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Applicable Law in Petroleum Arbitrations

On May 7, 2014, in a biographical narrative structure of his lecture entitled “Applicable Law in Petroleum Arbitration”, Prof. Dr. Ahmed S. EL KOSHERI, Senior Partner of Kosheri, Rashed and Riad Law Firm and Chairman of CRCICA’s Advisory Committee, shared with the audience his sixty-year record of experiences in tackling petroleum-related arbitrations. In a chronological fashion, the lecture arrayed the significant developments in oil concession law with highlights on the various legal and political circumstances affecting such developments over decades.

He stressed that the dominating feature of international petroleum contracts, in the past, was a lack of balance between the rights and obligations of host states and foreign petroleum companies, which, in many cases, involved an obvious negligence of national law systems. Concession agreements had been unilateral in nature in that they benefited mainly the oil companies and not the oil wealth holder. However, following a number of political changes and OPEC critical decisions, the practical scene started to change striking a relative balance between rights and obligations. One of the most significant model examples, in this concern, was the Government of Kuwait versus Aminoil Company Case after Kuwait’s nationalization of the company in 1978 and the termination of its petroleum concession. As a counsel for the Kuwaiti Government, Prof. Dr. El Kosheri succeeded in convincing the tribunal with the legitimacy of the nationalization in the light of international law despite counter-calls to internationalize the case. The award supports the legitimacy of the nationalization against reasonable compensations. According to the lecturer, the legal principles enshrined in the Kuwait/Aminoil award provided a model for many tribunals to follow.

Prof. El Kosheri concluded that petroleum arbitrations still unfold many developments regarding the balance between rights and obligations of big and high tech foreign companies on one hand and national companies of developing countries with lesser acquisitions and abilities on the other.

The seminar scored the highest level of attendance in the monthly Wednesday One Seminars with 120 participants from Law firms, public authorities, universities, national and inter-Arab holding companies, embassies, oil companies, banks, industrial corporations, construction companies and state courts. It was particularly honored by the presence of many of Professor El Kosheri’s colleagues, including Professors Georges Abi Saab and Foad Riad.

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 Posted in Seminar
 Event date May 07 2014

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