Lok Sabha Question No. 1173 (UNSTARRED), answered on 2020-02-10
Subject: Expert Committee on Disputes
Ministry: PETROLEUM AND NATURAL GAS
Asked by: Imtiaz Jaleel Syed, Asaduddin Owaisi

## Expert Committee on Disputes

## 1173 : SHRI SYED IMTIAZ JALEEL SHRI ASADUDDIN OWAISI

## पेट्रोलियम एवं प्राक ृ तिक गैस मंत्री

## Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:

- (a)      Whether oil and gas sector in the country have been affected hard by disputes from cost recovery to production targets leading to arbitration;
- (b)      If  so,  whether the Government  has decided to set up an Expert Committee for timebound resolution on exploration and production disputes;
- (c)      If so, the details thereof and the terms and conditions of the panel; and
- (d)      the extent to which this step of the Government is likely to minimize the arbitration and save the cost to oil and gas sector?

## ANSWER

## पेट्रोलियम एवं प्राक ृ तिक गैस मंत्री ( धमेन्द्र प्रधान )

## MINISTER OF PETROLEUM & NATURAL GAS (SHRI DHARMENDRA PRADHAN)

(a) to (c): To increase exploration activities, attract domestic and foreign investment and to promote ease of doing business, Government vide Notification dated 28.02.2019 decided to constitute a Committee of External Eminent Persons/Experts for dispute resolution. Pursuant to  decision,  Government  vide  Notification  dated  16.12.2019  constituted  a  Committee comprising three External Eminent Persons/Experts for dispute resolution.

Salient terms and conditions of the Committee are as under:-

- i. Tenure of Members: The tenure of the members of the Committee shall be three years.
- ii. Powers  and Functions  of  Members:  The  Committee  shall  exercise  all  powers  and discharge all functions necessary for carrying out conciliation and mediation proceedings for  resolution  of  the  disputes  between  the  parties  as  per  the  provisions  of  the Arbitration  and  Conciliation  Act,  1996  and  endeavor  that  the  parties  arrive  at  a Settlement  Agreement  within  three  months  from  the  date  of  the  first  meeting  of  the Committee.
- iii. The Committee acting as conciliator or mediator may take services of third party/expert agency to aid and assist it in discharge of its functions as and when required.

- iv. Any dispute or difference arising out of a contract relating to exploration blocks/ fields of  India  can  be  referred  to  the  Committee,  if  both  parties  to  the  contract  agree  in writing  for  conciliation  or  mediation  and  further  agree  to  not  invoke  arbitration proceedings thereafter.
- v. Upon receipt of a request referring dispute for resolution, the Committee shall conduct the  conciliation/  mediation  proceedings.  The  proceedings  shall  be  based  on  the principles of fairness, justice and  good  conscience. For procedural aspect, the Committee may take assistance of the principles and regulation as mentioned in Part III of the Arbitration and Conciliation Act, 1996.
- vi. The  parties  will  represent  their  case  before  the  Committee  acting  as  conciliators  or mediators only through their employees or executives. Advocates or Consultants shall not participate in the conciliation proceedings, unless the Committee on application filed by a party to the proceedings finds that some issue of legal nature or an issue requiring highly  specialized  knowledge  is  in  dispute  requiring  clarification/interpretation  by  an Advocate  or  Consultant  and  takes  a  view  that  in  absence  of  such  assistance  or participation the party's interests shall not be adequately represented in the conciliation or mediation proceedings.
- vii. Parties shall not claim any interest on claims and counter-claims from date of notice for conciliation or mediation till execution of the Settlement Agreement, if so arrived at.
- viii. All costs and expenses incurred on the conciliation or mediation proceedings before the Committee including fees of the members of the Committee, third party/expert agency shall be borne equally by the parties. However, the party requesting for engagement of an Advocate or Consultant shall bear the fees charged by such Advocate or Consultant.
- ix. Pendency of arbitral or judicial proceedings shall not constitute any bar on commencement of conciliation or mediation proceedings before the Committee, even if the conciliation or mediation proceedings are on the same subject matter/issue as the arbitral or judicial proceedings.

(d) Setting up of the Panel/Committee is likely to reduce the arbitration and save the cost to oil  and  gas  sector  through  Conciliation  or  Mediation  proceedings  by  the  Committee,  if  both parties to the contract agree in writing for conciliation or mediation and further agree not to invoke arbitration proceedings further.

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