISIONS OF THE COURT ALL THE WAY TO THE SUPREME COURT • APPEAL MAY BE EITHER BY RIGHT OR WITH THE LEAVE OF THE COURT

  13. ARBITRATION • PARTIES UNWILLING TO LITIGATE IN EACH OTHERS’ COURTS • OFFERS A LOT MORE PROCEDURAL FLEXIBILITY THAN LITIGATION • CONCEPTION THAT ARBITRATION IS LESS EXPENSIVE THAN LITIGATION • ARBITRATORS FEES • VENUE RENTALS • EXPERT FEES • SOLICITORS AND BARRISTERS FEES

  14. PLUSES FOR ARBITRATION • ARBITRATION PROCEEDINGS ARE CONFIDENTIAL • NOT PUBLIC DOCUMENTS AND CAN ONLY BE USED IN PROCEEDINGS BETWEEN THE SAME PARTIES IN VERY FEW INSTANCES • THE RIGHT TO CHALLENGE AWARDS NOT AS OPEN ENDED AS IN COURT JUDGMENTS

  15. ARBITRAL INSTITUTIONS • ARBITRATION CLAUSE OUGHT TO STATE IF ARBITRATION TO BE CONDUCTED UNDER PLATFORM OF ANY INSTITUTION • SOME INSTITUTIONS ARE • INTERNATIONAL CHAMBER OF COMMERCE • LONDON COURT OF INTERNATIONAL ARBITRATION • AMERICAN ARBITRATION ASSOCIATION • PROCEDURAL RULES OF INSTITUTION TO GOVERN THE PROCEEDINGS

  16. NOTE • IF NO PROVISION IN THE ARBITRATION CLAUSE FOR AN INSTITUTION THEN THE PROVISIONS OF THE ARBITRATION AND CONCILIATION ACT WILL APPLY • PARTIES MAY REFER DISPUTES TO ARBITRATION EVEN WHERE NO SUCH PROVISION IN THE CONTRACT DOCUMENT • RULES OF EACH INSTITUTION PROVIDE FOR HOW THE PROCEEDINGS ARE COMMENCED

  17. ARBITRATION AND CONCILIATION ACT • SECTION 17 – COMMENCEMENT ON DATE REQUEST IS RECEIVED BY THE OTHER PARTY • SECTION 54 – 1958 NEW YORK CONVENTION FOR ENFORCEMENT OF FOREIGN AWARDS • METHODS OF AWARD ENFORCEMENT • GROUNDS FOR REFUSING RECOGNITION OR ENFORCEMENT

  18. ALTERNATIVE DISPUTE RESOLUTION • THE LAGOS MULTI-DOOR COURT HOUSE • NEGOTIATION AND CONFLICT MANAGEMENT GROUP • LMDC AND NCMG WORK TOGETHER TO PROVIDE • MEDIATION SERVICES • ARBITRATION SERVICES • EARLY NEUTRAL EVALUATION SERVICES

  19. MEDIATION • TO FIND AN AGREEMENT OR SOLUTION BY TALKING TO TWO PEOPLE OR GROUPS IN CONFLICT • CHARTERED INSTITUTE OF ARBITRATION HAS GUIDELINES FOR CONCILIATION AND MEDIATION

  20. WHERE VIABLE OPTION • DESIRE TO MAINTAIN COMMERCIAL RELATIONSHIP • PUBLICITY SHY • REALIZATION THAT LITIGATION CAN BE A DRAIN ON TIME AND RESOURCES • REALIZATION THAT LITIGATION UNPREDICTABLE • MUTUAL INTEREST IN A QUICK RESOLUTION OF THE CONFLICT

  21. OPTION NOT VIABLE • DISPUTE LAW BASED • PRECEDENT IN FAVOUR OF ONE PARTY • LACK OF COMMITMENT TO RESOLUTION • WISH TO DELAY THE RESOLUTION • UNEQUAL BARGAINING POSITIONS • CREATION OF LEGAL PRECEDENT DESIRABLE • BELIEVE THAT LITIGATION WILL BRING ABOUT A COMPLETE VINDICATION

  22. UTILISING MEDIATION • CLAUSE IN THE CONTRACT DOCUMENT PRECLUDING LITIGATION OR ARBITRATION UNTIL ADR EXPLORED • AGREEMENT TO SEEK MEDIATION AFTER CONFLICT • AGREEMENT TO SEEK MEDIATION DURING ARBITRATION OR LITIGATION PROCEEDINGS

  23. ENFORCING MEDIATION CLAUSES • DIFFICULT IF ONE PARTY OPTS FOR LITIGATION • ACCESS TO COURTS A CONSTITUTIONAL RIGHT • PARTY HAS RIGHT OF ELECTION • GARBA V UNIVERSITY OF MAIDUGURI • ADEKUNLE V UNIVERSITY OF PORT HARCOURT

  24. CONCILIATION • THE PROCESS OF TRYING TO GET PEOPLE TO AGREE • ARBITRATION AND CONCILIATION ACT HAS PROVISIONS FOR CONCILIATION • SOME INSTITUTIONS HAVE RULES FOR CONCILIATION • THE INTERNATIONAL CHAMBER OF COMMERCE RULES OF CONCILIATION • THE UNCITRAL CONCILIATION RULES

  25. ARBITRATION AND CONCILIATION ACT • PROCESS INITIATED BY SENDING REQUEST TO THE OTHER PARTY • DATE OF COMMENCEMENT IS WHEN THE REQUEST IS ACCEPTED • PARTIES TO REFER CONFLICT TO CONCILIATION BODY • PROCEEDINGS OR RECORD OF SETTLEMENT NOT A BAR TO LITIGATION OR ARBITRATION

  26. ICC RULES OF CONCILIATION • SINGLE CONCILIATOR • REQUEST IS MADE BY APPLYING TO THE ICC SECRETARIAT • OTHER PARTY HAS FIFTEEN DAYS TO DECIDE • PARTIES RESPONSIBLE FOR FEES IN EQUAL SHARES • TERMINATION • SETTLEMENT AGREEMENT • REPORT BY CONCILIATOR THAT CONCILIATION HAS FAILED • PARTY PULLING OUT OF THE PROCESS

  27. UNCITRAL CONCILIATION RULES • WRITTEN REQUEST SENT BY A PARTY TO ANOTHER • ACCEPTANCE REQUIRED WITHIN THIRTY DAYS • SINGLE OR THREE CONCILIATORS • SUSPENSION OF RIGHT TO ARBITRATE OR LITIGATE DURING PROCESS • PARTIES RESPONSIBLE JOINTLY AND SEVERALLY FOR FEES • TERMINATION • SETTLEMENT AGREEMENT • FAILURE OF AND INABILITY TO REVIVE PROCESS • WRITTEN DECLARATION TO CONCILIATOR THAT PROCESS TERMINATED • CONFIRMATION BY ONE PARTY TO CONCILIATOR THAT PROCESS HAS TERMINATED

  28. MINI-TRIAL OR EXECUTIVE TRIBUNAL • PARTIES PRESENT ISSUES IN DISPUTE TO EXECUTIVES OF BOTH PARTIES • NEUTRAL CHAIRMAN • LEGALLY ENFORCEABLE DOCUMENT PREPARED • PROCESS NOT APPROPRIATE FOR DISPUTES INVOLVING CREDIBILITY OF PERSONNEL

  29. TEXACO V BORDEN • $200 MILLION ANTI-TRUST SUIT OVER NATURAL GAS CONTRACT • 300,000 DOCUMENTS IN DISCOVERY FROM DEFENDANT • EACH LAWYER ALLOWED ONE HOUR TO PRESENT HIS CASE BEFORE VICE – PRESIDENTS OF EACH COMPANY • TECHNICAL ADVISERS ASSISTED BY THIRD PARTY NEUTRAL • ISSUES RESOLVED IN TWO WEEKS WITH NEW GAS SUPPLY CONTRACT NEGOTIATED AS A BONUS

  30. WISCONSIN ELECTRIC POWER COMPANY AND AMERICAN CAN • $41 M CLAIM WITH $20 M COUNTERCLAIM • JUDGE - THIRD PARY NEUTRAL GAVE VIEWS ON LIKELY OUTCOME • SETTLEMENT WITHIN THREE MONTHS • 75 DAYS OF TRIAL AND MONTHS OF DISCOVERY AND INSPECTION AND ADVISERS FEES SAVED

  31. EXPERT DETERMINATION • USE OF EXPERTS TO SETTLE TECHNICAL AND VALUATION DISPUTES • PARTIES AGREE TO INSTRUCT A THIRD PARTY ON SPECIFIC ISSUE • DECISION OF EXPERT ONLY ENFORCEABLE AS A MATTER OF CONTRACT • SERVICE OFFERED BY LCIA, ICC AND CEDR

  32. CONCLUSION • ADR CLAUSES NOT LEGALLY ENFORCEABLE • SETTLEMENT REACHED NOT ENFORCEABLE IF ONE PARTY BALKS • NEED TO COUCH SETTLEMENTS IN CONTRACTUAL TERMS AND THEN EXECUTE • WOULD REQUIRE FRESH LEGAL ACTION TO ENFORCE

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