1. PERSPECTIVES on DISPUTE RESOLUTION: Lessons from the INTERNATIONAL OIL & GAS INDUSTRY a presentation by HEW R. DUNDAS Chartered Arbitrator DipICArb The SINGAPORE INSTITUTE of ARBITRATORS Tuesday 12 April 2005 at the Marina Mandarin, Singapore

2. OVERVIEW of PRESENTATION  Introduction  Dispute Resolution Options  International Disputes  Oil & Gas Industry  A Case Study – the WRONG approach  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. DISPUTE RESOLUTION OPTIONS  Litigation  Arbitration Domestic/International  Expert Determination  Mediation  Other ADR  Application in Oil & Gas Industry  Advantages and Disadvantages

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

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

7. CURRENT ISSUES IN OIL & GAS INDUSTRY  Industry Preference for Litigation  Expert Determination  Failure to Grasp ADR  Ignorance of non-Mediation ADR  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 (1)  Oil Industry Myth (1) - Certainty  Oil Industry Myth (2) - $000,000s = Judge  You Cannot Afford Macho-Man  Dinosaurs Still Survive  Judges are NOT Engineers  Judges are NOT Oilmen

10. CONCLUSIONS (2)  Oilmen’s Decisions for Oily Disputes  Widen The Options  Think ‘outside the box’  Take Risks – Caution is Expensive