1. DISPUTE RESOLUTION in the INTERNATIONAL OIL & GAS INDUSTRY a presentation by HEW R. DUNDAS Arbitrator, Mediator and Expert Determiner DUNDAS ENERGY SERVICES

2. OVERVIEW of PRESENTATION  Introduction  International Disputes  Forms of Dispute Resolution  Oil & Gas Disputes  A Case Study  Conclusions

3. CASE STUDY: CATS DISPUTE  CATS - North Sea Gas Pipeline  Capacity Reservation by 3 rd Party User  Send Or Pay Obligation; £45m paid  Fall In Gas Price – Contract Uneconomic  High Court/CoA/House of Lords  Did the Subsea valve work ?  Was CATS “Available “ ?  £100m at stake; £8-12 million legal costs

4. INTERNATIONAL DISPUTES  Difficulties of Litigating  International Commercial Arbitration  Substantive & Procedural Laws  Institutions and Tribunals  Finality  Enforceability  New York Convention 1958

5. FORMS OF DISPUTE RESOLUTION  Litigation  Arbitration Domestic/International  Expert Determination  ADR  Applicability to Oil & Gas Industry  Advantages and Disadvantages

6. FORMS OF ADR  Mediation/Conciliation  Executive Negotiation  Early Neutral Evaluation (ENE)  Private Mini-Trials  Med-Arb and Arb-Med  Adjudication and DRBs  None of the Above

7. CURRENT ISSUES  Industry Preference for Litigation  Failure to Grasp ADR  Expert Determination  Composition of Arbitral Tribunals  The Lawyers’ Involvement  Macho Management/Lawyers

8. CASE STUDY: CATS DISPUTE  CATS - North Sea Gas Pipeline  Capacity Reservation by 3 rd Party User  Send Or Pay Obligation; £45m paid  Fall In Gas Price – Contract Uneconomic  High Court/CoA/House of Lords  Did the Subsea valve work ?  Was CATS “Available “ ?  £100m at stake; £8-12 million legal costs

9. CONCLUSIONS  You Cannot Afford Macho-Man  BAO’s Legal Fees = 3 UKCS Wells  Dinosaurs Still Survive  Oil Industry Myth (1) - Certainty  Oil Industry Myth (2) - $000,000s  Oily Decisions for Oily Disputes  Lord Hoffman is NOT an Engineer