A DECISION on whether to include con- likely become a matter of - - PDF document

SLIDE 1

Power

ECONOMICS

Dispute Resolution

june 2002

A

DECISION on whether to include con- tractual provisions to resolve potential disputes associated with international power projects needs detailed consideration. This entails an evaluation of whether any disputes among the parties would be better resolved by litigation in court, arbitration or alternate dis- pute resolution procedures. In the absenceof any contrary agreement, disputes would typ- ically be heard and resolved by any national court having jurisdiction. Many contractual relationships common in the energy industry in general and the elec- tric power industry in particular, lend them- selves to the use of arbitration or alternate dispute resolution (ADR) mechanisms in resolving conflict among the parties. Among them are contracts for:

• Long-term fuel supply, whether coal, natur-

al gas, liqufied natural gas or other source

• Long-term power supply
• Operations and maintenance (O&M)
• Engineering, procurement and construction

(EPC) of new facilities or repowering of existing facilities

• Reservation of transmission capacity in an
• pen access transmission rights regime

Indeed, most contractual relationships, including concession agreements – where arbitration of disputes with the host country is not prohibited by its national laws – involved in a project finance transaction also lend themselves to the use of arbitration and

• ther ADR mechanisms.

Why arbitration or ADR?

The principal reasons why the parties may choose to provide for arbitration or ADR in such contracts are:

• The international nature of many contractual

relationships tend to cause the parties to pre- fer neutral, international forums, rather than the national courts of one participant

• The technical and sophisticated nature of the

matters in dispute lend themselves to an arbiter with greater industry expertise than is likely to be found in national courts

• The more flexible and convenient procedures

than available in national courts for which the parties may contract, including the avail- ability of fast track mechanisms for expedi- tious dispute resolution

• The possibility of maintaining confidential

valuable information which must be revealed to the tribunal because it is integral to the resolution of the dispute, and which would likely become a matter of public record if it were to be produced in a court.

Arbitration

Arbitration is a procedure for the resolution of disputes by an arbitral tribunal comprising one

• r more arbitrators, though always an odd num-

ber, chosen by or on behalf of the parties. The arbitration is conducted pursuant to an agree- ment of the parties and the tribunal’s decision upon the dispute submitted to it is binding, subject to any right of appeal or challenge against the award that may exist under an applicable law. If the losing party fails to hon-

• ur an abitration ruling – the award – the award

may be enforced through court proceedings and assets may be seized to satisfy the award. As indicated, arbitration has certain distinct advantages over litigation, especially in an international project.

Neutrality

National courts apply rules of procedure that may be unfamiliar to foreign litigants, which- would be obliged to retain local counsel to con- duct litigation before those courts. Proceedings will be conducted in the national language, which may be unfamiliar to one, some, or even all of the parties. The location of the national court exercising jurisdiction may be inconve- nient and not easily accessible to the parties. The frequency of travel required of key per- sonnel to attend audiences required by local procedure may be onerous. Consider, for exam- ple, a project finance transaction where the principal financiers/contractors/sponsors are companies and financial institutions from the US, Japan and Europe and the project is in Kazakhstan, a situation which would be likely to present all of these problems. The foreign litigant may also perhaps justi- fiably fear that a national court may favour a local party or parties. A national court may lack or appear to lack complete independence if one of the parties in the litigation is the government, a state entity or even a major investor-owned corporation of that country. In contrast, international arbitrations are generally conducted in a country that is neutral vis-à-vis the parties. The arbitrators will not be the judges of the courts of a nation which is home to one of the parties, rather they will be an international panel. The arbitral proceedings will not be governed by local rules of civil procedure. Instead, the pro- ceedings will be governed by the rules of arbi- tration of an arbitral tribunal or ad hoc rules, selected by the parties with knowledge of those rules, and any additional rules express- ly agreed to or, if the parties in dispute fail to so agree, that the arbitral tribunal may adopt. Therefore, the parties may agree on a more convenient location for the proceedings, on a limited number of hearings or indeed on an entire schedule for the proceedings, on detailed procedures, including discovery procedures, and on a language in which the proceedings will be conducted which is famil- iar to all parties. Such arrangements will also permit the parties to utilise their usual inter- national litigation counsel, without the need for local counsel.

Appointing experts

Another advantage of arbitration is the parties’ role in selecting the arbitrators. The procedure will vary, depending upon the num- ber of parties and the number of arbitrators. In the most straightforward alignment – two parties and an arbitral tribunal of three arbi- trators – each party is generally entitled to select, or nominate for confirmation by some

• ther authority, one arbitrator. The third arbi-

trator, who serves as chair, is then selected by agreement of the parties or the party-appointed arbitra- tors, or by some appointing authority. In most international arbi- trations, the arbitrators are required to be impartial and independent of the parties and,

• f course, their counsel. In some ad hoc pro-

ceedings conducted under rules agreed upon by the parties and not under the auspices and rules of any established arbitration institution, the parties may agree that only the neutral third arbitrator must be impartial and that the party-appointed arbitrators may act as advo- cates for their party’s position within the arbi- tration panel and, perhaps, may even continue during the proceedings to communicate ex parte with the party which appointed them, but not with the neutral arbitrator. Such a proce- dure is sometimes adopted because the parties believe that it will assist them in dealing with the questions which are actually troubling the neutral arbitrator, and increase the possibility

• f reaching a resolution by settlement.

Subject to the applicable rules regarding independence and impartiality, the parties may select arbitrators who have a particular profile,

Arbitration and dispute resolution in the electricity industry

By David J. Rosso & Carroll S. Dorgan

JONES, DAY, REAVIS & POGUE (MILAN & PARIS)

Arbitration traditionally resolves to settle disputes quickly and painlessly, but there are always further issues to consider

‘Arbitration has certain distinct advantages over litigation, especially in an international project’

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Power

ECONOMICS

Dispute Resolution

june 2002

in terms of nationality, professional qualifica- tions and experience. The parties can thereby have some confidence that their case will be decided by arbitrators who understand the subject matter of the dispute and the parties’ respective positions. This can be an especially important consideration because the industry expertise of the arbitrators will tend to produce a decision which is reasonable within the con- text of the contractual relationships and the ultimate business objectives of a project. Moreover, having an expert tribunal can considerably shorten the length of a proceed- ing by avoiding the need to submit extensive evidence designed to educate the decision- maker regarding the technology or industry economics within which the controversy aris-

• es. With an expert tribunal, the evidence of the

parties can go right to the heart of the dispute in question.

Confidentiality

Parties often value the con- fidentiality of arbitral pro- ceedings, in contrast to court litigation, which may be

• pen to the public and sub-

ject to unwelcome publicity. In fact, the confidentiality of arbitral proceedings is not

• absolute. Parties may be
• bliged to disclose informa-

tion about a pending arbi- tration in connection with audits and in reports to shareholders or regulatory

• agencies. Information about

arbitration sometimes enters the public domain during ancillary court proceedings

• r in an action to enforce the
• award. Nonetheless, it is cer-

tainly possible and easier to attempt the protection of confidential information in the context of an arbitral proceeding than in the con- text of court proceedings. The extent to which a particular arbitration is confidential may depend upon the parties’ agreement. Arbitration rules generally provide that hearings are private, unless the par- ties agree otherwise, but the rules may have strikingly different provisions regarding other aspects of confidentiality. For example, the rules

• f arbitration of the International Chamber of

Commerce (ICC) simply stipulate that the arbi- tral tribunal “may take measures for protecting trade secrets and confidential information”, while the arbitration rules of the World Intellectual Property Organisation (WIPO) include four detailed articles on confidentiality. Parties are well advised to consider whether spe- cific provisions on confidentiality in arbitration should be included in their contracts.

Awards and enforcement

Most arbitration rules provide that the tribunal’s award will be final and binding. To the extent permitted under the law governing the arbitra- tion, the parties waive any right of appeal against the award. Most modern arbitration laws stipulate limited grounds for setting aside an arbitral award such as, for example, viola- tions of procedural rights, or questions of juris- diction and public policy. The arbitrators’ decisions on the merits are generally not sub- ject to review by any other panel or court. Thus, the arbitral proceedings should not lead to a long succession of appeals to higher courts. Of course, there are instances in which a party may regret having little or no recourse against a decision that it considers to be mistaken in its interpretation of the facts or the law. One of the most important advantages of arbitration, compared to litigation, lies in international enforcement procedures. The laws governing the enforcement of court judgements are a patchwork of bilateral and multilateral agreements, with many gaps. Certain European countries have gone far in granting enforcement of each other’s court judgements, concluding in the 1968 Brussels Convention

• n

Jurisdiction and the Enforcement of Judgements in Civil and Commercial Matters among members of the European Community. These were modified by subsequent conventions as new members joined the EC, now the European Union and the 1988 Lugano Convention among members of the EC and members of the European Free Trade Association. Regulation No.44/2001, adopted by the European Council on 22 December 2000, incorporates the Brussels Convention into Community law, with certain

• modifications. This regulation took effect on 1

March 2002. Member states of the Organisation

• f American States have concluded the Inter-

American Convention on the Extraterritorial Validity of Foreign Judgements and Arbitral Awards (1979). However, the US is not a party to any such treaty and the enforcement of judgements there is subject to the laws of the various states, for example in New York, pur- suant to the Uniform Foreign Country Money- Judgments Recognition Act. In contrast, international arbitral awards may be enforced, inter alia, under the 1958 Convention for the Recognition and Enforcement of Foreign Arbitral Awards gen- erally known as the New York Convention. At present, 129 countries are parties to the New York Convention. In order to enforce an arbitral award in a country that is a party to the New York Convention, one must submit copies of the award and of the relevant arbitration agreement plus translations, if necessary, to the court where enforcement is sought. The Convention stipulates limited grounds for refusing enforce-

• ment. The party resisting enforcement has the

burden of proving, for example, that the arbi- tral tribunal lacked jurisdiction, that the arbitral procedure was not in accordance with the par- ties’ agreement, or that the award has been set aside in the country where the arbitration was

• conducted. In addition, the court may, on its
• wn motion, refuse enforcement if the subject

matter of the dispute was not capable of settle- ment by arbitration under the law of that country or if enforce- ment would be contrary to that country’s public policy. The New York Convention also permits parties seeking enforce- ment of arbitral awards to avail themselves of any rights they may have under a national law that is more favourable to enforce- ment than the

• Convention. Thus, arbi-

tral awards that have been set aside in the place of arbitration, for example in Switzerland and Egypt, have been enforced in other coun- tries such asFrance and the US.

Flexibility

One of the leading advantages of arbitra- tion is its flexibility. The arbitral procedure can be adapted to the subject matter of the dis- pute, the number and identity of the parties, the need for decisions in real time and so

• forth. Parties negotiating contracts should

consider procedural issues that could arise in an eventual arbitration and incorporate pro- visions designed to deal with those issues in the contractual documents. For example:

• Place and language of arbitration: It is advis-

able to stipulate the language and place of arbitration in the contract. If this is not done, and the parties cannot agree later upon the place of arbitration, the choice will be made by the selected arbitral institution or the arbi- tral tribunal. Various factors may dictate the choice of a place of arbitration, including neutrality vis-à-vis the parties, the arbitra- tion law of the country and convenience or a balancing of relative convenience for each

• f the parties. Generally, it is advisable to

select a country that is a party to the New York Convention, because some countries

‘Parties often value the confidentiality of arbitral proceedings, in contrast to court litigation’

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Dispute Resolution

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apply the Convention only on a reciprocal basis.

• Multiple parties and contracts: In a major

energy project there will ordinarily be a mul- tiplicity of parties and interrelated contractu- al relationships. The cost to the customer of the electricity generated, for example, will

• ften vary with the cost of fuel and other pro-

duction costs. The presence of multiple parties and/or interrelated contracts may raise special issues some of which may be foreseen and contractually addressed. Moreover, in such a situation the traditional methodology for selecting a three person arbitral panel may not function well in view of the multiplicity of parties and, therefore, of sides or positions in a dispute. Consequently, the parties may sim- ply agree that all of the arbitrators will be cho- sen by an arbitral institution or appointing

• authority. The parties may also decide to con-

clude a separate arbitration agreement to gov- ern the resolution of all disputes arising in connection with the project and its multiple interrelated contracts, and the differing sets of parties which may be involved in one such dispute or another. Such an agreement would normally include care- fully drafted provisions for notice to all par- ties, intervention, joinder, and other such

• matters. The parties may also decide to agree
• n and appoint an arbitrator or panel of arbi-

trators to deal with any disputes. Such provi- sions also should prescribe a methodology governing the replacement of any arbitrator no longer willing or able to serve. In instances where such a provision is utilised, the desire of the parties to have disputes resolved by experts familiar with the project is often an important motivation.

Negatives of arbitration

Arbitration may nonetheless have drawbacks. For example, certain costs that would not arise in litigation before a court may have to be paid, such as the fees and expenses of the arbitrators. On the other hand, in a major arbitration, the arbitrators’ fees and expenses may be greatly

• utweighed by other costs, such as attorneys’
• fees. An efficient arbitration proceeding may

also be more expeditious than litigation in the courts, resulting in savings outweighing the cost

• f the arbitrators. In addition, most rules of arbi-

tration permit the arbitral tribunal to award costs to the prevailing party. There is also a structural difficulty inherent in arbitration. Being based upon consent, arbi- tral proceedings generally cannot be extended to include third parties which have not agreed to be bound by the arbitration. Of course, what constitutes consent may be a matter of inter- pretation and the like, as a party may be bound by an agreement that it has not signed. Even where multiple parties have agreed in one or more contracts to arbitration, there are proce- dural issues that may be difficult to resolve. For example, the consolidation of arbitral pro- ceedings arising under different contracts, the parties’ rights to appoint arbitrators, the shar- ing of costs and the treatment of counterclaims and cross-claims. In contrast, rules of civil pro- cedure for litigation in court generally permit the joinder of third parties and give judges the power to manage the multi-party litigation. This factor can be significant in complex pro- jects involving multiple parties and contracts, such as a build operate transfer (BOT) infra- structure project. Consequently, if arbitration is to be utilised in such situations, it is critical that the applicable arbitration rules be spelled out in some detail and that all parties, contractors and subcontractors be required to arbitrate and be bound to those rules. Arbitrators generally do have the power to

• rder interim and conservatory measures. For

example, the power granted to the arbitral tri- bunal under Article 25 of the London Court of International Arbitration (LCIA) Rules is detailed and extensive, including the power to order a respondent to provide security, to

• rder the preservation, storage, sale or other

disposal of any property under the control of a party and relating to the arbitration and also to order on a provisional basis any relief that the arbitral tribunal would have power to grant in an award. In addition, the arbitral tri- bunal has the power to order any claiming or counterclaiming party to provide security for the legal or other costs of any other party. Article 25 – in common with analogous pro- visions under other arbitration rules – also stipulates that the arbitral tribunal’s power to

• rder interim measures does not prejudice any

party’s right to apply to any national court or

• ther judicial authority for interim measures

before the formation of the arbitral tribunal and, in exceptional cases, thereafter. A party’s right to resort to a national court may be very important, because the arbitral tri- bunal itself will lack the power to enforce its

• wn orders. Similarly, arbitral tribunals lack the

power to compel the attendance of witnesses or the production of documents or other evidence. Certain national laws provide expressly for the courts to assist the parties and the arbitral tri- bunal in this respect. For example, section 42

• f the English Arbitration Act 1996 provides

that the court may, upon the application of the arbitral tribunal or a party, order compliance with an order made by the arbitral tribunal, while section 43 provides that a party may, with the arbitral tribunal’s permission, apply to the court to secure attendance before the tribunal

• f a witness to give oral testimony or produce
• evidence. In Switzerland, a tribunal may request

the assistance of the court to obtain compliance with its order, pursuant to Article 183 of the Private International Law Statute. Under feder- al arbitration law in the United States (9 USC. § 7), a tribunal may summon a person to appear, provide documents or other evidence. If the person does not comply, the tribunal may petition the court for assistance.

Selecting the type of arbitration

These factors generally lead parties in an inter- national energy project to agree upon arbitra- tion to settle their disputes. However, such an agreement is, or should be, only the first step in determining how disputes will be settled. As indicated, the parties must also determine what type of arbitration they wish to select and they should consider a number of procedural issues thatmay arise in an eventual arbitration. Commercial arbitration may be institution- al or ad hoc. Well-known arbitral institutions, which administer arbitrations under rules that they have developed, include the International Chamber of Commerce (ICC), the London Court of International Arbitration (LCIA), the American Arbitration Association (AAA), the International Centre for the Settlement of Investment Disputes (ICSID) and the China International Economic & Trade Arbitration Commission (CIETAC). Parties that opt for an ad hoc arbitration often agree to follow the Arbitration Rules of the United Nations Commission for International Trade Law (UNCITRAL). While the parties in an institutional arbitra- tion must pay the institution’s administrative fees, the services provided by the institution generally justify this additional cost. The insti- tution will appoint an arbitrator if a party fails

• r refuses to do so and it will decide upon chal-

lenges against an arbitrator. The arbitrators’ fees are determined by the institution, in accor- dance with its rules, thus relieving the parties

• f direct contact with the

arbitrators on this delicate

• subject. The institution may

provide impartial advice on

• procedure. Under the ICC

Rules of Arbitration, a draft award is subject to scrutiny by the ICC, which can require changes in the award’s form and draw the arbitrators’ attention to matters of substance.

• Discovery: Parties from different countries

may find that they have very different expectations regarding discovery: the pro- duction of documents, the propounding of written interrogatories and the taking of wit- ness testimony, all prior to the actual pro-

• ceedings. Common law discovery procedures

are much more extensive than those avail- able in civil law countries. Even within those families of law there are important differ-

• ences. For example, the US practice of tak-

ing depositions as part of the discovery process is not followed in the UK. Parties should anticipate the possibility of disputes arising over discovery in an eventual arbi- tration and consider whether to address the issue in their arbitration clause.

• Rules of evidence: Arbitral proceedings must

respect due process. The parties must be treat- ed equally and be given a reasonable oppor- tunity to present their respective cases. Within these limits, parties and arbitrators are free to determine the rules of evidence that will apply in their arbitration without regard to the pro- cedural rules of any court. In practice, inter- national arbitral tribunals and the lawyers appearing before them have developed rules

• f evidence that draw elements from the com-

mon law and civil law systems. For example, the civil law practice of exchanging written submissions and documents may be combined with the common law practice of permitting examination and cross-examination of wit-

• nesses. Any person – whether a party or not

– may testify as a witness, as in common law courts, but not all civil law courts, although rules that would exclude evidence, such as the common law’s hearsay rule, are generally not applied in arbitration. The International Bar Association has published Rules on the Taking

• f Evidence in International Commercial

Arbitration (IBA Rules) that reflect this

‘An efficient arbitration proceeding may also be more expeditious than litigation in the courts’

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convergence of different traditions within

• arbitration. Parties rarely adopt the IBA Rules

in their arbitration clauses but may do so in the course of arbitration, or simply refer to them as representing good international arbi- tral practice. Fast-Track arbitration: It is sometimes said that one of the advantages of arbitration, compared with litigation, is speed. While this may be true, in that proceedings before some national courts take an unconscionable length

• f time, it must also be recognised that in

recent years arbitration itself has become more formal, expensive and thus time- consuming. In some types of transactions or projects, the parties cannot wait one or two years for an award that settles their dispute. For exam- ple, in an open access transmission regime, the availability of transmission capacity is critical to whether a transaction for the sale

• f power can be performed. Disputes often

arise as to whether transmission capacity is available for the transaction or as to priority for available transmission capacity among several proposed transactions. Such disputes

• ften involve interpretations of rather com-

plex concepts and rules as to the appropriate level of reserve capacity to maintain on a transmission system, safe loading levels, actu- al power flows and the like. If the open access system is to function efficiently, such disputes must be decided quickly, in real time so that the parties will know which transactions can be completed and which cannot prior to the time when the power is needed to supply the load and in time to make alternative arrange- ments for a supply of power if a proposed transaction cannot go forward. Damage awards a year or two later for usurpation of transmission capacity, damage to transmission lines, or losses due to unavailability of elec- tric power are no way to run a power system

• r an economy.

One solution to this problem is to agree upon a special, expedited procedure – a fast- track arbitration. Great care, however, must be taken in drafting the terms of such a procedure to avoid locking the par- ties and the arbitrators into a rigid framework that is unsuited to settling a dispute that actu- ally arises. Among the mechanisms which could be adopted in designing a fasttrackprocedure are:

• Advance selection of an expert or panel of

expert decision makers, who are kept informed on the project and to whom dis- putes will be referred

• Mini-arbitration in which the parties are lim-

ited to perhaps a few days or 1-2 weeks of time to present their cases, which might oth- erwise take months to present in very com- plicated matters, to an arbitral tribunal. Such proceedings require modification of the rules for presentation of evidence, for example, to allow for more of a narrative, or story-telling, procedure in which key documentary evi- dence is stipulated to as authentic and coun- sel is permitted to explain its significance or lack thereof and where testimony of witness- es is limited to specific key points

• Baseball arbitration, often used in conjunc-

tion with a mini-arbitration procedure, in which the arbitral tribunal is presented at the start of the proceedings with a proposed res-

• lution of the dispute by each party and

must choose one or the other of the propos - als as its decision, with no discretion to decide otherwise. In some cases, the parties are given one opportunity to modify their proposed resolutions, usually at the close of the presentations,beforethe tribunal decides. There are, of course, many variations of such procedures, which can be utilised, some- times in combination, to achieve the goal of a speedy resolution.

Alternate dispute resolution

The desire to find quicker and cheaper ways of settling disputes has led to the development of many forms of ADR. In general, ADR tech- niques can only complement and not replace procedures such as litigation or arbitration that do not rely upon co-operation and lead to a binding decision. However, to the extent that parties can save time and money by settling their disputes through ADR, such techniques are very valuable. In addition, the settlement

• f a dispute through ADR may permit the par-

ties to continue mutually beneficial commer- cial relations more easily than if they pursued their dispute all the way to an arbitral award

• r a court judgement. Among the leading

forms of ADR are the following:

• Structured negotiations: An arbitration

clause may provide that the parties shall seek to negotiate settlement prior to any reference to arbitration. Such negotiations can be structured in a more or less elaborate fash- ion, to ensure, for example, that disputes are referred to a steering committee or operating committee, or that senior executives are informed of the matter and have an oppor- tunity to settle the dispute in the context of

• verall corporate business objectives and

commercial relationships among the parties, rather than in the context of a narrow focus

• n the specific dispute
• Mediation: Mediation is a settlement tech-

nique in which a neutral third party acts as a facilitator to assist parties in a dispute to arrive at a negotiated settlement. As Redfern and Hunter, experts in international dispute resolution put it, “The task of the mediator is to attempt to persuade each party to focus

• n its real interests, rather than on what it

conceives to be its contractual or legal enti- tlement.” The mediator’s mission may include formulating and presenting the terms

• f a settlement. There are various interna-

tional or institutional rules for mediation that may be adopted in a contract or when a dispute arises. For example, the UNCITRAL mediation rules were adopted in 1980 and the ICC has recently promulgated new ADR rules, replacing its 1988 Rules of Optional

• Conciliation. Specialised institutions exist to

provide mediation and other ADR services. For example, the Centre for Effective Dispute Resolution (CEDR) in London and the CPR Institute for Dispute Resolution in the US

• Mini-trial: A mini-trial is an informal proce-

dure in which the two parties to a dispute present elements of their case, be it docu- ments or oral arguments, in a hearing before a neutral adviser, often a retired judge, that may last one or two days. The neutral advis- er then gives a preliminary opinion, indicat- ing how a court or tribunal might decide the

• case. The mini-trial is meant to give the par-

ties a realistic idea of their prospects in a real trial or arbitration. For this reason, it is expected that senior executives of the two parties will attend the mini-trial, which is then followed by negotiations.

• Expert determination: When a dispute con-

cerns a technical matter, the parties may wish to refer the matter to an expert or panel

• f experts for an opinion or decision. A wide

range of procedures is available. The parties may, for example, agree to institute a dispute review board (DRB), which will hear disputes and give an opinion that the parties may or may not accept. Alternatively, a dispute adjudication board (DAB) may be established to review disputes and render decisions that will be binding upon the parties unless chal- lenged in arbitration within a specified peri-

• d of time. Depending upon the nature of the

contract and the amounts of money at stake, the parties may establish the DRB or DAB at the beginning of their project, so that its members become and remain familiar with the project and are available on short notice to hear disputes. These and other ADR techniques can promote rapid and relatively inexpensive resolution of disputes. They are less con- frontational than litigation or arbitration, and therefore may facilitate the continua- tion of commercial relations between the

• parties. However, successful ADR ultimate-

ly depends upon the good faith of the par- ties and their willingness to compromise. Pursuing ADR may be a waste of time and money if a settlement is clearly beyond

• reach. If parties agree to ADR, either in their

contract or after a dispute arises, their agree- ment should include appropriate time limits and provisions for the binding settlement of disputes if their ADR proceedings do not pro- duce a settlement or a party does not comply with a settlement reached through the ADR procedure.

Conclusion

In conclusion, working within the context of power project negotiation, it can be seen that the adoption of the appropriate dispute reso- lution procedures can save money and time. It can also act to minimise the stress on the

• verall commercial relationship and progress
• f a project, which might otherwise result

from the need to resolve disputes.

POWER

Biography

David Rosso is partner-in-charge in Milan for Jones, Day, Reavis & Pogue and has been active in the public utility and energy indus- tries for more than 30 years, including major engagements in litigation, arbitration and project finance. Most recently he has con- centrated on the restructuring of the electric and gas industries in the US and abroad. David can be contacted via telephone on +39 02 7645 4001 or email: djrosso@jonesday.com. Carroll Dorgan is counsel in the Paris office of Jones, Day, Reavis &

• Pogue. He concentrates on international commercial arbitration

and other forms of dispute resolution relating, in particular, to complex long-term contracts and construction contracts. Carroll can be contacted via telephone on +33 156 59 38 54 or email: csdorgan@jonesday.com.

‘Damage awards a year or two later for usurpation are no way to run a power system or an economy’

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