Our experience has seen us handle disputes for private individuals, corporate entities, and States. We have a deep-rooted understanding of many of the arbitral rules that oversee these types of arbitrations and are uniquely familiar with many of the locations where these arbitrations take place.
Coronavirus presents significant and novel challenges, but the complex contractual issues that it raises are familiar to us. For decades, our industry-leading lawyers have counselled international clients on force majeure, change of circumstance, and economic hardship.
Force majeure risks and strategy in oil and gas disputes
- Represented an energy company in a shareholders dispute, under ICC Rules, relating to the shareholders’ agreement for a joint venture gas marketing company. The issues in dispute included whether the joint venture company should declare force majeure under its Spanish law-governed downstream supply contracts, as a result of upstream supply disruptions.
- Advised a leading oil and gas major in relation to force majeure risks and strategy in respect of rapidly changing security conditions in a Middle East State requiring the evacuation of essential personnel.
- Advising a global oil and gas leader on force majeure in Iraq as a result of security concerns following an unforeseen and serious event in the Middle East region. Arbitration, should it move forward, will be under ICC Rules, seated in Paris.
- Advised a global oil and gas major on the force majeure provision of a concession agreement with a Middle East State that required the State to take all measures in its power to bring the force majeure to an end.
COVID-related advice under English law
Advising clients on general position under English law, in the context of COVID-19, regarding (i) force majeure/frustration of contracts and (ii) suspension or termination of contractual obligations, including decommissioning.
COVID-related advice around production limits
Advising various clients on potential contractual and investment treaty recourse against production limits imposed by States to implement COVID-related OPEC+ commitments.
COVID-related advice for a national oil company
Advising an Asian national oil company on force majeure issues arising out of the coronavirus pandemic, including its rights and obligations under certain rig contracts.
Force majeure and economic hardship in an ICC gas transportation dispute
Representing a subsidiary of a major Asian national oil company in a complex, multi-party ICC arbitration, seated in Hong Kong, arising out of a gas transportation agreement governed by Indonesian law. Claims and cross-claims in the approximately $500 million dispute relate primarily to (i) the validity of our client’s declarations of force majeure following a reduction in the amount of gas available for transportation; and (ii) our client’s right to terminate the agreement through a provision akin to an economic hardship clause.
Enforcing force majeure in disputes arising out of the Arab Spring
Advised numerous clients in the energy, oil and gas, construction, telecoms, and hospitality sectors on their contractual rights and remedies – notably the enforcement of force majeure clauses – in response to the disruption caused by the Arab Spring events in 2011 and 2012 in Egypt, Libya, Syria, and Yemen. These include alleged consequential implications of the Arab Spring on the European gas market.
Force majeure in an ICC mining dispute
Advancing an argument in a French-language ICC arbitration between a Canadian mining company and an African state that circumstances of civil war in the country constituted force majeure that prevented progress on a mining exploration project and entitled the mining company to an extension of the exploration period.
Force majeure in response to an economic embargo
Advised clients in the energy, construction, and logistics sectors on their contractual rights and remedies, and enforcement of force majeure clauses, in response to the economic embargo imposed on Qatar by four of its neighbouring countries: Saudi Arabia, the UAE, Egypt, and Bahrain.
We successfully defended a leading Japanese automotive manufacturer in a dispute brought against it by a contractual counterparty. The claimant sought substantial damages alleging that the non-renewal of an agreement for the marketing and distribution of automobiles had been unlawful. The key issue in the dispute was whether the agreement was for a definite or indefinite term and, accordingly, under what conditions non-renewal could occur and the time period within which the claimant was required to bring its claims. Our client prevailed on this decisive issue, resulting in the rejection of the claimant’s primary claim. After this victory, residual claims and costs were settled on favourable terms with a net payment to our client.
We represented Areva and Siemens in an ICC dispute against a Finnish utility company, TVO, under a contract governed by Finnish law. The dispute related to the construction of the OL3 nuclear power plant in Finland – a first of a kind third-generation nuclear plant, and the first plant of any kind to be built in Europe since the Chernobyl disaster. The dispute involved claims and counterclaims totalling in excess of €5.5 billion and presented extraordinarily complex design, regulatory, delay, and quantification issues. Three Crowns lawyers continued acting after the firm was founded and remained at the forefront on the most significant issues in the case. The dispute settled in early 2018.
We secured a comprehensive victory for the Kingdom of Bahrain in an ICC case, brought by French company Constructions Industrielles de la Méditerranée (CNIM), under a contract to design, build, and operate a waste-to-energy plant in Bahrain. The claim – for over €180 million – was dismissed in its entirety, with the tribunal accepting essentially all of the defences advanced and also awarding the Kingdom over $5 million in costs. The matter raised complex issues concerning the financing of major projects in the Middle East amid the Arab Spring and the aftermath of the global financial crisis, as well as the environmental risks presented by waste-to-energy plants and how companies can establish to the satisfaction of regulators that they are mitigated. The case involved extensive written and oral expert evidence on both project financing and environmental issues, as well as on fundamental questions of Bahraini constitutional and administrative law.
We represented Crescent Petroleum, Dana Gas, and Pearl Petroleum in a London-seated LCIA arbitration against the Kurdistan Regional Government of Iraq (KRG) arising from the KRG’s violation of our clients’ contractual rights and obligations in relation to two oil and gas fields in the Kurdistan region of Iraq. We secured for our clients, from an eminent arbitral tribunal comprised of two former UK Supreme Court justices, various remedies including: (a) interim measures requiring the KRG to re-commence regular payments that had been discontinued; (b) partial final awards against the KRG worth approximately $2 billion; (c) dismissal of the KRG’s counterclaims worth several billion dollars; and (d) a favourable costs award. The arbitration eventually facilitated a settlement among the parties, under which our clients were able to proceed with development pursuant to a material lengthening and enhancement of their contractual rights in relation to the relevant fields.
In one of the largest ICC cases in history, Three Crowns helped ConocoPhillips obtain a $2 billion arbitral award against PDVSA, the Venezuelan State-owned oil and natural gas company. The arbitration raised issues of contract interpretation, contractual and extra-contractual liability, and the net present value of two long-term projects of macro-economic significance. ConocoPhillips has since entered into a favourable settlement with PDVSA for the full value of the arbitral award, including interest.
We represent a Middle East oil and gas company in two long-running, multibillion-dollar arbitrations brought against the National Iranian Oil Company (NIOC). Both arbitrations are ad hoc proceedings administered by the PCA and are seated in London and Geneva, respectively. They arise out of NIOC’s non-delivery of significant volumes of Iranian gas to the UAE market pursuant to a long-term gas supply contract of geopolitical and macro-economic significance. The cases raise issues of gas pricing, gas marketing, and infrastructure, as well as legal issues of Iranian law, sanctions, and the extent and limits of recoverable loss.
Representing ExxonMobil and Shell subsidiaries in a Nigeria-seat arbitration arising under a deep-water production sharing contract (PSC). The dispute resulted from the Nigerian National Petroleum Corporation taking more oil than it was entitled to under the PSC due to disputes over the application of a tax credit, royalty and cost recovery. The dispute also related to a change in tax policy that engaged rights under a contractual stabilization clause. In addition to an award of $2 billion in damages for historic losses, the tribunal awarded our clients’ request for a revision to the PSC itself to incorporate a new tranche of production going forward for any future tax assessments that applied the change in tax policy. The award is currently before the courts in Nigeria and New York, in post-award proceedings that implicate the enforcement of a locally-annulled award in the Second Circuit.
This M&A dispute raised questions about deferred payment provisions and the valuation of a future put option and took place against the backdrop of difficult economic conditions that accompanied a political crisis in Ukraine. Arising out of eight contracts, and involving the launch of eight related arbitrations, the dispute raised interesting procedural questions including the availability of consolidation. The dispute was settled in our clients favour, where we played a significant role.
The matter raises complex revenue allocation and accounting issues and is the subject of an expert audit procedure within the arbitration process, which our lawyers are managing under the supervision of a standing arbitral tribunal. The matter has been ongoing since 2008, and Three Crowns was brought in to replace our client’s prior counsel as the arbitration reached a new, significant phase.