Mock Case Abstract

The mock case centers on an oil & gas joint operating agreement (“JOA”) between SearchOil S.A., a company wholly-owned by SearchOil (a Texas oil & gas company), and Latin Oil S.A. (a State owned company) for the exploration and eventual exploitation of a local oil field.Under the JOA, US$3 million was budgeted for exploration expenditures during the first year of operations. However, LatinOil paid only US$250,000 of its share of cash calls.

SearchOil S.A. and SearchOil made several written requests for payment. They also gave notice to LatinOil S.A. that they were going to exercise their right to forfeit LatinOil S.A.’s share in the JOA for lack of compliance. Two months later, LatinOil S.A. terminated the JOA citing a deficient conduct in oil and gas operations resulting in environmental ramifications as well as lack of compliance by SearchOil S.A. with the cash call procedures established under the JOA. In response, SearchOil and SearchOil S.A. filed a request for ICC arbitration against both LatinOil S.A. and the State rejecting the termination of the JOA and arguing LatinOil S.A.’s lack of compliance with its cash call obligations.

The mock case will expose Seminar participants to questions that arise in the handling of an arbitration case, including choice-of-law applicability, implications of an arbitration clause, environmental issues, and the public policy matters that may arise in oil and gas cases.

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