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Offshore Floating Production


Page 200

CHAPTER 13

Dispute resolution

Stuart Beadnall and Mary Dodwell

A Introduction

13.1 The performance of an FPSO charter is bound to give rise to many circumstances in which the Company and the FP Contractor may disagree. The FPSO must be procured, installed and operated to precise standards in conditions that may be untested and uncertain. Remuneration may be dependent on achieving exacting targets, and circumstances may change from the date the charter was agreed and the date of performance. That is, of course, the whole reason for this book. However, the parties to an FPSO charter cannot afford the time and energy that may be needed for each potential dispute to be resolved entirely to both parties’ satisfaction – the priority is to continue with production. This requires a collaborative relationship. We consider in Chapter 11 the relational nature of an FPSO charter. Therefore, although disagreements cannot be avoided, both parties have a common interest in avoiding disputes, and, where disputes arise, resolving those as quickly and efficiently as possible. That said, when significant problems do arise, the consequences may be so great that formal legal proceedings cannot be avoided. The purpose of this chapter is to set out the nature of the variety of dispute resolution procedures available to the parties to an FPSO charter in order that they may consider which is most suitable for any disputes that may arise.

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