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Dispute Resolution Model for the
Energy Sector
Andrew Mackenzie
Chief Executive, Scottish Arbitration Centre
Secretary General, International Centre for Energy Arbitration
Scots Law and Arbitration
• Ancient legal system, independent of England and Wales
• Key differences between systems in Scotland and E&W
Common law system with civil roots
• Long history of arbitration
• Arbitration (Scotland) Act 2010
Modern world-class arbitration act
Modelled on Arbitration Act 1996 (E&W)
• Advantages over E&W
Stronger confidentiality
Limited rights of appeal
Cost advantages
Scottish Arbitration Centre
• Private company, established in 2011
• Promotes Scottish arbitration and Scotland as a
seat and venue for arbitration
• Provides arbitration suites
• Makes arbitral appointments
• Organises training and events
• Not currently administering arbitrations
View from Centre
Arbitration Suite
Energy Arbitration Focus in Scotland
• Why Scotland for Energy Arbitration?
Hybrid system
Civil law style document discovery/disclosure
Strong (but optional) statute backed confidentiality
Anonymised incidental court procedure
Limited rights of appeal
Cost advantages
Concentration of legal expertise in Scotland
Concentration of technical expertise in Scotland
Hybrid sytem
• Cultural differences
Recovery of evidence
Flexible procedure
Bridging the gap between common law
and civil law jurisdictions
Confidentiality
• Arbitration is a private
process
• In Scotland, under the
Arbitration (Scotland) Act
2010, arbitration is
confidential
• A breach of
confidentiality is
actionable
• Anonymised court
procedures
• Litigation is a public
process
• Court reports are
published online and in
legal journals
• Most other arbitral
regimes do not have
statute based
enforceable
confidentiality and
anonymity
Anonymity on appeal
• Courts on Anonymity
“In giving my decision I have tried to avoid
setting out any details which might betray the identity of the
parties.”
Lord Glennie, Arbitration Judge, Court of Session
Limited Rights of Appeal
• Arbitration under the
2010 Act
– Parties can agree to
limit appeals
– Appeals in respect of
points of law can be
excluded
– Where an appeal is
competent, consent of
the Court is required
– No appeal to London
• Litigation– An unsuccessful party
has an automatic right of appeal and
– The possibility of an appeal to the UK Supreme Court
• Arbitration Act 1996– Appeal to UK
Supreme Court possible
Cost advantages
• Limited discovery disclosure
• Limited appeal
• Lower venue costs
• Lower legal costs
Energy Law Expertise
• Cluster of Energy Law Expertise CEPMLP, University of Dundee
Centre for Energy Law, University of Aberdeen
Robert Gordon University
University of Strathclyde
University of Stirling
Various legal firms and advocates
Consultants
Members of the Scottish Arbitration Centre
Technical Energy Expertise
• Scotland Largest oil producer in the EU
Around 32% of total renewable generation in EU
Around 25% of Europe's tidal power
Around 10% of Europe’s wave power
Around 25% of Europe’s offshore wind potential
£10bn exports in supply chain services
International Centre for Energy
Arbitration
ICEA is a joint project of
www.energyarbitration.org
Background• Launched by then First Minister of Scotland, Alex
Salmond MSP
• Began work in October 2013
• Survey and consultation of energy sector in 2014
• Promotional events in Scotland and New York
• Launch of Initial Report in May 2015
Current trends and desired requirements in
respect of dispute resolution with the
energy sector
Responses
• 159 responses
• 94 from law firms
• 65 from industry
• 123 out of 159 from oil and gas sector
Initial Report: Findings
• Arbitration preferred method
• Strong support for mandatory high level
negotiation with, sanctions for failure to comply
• Strong support for and mediation, with sanctions
for failure to comply
• Support for confidentiality
• Desire for limited disclosure
• Interest in Parallel Online Blind Bidding
Specific features of a dispute process
• We asked respondents to rank key featuresof dispute resolution processes in order ofimportance, including:
expertise of decision maker
confidentiality
neutrality
enforceability
speed
Preferred method of dispute resolution
• We asked respondents to rank disputeresolution methods in order of preference,including:
arbitration
litigation
expert determination
mediation
med-arb, arb-med, etc
Factor when choosing a seat
• We asked parties to rank the factors which
influence their choice of arbitral seat in
order of importance, including:
reputation of the courts for probity
suitability of arbitration legislation
availability and reputation of local
arbitrators
Arbitral rules
• We asked respondents to rate the
importance of different features of
arbitration rules, including:
confidentiality
emergency arbitration provisions
default timetables
Confidentiality
• Confidentiality means different things indifferent jurisdictions
• We asked whether respondents favoured:
Publication of awards
No confidentiality
General confidentiality
Guaranteed enforceable confidentiality and anonymity in related proceedings
• Mandatory High Level Negotiation
• Mandatory Mediation
• Costs sanctions where failure to comply
• Restricted discovery/disclosure
• Default procedure and timetable
• Emergency arbitrator provisions
• Strong, but optional, confidentiality
• Parallel Online Blind Bidding
Proposed Dispute Resolution
Model
Next steps
• Consult on report
• Develop bespoke energy dispute rules
• Further work with sector
• Collaboration with other bodies
Andrew MackenzieChief Executive, Scottish Arbitration Centre
Secretary General, ICEA