the trend in modern petroleum agreements towards the adoption of institutional arbitration

From the review of the arbitration clauses in the petroleum agreements referred to above particularly agreements one sees that those clauses were generally ad hoe arbitration clauses(as opposed to institutional arbitration).

How there is a trend now in modern petroleum agreements towards the adoption of institutional arbitration.  In the words of one author:  With the growth and refinement of arbitration systems drafters now have available various comprehensive sets of arbitration rules and arbitral institutions that have stood the test time.

These can be incorporated by reference into agreements by means of submission clauses that are relatively simple and yet generally superior.  in a technical sense,  because of the quality the rules they incorporate.  Such institutions include the ICSID and the ICC International Court of Arbitration.  In the review conducted by the ICSID referred to above,  it was found that 48 percent of the contracts reviewed provided for institutional arbitration,  compared to 45 percent which referred to ad hoc mechanisms(47 percent of the agreements which provided for institutional arbitration specified the ICC as the arbitral forum 41 percent specified the ICSID and 12 percent specified other types of institutional arbitration).

About half of the agreements that provided for ad hoc international arbitration selected the arbitration rules of the UN Commission on International Trade Law(UNCITRAL)  as the rules applicable to the procedure.  The general practice followed in the Middle East of envisaging arbitration for the settlement of all disputes between the parties under oil concessions has not been followed in concessions concluded since the 1960s in Egypt and Saudi Arabia.  Generally,  in the past,  concessions embodied an arbitration clause Egyptian oil the agreements made covering all kinds of disputes.  However,  and followed a between Egypt and Pan American the concessionaire’s ferent course.  They made a distinction between w with the government and the concessionaire’s disputes

the Egyptian Petroleum Corporation(EGPC)  The a provided that any dispute arising between the government and with respect to the application or executu Qatar the agreement should be referred to the appropriate Egyptian coun Sheikh with competent jurisdiction,  but that any disputes arising bet Ltd.  i Pan American and EGPC should be referred to arbitration.

Compa event that any party failed to appoint an arbitrator,  or if the arbitrators failed to select a third arbitrator,  an application wonk early then be made to the International Chamber of Commerce(co International Court of Arbitration to make such an appointmen Compa with the arbitration being held in Stockholm,  Sweden(Anicle 42 Saudi Arabia has also shown since the 1960s a disinclination include an arbitrarily provision in its contracts.  On June 25,  1963,  se Libya in Council of Ministers issued a decision which limited government’s power to insert an arbitration clause in its contracts exceptional cases.  This attitude was reflected in the oil concessional Libyan granted by Saudi Arabia to Auxirap on April 4,  1965.

In eminent agreement,  Saudi Arabia followed the precedent set in Egp above making a distinction between the concessionaire’s disputes with government and the concessionaire’s dispute with the national ol Petroleum corporation with which it had entered into a joint venture agreement Only disputes occurring between Auxirap and PROMINENT (the On May Saudi national oil corporation)  qualified for arbitration in accordant ammeter with Article 13 of the agreement.

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