International Dispute Resolution: Energy Overview

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1 Power PSC/PSAs JOAs Pipelines Transmission Expropriation/Investment Disputes Construction/EPC Environmental Regulatory Renewables Excellent reputation for energy and commodities work, particularly in emerging markets Legal 500 EMEA 2013 The team also represents clients in high-level disputes (Africa) Chambers Global 2013 World s Leading Energy Law Firm Euromoney* (1995 Present) An accomplished disputes team which works cohesively alongside lawyers within the projects and finance groups to cater to the legal requirements of energy clients Chambers UK 2014 *Based upon the number of lawyers named in the Guide to the World s Leading Energy Lawyers International Dispute Resolution: Energy Overview As part of the World s Leading Energy Law Firm* (Euromoney 1995 Present), Vinson & Elkins ( V&E ) International Dispute Resolution ( IDR ) lawyers have the experience and ability to handle the most complex energy disputes wherever they may arise. Regarded as leaders in energy dispute resolution matters, our IDR lawyers have been involved in some of the largest and most complicated commercial and treaty claims ever brought in the international arena, advising prominent clients around the world in all segments of the energy industry in both litigation and arbitration. We have handled international disputes along the entire energy chain from upstream exploration and extraction to downstream refining and marketing, power production, transportation, distribution and sales. Our work has also included the full range of energy-related infrastructure projects, from construction disputes through to tariff setting controversies. Additionally, our practice also encompasses disputes across the field of renewables, alternative and emerging power. V&E lawyers have handled disputes arising from the entire suite of related contracts involved in exploration, development and production projects. While advising on such matters, we have acted from the perspective of all those involved in the industry (representing owners, contractors, JV partners, engineers, sub-contractors and states) giving us the ideal platform from which to advise on future disputes. V&E is often credited as being one of the inventors of the production sharing contract, which has given our team extensive experience in disputes that arise from concessions and other related agreements. Given the frequent involvement of states and state enterprises in such energy projects, we have developed extensive and deep experience in international investment law and treaty claims, advising clients in arbitrations under a range of treaties and investment laws, including numerous situations of resource nationalism and related nationalization attempts by states. As a result of our firm s outstanding energy and infrastructure knowledge, V&E s dispute resolution energy team is fully familiar with the energy industry and the legal issues which arise from it, allowing us to effectively advise our clients in energy disputes from the very start on how to reach an appropriate solution in a commercial and cost effective manner.

2 Europe/Middle East/Africa Experience: The Energy (E1) and Construction and Engineering (E3) Panels of the United Nations Compensation Commission (UNCC), which the UN Security Council agency established to adjudicate claims against Iraq arising out of the 1990/91 Gulf War, in connection with more than 50 claims filed by companies in the oil and gas and construction industries in the Middle East. The Energy panel work included the claims filed by Kuwait Petroleum Corporation for production and sales losses sustained from the well fires and oil spills in the aftermath of Iraq's withdrawal from Kuwait, for which the Panel recommended an award of US$15.9 billion. The Construction panel work included claims against Iraq relating to construction projects in Iraq and Kuwait interrupted, terminated or delayed by the 1991 invasion and occupation of Kuwait, including the Bekhme (Great Zab River) Dam claim and related claims. These projects were valued in excess of US$4 billion A European gas marketer in connection with a US$1.2 billion suit brought by Texas-based oil companies filed in Texas state court (but eventually rising to the Supreme Court of the United States) arising from a gas exploration and production project in the Norwegian North Sea; the case involved issues of removal jurisdiction to federal court, personal jurisdiction, arbitrability of alleged tort claims asserted by non-signatories to the underlying contract and principles of forum non conveniens SMN Barka Power Company SOAC in connection with a power and water facility in Oman in claims asserted by the contractor for time extensions and price increases and by the power and water authority for delays. The sums in dispute exceed US$100 million The claimant E&P company in connection with an LCIA arbitration against its local Nigerian partner; as part of this claim, an order for security of the sums in dispute (in excess of US$100 million) was obtained on behalf of our client Two affiliates of an international power and electricity producer in connection with the negotiation and resolution of disputes with a Middle Eastern power and water procurement company and power plant construction company. The sums in dispute exceed US$82 million Sohar Power Company SAOC in connection with an ICC arbitration brought by an Asian contractor under the terms of a turn-key EPC contract for construction of a power generation and saltwater desalination plant in Oman. The sums in dispute exceeded US$80 million The oil ministry of a Middle-Eastern government in connection with a US$59 million oil supply dispute with a major international petroleum supplier Numerous energy companies in connection with arbitration proceedings before the American Arbitration Association/International Center for Dispute Resolution (AAA/ICDR), involving claims of US$9 million in damages asserted by a drilling contractor against an international exploration and production company involving allegations of breach of contract and defenses of force majeure and contract frustration resulting from the alleged expropriation of interests in certain Nigerian oil producing properties by the Nigerian Oil Minister An international exploration and production company with assets in Nigeria in connection with an international arbitration pending before the AAA/ICDR in a dispute brought by a drilling contractor alleging breach of contract and damages in excess of US$3 million A syndicate of banks in connection with disputes under an oil pre-export financing arrangement involving a West African national oil company (as the supplier and borrower), an oil major (as the off-taker) and the State as the guarantor of certain of the supplier s obligations A Korean contractor in connection with defending a claim brought in a LCIA arbitration by a Kuwaiti subcontractor in respect to the installation of control systems at a Kuwaiti oil gathering facility A UK company in connection with an arbitration with a major Russian energy company in respect of contractual claims brought under the rules of the Stockholm Chamber of Commerce A Kenyan employer in connection with defending a claim brought in a ICC arbitration by a Japanese-led JV contractor in respect to the construction of a hydro power plant The sponsor of a U.S. waste-coal to liquid fuel plant in connection with a dispute with a South African contractor A major oil company in connection with an arbitration against the Libyan government involving a dispute over the operation of Libyan oil and gas concessions A Kuwaiti drilling company in connection with obtaining a drilling rig trapped in insolvency proceedings Arbitrator in connection with a LCIA arbitration relating to a dispute between two major energy sector companies in Russia

3 GEA Group Aktiengesellschaft in connection with a claim under the German-Ukrainian BIT against Ukraine (ICSID Case No ARB/08/16). The dispute related to the misappropriation of petrochemical products and the non-enforcement of an ICC arbitration award A UK-listed oil and gas company in connection with claims brought against it by the purchaser of the shares of a subsidiary company holding oil assets alleging that warranties contained in the SPA as to the recognition of liabilities in its balance sheet had been broken and a tax indemnity triggered by host government claims for royalties The Rompetrol Group NV in connection with a claim under the Dutch-Romanian BIT and the Energy Charter Treaty against Romania (ICSID Case No ARB/06/3). The claim relates to allegations of mistreatment of a foreign investor working in the downstream oil industry A U.S. oil royalty trader in connection with reaching a successfully negotiated settlement with the Economic and Social Development Fund (ESDF), an arm of the Libyan state The Kazakhstan owners of an oil business in connection with defending claims brought in a ICC arbitration by a Canadian company in respect of a failed joint venture U.S. oil companies in connection with garnishment proceedings filed by a judgment creditor of an African foreign state seeking garnishment of royalty and tax obligations owed to the foreign state under a concession agreement for the exploration and production of oil in the foreign state A BVI claimant in connection with LCIA arbitration proceedings concerning the breach of a settlement agreement related to an oil and gas production block offshore Nigeria A Middle Eastern state oil company in connection with a dispute in Central Asia with two other former Soviet republics and a private company over a contract to build and operate an oil pipeline A Kuwaiti investor in connection with a bid to construct power generation facilities in Kuwait in relation to the Government of Kuwait s emergency power program A major multinational energy company in connection with proceedings arising from an oil well blowout in Syria The operator of a UK-sector oil field in connection with disputes with a non-operator under the JOA arising out of the work program, the accounting procedure and the operator s intended action in carrying out a drilling program The project company and sponsors of a power project in a Middle Eastern country in connection with proceedings brought in the host company s administrative courts, seeking to have a guarantee given by the government treasury of the off-taker s obligations under the PPA declared to be null and void on constitutional grounds The operator of a UK-sector oil field in the English High Court in connection with a claim against the UK tax authority to recover interest (repayment supplement) on amounts of petroleum revenue tax which had become repayable following a successful claim for the carry-back of losses arising out of the destruction of the production platform A U.S. oil and gas company in connection with potential claims against it in relation to lifting cargo from Iraq A European oil and gas company in connection with an UNCITRAL arbitration production rights dispute with Central Asian state oil company administrated by the Stockholm Chamber of Commerce A Kazakhstan company in connection with a ICC arbitration with a Kuwaiti oil company regarding the ownership of oil assets A U.S. oil and gas company in connection with an UNCITRAL arbitration in London. Our client was the operator of two offshore oil and gas fields, in a dispute with a private sector participant and the national oil company (as non-operators) relating to the rights of the parties under the JOAs and the non-operators obligation to pay cash calls and to approve work payment orders punctually An Ecuadorian engineering company and a Cayman Island oil trading company in connection with a dispute with a Russian refinery for breach of an engineering, procurement and construction contract for installation of a process for the production of high-octane, unleaded gasoline which involved counterclaims of fraud and noncompliance with Russian currency laws An Indian oil and gas company in connection with a dispute under a JOA over cost recovery in a Middle Eastern oil and gas production project An investor in connection with an ICC arbitration concerning its interest in a hydrocarbons block in Kurdistan

4 Asia/Pacific/Australian Experience: Members of a contractor group engaged in the development of an oil and gas field in connection with multiple arbitrations and cross-border litigations against an Asian state; these proceedings concern detailed issues of contractual interpretation and are valued in excess of US$500 million One of India s most successful industrial conglomerates in connection with a dispute over a US$100 million cargo of oil An international independent power producer in connection with a US$10 million ICC dispute with by a minority interest holder of a Pakistani power plant Two gas exploration and development companies in connection with a dispute over interests in a production sharing agreement involving an oil and gas field in Brunei A large Indian oil and gas company in connection with an ICC arbitration arising out of the operation and management of an offshore drilling platform together with the supply of a Blow Out Prevention Stack The Indian sponsor of an offshore oil and gas development project in connection with disputes with the EPC contractor and suppliers over construction and installation of offshore facilities The sponsor of two power projects in a South Asian country in connection with disputes with the state owned and controlled off-taker concerning the PPA and the government support / implementation agreements for the projects The U.S. sponsors of, and the commercial lenders to, several privately financed power projects in connection with an ICC arbitration and ICSIS arbitration, in each case in Singapore, in relation to claims pursued against the Government of Pakistan by means of international arbitrations arising out of allegations by the government that the PPAs had been corruptly procured An international drilling company in connection with HKIAC arbitration proceeding over a mining project in China heard by an arbitral tribunal (Hong Kong seat), which ruled unanimously in our client s favour The PSC Operator of a pipeline off the coast of Malaysia in connection with an arbitration concerned with modification and use of the pipeline An international energy company in connection with an arbitration commenced by another energy company concerning a pipeline system in Indonesia The Pakistani Government and its state-owned oil company in connection with a LCIA arbitration relating to the alleged breach of a fuel supply agreement and multi-party claims arising from the sponsorship, construction and operation of a 1300 MW power project One of the sponsors of a power project in Western India in connection with proceedings in the High Court of that state and (on appeal) in the Indian Supreme Court seeking to have certain governmental consents and approvals required to set up the project set aside on the ground that the necessary consents and approvals had allegedly been corruptly procured by the other sponsor of the project An Asian pipeline company indirectly owned by a foreign government in connection with a lawsuit in Texas state court involving claims of misappropriation of corporate opportunity in connection with the operation of an Asian joint venture Three members of a contractor group engaged in the exploration of oil and gas in India in connection with the third of a series of UNCITRAL arbitrations against the Government of India. The dispute arose out of a production sharing contract and concerns the recoverability of initial development costs paid by the parties to develop an oil and gas field A U.S. sponsor in connection with an ICC arbitration in Singapore in relation to its disputes with its co-sponsor under a joint development agreement for the development of a privately financed power station in Taiwan The contract operator of an offshore natural gas field in connection with disputes arising under the contract to construct and install the works necessary to produce the field, which is in Indian waters A Canadian energy company in connection with a power generating equipment supplier dispute arising out of construction of a generation facility in Asia Two North American investors in connection with several disputes with Asian and African sovereigns over contracts to build, operate and transfer power generation facilities A gas producer in an Asian field in connection with price renegotiation claims from power producers under long term take contracts

5 The owner/operator of a Philippine power and CO2 cogeneration facility in connection with ICC proceedings. The dispute turned on complex questions of design and fitness for purpose The project company and sponsors of the Dabhol Power Project in India, (2,1051MW) in connection with a series of disputes with various state and federal government entities An Indian oil and gas company in connection with a multi-jurisdiction dispute, including international arbitration and English and Singapore court proceedings, in connection with disputes arising in an operation and maintenance agreement for an offshore drilling rig and other related agreements An Asian oil and gas client in connection with a dispute with the sovereign over changes in the fiscal regime and rights under stabilization clauses in the concessions and under international law An international investor and a domestic Indian energy company in connection with a dispute with a third investor over the management of an offshore oil field American/Caribbean Experience: A group of U.S. company developers of a Latin American natural gas and electric power project in connection with an ICC arbitration against the project s prime contractor regarding liquidated damages for delays in project completion, design and construction defects, and alleged change orders. The arbitration award in favour of the client was successfully enforced in federal court The claimant parties in connection with English High Court proceedings concerning the sale of hydrocarbon products into Guatemala The designer/manufacturer of a gas turbine in connection with AAA construction arbitration related to a power plant in California The winning bidder of a withdrawn oil and gas concession in connection with an ICSID arbitration with a Caribbean government brought under the relevant bilateral investment treaty A gas transportation concessionaire in a South American state in connection with a dispute over amortization of unrecovered costs from privatization of a state utility. The dispute involved similar issues, including the question of creeping expropriation and ICSID arbitration rights under bilateral investment treaties between the host state and the home states of two of the investor s partners in the investment An American energy company in connection with a US$1 billion dispute with a South American state over the state s claims of hardship and changed circumstances with respect to a contract for the construction and operation of a gas-fired power plant A foreign state-owned oil company in connection with ad hoc arbitration proceeding with American oil company asserting claims for US$600 million involving dispute over ownership interests and the determination of rights and obligations under exploration and development agreements with respect to properties located in Peru and Venezuela A power developer in connection with the resolution of disputes related to an engineering, procurement, and construction contract for a power plant in Guatemala The owner/operator of a South American gas transportation facility in connection with multiple ICC arbitrations involving various claims for stabilization/change in law indemnities arising from changes in the tax laws and in official interpretation of the tax code and claims for construction costs, rate design, and gas quality. This case gave rise to complex issues of issue estoppel and the ability of a sovereign to avoid its consent to arbitration A power company and its Brazilian subsidiary in connection with the enforcement of a US$100 million ICC arbitration award against its Brazilian contractor and in relation to collection under performance and retention bonds Halliburton Company and Kellogg Brown & Root in connection with obtaining the dismissal of a US$11 million claim by Spie Enertrans S.A. in a dispute arising out of a project involving the design and construction of production facilities for the Barracuda and Caratinga oil fields in Brazil A contractor in connection with a dispute with a South American state oil company for overruns and force majeure events An oil company in connection with defending claims brought in a LCIA arbitration by a Canadian-Maltese contractor A developer and operator of power plants in connection with an ICC arbitration involving the construction of a hydroelectric power facility in Central America. The issues involved complex questions relating to the custom and practice in project finance

6 A refinery in connection with an ICC arbitration in London against a South American state oil company involving a crude oil supply agreement An oil and gas company in connection with a lawsuit alleging breach of contract, tortious interference with contract and fraud in matter arising in Colombia The claimant in connection with an LCIA arbitration regarding the enforcement of an indemnity agreement, given in relation to the claimant's purchase of an interest in an offshore production block in a South American state, which was triggered when the state cancelled the production license on the block after the sale An independent U.S. oil company before the International Centre for the Settlement of Investment Disputes against the government of Trinidad and Tobago in connection with an investment dispute regarding offshore oil and gas fields Investors in a gas transportation project in connection with claims against the Republic of Argentina over the 2002 emergency economic laws, which arose under the bilateral investment treaty between the U.S. and Argentina A Chinese oil and gas client, a joint venture between two PRC state entities, in connection with its LCIA arbitration against a major North American oil company, concerning the right to an indemnity in respect to Ecuador s declaration of cancellation of rights in a certain hydrocarbons block in Ecuador An energy company that exercised certain contractual rights in connection with a power plant in Brazil A state-owned Asian oil and gas company in connection with arbitration proceeding involving allegations of misappropriation of corporate opportunities in connection with oil and gas development activities in Peru and Venezuela A U.S. investor in connection with a bilateral investment treaty claim against the Republic of Ecuador, arising out of the indirect expropriation of power generation A U.S. investor in connection with a breach of bilateral investment treaty concerning the treatment of two power barges in a Latin American state An energy company that exercised certain contractual rights in connection with a power plant project in Brazil in arbitration proceedings A developer of Peruvian natural gas liquids and power projects in connection with a dispute with the prime contractor over delays and other difficulties encountered in the completion of the project Prior results do not guarantee a similar outcome. Please note that some of these matters may have been undertaken by our lawyers whilst at previous firms For more information, please contact: James L. Loftis Chair, IDR Practice Group, Partner, London and Houston jloftis@velaw.com Alden L. Atkins Partner, Washington aatkins@velaw.com Mark Beeley Partner, London mbeeley@velaw.com George Burn Partner, London gburn@velaw.com Philip Dye Partner, Houston pdye@velaw.com Christopher J. Walker Partner, Hong Kong cjwalker@velaw.com Vinson & Elkins RLLP Attorneys at Law Abu Dhabi Austin Beijing Dallas Dubai Hong Kong Houston London Moscow New York Riyadh San Francisco Tokyo Washington