"A la carte menu for two" - How to achieve a workable Dispute Resolution process for both parties to an Oil and Gas Contract

As explained in our last blog about payment provisions in oil and gas contracts, Brodies have recently launched the Contracting Compass initiative, which provides insight on issues of English law relevant to oil and gas contracts.

The initiative comprises a series of seminars, with each accompanied by a dedicated white paper.

Recognising that the landscape of the contract is sometimes difficult to navigate, each seminar and paper highlights a key clause from the contract, focuses on particular points of English law and commercial practice most relevant to the clause concerned, and heightens awareness of the landscape as a whole.

Download the white paper

In 2016, we covered four topics. The second was the dispute resolution clause, to which this blog refers. Access the full white paper here.

If a dispute arises, it is in both parties interests to avoid the financial consequences and lost management time of a drawn out dispute resolution process which damages the existing commercial relationship.

When drafting and agreeing contract terms it is a common mistake for parties to underestimate the importance of the governing law clause. This should not be overlooked as it is pivotal to ensuring that rights under the contract are effective and enforceable.

Even the most watertight contract will not eliminate the risk of dispute. Any decision on choice of law must be coupled with a considered selection of location for dispute determination.

The ability to choose

The value of anticipating where disputes are likely to arise and providing appropriate mechanisms for resolution cannot be overstated. Dispute resolution procedures are all about choice. It can be as simple as choosing the right options from a menu. Our white paper describes when and how you should select from this menu.

Whether it's the sirloin steak or the lobster linguine (or in this context arbitration or mediation) the ability to choose from the outset presents a better position than the uncertainty arising from a lack of clarity from poor drafting which could result in an unwanted and unpalatable outcome being forced upon you.