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Oil Refinery Upgrade Project, Caribbean

Facts

Client: Oil and gas contractor

Region: Caribbean

Industry: Oil & Gas – oil refinery upgrade project, ultra low sulphur diesel unit plant

Issues

Our client was the main contractor on a USD250 million oil refinery upgrade project. Disputes arose with a major subcontractor in connection with two subcontract packages. The subcontractor was eventually terminated and subsequently brought substantial claims against our client. In response, our client advanced its own substantial counterclaims. Two parallel ICC arbitrations were commenced against our client (seat New York City). The aggregate amount in dispute was in excess of USD45 million.

Issues arising included delay and disruption, scope changes, force majeure, liability for delay liquidated damages, termination and entitlement to costs of completion.

In addition to the usual procedural, jurisdictional and strategic issues arising in a complex international arbitration, in this case the existence of two parallel sets of proceedings added additional potential complications.

Solutions

We worked with our client to defend the claims being made against them and to prepare and advance substantial counterclaims. We were also able to ensure that potentially complex procedural considerations were dealt with efficiently and in a manner which was advantageous to our client. We also worked with our client to maximise the possibility of a negotiated settlement.

The parties were able to achieve a negotiated solution to both arbitrations.

Benefits

By relying on our extensive experience of international arbitration in general, and ICC arbitration in particular, we were able to guide our client though potentially complex procedural and jurisdictional issues without disruption or additional cost.

We were able to develop a strong defence to the claims made against our client and develop very substantial counterclaims. In the end, our client was able to use this platform to achieve a successful negotiated outcome.