Application of the Theory of Dépeçage to Upstream Oil and Gas Contracts
Date
2018-03-29
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Abstract
Determination of the applicable law in upstream oil and gas contracts plays an important role with regards to the parties’ rights and liabilities. There are various approaches regarding the choice of applicable law and different theories have been expressed relating to choice-of-law provisions. This research explores one of these theories called Dépeçage in private international law and conflict of law. The theory of Dépeçage is a concept in private international law that refers to the process of cutting a case into individual issues whereby each issue is constrained to a different applicable choice-of-law analysis. In other words, the theory of Dépeçage is the application of different laws to various legal issues arising from a dispute. The theory was first applied in Tort law and specifically aviation litigation. This research shows that there is an opportunity to gain many advantages by the application of the theory of Dépeçage in upstream oil and gas contracts. However, adopting this theory ought to be treated with caution due to its disadvantages and the issues it may cause if not applied within a specific framework. Therefore, for appropriate application of Dépeçage, upstream oil and gas contracts must meet certain criteria such as protecting parties’ justified expectations, and maintaining parties’ interests. Also, this theory should not be applied in cases where it would lead to dissatisfaction of the contracting parties, destruction of legislative intention, or invalidation of a contract. Moreover, the applicable law that has the greatest concern for each issue must be applied to effectuate the purpose of each of the applied rules. In other words, choice-of-law values are significant principles for the application of Dépeçage. Lastly, judges and arbitrators must provide criteria and legal reasons for the application of Dépeçage in upstream oil and gas contracts during the dispute resolution process.
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Keywords
Dépeçage, Upstream Oil and Gas Contracts, Different Governing Laws, Choice-of-Law, Issue-by-Issue Basis, Conflict of Laws
Citation
Karimi, S. (2018). Application of the Theory of Dépeçage to Upstream Oil and Gas Contracts (Master's thesis, University of Calgary, Calgary, Canada). Retrieved from https://prism.ucalgary.ca. doi:10.11575/PRISM/31771