Arbitrators Give Early Win to Trans-Global Petroleum in Claims Against Jordan

TGP's BIT claims arise from a 1997 concession agreement, concluded by TGP andJordan where TGP carried out oil exploration activities in its Dead Sea license area for 10 years, investing over $29 million. TGP notified the government in August, 2005 that it made important oil discoveries and then sought a financial partner for fast-tracking the development of its new oil discoveries. The Jordanian authorities through its Natural Resources Administration (NRA) sought, though unsuccessfully, to terminate its contract rights. The NRA then intervened with its partnering effort and effectively forced TGP to surrender a controlling stake in its concession, as well as operating control of the concession to a newly formed entity owned by a Lebanese billionaire with no experience in oil exploration. Since then Jordanian officials have undertaken a media campaign against TGP, including the denial of any oil discoveries, sought to cancel its custom's exemptions and legal status and refused further communication with TGP, all the while showing strong favoritism to the new entity.

For these reasons, TGP filed a "Request for Arbitration" with the World Bank's International Centre for the Settlement of Investment Disputes (ICSID), alleging that Jordan's NRA violated the U.S.-Jordanian BIT through a pattern of unfair and discriminatory treatment.

Jordan responded to the Request by seeking to throw-out TGP's claims under the BIT, via a new ICSID Rule (41-5), claiming they were "manifestly without legal merit." The arbitrators ultimately rejected Jordan's arguments for dismissal and declared that TGP's allegations concerning discrimination and unfair treatment were legally sufficient at this stage. TGP had agreed to withdraw a third claim, based on "a failure to consult," which was consequently memorialized in the decision.

"We are pleased, but not surprised, at the arbitrators' decision," said TGP's President, Nick Abraham. "We have always contended that our rights have been grossly violated. We look forward now to the opportunity to present our evidence on those claims to the international arbitration panel." While a damage claim for $700 million was previously filed by TGP, the company has stated repeatedly that it meant no harm to the Kingdom or people ofJordan, who also suffered from these actions by the NRA, through the delay in the development of badly needed oil resources.

SOURCE Trans-Global Petroleum

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Copyright © 2008, NewsBlaze, Daily News

Tags: ,OIL,LAW,FOR,POL,TGP-Jordan-arbitrate

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