The past 12 months have seen increased efforts by environmental activists to disrupt the business of oil and gas companies (or those associated with them) and draw attention to their campaigns against the use and production of fossil fuels. Public statements by groups such as Greenpeace and Extinction Rebellion suggest that this trend is likely to continue. Two recent cases provide some indication of the extent of any protection which may be sought from the courts in the event of disruption.
The Commercial Court recently decided that the right of non-operators to vote to remove an operator at will in a joint operating agreement (JOA) was not subject to any implied constraints, including good faith. As similar clauses are an option in the Association of International Petroleum Negotiators 2012 Model International JOA and continue to exist in a number of North Sea JOAs, this decision will be of wide commercial interest to operators and non-operators in the oil and gas industry.
The Court of Appeal has considered the extent to which an arbitrator may, without the parties' knowledge, accept appointments in several matters in relation to the same or overlapping subject matters with only one common party without giving rise to an appearance of bias. As disputes in the oil and gas industry can reverberate through the value chain, and associated insurance, the decision is of particular interest to the sector.
A recent Court of Appeal decision has confirmed that a claim against an English-domiciled parent of a foreign oil and gas company may not proceed in the English courts if the claimants are unable to prove that the parent owed them a duty of care. The decision highlights that the court will look closely at the influence of group policies and the extent of practical or shared control that the parent has over the operations that are the subject of a claim.
The Court of Appeal has provided guidance as to what the words "fully operational and enforceable" in an agreement might mean in the context of a production sharing agreement in Kurdistan – in particular, whether such an agreement may be considered fully operational and enforceable without ratification by the Federal Government of Iraq. In doing so, the Court of Appeal ventured into an area that is hotly contested in Iraq.
The Court of Appeal recently upheld a High Court decision in which an oil company was found in contempt of court for holding an operating committee meeting in the absence of an alleged defaulting party. In doing so, the English courts have confirmed a willingness to intervene on an interim basis to preserve the status quo and prevent remedies available under a joint operating agreement from being exercised, pending the resolution of the issue in dispute by means of arbitration.