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RULES 1959
Rule 33 of the petroleum & natural gas rules says any
dispute between government and the licensee or lessee
shall be settled through arbitration and conciliation
proceedings under the provisions of Arbitration and
Conciliation Act 1996
As per article 33 of model production sharing contract
a dispute between the government and the contractor
may be referred to a sole expert, conciliator or to
Settle Disputes
The parties shall use their best efforts to settle the
disputes amicably that arise in connection to the terms
and conditions of this contract
Sole Expert
Matters agreed by the parties by this contract will be
referred to sole expert
The sole expert shall be an independent and impartial
person of international standing with relevant
qualifications and experience appointed by a written
agreement between the parties
Sole expert shall not have any commercial interest
Sole Expert
Appointment of sole expert within 30 days by mutual
agreement between the parties
If parties fail, Then they have to appoint an institution
or agency or person to appoint a sole expert within 30
If again fail to appoint an institution or agency or
person to appoint a sole expert within 30 days then the
matter will be referred to arbitration
If Agency or institution or person fails to appoint a sole
expert within 30 days
Sole Expert
Then the matter will be referred to arbitration
Decision of the sole expert shall be final and binding
on the parties and shall not be subject to arbitration
Sole expert appointed shall be acting as an expert and
not as an arbitrator

Arbitration covers only matters other than those
referred to expert.
Any matter between the parties which is not settled
within 90 days after the dispute arises then the matter
will be referred to arbitral tribunal or conciliation for
final decision
The arbitral tribunal will consists of three arbitrators
Each party will appoint one arbitrator
Two appointed arbitrators will select the third
If one party fails to appoint an arbitrator within 30
days on the request by the other side then the second
arbitrator will be appointed as per the arbitration and
conciliation act 1996
If appointed two arbitrators failed to appoint a third
arbitrator then the third arbitrator shall be appointed
as per Arbitration and Conciliation Act 1996
If any of the arbitrator fails or unable to act the
successor will be appointed

Decision of the arbitral tribunal to be pronounced
within 4 months or time agreed by the parties
The decision of the majority shall be final and binding
on the parties
The right to arbitrate disputes under this contract shall
survive expiry or termination of this contract

Arbitration agreement contained in this article as per
the Arbitration and conciliation act 1996
Arbitral award can be challenged in court on certain
grounds as per the Arbitration act 1996[Section 34(2)]
It can be enforced as it is decree of the court [Section
Prior to submitting the matter to arbitration the
parties may refer the dispute to conciliation by mutual
No arbitration proceedings during conciliation
Matter can be referred to arbitration only if the dispute
has not been solved within 60 days of the date of the
Government Companies
If the dispute involves between government companies
then such disputes shall be settled in accordance with
guidelines issued on the subject by government from
time to time
Legal Issue
Whether the decision of the sole expert is enforceable?