Legal tips Dispute resolution
The financial pressures caused by the low oil price has led to a significant increase in the number of disputes in the industry, at all levels in the contractual chain. Set out below are some key points to to keep in mind when considering litigation/arbitration:
– – Pre contract – carry out extensive credit checks and, if possible, obtain security – – Be vigilant – keep a constant eye on unpaid invoices and the changing financial status of the debtor – – Keep careful records – document all phone calls and meetings and preserve all emails and documents – – Review contract termination provisions – in particular termination for cause – and follow the contractual notification process to the letter – – Don’t delay – consider the choice of law and dispute resolution clauses and escalate the dispute resolution process sooner rather than later – – ADR – make sure you closely follow any contractual alternative dispute resolution procedures before commencing litigation/arbitration – – Look carefully at enforcement before spending a lot of money on litigation/arbitration – there is nothing worse than a pyrrhic victory
– – If the counterparty is in serious financial difficulty, litigation/arbitration should be commenced as quickly as possible – it may be possible to obtain a judgment in default and enforce that (eg by a third party debt order or a charge over property or shares). Once enforcement is complete this may allow you to keep the recovery, as a secured creditor. However, if you do not complete enforcement before an insolvency process commences, you are usually part of the general body of unsecured creditors (and may make only a minimal recovery) – – Consider using expedited procedures within the relevant arbitration rules or rules of court – consider interim remedies, such as freezing of assets and security for costs – – Manage the litigation/arbitration carefully – through cost control and consideration of innovative litigation funding, such as third party finding or insurance backed products. Don’t throw good money after bad
17
Made with FlippingBook Annual report