RDOC Mock SAQ Flashcards
Phentes Gas entered an agreement in 2009 for the development of a gas production
plant with Yemen Gas Company. Phentes agreed to construct an extraction and
processing plant in Balhaf, Yemen. In return Phentes were to receive a share of the
profits on the sale of Liquefied Natural Gas (LNG). The agreement between the
parties contains a clause which stipulates that any disagreement arising from the
contract must be referred to arbitration, the contract further sets out the mechanism
and rules for doing so. The agreement also contains a clause which allows the
parties to vary the percentage of the profit which Phentes receives on the sale of
LNG if market conditions vary to a degree specified in the agreement between the
parties. The construction of the plant was largely successful and exports commenced
in 2010.
In 2018 Yemen Gas Company decided that the conditions specified in the contract in
which Phentes percentage of profit could be varied had arisen. They therefore
started to pay Phentes a lower percentage of profit on the sale of LNG from that time.
Phentes dispute that Yemen was entitled to do this and have referred the matter to
arbitration.
In the circumstances of this case what are the benefits to Phentes of referring the
matter to arbitration rather than commencing court proceedings? [8 marks]
The parties are contractually bound to arbitrate (1 mark) (25.05, 25.06). If
Phentes commence proceedings those proceedings are likely to be stayed (1
mark) thereby wasting time and money (1 mark) (25.08)
Arbitration may be quicker to conclude than litigation (0.5 mark) (25.04)
allowing the parties to establish their rights and obligations/continue business
as quickly as possible (0.5 mark)
Arbitration will be confidential (0.5 mark) neither party is likely to want the
dispute to become public (0.5 mark) (25.04, 25.21)
The parties may appoint suitable arbitrators who have experience in dealing
with contract clauses of this type 1 mark (25.11)
The parties may agree to limit disclosure (0.5 marks) (25.14) and/or witness
evidence (0.5 marks) in order to make the dispute resolution process quicker
and cheaper (0.5 mark) (25.14)
Arbitration may limit appeal rights (0.5 mark) thus allowing the parties greater
certainty/stability (0.5 mark) (25.26)
2018-2019
The parties in arbitration may be able to agree a neutral location and neutral
arbitrator (1 mark) (25.04)
Arbitration has greater enforcement powers (1 mark) (25.24)
Marie and Geoff formed a business called Blue Felt Design Limited which provided
online design services for small business in 2006. At the time the company was
incorporated Marie and Geoff were married. The company provided website design
and support as well as promotional material and corporate image assistance. The
company has grown steadily and since 2009 Blue Felt has provided their sole
incomes. In 2011 Blue Felt employed the couple’s daughter Siobhan. In 2017 Marie
and Geoff’s relationship broke down due to infidelity on Marie’s part. Both parties
attempted counselling to repair their relationship which did not work. Marie and Geoff
have continued to work at Blue Felt but the situation now has become impossible due
to disagreements at the workplace. Marie and Geoff both want to buy the other party
out. They have now agreed to attempt mediation in an effort to resolve their dispute.
Both parties are represented at the mediation. At the start of the mediation before the
opening stage where both parties are to set out their position Geoff becomes highly
emotional and says that he cannot face seeing Marie.
(a) What steps may the mediator take in order to assist the mediation in light of
Geoff’s emotional state? [1 mark]
Answer –
The opening joint session may be dispensed with/shortened to limit contact
between the parties ADR Handbook 15.06
(b) On the facts of this problem why would a facilitative rather than evaluative
approach be more suitable [5 marks]
This is not a situation where only one of the parties is ‘in the right’ [1 mark]
a facilitator can help them achieve a compromise, rather than decide who
wins [1 mark]
A facilitative mediator will not be expressing their view [1 mark].
This will
allow the parties to feel that they have more control over the outcome [1
mark]
Evaluative mediation may create perception of bias making the parties
much less likely to reach an agreement [1 mark]
Evaluative may entrench positions making the parties much less likely to
reach an agreement [1 mark]
Facilitative focuses on underlying objectives [1 mark]
Facilitative can have creative solutions [1 mark]
Facilitative may be more suited to the emotional nature of the hearing [1
mark]
ADR Handbook 14.06 – 14.12
Unfortunately Geoff and Marie do not reach a settlement in their mediation. Each
party made offers during the course of the mediation but despite some progress a
final settlement was not reached.
What should the mediator do at the conclusion of the mediation? [4 marks]
The mediator will usually record that no agreement has been reached [1 mark]
The mediator is likely to summarise the closing positions of the parties [1
mark]
The mediator may invite the parties to let their closing offers remain open for
acceptance for a limited period of time after the mediation [1 mark]
The mediator is likely to summarise the progress made [1 mark]
The mediator may encourage the parties to try to settle [1 mark]
ADR Handbook 15.29
Geraint employed Blaenavon Builders to renovate the front of his property in
Crickhowell. Whilst most of the work was done to a satisfactory standard, part of the
paintwork was not completed. Geraint employed another local workman to complete
the work at a cost of £750 plus VAT. Geraint wrote to Blaenavon threatening to issue
proceedings if he did not pay this sum of money. Blaenavon have now offered to pay
Geraint £600 to settle the matter, which he has accepted.
(a) Explain how the parties record the agreement, giving reasons [2 marks]
As the agreement has been reached before issue [1 mark] settlement will
normally/should be recorded in a contract/written agreement [1 mark]
(18.06 onwards. See discussion at 18.14 on the dangers of oral agreements)
(b) If Blaenavon fail to pay the £600 to Geraint what action can he take [2 marks]
Geraint will have to bring an action/issue proceedings/a claim [1 mark] to
sue on the contract [1 mark]
ADR Handbook 20.02.
(a) If Agritex unreasonably refuse to engage in ADR a court may make an
adverse costs order against them. What factors would a court take into
account in determining whether to make a costs order against Agritex? [4
marks]
Answer – Nature of dispute [1 mark] Merits of the case [1 mark] Whether costs of ADR too high [1 mark] Whether reasonable prospects of ADR being successful [1 mark] (ADR Handbook 11.08)
(b) Give two types of ADR which would be suitable for this dispute and a reason
why it would be suitable in this scenario for each [1 mark for each type up to
a maximum 2 marks; 1 mark for each reason up to a maximum of 2
marks]
Arbitration, expert determination, mediation, med/arb or arb/med plus a
valid reason for each – the reason must link to the problem rather than
be general.
