Govt creates expert panel for time-bound resolution of oil, gas disputes

With overhang of disputes choking investments in the oil and gas sector, the government has constituted an expert committee for time-bound resolution of exploration and production disputes without having to resort to tardy judicial process.

The 'Committee of External Eminent Persons/Experts' for dispute resolution will comprise former oil secretary G C Chaturvedi, Oil India Ltd former head Bikash C Bora and Hindalco Industries Ltd Managing Director Satish Pai, according to an official notification.

The panel will have a tenure of three years and the resolution will be attempted to be arrived at within 3 months.

India's oil and gas sector has been plagued by disputes from cost recovery to production targets, and companies as well as the government have resorted to lengthy and costly arbitration followed by judicial review -- a process that takes years to resolve differences.

The notification said the committee will arbitrate on a dispute between partners in a contract or 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," it said.

Once a resolution has been referred to panel, the parties cannot resort to arbitration or court case to resolve it.

"The committee shall exercise all powers and discharge all functions necessary for carrying out conciliation and mediation proceedings for resolution of the disputes between the parties as per the provisions of the Arbitration and Conciliation Act, 1996, and endeavour that the parties arrive at a settlement agreement within three months from the date of the first meeting of the committee," it said.

The members and the parties may, however, extend the time for arriving at a settlement agreement by mutual agreement.

"The members of the committee shall at all times remain impartial to the parties during the course of the conciliation or mediation proceedings," the notification said.

The committee acting as conciliator or mediator will be allowed to take services of third-party or expert agency to aid and assist it in discharge of its functions as and when required.

Upon receipt of a request referring dispute for resolution, the committee shall conduct the conciliation or mediation proceedings. "The proceedings shall be based on the principles of fairness, justice and good conscience," it said.

For procedural aspect, the committee will be guided by the Arbitration and Conciliation Act, 1996, and the venue of the conciliation or mediation proceedings shall be New Delhi.

"The parties will represent their case before the committee acting as conciliators or mediators only through their employees or executives. Advocates or consultants shall not participate in the conciliation proceedings, unless the committee on application filed by a party to the proceedings finds that some issue of legal nature or an issue requiring highly specialised knowledge is in dispute requiring clarification/interpretation by an Advocate or Consultant and takes a view that in absence of such assistance or participation the party's interests shall not be adequately represented in the conciliation or mediation proceedings," it said.

It shall be open to the parties to make any suggestions, proposal or alternative proposals for amicable settlement of dispute.

"Parties shall not claim any interest on claims and counter-claims from date of notice for conciliation or mediation till execution of the settlement agreement, if so arrived at.

"In case, parties are unable to arrive at a settlement, no interest shall be claimed in any further proceedings for the period from the date of notice till date of completion of the proceedings pending before the committee or date of the receipt of the final ? recommendations from the committee or date of execution of the settlement agreement whichever is later," it said.

The parties are required to keep conciliation or mediation proceedings confidential and the same cannot be relied upon them as evidence in any arbitration or court proceeding.

"Pendency of arbitral or judicial proceedings shall not constitute any bar on commencement of conciliation or mediation proceedings before the committee, even if the conciliation or mediation proceedings are on the same subject matter/issue as the arbitral or judicial proceeding," it said.

It added that the parties shall not initiate or take any step to initiate any arbitral or judicial proceedings in respect of a dispute, which is a subject matter of the conciliation or mediation proceedings pending before the committee.