Dispute Resolution in International Business - Research Paper Example

Running head: business law 15th November Introduction Abu Dhabi National Oil Company (ADNOC) iscategorized as the fourth largest company which is used to distribute and reserve oil and gas. The company, which is owned by the government of United Arab Emirates, is estimated to have a reservation of 137 billion barrels. On daily basis Abu Dhabi National Oil Company is able to oversee 2.7 million barrels which makes it competitive with other oil production companies. Policies to be used during extraction of the oil and gas are formulated by Supreme Petroleum Council (SPC), the president of United Arab Emirates and other rulers from the Abu Dhabi (Stephan and Christopher, 2012). The policies formulated must be taken into consideration for implementation purposes. Due to dispute that may arise either from the residents of United Arab Emirates or investors from other countries, ADNOC is a company which is committed to ensuring that sustainable development or equal share between individuals and the earth is achieved. Due to this fact, it has made the company to be competitive and thus it has substantial business transactions by either transporting, shipping oil to other countries, marketing oil and distributing. The demand of oil from non producing countries has made United Arab Emirates to expand and develop other gas fields. Due to this expansion Abu Dhabi National Oil Company has 14 companies for distributing oil, gas and other crude oil. This paper seeks to discuss and examine the means of dispute resolution used by Abu Dhabi National Oil Company in United Arab Emirates. United Arab Emirates is a country that is known for foreign investments and thus the country does not have domestic laws which protect those individual who invest in the country. Treaties are normally used in United Arab Emirates though there is need to come up with investment protection and legal means which are used when there is an investment opportunity. Governing law The Great Britain was the one which granted emirates free from protectorate laws in 1939 to 1953. During this entire period the law to govern the Emirates of Abu Dhabi was not documented and thus no legislative or administrative means could be used to cancel any business operation that was being carried by the investors. In 1960s agreements between Abu Dhabi and other international oil companies were written requiring the applicable law to be used while carrying business transactions either abroad or locally. The agreements which were signed out contained force of law and thus incase of breaking it then one was answerable to the law. The agreement signed additionally, contained the general principles of law which are recognized by the United Arab Emirates and other states. The general principles of law are recognized so that to alert foreigners that United Arab Emirates has governing laws since it is a sovereign state which should be respected together with the natural resources which are available. ADNOC has been keenly governed by the laws of United Arab Emirates and thus making the company to distribute oil in the recommended way which is a reflection that laws exist and have developed. Other law which must be observed when carrying any transactions in United Arab Emirates is UAE Civil Transactions Law. Another law which makes foreigners to increase their confidence with ADNOC or any other company is Commercial Transactions Laws which guarantees the contactors and foreigner’s fairness while dealing with them. Dispute resolution by arbitration Incase of disputes while carrying business transaction in oil and other related products it can be resolved through international arbitration where a neutral city like London or Paris can be involved in. This means negotiations can proceed which has been recommended by Abu Dhabi as a dispute resolution measures. Arbitration goes in hand with international norms instead of engaging to litigations and other market suctions. For example Abu Dhabi National Oil Company usually calls for domestic arbitration when disputes arise locally. If a contract is given to another state and dispute arises, then it is taken to international level where a neutral city is engaged so that the dispute can be resolved. One of the organizations that are in United Arab Emirates that are concerned with domestic arbitration is Abu Dhabi Commercial Conciliation and Arbitration Center (ADCCAC) (Berger, 2006). United Arab Emirates is recognized as the best foreign arbitrator and it has once been awarded with Foreign Arbitral Award in New York. Even if the courts in United Arab Emirates try to solve domestic issues using arbitration means they have been experiencing challenges due to errors that have been occurring in the courts. Based on this fact, then the local individuals use local procedural rules in case of dispute and thus they are resolved amicably. Treaties Bilateral Investment Treaties (BITs) have been used by a number of countries where agreements are signed by the investors so that incase of violation of terms and conditions of the treaty one can be taken in the court of law. Due to this aspect, most of the investors who carry business transactions with Abu Dhabi National Oil Company have an advantage since it allows for international arbitration (Ulfstein, 2007). The treaties are signed if the host government feels that damages have been caused in the country of host or the contract is not done the way it is supposed to be done thus requiring an international obligation treaty. The treaties are signed so that the investors can be treated equally with the locals if the contractor is from a foreign county. Secondly, there is need for compensation if serious offense is committed while carrying the daily to day routines and thus payment is required and compensated fully. Thirdly, it is signed so that discrimination is eliminated while offering the contract. The treaty signed leads to government being involved in negotiations and thus increases the chances of arbitration. The violation of laws that have been set leads to investors convincing the arbitration panel that such an occurrence will never be repeated and thus negotiations will be given the first priority. Long term investment with United Arab Emirates should be signed since international and local treaties are available leading to favorable environment. Mediation Mediation is like arbitration where a neutral individual is involved in dispute settlement. This involves the government of United Arab Emirates stakeholders of Abu Dhabi National Oil Company and the investors. The method of dispute reconciliation is the best instead of applying trade litigation which only lead to economic down fall of the country which has been litigated. This makes it possible to create friendly environment with the countries which have violated the law and litigation should only be applied as the last option when the affected investor makes the same mistake more than thrice and thus ban to trade with is encouraged (Moffitt and Schneider, 2011). Disputes should not divide investors with countries so that economic stability will stabilize leading to long term investment. The facts that have led to the dispute must be brought into account so that the partial individual or the mediator is able to asses the strength and weakness of both sides. Incase of Abu Dhabi National Oil Company has a dispute with a local company, then an agreement in writing is done and signed so that terms and conditions of working will be followed according to the agreement. Conclusion While undertaking their activities, companies such as Abu Dhabi National Oil are involved in disputes that needed to be addressed in a timely manner. Given the importance of domestic and foreign investment in terms of creating wealth and employment, Abu Dhabi National Oil has emulated effective methods of resolving their disputes. With the application of governing law, arbitration, treaties, and mediation, ADNOC has ensured that the disputes that occur during its operation locally and globally are properly handled. References Berger, K. (2006). Private dispute resolution in international business: Negotiation, mediation, arbitration. Netherlands: Kluwer Law International. Moffitt, M and Schneider, A. (2011). Dispute resolution. New York: Wolters Kluwer Law & Business. Stephan, E and Christopher, D. (2012). Abu Dhabi and Gas Updates: Investment Protection. Available from http://www.pillsburylaw.com/publications/abu-dhabi-oil-andamp-gas-update-investment-protection Ulfstein, G. (2007). Making treaties work: Human rights, environment and arms control. Cambridge: Cambridge University Press. Read More