Tag Archives: FAA

Case of the Day: Hardy Exploration v. Government of India

The case of the day is Hardy Exploration & Production (India), Inc. v. Government of India (D.D.C. 2016). Hardy was a participant, initially with other private firms and later on its own, then in the end with an Indian state-owned company, GAIL (India) Ltd., in a contract with the government of India for the development and production of hydrocarbons in an area off India’s southeastern coast. After Hardy and GAIL found hydrocarbons in 2006, a dispute arose as to whether the find was natural gas (as the government thought) or oil (as Hardy and GAIL thought). If the find was oil, then Hardy, for reasons unimportant here, would have forfeited its interest under the contract. Hardy demanded arbitration in Kuala Lumpur, as per the parties’ arbitration agreement. The tribunal found that Hardy’s position was correct, ordered a restoration of the status quo ante, and awarded damages of 5 billion rupees (about $74 million). India sought to vacate the award in the Indian courts (not the Malaysian courts), but its petition was dismissed. Hardy filed a petition to enforce the award in India, and then sought confirmation in Washington. India’s defense was that service of process (by FedEx) was defective under the FSIA. Hardy countered that the contract contained a special arrangement for service of process, and that service was therefore proper under 28 U.S.C. § 1608(a)(1).
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Case of the Day: Getma v. Guinea

The case of the day is In re Certain Controversies Between Getma International and the Republic of Guinea (D.D.C. 2016). Getma had a contract to develop Guinea’s main port in the capital city, Conakry. The agreement called for arbitration of disputes under the CCJA arbitration rules. When a dispute arose, Getma demanded arbitration. The tribunal ultimately awarded Getma significant damages.

During the proceedings, the CCJA had ordered the parties to pay certain arbitration costs in advance. The tribunal asked the CCJA, which was administering the arbitration, to increase the arbitrators’ fees. The CCJA seemed to encourage or at least countenance this request, and the parties indicated they had no objection. But later, the CCJA rejected the tribunal’s effort to increase the fees, citing its prior precedents. Nevertheless, the tribunal’s award included a demand for € 450,000 in arbitrators’ fees, contrary to the CCJA’s decision. “And somehow, the tribunal eventually collected half of the increased arbitrators’ fees from Getma,” the prevailing party.

Guinea sought to annul the award in proceedings before the CCJA, and the CCJA granted its petition on the ground sthat the tribunal had violated the CCJA rules by increasing its fees, which only the CCJA had the authority to do. Getma sought confirmation of the now-annulled award in Washington.
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