The Establishment of Midstream and Downstream Alternative Dispute Resolution Centre in Nigerian oil and gas, Disputes within the jurisdiction of the Centre and Dispute resolution mechanisms.
INTRODUCTION
The Nigerian Petroleum Industry Act (PIA) was enacted in 2021 to overhaul the sector. The PIA established two regulatory agencies- the Nigerian Midstream and Downstream Petroleum Regulatory Authority (the Authority) and the Nigerian Upstream Petroleum Regulatory Commission (the Commission), which are saddled with the mandate to make regulations on specific issues within their scope.
One such Regulations made by the Authority is the Midstream and Downstream Petroleum Alternative Dispute Resolution Regulations in 2023 under its powers in Sections 33(t), 120 (j), 163 and 179(2) of the PIA. The main aim of the Regulations is to establish the Midstream and Downstream Petroleum Alternative Dispute Resolution Centre as a non-judicial grievance mechanism and provide the procedures for timely and cost-efficient dispute resolution in the sector.
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The Centre, utilising ADR methods, shall have jurisdiction in disputes arising from petroleum operations in the midstream and downstream petroleum industry including the provision of open access and third-party access to facilities and infrastructure used for gas and petroleum liquids operations, gas trading and settlement, host communities and industry labour matters. Courts of competent jurisdiction may also refer industry disputes to the Centre for amicable resolution.
Establishment of Midstream and Downstream Alternative Dispute Resolution Centre. The Centre shall:
- provide administrative supervision of ADR at the Centre in accordance with the rules adopted by the Centre or those agreed upon by the parties to disputes.
- Resolve disputes through ADR methods in accordance with the relevant rules adopted by the Centre.
- coordinate, cooperate, and conclude agreements and memoranda of understanding with specialised regional and international arbitration institutions and centres which includes exchanging: expertise, lists of arbitrators, mediators, conciliators or experts, and other resources.
- conclude agreements and memoranda of understanding with competent courts within and outside Nigeria.
- raise awareness and build capacity on ADR methods.
- create a register of members of the Centre and lists of arbitrators, experts, mediators and conciliators qualified and versed in the requirements and procedures of ADR methods.
- provide the rules of arbitration, mediation, conciliation and expert determination and the by-laws governing the ADR methods, and publish them on the website of the Centre and its approved digital channels.
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Disputes within the jurisdiction of the Centre
The Centre shall have jurisdiction in disputes arising from:
- operations between licensees or permit holders in the midstream and downstream petroleum industry;
- the provision of open access in gas and petroleum liquids operations;
- the provision of third-party access to facilities and infrastructures used for gas and petroleum liquids operations by owners operating on their own account;
- gas trading and settlement transactions;
- midstream and downstream petroleum labour matters;
- Referrals to the Centre by a court of competent jurisdiction;
- the commercial, technical and operational aspects of midstream and downstream petroleum operations among licensees or permit holders;
- Any other dispute involving companies, within or outside Nigeria, in and connection with midstream and downstream petroleum operations.
Read: Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) permit
Dispute resolution mechanisms
The Centre shall utilise the following dispute resolution mechanisms:
- expert determination;
- conciliation;
- mediation;
- arbitration; and
- any other dispute mechanism the Centre may approve.
The procedures for the use of dispute resolution mechanisms of the Centre shall be as stipulated in the rules or guidelines made in these Regulations.
Fees: The Centre shall fully disclose and explain the basis of compensation, fees, and charges payable by parties submitting disputes to the Centre
- The parties will be provided sufficient information about fees to determine if they wish to retain the services of the Centre.
- The fees of the Centre shall be reasonable, considering, among other things, the type and complexity of the matter, the expertise of the arbitrator, mediator, conciliator or expert and the time required.
- Costs and expenses associated with the expert, conciliator, mediator or arbitral panel shall, subject to parties’ agreement as contained in their contract or as agreed with the Centre, be apportioned equally between the parties
- The Centre may prescribe the fees payable by the parties in a written agreement.
- Each party shall bear the cost and expenses of all professional advisers, witnesses and employees retained by it.