Government of Kuwait vs American independent oil 1982 Company

The Oil t of d the jurisdiction of Saudi Arabia,  the parties envisaged the f a law to be determined by the tribunal app applicable Law:  Ler trilobite:  Based on the fact that”the Parties intended from the very beginning to withdraw their disputes from the jurisdiction of local tribunals,”  the tribunal held that the law to be applied was”mot the law of Saudi Arabia The arbitrators observed that arbitral proceedings to which a state is a party could not be subject to the law of another state.  It was held that the”arbitration,  as such,”  was to be governed by”the Law of Nations.”

Characterization:  It was determined by the arbitrators that the oil concession was to be characterized in accordance with Muslim law.  The Hanbali School of Muslim law was to determine the legal nature of the concession.  Proper Law:  The tribunal held that: “Matters pertaining to private law are,  in principle,  governed by the la of Saudi Arabia but with one important reservation.  The law must,  in case of need,  be interpreted or supplemented by the general principles of law,  by the custom and practice in the oil business and by notions of pure jurisprudence”Contractual Concessions and”Public Service Concessions The tribunal held that a concession that is contractual in character gives rights and obligations to the concessionary company that cannot be modified without the company’s Aramco concession was Decision The tribunal found that the provisions were contractual in character,  and that its transport tribunal held that prevail over those of the Onassis agreement.  The in question Aramco had the exclusive right to transport the oil.

Government of Kuwait vs.  American independent oil 1982 Company In 1948 the of Kuwait granted to the Am Independent oil company(AMINOIL)  in Arabia neutral zone.  After several modifi of the agreement in the following years,  the Gulf states adopted the Abu Dhabi formula in 1974,  providing for further increase in tax and royalty rates.  The parties were unable to agree upon a new scheme of payment,  on September 19,  1971.

Government of Kuwait promulgated Decree Law No.  124,  which terminated the AMINOIL concession and nationalized all AMINOIL assets in Kuwait.  This law provided for the assessment of compensation due to the company by a committee appointed by the government.  oeyect of the claim:  The Government of Kuwait claimed royalties and taxes due;  AMINOIL’s liabilities to third parties as of 19 september 1977;  and damages in relation to”lost oil”  as a result of AMINOIL’s failure to operate the oil fields efficiently and in accordance with the terms of the 1948 concession that provided for”good oil field practice AMINOIL claimed payments in respect of loss of profits,  compensation:  the value of by assets;  and reimbursement for over payment allegedly made AMINOIL to the government.  Relevant legal issues:  Applicable Law:  Lex Mrbitri,  the tribunal found that article IV of the 1979 arbitration agreement made the proceedings tothe mandatory provisions of French law as the law of the seat of arbitration.  The agreement left to the tribunal the power to prescribe procedural rules,  insofar as French law parties tribe cor Go pitted, “on the basis of natural justice and principles of arbitration.

Transnational The tribunal observed that the choice of law Proper arbitrator agreement stated: “the law clause of the 1979 governing the substantive issues between the Parties shall be determined by the Tribunal having regard to the quality of the Parties,  the transnational character of their relations and the principles of law and practice prevailing in the modern world The tribunal found that Kuwait law applied to many matters over which it was the law most directly involved”  and that public international law,  relevant as well,  was”part of the law of Kuwait.

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