Oil & gas arbitration cases have hit a five-year high in London in a spike put down to high oil prices and an upswing in global political unrest.
The London Court of International Arbitration (LCIA) saw 45 cases lodged last year related to oil & gas, according to its latest registrar’s report.
Law firm Pinsent Masons said that the rate of new cases had doubled from 2013’s total of 22 new cases and exceeded the five-year high-point of 40 cases seen in 2010.
Dispute resolution expert Scott Johnston of Pinsent Masons said the increase in activity was reflective of recent developments in global oil & gas.
“Over a number of years in which we have experienced changing levels of demand, high crude prices and continued geopolitical uncertainty across a number of jurisdictions, this has resulted in volatility in the market, which ultimately drives a surge in complex disputes across all industry sectors,” he said.
The LCIA’s track record in providing impartial arbitration is another reason it continues to see increased business, Johnston said, while its status as a ‘private’ court which does not disclose its decisions also makes it legal avenue favoured by international participants seeking to avoid public wrangles.
The LCIA is only one of a number of international arbitration centres, including organisations in cities like Washington, Paris, Stockholm and Singapore among others.
Some high-profile oil & gas disputes have come to international arbitration in recent times, most notably the $5 billion settlement between Spain’s Repsol and Argentina over the latter’s expropriation of the Spanish major’s stake in YPF that came before the World Bank’s arbitration arm ICSID.
Dana Gas chose to make public earlier this month that the LCIA tribunal had made an interim award in its favour to force outstanding payments from the Kurdistan Regional Government relating to gas field contracts in an ongoing case.
The KRG accused the UAE-based explorer of mischaracterising that ruling. Erbil also denied any sums were outstanding and vowed to vigorously pursue its claims against Dana Gas, according to a report in Iraqi Business News.