Indian Government Establishes an ADR panel to resolve Oil and Gas Disputes
With an overhang of disputes choking investments in the oil and gas sector, the government is pushing for contractual disputes being sent to an expert committee for time-bound resolution but the move has found few takers due to inherent conflict of interest in such a process, sources said. The government had in December last year constituted a 'Committee of External Eminent Persons/Experts' comprising former oil secretary G C Chaturvedi, former Oil India Ltd head Bikash C Bora, and Hindalco Industries Ltd Managing Director Satish Pai, for dispute resolution without having to resort to the tardy judicial process.
However, none of the bigger parts of the clash is being referred to in the panel so far. The expert panel has failed to garner a lot of or even any considerable confidence in oil and gas companies because of a major chunk of their clashes over interpretable clauses in mutual contracts and procedural related concerns. That same central govt. is not only the decision-maker on how the dispute is to be resolved but also on the appointment of members of the said panel as well as fixating its terms of reference and There is an inherent conflict of interest that has kept most disputes away from the committee, they said.
The oil and gas industry in India has been burdened with disputes ranging from recovering costing to manufacturing targets, both the industries and the govt. have put their faith in lengthy and expensive arbitration following which is judicial review -- a procedure that can take up to several years to resolve said disputes. As per the official notification, the committee is to arbitrate on a dispute between partners in a contractor 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," the December 2019 notification said.
After a resolution has been referred to the tribunal, it is unlikely for the parties to return to arbitration or court proceedings to settle it. The unconventional technological branch of the Oil Ministry, the Directorate General of Hydrocarbons (DGH), is to provide the Committee with secretarial assistance. The panel was named in absence of any consultation with the sector. That notice also notes that the "government reserves the right to change the terms and conditions as and when required without assigning any reasons thereof" There seems to be a term of 3 years for the panel as well as the resolution is to be attempted within three months.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.