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Oil and Gas Arbitration in the Asia-Pacific Region

Introduction

The increased use of arbitration by parties in the Asia-Pacific region [1] has been a consistent trend over the past decade and shows little sign of abating. The Singapore International Arbitration Centre (SIAC), for example, recently announced that it administered 402 new cases in 2018, up 17 per cent from 343 new cases in 2016 and a 48 per cent increase from the 271 new cases filed in 2015. [2] The Chinese International Economic and Trade Arbitration Commission (CIETAC) administered its all-time high of 2,962 new domestic and foreign-related cases in 2018, up from only 2,298 cases in 2017. [3] The Hong Kong International Arbitration Centre (HKIAC) had a total of 532 new cases filed in 2017, [4] of these new cases, 297 were arbitrations, 15 were mediations and 220 were domain name disputes. [5]

The importance of the oil and gas sector to the Asia-Pacific economies cannot be overstated. [6] It is therefore unsurprising that oil and gas arbitrations in the region continue to increase in both prominence and frequency.

Disputes arising out of the oil and gas sector often involve multiple parties and contracts, require highly technical areas of expertise and are particularly suitable for international arbitration. Indeed, in recent surveys conducted by the Queen Mary University of London, 56 per cent of energy industry respondents preferred arbitration as a choice of resolving cross-border disputes and 78 per cent of energy industry respondents strongly agreed or agreed that arbitration is well-suited to the energy industry. [7] Further, 85 per cent of respondents opine that it is likely that the use of international arbitration for resolving cross-border energy disputes will increase in the future. [8]

The Asia-Pacific region’s share of global energy consumption is expected to rise to 48 per cent – or almost half of global consumption – by 2040. [9] These dramatic increases in commercial and economic activity in the oil and gas sector portend an even greater role for international arbitration in the Asia-Pacific region.

The types of interests that may give rise to arbitration in the oil and gas sector are diverse and vary within the region. Asia accounted for 72.9 per cent of global liquefied natural gas (LNG) imports in 2017, with a 72.9 per cent market share, and Japan, China and South Korea are the world’s largest LNG importing countries. [10] The pattern of LNG importation within Asia has also shifted in recent years, with China, India and other developing countries overtaking the more established markets of Japan and South Korea. [11]Australia, Malaysia, India and Indonesia, along with China, are the largest oil and gas producers in the Asia-Pacific region. [12] Jurisdictions such as Timor Leste, Vietnam and the Philippines have significant amounts of unexplored oil and gas resources that are more recently being commercialised. [13]

Although it is difficult to generalise about the varied contracts, practices and legal frameworks pertaining to oil and gas across the Asia-Pacific region, a few emerging trends can be identified. This article examines these trends and considers possible future directions for oil and gas arbitrations in the region.

Current trends

Enhancing the appeal of international arbitration

Several jurisdictions in the Asia-Pacific region have taken steps to make themselves more attractive to arbitration generally and oil and gas arbitration in particular. These have taken the form of institutional developments and legislative changes.

Institutional developments

Australia has introduced innovations specific to the oil and gas sector. In November 2014, the Perth Centre for Energy and Resources Arbitration (PCERA) was launched. As a specialised energy and resources arbitral institution with a dedicated panel of expert arbitrators, PCERA is the first of its kind in the Asia-Pacific region. [14] In August 2017, PCERA published the PCERA Arbitration Rules 2017, which are based expressly on a modified version of the UNCITRAL Arbitration Rules.

Many institutions in the region have made changes that are designed to improve arbitration generally, but which will also have a positive effect on oil and gas arbitrations. For example, the SIAC most recently revised its rules in 2016. Included in the revisions are a number of amendments that will enhance the utility and attractiveness of the SIAC Rules to the oil and gas sector, including:

  • the early dismissal of claims and defences procedure;
  • provisions regarding joinder of additional parties and consolidation of multiple arbitrations; and
  • further refinements to the existing emergency arbitrator and expedited arbitration procedures. [15]

Given that oil and gas disputes often involve multiple contracts and multiple parties, joining relevant parties or consolidating the dispute in a single arbitral forum will result in a more efficient resolution of the dispute, if it is fair and appropriate to do so. Disputing parties will also benefit from the enhancements made by the SIAC to its emergency arbitrator mechanism, which allows parties to obtain expedited interim relief before the constitution of the tribunal within 14 days, [16] and to the expedited procedure, which allows parties to obtain an award within six months of the constitution of the tribunal. [17]

The SIAC has also released its first set of investment arbitration rules (the SIAC IA Rules), which came into effect on 1 January 2017. [18] The SIAC IA Rules were developed with a view towards issues ‘unique to international investment arbitration’. [19] Some of the key provisions under the SIAC IA Rules include:

  • a default list procedure for the appointment of the sole or presiding arbitrator;
  • an opt-in mechanism for the appointment of an emergency arbitrator;
  • a procedure for early dismissal of claims and defences;
  • provisions for submissions by non-disputing parties; and
  • provisions to enable the tribunal to order the disclosure of third party funding arrangements and to take such arrangements into account when apportioning costs. [20]

In December 2017, the SIAC proposed an innovative cross-institution consolidation protocol, [21] which is designed to facilitate the consolidation of international commercial disputes across multiple institutions. Such consolidation is currently not possible under the leading institutional arbitration rules. The SIAC has prepared a memorandum discussing the protocol for cross-institution consolidation [22] and is in the process of engaging with other arbitral institutions and the arbitration community on the protocol. [23]

There is a degree of convergence among the rules of the leading centres in the Asia-Pacific region. The HKIAC revised its rules in 2018, with the latest version of the rules also including comprehensive provisions dealing with multiple contracts, joinder and consolidation, emergency interim relief, early dismissal of claims and expedited procedures. [24] CIETAC likewise revised its rules in 2015 and the revised CIETAC Rules also have provisions on multiple contracts, joinder and consolidation, and emergency interim relief and expedited procedures. [25] In addition, on 1 October 2017, CIETAC released the International Investment Arbitration Rules (CIETAC IA Rules), the first set of investment arbitration rules promulgated by a Chinese arbitration institution. [26]

In April 2016, India established the Mumbai Centre for International Arbitration (MCIA), its first home-grown international arbitration centre. [27] The MCIA Rules, like the other leading rules in the region, have provisions dealing with multiple contracts, joinder and consolidation, emergency interim relief, and expedited procedures. More recently, in 2019, the Japan Commercial Arbitration Association (JCAA) amended its Administrative Rules and its Commercial Rules and issued a new set of ‘Interactive Rules’. [28] The changes to the Commercial Rules include duties for arbitrators to conduct a reasonable investigation into potential conflicts of interest, rules regarding tribunal secretaries and rules on disclosure of dissenting opinions. [29] The new Interactive Rules take a more inquisitorial approach by, for example, requiring the tribunal to set out its preliminary view on key factual and legal issues as early as possible and before a decision on whether a hearing is necessary.

Legislative changes

Singapore and Hong Kong have periodically made refinements to their legal frameworks for arbitration to ensure that they remain ahead of latest developments in the field. Most recently, in 2017, both Singapore and Hong Kong took legislative steps to permit third party funding. Singapore introduced amendments to the Civil Law Act with effect from 1 March 2017 that abolished the common law torts of champerty and maintenance, and also provided that third-party funding is not contrary to public policy or illegal when it is provided by qualifying funders in prescribed dispute resolution proceedings, details of which are set out in the Civil Law (Third Party Funding) Regulations 2017 (Regulations). [30]

In June 2017, Hong Kong passed the Arbitration and Mediation Legislation (Third Party Funding) (Amendment) Ordinance 2017 to permit third-party funding and this law came into force in February 2019. [31] Unlike Singapore, Hong Kong does not mandate third-party funders to adhere to particular regulations. Hong Kong also adopted a broader definition of a third-party funder that is not limited to professional funders and includes any ‘person who is a party to a funding agreement . . . and who does not have an interest recognised by the law in the arbitration other than under the funding agreement’. [32] This would include lawyers and law firms (save for lawyers and law firms acting for a party in the arbitral proceedings).

These changes will provide additional options to arbitration users in the oil and gas sector in terms of funding their claims (although users should be aware that public policy issues may still arise if third-party funding is prohibited in a jurisdiction where enforcement may be sought).

Australia has made a number changes to its arbitration legislation in recent years that will have positive consequences for energy arbitrations. In 2015, the International Arbitration Act was amended to expressly provide that arbitrations seated in Australia are presumptively confidential, subject to a number of limited exceptions, namely consent, third party rights, enforcement of awards, public interest and natural justice. [33] Confidentiality can be very important for the oil and gas industry, especially as highly valuable and proprietary information may be at stake, particularly in upstream exploration and appraisal ventures. In 2018, further amendments were introduced to broaden the tribunal’s discretion in awarding costs and disapply the existing confidentiality provisions to arbitral proceedings to which the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration apply. [34]

India has made significant strides to improve its reputation as a venue for arbitration, including revisions to its legal framework for arbitration through the 2015 Indian Arbitration and Conciliation (Amendment) Act, which came into force on 23 October 2015. [35] The key reforms made by the new act include:

  • clarification that provisions on court-ordered interim relief and court assistance in the taking of evidence would, subject to contrary agreement, apply to arbitrations seated outside India; [36]
  • strict time limits for an arbitral tribunal seated in India to render a final award; [37] and
  • limitations on the scope of ‘public policy’ as a ground for refusing enforcement of awards. [38]

The 2015 amendments are in line with modern arbitration practice (although some, such as the time limits, have been criticised) and, along with the introduction of the MCIA, will give India greater prominence as a potential seat for arbitration. China is also continually improving its arbitration legal framework. Under Chinese law, before a lower court refuses recognition or enforcement of a foreign-related or foreign arbitration award, such decision has to be reported to the Supreme People’s Court (SPC). [39] In 2017, the SPC released two judicial interpretations on arbitration (the Interpretations). [40] The Interpretations extend the SPC reporting system to domestic arbitral awards, permit parties to participate in the decision-making of the reviewing court and clarify the approach the SPC will take with respect to the law governing the arbitration agreement (which will not necessarily be the law governing the underlying contract). [41]

Arbitrations involving states or state-linked parties

Oil and gas resources often take on a strategic, security or geopolitical significance for a state. The state is the resource-owner under the law for most countries in the region. [42] Producing states are thus key players in the oil and gas industry and may take on a commercial interest in a particular oil and gas venture or contract, or exercise certain regulatory and control functions that affect a particular venture or contract. States can participate in a venture or contract in one or more of a variety of ways:

  • they may participate through an oil and gas ministry or some type of government agency;
  • they may participate through a national oil and gas company; or
  • they may regulate through hydrocarbon laws, regulations or policies. [43]

Oil and gas arbitrations therefore frequently involve states or state-linked parties. These can include commercial arbitrations arising out of various contracts between private parties and states or state-linked parties, and also arbitrations under investment treaties.

Commercial arbitrations

States or their national oil companies are typically parties to upstream agreements granting private oil and gas companies the rights to certain oil and gas interests. These may take the form of a concession agreement, a licence agreement, a production sharing agreement or a service agreement. They may also take the form of a hybrid agreement that combines elements of the different types of granting agreements. In general, since the 1970s, the oil and gas industry has shifted from concession agreements, under which the state granted title over the resource to private companies, to production sharing agreements or service agreements, under which the state retains ownership over the resources but grants a private company the right to participate as an investor and a producer. [44]

Under a production sharing agreement, which is the most commonly encountered type of granting agreement, the investor takes on exploration and other risks in the venture, but has an entitlement to recover costs and share in the production as profit, once operations become commercial. Indonesia, in fact, introduced production sharing agreements in the 1960s. [45] Production sharing agreements are now found across the Asia-Pacific region, including in Bangladesh, China, India, Malaysia, Myanmar, Philippines, Sri Lanka and Vietnam. [46]

Disputes that may arise under production sharing agreements include disputes regarding:

  • the recovery of costs and accounting procedure under the agreement;
  • the extent and nature of rights granted under the contract;
  • non-payment of invoices or royalties;
  • prices or price adjustments; and
  • delays, disruptions or force majeure.

The nature and complexity of such disputes varies, and depend on factors such as the scale and complexity of the project, the parties involved and the political environment.

A large proportion of oil and gas arbitrations in the region have arisen out of production sharing and other granting agreements – India has reportedly been involved in arbitrations relating to 22 out of its 310 production sharing agreements in the past 15 years. [47] Some arbitrations are illustrative of the range of issues that might be encountered. In December 2010, Reliance Industries, together with BG Exploration, commenced arbitration against India regarding a dispute about two production sharing contracts that granted the claimants the exclusive right to exploit petroleum resources. [48] The arbitration is still yet to conclude, although five awards have been issued and parts of the ‘Final Partial Award’ issued in October 2016 have been challenged before the English Commercial Court by the claimants. [49] In November 2011, Reliance Industries filed another notice of arbitration against India, regarding a dispute arising out of the cost recovery provisions its production sharing agreement over the KG-DG offshore gas block in the Bay of Bengal, which it operates in a joint venture with the Indian government, BP and Niko Resources, a Canadian company. [50] The parties’ pleadings are before the arbitral tribunal and the parties are in the process of completing the arbitration proceedings. [51] Reliance Industries then filed another claim together with BP and Niko Resources in 2014 under the same agreement relating to the Indian government’s delay in implementing a price hike for natural gas. [52] This claim was later withdrawn. [53] In November 2016, Reliance Industries began yet another arbitration under the same agreement after India imposed a US$1.55 billion fine on Reliance Industries and its partners for extracting certain gas that had migrated to the KG-D6 block from adjacent blocks owned by the Oil and Natural Gas Company (ONGC). [54] In 2018, the arbitral tribunal held for Reliance, finding that the consortium was entitled to produce all gas from its contract area and India was ordered to pay US$8.3 million in costs. [55] Most recently, in the last quarter of 2018, Niko Resources served a notice of arbitration on Reliance, after Reliance and BP issued notice to Niko Resources for withdrawal from the production sharing contract based on the latter’s alleged default on certain cash calls. [56]

Many oil and gas arbitrations in the region or involving parties from the region arise out of joint venture agreements as well. In June 2016, Sinopec, China’s state owned energy company, filed a US$5.5 billion claim against Repsol in Singapore over an investment in an ailing North Sea oil joint venture. [57] A decision in this case is expected this year. [58] In March 2017, PetroChina and five other Chinese state-owned oil companies submitted to arbitration under the American Arbitration Association Rules a dispute over oil and gas fields in Chad against Carlton, a Texas energy investments company. [59] This reflects a marked shift away from the reluctance that Chinese state-owned companies have sometimes had in the past to invoke formal dispute resolution procedures. In May 2017, MedcoEnergi, an Indonesian oil company, won a US$24 million UNCITRAL award in a dispute with Singaporean and Australian partners arising out of a joint venture to operate the Jeruk oil field off the coast of East Java. [60] MedcoEnergi received full payment in 2017. [61]

Investment treaty arbitrations

A significant number of oil and gas disputes in the Asia-Pacific region have also been submitted to arbitration under various investment treaties. Such treaties frequently provide for commitments by host states to certain standards of conduct with respect to the treatment of foreign investments, and for the states’ consent that breaches of such standards may be submitted to arbitration. Countries in Asia are party to more than 1,200 bilateral investment treaties or investment agreements, many of which provide for the arbitration of investment disputes. [62]

A number of multilateral treaties that cover the region, including the 2009 ASEAN Comprehensive Investment Agreement (ACIA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) also provide for arbitration. The CPTPP is an agreement reached in January 2018 by the remaining 11 of the former 12 Trans-Pacific Partnership (TPP) countries after the withdrawal of the United States. The CPTPP came into force on 30 December 2018. The CPTPP incorporates the original TPP, with a number of changes effected to the original text through the suspension of over 30 TPP provisions that are listed in an annex. [63] It remains to be seen whether China, the biggest economy in the region, will join the CPTPP, [64] or whether it will focus on other multilateral treaties with other trade partners in the Asia-Pacific, including the Regional Comprehensive Economic Partnership (RCEP) and the Free Trade Area of the Asia-Pacific (FTAAP). [65]

A substantial number of investment treaty arbitrations involving states in the Asia-Pacific region have related to oil and gas disputes. A large proportion of ICSID arbitrations involving parties from the region have been related to the oil and gas sector. As of October 2016, out of the 46 ICSID cases involving a state from South Asia, East Asia and the Pacific, 45 per cent concerned the oil, gas and mining sector. [66] A significant number of non-ICSID investment treaty arbitrations also relate to the oil and gas sector.

Given the complexity and variety of the security and political environments in which many oil and gas ventures operate, a wide range of different issues can give rise to investment treaty arbitration. For example, expropriation claims of various descriptions whether framed as lawful or unlawful, direct or indirect are not uncommon in the oil and gas sector. In 2016, a UNCITRAL tribunal dismissed two treaty claims brought by Progas Holdings, a Mauritian entity, and its British-Iraqi shareholder against Pakistan for alleged expropriation of an LPG terminal in Port Qasim, Karachi. [67] The awards are being challenged before the English court in an application to set aside filed by the investors. [68]

Retroactive taxation claims and other regulatory actions by governments also frequently give rise to investment treaty disputes. In March 2015, Cairn Energy, a Scottish oil company, initiated a UNCITRAL arbitration against India under the UK–India bilateral investment treaty (BIT), alleging that India’s demands for US$1.6 billion in retroactive taxes against its Indian subsidiary, as well as India’s restrictions preventing Cairn from selling its remaining 10 per cent stake in its subsidiary, are in breach of the treaty. [69] In 2017, the tribunal declined Cairn’s request for interim measures to prevent India from enforcing against its assets and proceeding with the sale of Cairn’s minority stake in a former subsidiary. [70] In May 2015, Hanocal Holding and IPIC International, Dutch subsidiaries of the International Petroleum Investment Company (IPIC), initiated an ICSID arbitration for retroactive tax levied on the sale of a controlling stake in Hyundai Oilbank, which is a Korean petroleum and refining company. [71] The case was discontinued in October 2016. [72] More recently, in July 2016, Royal Dutch Shell initiated ICSID arbitration against the Philippines for US$1.1 billion in retroactive tax bills levied by the Philippines auditing commission on the gas produced from the Philippines’ first natural gas field in Malampaya. [73] The case is still pending. [74] Samsung filed an ICSID claim against Oman, under the Oman–Korean BIT, in relation to a bidding process held by the state to find a contractor to undertake improvements to the Sohar refinery in northern Oman in 2015. The case settled in 2018. [75]

Investment treaty arbitration has also been subject to criticism in recent years and the response of some states in the region has been to terminate or seek to renegotiate its BITs. As at March 2017, India notified 58 countries, including 22 EU countries, of its intention to terminate its BITs. [76] India has announced that it intends to replace those treaties by negotiating a new set of treaties based on the new Indian Model BIT, which it published in 2015. [77] It was reported last year that the new model treaty, in particular the arbitration clause requiring investors to resolve the dispute in Indian courts for at least five years before going for arbitration, has not been well-received. [78]

Indonesia also announced at the end of 2014 that it would formally phase out its 67 BITs and has proceeded to terminate a number of such treaties in accordance with that announcement. [79] There have been indications that Indonesia plans to negotiate new treaties on different terms, although reports are not conclusive. For treaties that have been terminated or are about to be terminated, investments made prior to the expiry of the treaties should continue to enjoy protection under survival or sunset clauses for up to 15 years. [80] Indeed, in August 2016, Oleovest, a Singapore-based subsidiary of an Australian renewable energy company, initiated an ICSID arbitration against Indonesia under the Singapore–Indonesia BIT with respect to a palm oil oleochemcial project in Sumatra. The treaty had lapsed in June 2016, but the relevant treaty contains a survival clause protecting existing investments for ten years after June 2016. [81] The case was discontinued in 2018. [82]

Future directions

Price movements and volatility

Price movements in oil and gas markets are a key driver of change in the industry. They are also a driver of disputes. Parties to energy related contracts that were formed and negotiated in a different price environment may find themselves or their counterparts tied to agreements that are no longer as profitable as had been anticipated. Further exploration, appraisal or development of existing oil and gas assets may proceed on a slower and more conservative timescale. Parties may seek to get out of, or revise, a bad bargain. All of this can give rise to disputes; indeed, the recent low price environment has reportedly given rise to a number of disputes arising out of unpaid invoices or cost overruns, or the suspension, renegotiation or cancellation of oil exploration and drilling obligations. [83]

Price movements will continue to be volatile and difficult to predict. Future upward movements in oil and gas prices or regional divergences in prices creating arbitrage opportunities, will very likely fuel an increase in disputes. Indeed, a study done by Chatham House shows a correlation between the oil and gas price level and the number of arbitrations in other words, the highest incidence of arbitrations took place during the oil and commodity price boom from 2002–2008. [84]

Because gas is often sold in large volumes under 20 to 35-year long-term gas supply and purchase agreements, price movements and volatility often lead to very large and complex gas pricing disputes. In particular, many such contracts include a price review or price adjustment clause, which permits parties to revise the price formulae under their contract if a certain set of contractually defined criteria are satisfied. [85]

In Europe, various factors and developments have contributed to a proliferation of gas price arbitrations in the past decade involving disputes over the applicability and mechanics of such price review clauses. Commentators attribute this increase to the development of competitive natural gas markets and liquid gas hubs in some parts of Europe, leading to a mismatch between spot prices for gas and the prices paid under long-term gas supply contracts that predate those developments, which tend to be linked to oil and alternative fuels. [86] Another driver of the increase in such disputes has been the oversupply of natural gas due to the development of shale gas in the United States and China, and increased LNG imports from the Middle East and North Africa, which has led to a further divergence in the price-setting mechanisms in the oil and gas markets. [87]

Perhaps surprisingly, such gas price arbitrations have not been as common in the Asia-Pacific region even though regional developments, including the dramatic spike in demand for LNG after the Fukushima nuclear power plant incident, have contributed to the increase in gas pricing disputes in Europe. [88] One commentator’s review of public LNG disputes found that, out of 72 LNG disputes observed globally between 2010 and 2016, there have been no reports of arbitrations brought by a Japanese, Chinese or Korean LNG buyer (even though Japan, China and South Korea together account for more than half of global LNG imports). [89]

In February 2018, Korea Gas Corporation, a South Korean state-owned entity, brought a gas price review arbitration against the Australia’s North West Shelf joint venture under supply contract that ended in 2016. [90] It remains to be seen whether this is an isolated example or the first of a series of gas price review claims akin to the spate of such claims that has recently been seen in Europe.

Not much information is publicly available on the price revision mechanisms in gas or LNG supply and purchase agreements. However, commentators point to anecdotal evidence that long-term contracts in the Asia-Pacific region are traditionally set on the basis of Japan Customs-cleared Crude (JCC) prices and contain vague price review clauses that do not always provide for price revision through arbitration. [91] There are also suggestions that Asian market participants prefer to negotiate rather than arbitrate price adjustment issues. [92]

However, more recent reports suggest that regional participants are now more seriously considering drafting or relying on gas price review mechanisms in their long-term contracts, in part because of a growing divergence between sellers’ and buyers’ positions. This will increasingly be the case as the JCC prices compete with the development of emerging gas trading markets in Singapore and Shanghai, [93] which may develop in the future into gas hubs and a reference point for gas pricing. The European experience with liberalisation of gas markets and the emergence of gas hubs, and its impact on market behaviour and gas price reviews, suggests that gas price arbitrations will be a potential growth area for the future in the Asia-Pacific region. [94]

One important difference with Europe, however, is that the Asia-Pacific is not a single market and does not have a coordinating political, legal or regulatory mechanism like the European Commission that can establish standards across the board for third party access to infrastructure or to regulate anticompetitive contracting behaviour. [95] This means that the development of a regional gas hub may take a longer time than it did in Europe.

Other LNG disputes

The Asia-Pacific region alone accounts for over two-thirds of the global LNG growth. [96] In 2017, 50.3 per cent of the global supply of LNG went to the Asia-Pacific. [97] Japan, China and South Korea remain the world’s top three LNG importers. [98] Asia-Pacific buyers received an increased amount of LNG from sellers within the region, causing intra-regional trade to rise to 83.9 metric tonnes (MT) in 2017 from 76.5 MT in 2016. [99] By 2017, Australia and Malaysia had become the second and third world’s leading exporters of LNG, only surpassed by Qatar. [100] In November 2018, Australia overtook Qatar for the first time as the world’s largest exporter of LNG. [101] In the future, some commentators have predicted that, as result of increasing demand from Australia, India, Indonesia and Malaysia, the demand for LNG in the region is expected to be double or more by 2030. [102]

Besides the gas price review issues referred to above, there are other issues specific to LNG ventures and contracts that can give rise to disputes. In particular, unlike pipeline gas, LNG can be transported and delivered to destinations other than those specified in the parties’ contract and can also be re-exported after it is delivered. This creates opportunities for market participants to create additional value by sending LNG cargoes to a destination that has a higher price, which can give rise to disputes. For example, disputes have arisen out of destination restrictions or diversion provisions in LNG contracts, including whether a seller is entitled to refuse a diversion proposal or whether and how profits on diverted cargoes are to be shared. [103]

There is very little public information on LNG-related arbitrations involving parties from the Asia-Pacific region as most LNG contracts are confidential and therefore publicly available details about disputes are limited. [104] However, as LNG markets continue to mature in the Asia-Pacific and trading volumes continue to increase, it is likely that more of such disputes will arise in the future.

Another area to watch is LNG-related construction disputes. Australia has almost US$200 billion of LNG-related construction projects underway, as the recent build up of Australia’s LNG industry has also led to cost overruns of almost US$50 billion at multiple facilities operated by major oil and gas companies. [105]Along with other factors, this has predictably led to a number of LNG-related construction disputes being submitted to arbitration. For example, in 2015, Saipem, an Italian company, commenced arbitration against GLNG Operations, an Australia-based company, regarding a contract related to the Gladstone LNG project. GLNG’s counterclaim in this case amounts to approximately A$1.1 billion (in alleged pipeline replacement costs) and A$24 million (in alleged costs for the adoption of temporary adjustment measures). [106] Proceedings are currently ongoing and an award is expected soon. [107] In September 2016, Chevron initiated UNCITRAL arbitration in Perth against CPB Contractors, an Australian construction company, and Saipem, regarding a disputed request for US$1.5 billion in extra costs for constructing a jetty for the LNG project. [108] This case is still pending. [109] In August 2017, CPB notified Saipem of yet another arbitration regarding the construction of the dock of the same LNG jetty project, in which CPB requested that Saipem be ordered to pay approximately A$1.39 billion. [110]

State-to-state arbitration disputes

As energy and resource security becomes an increasing concern for states in the Asia-Pacific region, which is likely given volatile energy prices and the reliance of China, Japan and South Korea on oil and gas imports, [111] there may also be more state-to-state arbitrations that are related to the oil and gas sector.

State-to-state disputes can arise out of oil and gas resources that straddle contested state boundaries. For example, in 2009 the Permanent Court of Arbitration (PCA) in The Hague administered a UNCITRAL arbitration between the Sudan People’s Liberation Movement and the government of Sudan regarding the contested borders of the Abyei region, which is located within the Muglad Basin and contains a number of oil and gas subsurface resources. [112] Similar disputes have arisen regarding land boundaries in the Asia-Pacific, most notably in the Kashmir region where Pakistan, India and China have all put forward competing claims, [113] although such claims have not been submitted to arbitration.

Similar disputes can also arise out of oil and gas resources that straddle maritime boundaries or exclusive economic zones. In July 2016, a five-member PCA tribunal constituted under the 1982 UN Convention on the Law of the Sea (UNCLOS) rejected territorial claims by China in the South China Sea, with respect to the status of the Scarborough Shoal, Itu Aba and certain features in the Spratly Islands. [114] China has, however, consistently rejected the legitimacy of the PCA award, on the basis that territorial questions are not subject to the United Nations Convention for the Law of the Sea (UNCLOS), [115] and rather than comply with the award, China has instead stepped up its construction activities and presence in the South China sea. [116] This goes to show how delicate and politically sensitive these boundary issues can be and illustrates some of the limitations of the arbitration process in resolving such disputes.

Disputes could also arise out of agreements to share revenue between states. One example is the dispute between Australia and Timor-Leste regarding the controversial Certain Maritime Arrangements in the Timor Sea (CMATS) treaty that sets out a method for dividing revenue from the very large and potentially lucrative Greater Sunrise oil and gas reserve. [117] CMATS split revenues on a 50–50 basis and imposed a 50-year moratorium on Timor-Leste pursuing maritime boundary negotiations or claims. Timor-Leste sought to terminate the CMATS. [118]

In September 2016, a five-member commission at the PCA found that it had jurisdiction to hear a compulsory conciliation proceeding under UNCLOS annex V involving Australia and Timor-Leste, which would require Australia to negotiate with Timor-Leste regarding a permanent maritime boundary (Australia had expressly excluded disputes relating to sea boundary delimitation from compulsory arbitration and judicial settlement in 2002). [119]

After negotiations, Timor-Leste and Australia reached an agreement on 30 August 2017 in Copenhagen on the central elements of a permanent maritime boundary in the Timor Sea ending a maritime boundary dispute affecting the fate of an estimated US$40 billion in oil and gas reserves. The agreement also addresses the legal status of the Greater Sunrise gas field located in the disputed waters and the establishment of a special regime for the development of the field and the sharing of revenues. [120 The treaty was signed on 6 March 2018.121]

The UNCLOS annex 5 conciliation proceedings were the first of their kind. It remains to be seen how such procedures will be employed in future state-to-state disputes.


Notes

[1] The exact periphery of what constitutes the ‘Asia-Pacific region’ is difficult to define with precision and depends in part on context. For example, the Asia-Pacific Economic Cooperation forum includes Canada, Chile, Russia, Mexico, Peru and the United States. For the purposes of this article, these countries are not treated as falling within the Asia-Pacific region.

[2] See SIAC, 2018 Annual Report, at p 15, available at http://www.siac.org.sg/images/stories/articles/annual_report/SIAC_Annual_Report_2018.pdf.

[3] CIETAC, Statistics, available at http://cietac.org/index.php?m=Page&a=index&id=24.

[4] At the time of publication of this article, the HKIAC has not yet released its 2018 statistics.

[5] HKIAC, Statistics, available at http://www.hkiac.org/about-us/statistics.

[6] Based on 2017 data, Asia-Pacific, as a region, remains the biggest consumer of oil. Asia-Pacific’s oil consumption represented 35.6% of the global consumption. The region’s oil consumption growth is also the highest at 2.9 per cent per annum. Asia-Pacific’s natural gas consumption grew steadily (second only to Africa) and continues to consume over a fifth (21.0 per cent) of the world’s natural gas. On the production side, apart from the Middle East, Asia-Pacific achieved the highest average natural gas production growth rate in the past 10 years (at 4.0 per cent per annum). See BP, Statistical Review of World Energy June 2018, available at https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2018-full-report.pdf, at pp 17, 28, 29.

[7] Queen Mary University of London, Corporate choices in International Arbitration Industry Perspectives, at p 2, available at http://www.arbitration.qmul.ac.uk/docs/123282.pdf; see also International Centre for Energy Arbitration, Dispute Resolution in the Energy Sector: Initial Report (2015), available at http://www.scottisharbitrationcentre.org/wp-content/uploads/2015/05/ICEA-Dispute-Resolution-in-the-Energy-Sector-Initial-Report-Square-Booklet-Web-version.pdf, at pp 3 and 8.

[8] Queen Mary University of London, The Evolution of International Arbitration, at p 30, available at http://www.arbitration.qmul.ac.uk/media/arbitration/docs/2018-International-Arbitration-Survey-report.pdf; Id, at pp 30–31.

[9] BP Energy Outlook 2019, at p 65, available at https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/energy-outlook/bp-energy-outlook-2019.pdf.

[10] GIIGNL, The LNG Industry GIIGNL Annual Report 2018, at p 6, available at https://giignl.org/sites/default/files/PUBLIC_AREA/Publications/rapportannuel-2018pdf.pdf.

[11] BP Energy Outlook 2019, at p 99 available at https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/energy-outlook/bp-energy-outlook-2019.pdf.

[12] See BP Statistical Review of World Energy June 2018, available at https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2018-full-report.pdf, at pp 14, 28.

[13] See J Reed and G Ramos, ‘Philippines set to develop 14 petroleum blocks’, dated 25 March 2018, available at https://www.ft.com/content/7759221a-2cc3-11e8-9b4b-bc4b9f08f381 ; J Reed and G Ramos, ‘China and Philippines sign offshore oil and gas deal’, dated 21 November 2018, available at https://www.ft.com/content/a4bf926e-ecb9-11e8-89c8-d36339d835c0 .

[14] A Van Der Walt, P Wiese and D Jasmat, ‘Australia: Will Australia’s first dedicated Energy and Resources Arbitration Centre meet the needs of industry?’, dated March 2015, available at http://www.mondaq.com/australia/x/382996/Will+Australias+first+dedicated+Energy+and+Resources+Arbitration+Centre+meet+the+needs+of+indus.

[15] See G Born, J Lim and D Prasad, 2016 SIAC Rules, International Arbitration Alert, dated 29 July 2016, available at https://www.wilmerhale.com/uploadedFiles/Shared_Content/Editorial/Publications/WH_Publications/Client_Alert_PDfs/2016-07-29-2016-SIAC-Rules.pdf.

[16] See 2016 SIAC Rules, Schedule 1.

[17] See 2016 SIAC Rules, Rule 5.

[18] See 2017 SIAC IA Rules, available at, http://www.siac.org.sg/our-rules/rules/siac-ia-rules-2017.

[19] 2017 SIAC IA Rules, available at, http://www.siac.org.sg/our-rules/rules/siac-ia-rules-2017.

[20] ‘SIAC unveils investment arbitration offering’, Global Arbitration Review, dated 3 January 2017, available at https://globalarbitrationreview.com/article/1079293/siac-unveils-investment-arbitration-offering.

[21] Proposal on Cross-Institution Consolidation http://siac.org.sg/69-siac-news/551-proposal-on-cross-institution-consolidation-protocol.

[22] SIAC, Memorandum Regarding Proposal on Cross-Institution Consolidation Protocol, available at http://siac.org.sg/images/stories/press_release/2017/Memorandum%20on%20Cross-Institutional%20Consolidation%20(with%20%20annexes).pdf.

[23] See also Kshama A Loya, ‘Institution Consolidation Protocol Mitigate the Perceived Weakness of Arbitrations in Effectively Resolving Multi-Party, Multi-Contract Disputes?’ YSIAC Newsletter June/July 2018, Issue 19, at p 23, available at http://www.siac.org.sg/images/stories/documents/ysiac_newsletter/YSIAC%20Newsletter%20Issue%20No.19.pdf.

[24] 2018 HKIAC Administered Arbitration Rules, available at http://www.hkiac.org/sites/default/files/ck_filebrowser/PDF/arbitration/2018_hkiac_rules.pdf.

[25] 2015 CIETAC Rules; J Tao and M Zhong, ‘A Quick Read of the CIETAC Arbitration Rules 2015’, 31 Arbitration International 2015, p 455.

[26] CIETAC IA Rules, available at http://www.cietac.org/index.php?m=Article&a=show&id=15199&l=en; see also J Fei, A Crockett and P Chen, ‘Facilitating the Belt and Road: CIETAC Launches Investment Arbitration Rules’, dated 4 December 2017, available at https://www.herbertsmithfreehills.com/latest-thinking/facilitating-the-belt-and-road-cietac-launches-investment-arbitration-rules.

[27] See A Ross, ‘Home-grown centre to launch in Mumbai’, Global Arbitration Review, dated 8 April 2016, available at http://globalarbitrationreview.com/article/1035436/home-grown-centre-to-launch-in-mumbai.

[28] D Gilmore, J Ribeiro, S Beer, B Jolley, ‘New 2019 JCAA Rules: Is Three a Crowd?’, dated 8 February 2019, available at http://arbitrationblog.kluwerarbitration.com/2019/02/08/new-2019-jcaa-rules-is-three-a-crowd/.

[29] D Gilmore, J Ribeiro, S Beer, B Jolley, ‘New 2019 JCAA Rules: Is Three a Crowd?’, dated 8 February 2019, available at http://arbitrationblog.kluwerarbitration.com/2019/02/08/new-2019-jcaa-rules-is-three-a-crowd/.

[30] See I Rajah, ‘Third Party Funding – Reinforcing Singapore As A Premier International Dispute Resolution Centre’, dated 24 January 2017, available at https://www.mlaw.gov.sg/content/dam/minlaw/corp/News/Civil%20Law%20Amendment.pdf.

[31] The amendment is fully in force since February 2019, because a code of practice for third-party funders had to be issued for some provisions of section 3 of the Arbitration and Mediation Legislation (Third Party Funding) to have effect. The Hong Kong Department of Justice issued that code in December 2018. The government of the Hong Kong Special Administrative Region, Code of Practice for Third Party Funding of Arbitration issued, available at https://www.info.gov.hk/gia/general/201812/07/P2018120700601.htm.

[32] Hong Kong Arbitration Ordinance (Cap 609), section 98J(1); cf Singapore Civil Law (Third-Party Funding) Regulations 2017, section 4; Singapore Civil Law Act, section 5B(8); see also J D Agostino, B Young and M Wallace, ‘Hong Kong Allows Third Party Funding for Arbitration and Mediation’, dated 14 June 2017, available at https://hsfnotes.com/arbitration/2017/06/14/hong-kong-allows-third-party-funding-for-arbitration-and-mediation/.

[33] Australian International Arbitration Act 1974, Sections 23D, 23G.

[34] Australian Civil Law and Justice Legislation Amendment Act 2018, Schedule 7.

[35] See J Rahman and D Prasad, Indian Parliament Enacts Revisions to the 1996 Arbitration Act, dated 14 January 2016, available at https://www.wilmerhale.com/pages/publicationsandnewsdetail.aspx?NewsPubId=17179880410; see India Arbitration and Conciliation Act 2015, Sections 2(2), 29A, 34(2)(b) and 48(2)(b).

[36] Bharat Aluminium Co & ors v Kaiser Aluminium Technical Service, Inc (2019) 9 SCC 552; Indian Arbitration and Conciliation Act 2015, Section 2(2).

[37] Indian Arbitration and Conciliation Act 2015, Section 29A.

[38] Indian Arbitration and Conciliation Act 2015, Sections 34(2)(b) and 48(2)(b).

[39] Notice of the Supreme People’s Court on Handling Foreign-Related and Foreign Arbitration Issues, [1995] Fa Fa 18, available at http://www.people.com.cn/zixun/flfgk/item/dwjjf/falv/9/9-2-1-05.html.

[40] Rules on the Reporting and Verification Matters in Cases of Arbitration-Related Judicial Review, [2017] Fa Shi 21, available at http://www.court.gov.cn/zixun-xiangqing-75862.html; Rules on Several Substantive Matters in Hearing Cases of Arbitration-Related Judicial Review, [2017] Fa Shi 22, available at http://www.court.gov.cn/zixun-xiangqing-75872.html.

[41] K Sanger, J Fei and B Young, SPC Publishes new Judicial Interpretations on Arbitration, available at https://hsfnotes.com/arbitration/2018/01/10/spc-publishes-new-judicial-interpretations-on-arbitration/; D Thomson and A Ross, ‘China reforms reporting system’, Global Arbitration Review, dated 9 February 2018, available at https://globalarbitrationreview.com/article/1153364/china-reforms-reporting-system.

[42] D Bishop, E Roche and S McBrearty, ‘The Breadth and Complexity of the International Energy Industry’, in JW Rowley et al (eds), The Guide to Energy Arbitrations (2nd ed, 2017), at p 2 (‘Most countries follow the regalian or dominial systems regarding ownership of subsurface minerals. Under these systems, subsurface minerals belong to, or are controlled by, the sovereign.’).

[43] D Bishop, E Roche and S McBrearty, ‘The Breadth and Complexity of the International Energy Industry’, in JW Rowley et al (eds), The Guide to Energy Arbitrations (2nd ed, 2017), at p 6.

[44] D Bishop, E Roche and S McBrearty, ‘The Breadth and Complexity of the International Energy Industry’, in JW Rowley et al (eds), The Guide to Energy Arbitrations (2d ed, 2017), at p 6.

[45] C Duval, International Petroleum Exploration and Exploitation Agreements: Legal, Economic & Policy Aspects, 2009, 69; K Bindemann, Production-Sharing Agreements: An Economic Analysis, Oxford Institute for Energy Studies, October 1999, at p 10.

[46] K Bindemann, Production-Sharing Agreements: An Economic Analysis, Oxford Institute for Energy Studies, October 1999, at p 63.

[47] Petroleum & Natural Gas Minister Dharmendra Pradhan’s written reply, ‘Energy World’, Economic Times, dated April 2015, available at http://energy.economictimes.indiatimes.com/news/oil-and-gas/310-production-sharing-contracts-have-attracted-22-arbitration-cases-dharmendra-pradhan-tells-lok-sabha/46988403.

[48] Reliance Industries Ltd v Union of India [2018] EWHC 822 (Comm) paragraph 2 (16 April 2018).

[49] Reliance Industries Ltd v Union of India [2018] EWHC 822 (Comm) paragraph 9 (16 April 2018).

[50] K Karadelis, ‘Reliance tackles India over gas field cost recovery’, Global Arbitration Review, dated 5 December 2011, available at http://globalarbitrationreview.com/article/1030829/reliance-tackles-india-over-gas-field-cost-recovery.

[51] Reliance Industries Limited, Integrated Annual Report 2017 18, at p 71, available at http://www.ril.com/getattachment/e5d8ddac-3899-4a0f-beb5-aa7f8100010c/AnnualReport_2017-18.aspx.

[52] ‘India faces new claim over gas pricing delay’, Global Arbitration Review, 12 May 2014, available at http://globalarbitrationreview.com/article/1033385/india-faces-new-claim-over-gas-pricing-delay.

[53] D Thomson, ‘BP and Reliance withdraw claim against India’, Global Arbitration Review, dated 23 June 2017, available at https://globalarbitrationreview.com/article/1143456/bp-and-reliance-withdraw-claim-against-india.

[54] T Jones, ‘Reliance threatens India claim over billion-dollar fine’, Global Arbitration Review, November 2016, available at http://globalarbitrationreview.com/article/1072591/reliance-threatens-india-claim-over-billion-dollar-fine.

[55] C Sanderson, ‘India loses billion-dollar case over gas migration’, dated 1 August 2018, available at https://globalarbitrationreview.com/article/1172530/india-loses-billion-dollar-case-over-gas-migration.

[56] Reliance Industries Limited, Financial performance for the quarter/nine months ended 31 Dec, 2018, at p 16, available at http://www.ril.com/getattachment/8aa9eb29-fa77-4555-8056-7998b7e1159b/Financial%20performance%20for%20the%20quarter/nine%20months%20ended%2031%20Dec,%202018.aspx.

[57] D Thomas, ‘Sinopec takes on Repsol over North Sea oil investment’, Global Arbitration Review, dated 17 June 2016, available at https://globalarbitrationreview.com/article/1036415/sinopec-takes-on-repsol-over-north-sea-oil-investment.

[58] C Denina, ‘Exclusive: Repsol working with BofA-Merrill Lynch to sell UK North Sea fields – sources’, Reuters, 28 February 2018, available at https://www.reuters.com/article/us-repsol-m-a-northsea-exclusive/exclusive-repsol-working-with-bofa-merrill-lynch-to-sell-uk-north-sea-fields-sources-idUSKCN1GC2GW.

[59] L Yong, ‘PetroChina submits to arbitration after five-year battle’, Global Arbitration Review, 22 March 2017, available at https://globalarbitrationreview.com/article/1138499/petrochina-submits-to-arbitration-after-five-year-battle; L Yong, ‘PetroChina affirms consent to arbitrate Chad oil dispute – but with a footnote’, dated 21 April 2017, available at https://globalarbitrationreview.com/article/1139900/petrochina-affirms-consent-to-arbitrate-chad-oil-dispute--but-with-a-footnote.

[60] T Jones, ‘Indonesian company wins dispute over oil field joint venture’, Global Arbitration Review, dated 26 May 2017, available at https://globalarbitrationreview.com/article/1142086/indonesian-company-wins-dispute-over-oil-field-joint-venture.

[61] MedcoEnergi, Annual Report 2017 (2018), at p 117.

[62] See S Hamanaka, Asian Noodle Bowl of International Investment Agreements (IIAs), Presentation to the ARTNeT Conference, dated 10 December 2013, available at http://www.unescap.org/sites/default/files/pari-shintaro.pdf; UNCTAD International Investment Agreements Navigator, available at http://investmentpolicyhub.unctad.org/IIA.

[63] See D Robertson, L Chung and Z Wang, ‘A Comprehensive and Progressive Agreement for Trans-Pacific Partnership’, dated 17 November 2017, available at https://hsfnotes.com/publicinternationallaw/2017/11/17/a-comprehensive-and-progressive-agreement-for-trans-pacific-partnership/.

[64] See eg SCMP, ‘Beijing “looking into joining trans-Pacific trade pact” to hedge against US’, dated 11 October 2018, available at https://www.scmp.com/news/china/diplomacy/article/2168147/beijing-looking-joining-trans-pacific-trade-pact-hedge-against; Global Times , ‘CPTPP could be a strong trading partner for China’, dated 1 January 2019, available at http://www.globaltimes.cn/content/1134261.shtml ; Global Times, ‘CPTPP puts pressure on China, but options remain open’, dated 1 January 2019, available at http://www.globaltimes.cn/content/1134250.shtml.

[65] See Consulate-General of the People’s Republic of China, Wong Yi: Speed up RCEP Negotiation and March toward the FTAAP, dated 7 February 2017, available at http://www.fmprc.gov.cn/ce/cggb/eng//xwdt/t1437162.htm.

[66] ICSID, ICSID Caseload – Statistics, Special Focus: South & East Asia & the Pacific, October 2016, available at https://icsid.worldbank.org/en/Documents/resources/ICSID%20Web%20Stats%20Asia%20Statistics%20Oct%202016.pdf,at p 19.

[67] D Thomson, ‘Pakistan defeats treaty claims over gas terminal’, Global Arbitration Review, 1 September 2016, available at http://globalarbitrationreview.com/article/1067803/pakistan-defeats-treaty-claims-over-gas-terminal.

[68] J Hepburn, ‘English Court Orders Security for Costs Against Claimants in set-aside proceedings funded by Burford Capital, but Declines Security over Still-Unpaid Adverse Costs order in Underlying Arbitration’, IA Reporter, 12 February 2018, available at https://www.iareporter.com/articles/english-court-orders-security-for-costs-against-claimants-in-set-aside-proceedings-funded-by-burford-capital-but-declines-security-over-still-unpaid-adverse-costs-order-in-underlying-arbitration/.

[69] D Thomson, ‘A tax claim against Modi’s India?’, Global Arbitration Review, dated 11 March 2015, available at http://globalarbitrationreview.com/article/1034289/a-tax-claim-against-modi%E2%80%99s-india; D Thomson, ‘India says no to Cairn tax arbitration’, Global Arbitration Review, 29 June 2015, available at https://globalarbitrationreview.com/article/1034568/india-says-no-to-cairn-tax-arbitration; L Yong, ‘Cairn seeks to halt sale in Indian back tax dispute’, Global Arbitration Review, 12 June 2017, available at https://globalarbitrationreview.com/article/1142783/cairn-seeks-to-halt-sale-in-indian-back-tax-dispute; L Yong, ‘Cairn loses bid to restrain India in tax dispute’, Global Arbitration Review, 11 July 2017, available at https://globalarbitrationreview.com/article/1144271/cairn-loses-bid-to-restrain-india-in-tax-dispute.

[70] L Yong, ‘Cairn loses bid to restrain India in tax dispute’, Global Arbitration Review, 11 July 2017, available at https://globalarbitrationreview.com/article/1144271/cairn-loses-bid-to-restrain-india-in-tax-dispute.

[71] L Yong, ‘New ICSID claim against South Korea’, Global Arbitration Review, 22 May 2015, available at http://globalarbitrationreview.com/article/1034478/new-icsid-claim-against-south-kore

[72] Hanocal Holding BV and IPIC International BV v Republic of Korea, ICSID Case No ARB/15/17, available at https://icsid.worldbank.org/en/Pages/cases/casedetail.aspx?CaseNo=ARB/15/17.

[73] L Yong, ‘Shell takes on Philippines over back taxes’, Global Arbitration Review, 22 July 2016, available http://globalarbitrationreview.com/article/1067235/shell-takes-on-philippines-over-back-taxes.

[74] Shell Philippines Exploration BV v Republic of the Philippines, ICSID Case No. ARB/16/22, available at https://icsid.worldbank.org/en/Pages/cases/casedetail.aspx?CaseNo=ARB/16/22.

[75] T Jones, ‘Samsung and Oman settle ICSID dispute’, Global Arbitration Review, 22 January 2018, available at https://globalarbitrationreview.com/article/1152959/samsung-and-oman-settle-icsid-dispute.

[76] N Peacock and N Joseph, ‘Mixed Message to investors as India Quietly Terminates Bilateral Investment Treaties with 58 Countries’, 16 March 2017, available at https://hsfnotes.com/arbitration/2017/03/16/mixed-messages-to-investors-as-india-quietly-terminates-bilateral-investment-treaties-with-58-countries/.

[77] See K Singh and B Ilge, ‘India overhauls its investment treaty regime’, Financial Times, 15 July 2016, available at http://blogs.ft.com/beyond-brics/2016/07/15/india-overhauls-its-investment-treaty-regime/.

[78] Reuters, ‘India’s proposed investment treaty terms leave foreign partners cold’, 19 January 2018, available at https://www.reuters.com/article/india-investment-treaty/indias-proposed-investment-treaty-terms-leave-foreign-partners-cold-idUSL4N1P72N1.

[79] See A Crockett, ‘Indonesia’s Bilateral Investment Treaties: Between Generations?’, 30 ICSID Review 2, 2015, 437.

[80] See A Crockett, ‘Indonesia’s Bilateral Investment Treaties: Between Generations?’, 30 ICSID Review 2, 2015, 437, at p 438.

[81] J Hepburn, ‘Palm Oil Company Sees BIT Claim Registered Against Indonesia at ICSID’, IA Reporter, 11 August 2016.

[82] L E Peterson, ‘Singapore Investor Takes U-Turn in BIT Arbitration with Indonesia, Leading to Split Tribunal Order’, IA Reporter, 22 March 2018, available at https://www.iareporter.com/articles/singaporean-investor-takes-u-turn-in-bit-arbitration-with-indonesia-leading-to-split-tribunal-order/.

[83] See also R King, ‘Disputes arising from oil price decline’, Globe Law and Business, dated 1 April 2015, available at http://www.globelawandbusiness.com/blog/disputes-arising-from-oil-price-decline.

[84] P Stevens, J Kooroshy, G Lahn and B Lee, ‘Conflict and Coexistence in the Extractive Industries’, Chatham House Report, dated November 2013, available at https://www.chathamhouse.org/sites/files/chathamhouse/public/Research/Energy%2C%20Environment%20and%20Development/chr_coc1113.pdf.

[85] J Trenor and A Holloway, ‘Gas Price Disputes under Long-Term Gas Sales and Purchase Agreements’, in D Schwartz (ed), The Energy Regulation and Markets Review, 2018, 32, at p 35.

[86] J Trenor and A Holloway, ‘Gas Price Disputes under Long-Term Gas Sales and Purchase Agreements’, in D Schwartz (ed), The Energy Regulation and Markets Review, 2018, 32, at pp 37–38; S Sarzana, ‘The rise of price revision arbitrations’, CDR, 31 October 2012, available at https://www.cdr-news.com/categories/uk/european-energy-disputes:-the-rise-of-price-revision-arbitrations; also see ‘Gas Price reviews: Is arbitration the problem?’, 6 March 2014, available at https://www.blplaw.com/expert-legal-insights/articles/gas-price-reviews-is-arbitration-the-problem; also see J Baily and R Lidgate, ‘LNG price reviews: a sign of the times’, The Journal of World Energy Law & Business (2014) 7 (2): 140–152.

[87] S Sarzana, ‘The rise of price revision arbitrations’, 31 October 2012, available at https://www.cdr-news.com/categories/uk/european-energy-disputes:-the-rise-of-price-revision-arbitrations; also see ‘Gas Price reviews: Is arbitration the problem?’, 6 March 2014, available at https://www.blplaw.com/expert-legal-insights/articles/gas-price-reviews-is-arbitration-the-problem; also see J Baily and R Lidgate, ‘LNG price reviews: a sign of the times’, The Journal of World Energy Law & Business (2014) 7 (2): 140–152.

[88] J Trenor and A Holloway, ‘Gas Price Disputes under Long-Term Gas Sales and Purchase Agreements’, in D Schwartz (ed), The Energy Regulation and Markets Review, 2018, 32, at p 38.

[89] P Weems, ‘A Look Inside the Recent Rise in LNG Disputes’, Law360, 4 August 2016, available at https://www.law360.com/internationalarbitration/articles/823081/a-look-inside-the-recent-rise-in-lng-dispute.

[90] T Jones, ‘Korean buyer brings gas pricing claim against Australian supplier’, Global Arbitration Review, dated 14 February 2018, available at https://globalarbitrationreview.com/article/1159042/korean-buyer-brings-gas-pricing-claim-against-australian-supplier.

[91] K Yafimava, ‘Outlook for the Long Term Contracts in a Globalizing Market’, Oxford Institute for Energy Studies, dated 19 January 2014, available at https://www.unece.org/fileadmin/DAM/energy/se/pp/geg/gif5_19Jan2015/s1_1_Yafimava.pdf,  at p 18.

[92] P Weems, ‘A Look Inside the Recent Rise in LNG Disputes’, Law360, dated 4 August 2016 (‘More than a dozen’ disputes ‘did not result in any litigation or arbitration, as the parties found a way to renegotiate their agreements or otherwise work out their serious commercial issues & most of those settled disputes involved Asian parties or claims under construction contracts (particularly for recent Australian projects’), available at https://www.law360.com/internationalarbitration/articles/823081/a-look-inside-the-recent-rise-in-lng-disputes.

[93] See ‘Singapore: Are Asia’s LNG players heading for a contractual train wreck?’, Global Arbitration Review, 4 November 2015, available at http://globalarbitrationreview.com/article/1034880/singapore-are-asias-lng-players-heading-for-a-contractual-train-wreck; Gaffney, Cline & Associates, ‘All Change for LNG! The Energy Market Reform train Arrives in Japan’, 14 July 2015, available at http://gaffney-cline-focus.com/all-change-for-lng-the-energy-market-reform-train-arrives-in-japan.

[94] G MacLaren et al, ‘Recent moves towards gas trading hubs in Asia: implications for Asian gas buyers and sellers’, 27 May 2016, available at http://knowledge.freshfields.com/m/Global/r/1524/recent_moves_towards_gas_trading_hubs_in_asia .

[95] See G MacLaren et al, ‘Recent moves towards gas trading hubs in Asia: implications for Asian gas buyers and sellers’, 27 May 2016, available at http://knowledge.freshfields.com/m/Global/r/1524/recent_moves_towards_gas_trading_hubs_in_asia.

[96] ExxonMobil, ‘The Outlook for Energy – Asia Pacific demand drives LNG trade’, available at http://corporate.exxonmobil.com/en/energy/energy-outlook/charts-2017/asia-pacific-demand-drives-lng-trade; also see T Daiss, ‘New LNG Supply to Create Structural Changes in Asia-Pacific Gas Market’, 14 December 2015, available at http://www.downstreamtoday.com/news/article.aspx?a_id=50308; also see T Daiss, ‘OPEC/Russia Oil Deal Pushes Up Asian Natural Gas Prices’, dated 10 December 2016, available at https://www.forbes.com/sites/timdaiss/2016/12/10/opec-russian-oil-cut-deal-pushes-up-asian-natural-gas-prices/#2d0a855d6a92.

[97] International Gas Union, 2018 World LNG Report, at p 11, available at https://www.igu.org/research/2018-world-lng-report-27th-world-gas-conference-edition.

[98] International Gas Union, 2018 World LNG Report, at p 11, available at https://www.igu.org/research/2018-world-lng-report-27th-world-gas-conference-edition.

[99] International Gas Union, 2018 World LNG Report, at p 11, available at https://www.igu.org/research/2018-world-lng-report-27th-world-gas-conference-edition.

[100] International Gas Union, 2018 World LNG Report, at p 3, available at https://www.igu.org/research/2018-world-lng-report-27th-world-gas-conference-edition.

[101] See J Smyht, ‘Australia’s LNG export surge fuels domestic supply concerns’, dated 12 December 2018,available at https://www.ft.com/content/912a7de8-fdc3-11e8-aebf-99e208d3e521.

[102] A Corbeau and D Ledesma (eds), LNG Market in Transition: The Great Reconfiguration, 2016, p 385.

[103] S Finizio, ‘Destination Restrictions and Diversion Provisions in LNG Sale and Purchase Agreements’, in J W Rowley et al (eds), The Guide to Energy Arbitrations (3rd ed, 2018), 218, at pp 228–229.

[104] S Finizio, ‘Destination Restrictions and Diversion Provisions in LNG Sale and Purchase Agreements’, in J W Rowley et al (eds), The Guide to Energy Arbitrations (3rd ed, 2018), 218, at p 228.

[105] See J Smyth, ‘Cost overruns near $50bn as Australia s LNG boom falters’, Financial Times, dated 31 October 2016, available at https://www.ft.com/content/29667e96-9f15-11e6-891e-abe238dee8e2.

[106] SAIPEM, Interim Consolidated Report, as of 30 June 2018, at p 118, available at http://www.saipem.com/en_IT/static/documents/SaipemSem18Ing.pdf .

[107] SAIPEM, Interim Consolidated Report, as of 30 June 2018, at p 118, available at http://www.saipem.com/en_IT/static/documents/SaipemSem18Ing.pdf

[108] B Button-Stephens, ‘Chevron stay upheld in LNG jetty dispute’, Global Arbitration Review, dated 21 March 2017, available at http://globalarbitrationreview.com/article/1138487/chevron-stay-upheld-in-lng-jetty-dispute.

[109] SAIPEM, Interim Consolidated Report, as of 30 June 2018, at p 119, available at http://www.saipem.com/en_IT/static/documents/SaipemSem18Ing.pdf .

[110] SAIPEM, Interim Consolidated Report, as of 30 June 2018, at p 119, available at http://www.saipem.com/en_IT/static/documents/SaipemSem18Ing.pdf .

[111] M Herberg, ‘The Role of Energy in Disputes over the South China Sea, Maritime Awareness Project’, 28 June 2016, available at http://maritimeawarenessproject.org/2016/06/28/the-role-of-energy-in-disputes-over-the-south-china-sea/.

[112] F Baetens and R Yotova, ‘The Abyei Arbitration: A Model Procedure for Intra-State Dispute Settlement in Resource-Rich Conflict Areas?’, Goettingen Journal of International Law 3 (2011) 1, 417–446, available at http://www.gojil.eu/issues/31/31_article_baetens_yotova.pdf, at p 419.

[113] See ‘India, Pakistani and Chinese border disputes: Fantasy frontiers’, The Economist, dated 8 February 2012, available at http://www.economist.com/blogs/dailychart/2011/05/indian_pakistani_and_chinese_border_disputes.

[114] Award, The Republic of the Philippines and the People’s Republic of China, PCA Case 2013-19, dated 12 July 2016, available at http://res.cloudinary.com/lbresearch/image/upload/v1468332901/PH-CN-20160712-Award_hp4h85.pdf.

[115] ‘China rejects UNCLOS award’, Global Arbitration Review, 12 July 2016, available at http://globalarbitrationreview.com/article/1067170/china-rejects-unclos-award/; see also I Kardon, ‘China Can Say “No”: Analyzing China’s Rejection of the South China Sea Arbitration’, (2018) 13 University of Pennsylvania Asian Law Review 1.

[116] O Holmes and T Phillips, ‘South China Sea dispute: what you need to know about The Hague court ruling’, The Guardian, 12 July 2016, available at https://www.theguardian.com/news/2016/jul/12/south-china-sea-dispute-what-you-need-to-know-about-the-hague-court-ruling.

[117] D Doherty, ‘Australia and Timor-Leste to negotiate permanent maritime boundary’, The Guardian, 9 January 2017, available at https://www.theguardian.com/world/2017/jan/09/australia-and-timor-leste-to-negotiate-permanent-maritime-boundary.

[118] B Doherty, ‘Timor-Leste drops espionage claims against Australia in maritime border dispute’, The Guardian, 24 January 2017, available at https://www.theguardian.com/world/2017/jan/24/timor-leste-drops-espionage-claims-against-australia-in-maritime-border-dispute; T Jones and S Perry, ‘East Timor and Australia to tear up oil and gas treaty’, Global Arbitration Review, 10 January 2017, available at https://globalarbitrationreview.com/article/1079859/east-timor-and-australia-to-tear-up-oil-and-gas-treaty.

[119] T Jones, ‘Australia fails to halt conciliation with East Timor’, Global Arbitration Review, 26 September 2016, available at http://globalarbitrationreview.com/article/1068790/australia-fails-to-halt-conciliation-with-east-timor.

[120] L Yong, ‘East Timor and Australia reach deal on maritime border’, Global Arbitration Review, 4 September 2017, available at https://globalarbitrationreview.com/article/1147052/east-timor-and-australia-reach-deal-on-maritime-border.

[121] L Young, ‘Australia and East Timor sign treaty on maritime border’, Global Arbitration Review, 6 March 2018, available at https://globalarbitrationreview.com/article/1166345/australia-and-east-timor-sign-treaty-on-maritime-border.

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