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Scenario Analysis: Business Dispute Arbitration

Question

A is a Malaysian contractor in the oil and gas business. B is a large British oil exploration company. By a written Contract, B appointed A in January 2008 to maintain B’s offshore platform for a period of 3 years. The platform is just off the coast of Terengganu. The contract between A and B states that, "Any dispute, controversy or claim arising out of or relating to this contract, or the breach, termination or invalidity thereof, shall be decided by arbitration in accordance with the Rules for Arbitration of the Regional Centre for Arbitration Kuala Lumpur by three Arbitrators appointed in accordance with the rules. The place of Arbitration shall be Switzerland". By letter dated 31.12.2009, B terminates the contract with A, stating that the termination was due to unsatisfactory work performed by A and that B has incurred various costs rectifying A’s shoddy work. A issued a Notice of Arbitration in January 2010 pursuant to the arbitration agreement in the Contract and claims for loss of profits as a result of the termination of the Contract. B however, has filed a claim in Court against A for breach of Contract and for damages related to the costs it says it suffered as a result of the shoddy work. At the Preliminary meeting with the Tribunal, it was discovered that the Contract was in fact not signed by B although both parties performed their obligations under the terms stipulated under the written document (the Contract) from January 2009. On this ground, B challenges the Tribunal’s jurisdiction to hear and determine the dispute on grounds that there is in fact no Contract (and therefore any arbitration agreement) between A and B. Based on the aforesaid facts, discuss the following:

  • Whether the Tribunal may determine if it has jurisdiction to hear and determine the disputes between the parties. if so, explain with reasons whether there is, in your view, an arbitration Agreement between A and B. what, in your view, is the seat of the arbitration in this dispute whether B may proceed with its action in Court.
  • If so, explain with reasons whether there is, in your view, an arbitration Agreement between A and B.
  • what, in your view, is the seat of the arbitration in this dispute
  • Whether B may proceed with its action in Court.

 

Summary

The question belongs to Law, particularly to business law. It is about an oil refinery company and a contractor. According to their agreement, any dispute arising out of the contract had been arbitrated to the Regional Centre for Arbitration Kuala Lumpur. The details for this scenario have been given in the solution in detail.

Total Word Count 2409


 

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