Nigeria: DPR Adopts Dispute Resolution Mechanism for Oil Industry

16 April 2021

The Director of the Department of Petroleum Resources (DPR), Mr. Sarki Auwalu, has declared that the era of unnecessary litigation arising from conflicts in the Nigerian oil and gas industry was completely over with the institutionalisation and application of Alternative Dispute Resolution (ADR) channel for the industry.

Auwalu stated this yesterday in Lagos at the flag-off of the oil and gas industry Alternative Dispute Resolution Centre (ADRC) and inauguration of the 20-man Advisory Council and the six-man Body of Neutrals, both for the centre.

ADRC is one of the flagship centres of the National Oil and Gas Excellence Centre (NOGEC) sited at the former DPR headquarters in Lagos and is primarily aimed at resolving conflicts among parties relating to commercial, contractual, technical, host community issues, among others, in the industry without recourse to law courts.

He said unnecessary litigation was uncalled for as it retards the growth of the oil and gas industry and creates a lot of conflicts among contractual parties, technical parties, and commercial parties, among others.

"It is completely over; unnecessary litigation is uncalled for, it really retards the growth of the industry. It creates a lot of issues within the parties, whether it is contractual parties, technical parties, and commercial parties.

"All these, the centre is there to address and make sure that it mediates, it arbitrates, it reconciles so that the industry will grow," he said.

He said the ADRC was established with the principal aim of providing a platform where disputes in the oil and gas industry could be settled in a timely, cost-effective, and mutually agreeable manner.

He added that the department had noted the several oil and gas related disputes that were currently pending before the Nigerian and international courts and tribunals.

These disputes, according to him, usually take a considerable amount of time and cost to resolve.

Auwalu noted that a typical dispute in court runs for a significant period prior to the rendering of a final judgment, which might not be to the satisfaction of any of the parties.

He stated that in certain instances, court judgments and even arbitral awards did not adequately resolve disputes in a manner consistent with the regulatory and commercial interests of the industry.

"There was therefore an increasing awareness of the need to establish an Alternative Dispute Resolution (ADR) Centre specifically designed for use by the oil and gas industry in Nigeria.

"The setting up of the ADRC is in consonance with the provisions of the Petroleum Act Cap P10 Laws of the Federation 2004, which emphasizes the settlement of disputes through alternative dispute resolution mechanisms without recourse to litigation," he said.

Auwalu said the oil and gas industry expected the ADRC to ensure that all the disputes in the industry were resolved amicably to increase sustainability and investment and reduce risks and uncertainties in the sector.

He noted that the oil sector was always faced with lots litigation across the value chain pointing out that this litigation reduces profitability and increases reduction in investor confidence in the industry.

"But today, with the establishment of the Advisory Council and the Body of Neutrals for the Alternative Dispute Resolution Centre, with the calibre of people that are in this Advisory Council and the Body of Neutrals, it shows that the industry is lucky to tap from the wealth of experience of these learned individuals and experienced industry professionals.

"At least we know now that the litigation is going to be totally reduced or even eliminated, and we are happy with the gracious acceptance of this particular initiative by the industry as you can see from all the people present.

Meanwhile, the members of the ADRC Advisory Council included the DPR Director, Auwalu (Chairman).

Others are Hon. Justice Saliu Saidu, Hon. Justice Cecelia Olatoregun, Chief Bayo Ojo (SAN), Mr. Daere Akobo, and Mr. Nicholas Odinuwe of PETAN.

Similarly, members of the ADRC Body of Neutrals are Mr. Anthony Madiche, Prof. M. Okorodudu Fubara, Hon. Justice J. Shakarho, Mrs. Funke Adekoya (SAN), Mr. Musa Adamu, Mr. Isaiah Odeleye, and Mrs Elizabeth Akah.

Others are: Chief Offiong Effiong Bassey (SAN), Mr. Japhet Nwanduno, Mrs Ungbuku Dauperemo Dele, Mr. Valentine Obi (SAN), Mr. Fidel Onichabor, Dr Arome Okwori, Mr. Godfrey Eitekerenshe, Mr. Osten Olorunsola, Mr. Dozie Irrechuckwu, Dr Nike Esan, Mr. Lucky Nengite, Mrs Yinka Omorogbe, and Mr. Ayuli Jemide.

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