Govt forms expert panel for time-bound resolution of disputes in oil & gas sector
The Indian Express
In a move that may lift overall business sentiment, especially in the
oil and gas sector, and will help the sector get rid of disputes
choking investment in it, the government has constituted an expert
committee for time-bound resolution of exploration and production
disputes without having to resort to tardy judicial process.
According to a government notification dated December 16, the three
member ‘Committee of External Eminent Persons/Experts’ for dispute
resolution will comprise of former Secretary of Ministry of Petroleum
and Natural Gas G C Chaturvedi, former Chairman and Managing Director of
OIL and ONGC Bikash C Bora, and former MD of Hindalco Industries Satish
Pai. The notification further stated that the panel will have a tenure of
three years and the resolution will be attempted to be arrived at within
three months.
“The Committee shall exercise all powers and discharge all functions
necessary for carrying out conciliation and mediation proceedings for
resolution of the disputes between the parties as per the provisions of
the Arbitration and Conciliation Act, 1996 and endeavour that the
parties arrive at a Settlement Agreement within three (3) months from
the date of the first meeting of the Committee,” the notification read. It added that the members and the parties may, for reasons to be
recorded in writing, extend the time for arriving at such Settlement
Agreement by mutual agreement
The country’s oil and gas sector has been plagued by disputes from
cost recovery to production targets, and companies as well as the
government have resorted to lengthy and costly arbitration followed by
judicial review — a process that takes years to resolve differences. The December 16 notification said that the panel will arbitrate on a
dispute between partners in a contract or with the government over
commercial or production issues for oil and gas.
“Any dispute or difference arising out of a contract relating to
exploration blocks/fields of India can be referred to the committee, if
both parties to the contract agree in writing for conciliation or
mediation and further agree to not invoke arbitration proceedings
thereafter,” it said. Once a resolution has been referred to panel, the parties cannot resort to arbitration or court case to resolve it. As per the notification, for procedural aspect, the committee will be
guided by the Arbitration and Conciliation Act, 1996, and the venue of
the conciliation or mediation proceedings shall be New Delhi.
Stating that the parties will represent their case before the
committee acting as conciliators or mediators only through their
employees or executives, the notification said that “Advocates or
Consultants shall not participate in the conciliation proceedings,
unless the committee on application filed by a party to the proceedings
finds that some issue of legal nature or an issue requiring highly
specialised knowledge is in dispute requiring
clarification/interpretation by an Advocate or Consultant and takes a
view that in absence of such assistance or participation the party’s
interests shall not be adequately represented in the conciliation or
mediation proceedings.”
It further said that if the concerned parties are unable to arrive at
a settlement, “no interest shall be claimed in any further proceedings
for the period from the date of notice till date of completion of the
proceedings pending before the committee or date of the receipt of the
final recommendations from the committee or date of execution of the
settlement agreement whichever is later.”
While the notification stated that the conciliation or mediation
proceedings should be kept confidential, it also pointed out that the
pendency of arbitral or judicial proceedings shall not constitute any
bar on commencement of conciliation or mediation proceedings before the
committee, even if the conciliation or mediation proceedings are on the
same subject matter/issue as the arbitral or judicial proceeding. It also said that the parties shall not initiate or take any step to
initiate any arbitral or judicial proceedings in respect of a dispute,
which is a subject matter of the conciliation or mediation proceedings
pending before the committee.
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