GRM 2010 GRM 2011

Abstract Details

Family Name:
First Name:
Title of Paper:
Legal challenges facing the GCC Oil and Gas Industry
Paper Proposal Text :
Mary B. Ayad*

Keywords: Bilateral Investment Treaty Arbitration, International Commercial and Investment Arbitration Law and Practice, Lex Petrolea, Early Oil Concessions, Investor-State Disputes, International Relations of GCC States with European and other Investors, Investor Relations.

This research will address challenges facing the GCC Oil and Gas Industry from a legal perspective. The paper will discuss the overall legal framework governing mineral and petrol concessions and contracts amongst and with GCC States with a special focus on Saudi Arabia and the United Arab Emirates (UAE). The overall legal framework governing the industry has strengths that can be further harnessed in order to increase profitability and attract further investment as well as stronger relations with contracting parties. This will allow an increase in large scale projects and cross-border cooperation as well as contributions to the respective economies. The legal framework covered will include favourable constitutional provisions, international treaties such as the New York Convention and the Washington Convention, Bilateral Investment Treaties (BITs), domestic civil legislation and the UNCITRAL, as well as international commercial arbitration laws. The relationship between international trade and increases in projects and large scale business deals with international arbitration will be shown. It is suggested that good international arbitration laws and increases in BITs, inter alia support increases in profitability for both parties. Recommendations for a specific Lex Petrolea (Oil Law) will be given. The early history of oil concessions ended unfavourable for Arab parties and case analysis shows where the legal gaps occurred. The author will propose specific legal articles that can be drafted into a contract or concession that can protect both parties legally, ensuring that legal challenges to the industry are kept at a minimum so that contractual parties can proceed with profitable large-scale projects.
1. Link between increased international trade and economic development on one hand with international commercial arbitration and international investment arbitration on the other.
2. The UAE legal framework with respect to international commercial arbitration and particularly mineral contracts/concessions.
3. The new Saudi Arabia international arbitration law.
4. Domestic provisions/ domestic laws – normally based on the UNCITRAL (see number 2 and 3 above).
5. International instruments
6. Empirical examples of evidence of link of international arbitration with increase in contracts. (The Renfe contract, inter alia).
7. The early oil concessions as evidence of the absence of legal provisions/codes that Western parties could understand which posed challenges to the industry and cost the Arab parties, unfairly. These concessions were unfair to the Arab parties and based on a lack of knowledge of Islamic law by the Western arbitrators.
8. Codified Islamic law provisions researched by the author that are consistent with Civil Law and can be adopted as arbitration clauses in contracts to protect both Arab and non-Arab contracting parties.
9. Other helpful legal recommendations including Lex Petrolea.

*Mary B. Ayad is convenor/lecturer of Law 869 Law, Globalisation and Cultural Transformation at Macquarie Law School, a course designed by her for postgraduate law students. She is completing her PhD Candidature in international commercial arbitration law and international investment arbitration in which she wrote her case studies on Egypt and the United Arab Emirates. She has published widely in these matters in international law journals (twenty plus articles) and her PhD dissertation will be published as a book with Springer-Verlag Publishers. She has given expert opinions to the media with respect to MENA concerns and she has advised European state counsel with respect to entering into international contracts with Arab governments.