Research Paper on "Dispute Resolution the Growing Trend of Mediation in the Oil and Gas Industry"

Research Paper 12 pages (3500 words) Sources: 10

[EXCERPT] . . . .

Business law is becoming increasingly complex, and the oil and gas companies that experience litigation suits from lessees dissatisfied with their contract or experience may well find themselves facing additional complexities in court particularly since public policy favors an increase in production of oil and gas and may be less patient for traditional methods used in its production 1. It is in this manner that parties and courts will face new issues in covenant litigation, whilst parties will spend enormous amounts of time and money in endless litigation before eventuating in, potential future acrimony. This is the conventional litigious procedure that mediation succeeds in circumventing.

The benefits of mediation are well-known. According to Boulle, 2 for instance, surveys of those who have participated in mediation processes consistently reveal unanimous satisfaction with the service. It is to the description of mediation that this essay, therefore, proceeds, evaluating mediation in all its complexities, detailing the process of mediation, stating limitations to mediation, and describing alternatives. Finally, the essay concludes with a synopsis of the benefit of mediation to the industrial sector in general and to the industry of oil and gas in particular.

2. OVERVIEW of MEDIATION

This essay presents mediation as a favorable option to litigation. Mediation is defined as the situation where, in terms of a conflict, a non-biased third party professional steps in to formulate a win-win situation where both parties are enabled to understand the other's position and arrive at mutually desirable and fixed terms. Unlike similar interventions such as arbitration, counseling, and certainly legalistic, the facilitator refrains from actively involving himself or being advisory and acts in a purely facilitative position 3.

The benefits of mediation include the following:

Parties are made aware of each other's interest and priorities in a non-conflictual open setting.

Parties are enabled to healthily vent their emotion in a protected setting

Parties set themselves to work through an agreed upon agenda with a professional guiding their progression and development through these sessions

The roles of the constituents (or people involved in the case, such as other business partners etc.) are identified

Parties arrive at knowledge of a constructive resolution that can be used in future disputes 4

Increasingly popular, mediation is commonly used in a variety of fields with the business or commercial sector typically manifesting one of its largest uses of applications 5. In this manner, it is suggested that the oil and gas industry would profit enormously from adopting the medium, and the purpose of this essay is to elaborate on this thesis.

2.1 WHAT IS MEDIATION

Otherwise known as an alternative dispute regulation (ADR), mediation is a legal process where trained neutral professionals help two or more parties negotiate and come to some self-determined agreement regarding their particular dispute. Mediation is used in a variety of situation including commercial, domestic, legal, diplomatic, family, and workplace matters 6. The Internal Revenue Service, for instance, regularly favors mediation as a method to resolving its tax disputes 7 .

Confidentiality of sessions is a given with privacy allocated to concerned parties and leakage of information forbidden to members not connected to the case. As a non-adversarial strategy of dispute negotiation, sessions resemble a win-win agreement where parties, through help of the mediator, attempt to arrive at mutual benefit, rather than the outcome being a win-lose condition where one or other loses or where a third-party is compelled or chooses to intervene. The mediator must be wholly partial, and he or she uses various techniques to enable the parties to negotiate their dispute and differences.

The style of mediation falls into three categories. These are: evaluative, transformative, and facilitative. Evaluative mediation differs from the other two in that the practitioner evaluates the strength and weakness of each of the arguments in the eventuality that they should appear in court. Evaluative mediation, too, has as its objective settlement of the argument, whilst transformative mediation sees conflict as a crisis in communication and as an object to enable the parties to better their communication through conflict-resolution strategies with one another 8.

The benefits of mediation in this case include that they prevent the monetary expense of long-drawn out cases in court, as well as the stress associated with the manipulating and ordeal of the legal procedure. The amount of time is also circumvented - a court case can draw on for years whilst mediation may be resolved in several hours. Furthermore, the partners, can generally reach a more amicable, less acrimonious agreement than they would otherwise have accomplished via the legal profession where each abuses the other, and where a third party (most often the judge) would have to intervene to promulgate a decision that would necessarily be unsatisfactory to one or either of the parties. Mediation also offers strict confidentiality to the extent that the legal system cannot force a mediator to testify in court. Finally, mediation offers the possibility for multiple and flexible decisions to a dispute and grants parties the empowerment to arrive at the decision themselves. In a legal situation, however, the decision is enforced by an external source.

At times, however, mediation may prove unsatisfactory in that complaints remain unresolved or other issues emerge. In that case, issues not resolved by mediation are referred in court (via a process called litigation) and addressed by a magistrate, judge, or jury. Similarly, parties demanding a follow-up on mediation can also bring their complaint to court where their issue is addressed in a similar manner. There is more on this later.

2.2

WHY USE MEDIATION in the OIL and GAS INDUSTRY

Mediation is often used in commerce and business and is valuable to the enterprise since it helps individuals arrive at a win-win agreement at a minimum of cost and time. This is particularly so given today's complex legal environment where the rise of international trade law, continental trading blocs, the world trade organization and its opposing anti-globalization movement are just a few of the institutions that indicate the global legal complexity with which international businesses are faced today9.

Business people unschooled in the increasingly complexities and nuances of the law can be -- and are - regularly deceived by lawyers who, whether willfully unscrupulous or not, could readily lead vulnerable parties through lengthy and cost-consuming legalistic processes where a person's business would inevitably be squandered in the process. More so, legalistic procedures, by disappointing one of the parties, often fail to provide closure guarantees to the belligerent situation, and this can result in a potential spurt of the conflict at some future time. Since mediation is congruent to the amicable win-win situation, mediation seems to be a highly satisfactory resolution for the oil and gas industry to adopt. This is particularly so the commercial mediator helps parties arrive at a dignified and mutually respectful solution where the buying and selling proceeds under harmonious, satisfactory conditions in an amicable, confidant manner.

As with any business environment, the oil and gas company has problems that are typically its own. One of these involves the fact that it buys or leases land that promises to be an invaluable resource for producing gas or oil. The landowner, as lesser, authorizes the oil company, as lessee, to conduct operations on the landowner's land at the oil company's sole risk and expense, whilst, in return, the landowner receives certain consideration consisting primarily of a bonus and royalties 10.

If amicable, this oil and gas lease between landowner and company may last for generations -- both share mutual interest of profit from gas and oil production. However intermediate interests and goals of lesser and lessee may sometimes diverge and become quite vociferous and it is in this manner that disputes between lesser and lessee arise which will need to be legally adjudicated.11Business law has become ever more complex in terms of oil and gas due to demands from public policy that favors an increase in production of oil and gas and calling for changes in exploration, drilling, and enhanced recovery technologies, may be less patient for traditional methods used in its production 12. It is in this manner that parties and courts will face new issues in covenant litigation and, subsequently that enormous amounts of time and money will be spent in endless litigation whilst the business itself may be at risk.

As an extension, gas and oil companies may well find themselves faced with many legal issues that are unfamiliar and intimidating. These include: terms in oil and gas leases that are ambiguous and confusing 13; the nuances in which gas leases differ from those of oil leases: how royalties are calculated; the mineral rights in oil and gas lease; oil and gas lease terms; oil lease sale; and oil lease pooling. In a world that is becoming increasingly complex, and where oil and gas is becoming an increasingly valued resource, rules and regulations are added almost day by day. This can make the law a tortuous and torturous procedure.

Such disputes are often resolved under litigation, but… READ MORE

How to Reference "Dispute Resolution the Growing Trend of Mediation in the Oil and Gas Industry" Research Paper in a Bibliography

Related Research Papers:

Mediation Online Dispute Resolution Research Proposal

Mediation: Online Dispute Resolution

Online interaction has risen dramatically over the last decade. According to data published by Nielsen Online, the International Telecommunications Union, GfK, and local regulators, as of… read more

Research Proposal 8 pages (2512 words) Sources: 10 Style: APA Topic: Business / Corporations / E-commerce

---

Law Legal System Dispute Resolution Essay

Legal System//Dispute resolution

You are a party (plaintiff or defendant) in a civil lawsuit. You and your attorney are deciding whether you should request that the trial be conducted with… read more

Essay 2 pages (924 words) Sources: 3 Style: MLA Topic: Law / Legal / Jurisprudence

---

Master of Dispute Resolution Term Paper

Master of Dispute Resolution

By nature, human life presents all of us with challenges. Not everybody can handle all challenges with an equal amount of grace and style. Indeed, many… read more

Term Paper 3 pages (1083 words) Sources: 3 Topic: Education / Teaching / Learning

---

Mediation and Arbitration Essay

Mediation and Arbitration

How do the relative advantages of mediation and arbitration, create a synergy in a combined strategy of MED-ARB?

Both mediation and arbitration have been used for many… read more

Essay 3 pages (803 words) Sources: 3 Topic: Law / Legal / Jurisprudence

---

Future Norwegian Policy Oil and Gas Term Paper

Future Norwegian Oil and Gas Policy

Norwegian Oil Policy: The Development and Maintenance of Efficient Fiscal and Regulatory Policies

Management Summary

Oil and natural gas have helped run this world… read more

Term Paper 13 pages (4262 words) Sources: 1+ Topic: Energy / Power

---

View 100+ more related papers  >>