Energy and Natural Resources Case Law Update - Issue 6
The COVID-19 crisis interrupted many things, including the twice-yearly publication of this august digest. However, it did not stop a regular stream of English law legal developments which will affect Energy and Natural Resources (ENR) sector businesses, both domestically, and (where contracts are governed by English law) internationally. This bumper edition of our Case Law Update summarises a number of significant English Court decisions relevant to businesses in the ENR sector that were handed down in the period July 2020 to July 2021, and the key takeaways arising from them.
A common theme through a number of the cases is the attempt by parties to use various contractual mechanisms (such as the requirement for consent or fulfilment of required capacity levels) to shift the burden of certain business risks in order to improve their commercial position. The decisions discussed below demonstrate the Court’s approach to construing contractual provisions in a balanced and considered manner, providing parties, and participants in the sector more generally, with consistency and certainty in the face of unsettled market conditions. As the ENR Sector emerges from the lingering shadow of the pandemic, understanding the nuances that often sit behind the operation of complex contractual provisions can be invaluable in releasing commercial pressures and has rarely been more important.
Those common themes arise across a broad range of contractual frameworks. The disputes covered below relate to a Transportation and Processing Agreement, Long Term Gas Supply Agreements, Farm Out Agreements, Joint Operating Agreements and Commodities Trading Agreements, all of which we come across regularly in our practice. Also covered below and of great importance are issues of broad application in the ENR sector, notably the impact of illegality, the reach of the Human Rights Act, and the rules on state immunity.