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PRACTICE NOTES
Role of oil service agreements in a petroleum project A typical oil and gas project can be divided into four key stages: • exploration/appraisal—when a company will look for oil/gas and determine if the project is economically feasible • development—this phase commences once the project has been appraised as economically viable, and therefore the relevant infrastructure to search for and get the oil/gas out of the ground must be constructed • production—during this stage, oil/gas is produced and sold; and • abandonment—when the company proceeds to its plugging and abandoning operation, which takes place once the economics are no longer sustaining the project as a whole For more details on the typical agreements seen in the UK upstream oil and gas projects, see Practice Note: Upstream Oil and Gas Agreements on the UKCS. The exploration phase is arguably the most critical within the cycle of an upstream petroleum project, given that the oil and gas operator will determine, during the appraisal
PRACTICE NOTES
Introduction The business model underpinning a liquefied natural gas (LNG) project is of fundamental importance since this will determine the risk profile of the project as a whole and consequently, the type of financing that will be required. The choice will ultimately depend on a number of factors, including the risk appetite, fiscal and tax considerations and financing issues of the relevant investor as well as their interest in investing in one or more of the LNG chain segments (For more details on the LNG value chain, see Practice Note: LNG—an introduction). LNG projects can be structured in a number of different ways: • integrated/non-integrated • merchant/tolling In an integrated model, there is unity of ownership throughout the entire LNG chain, from production through to liquefaction—that is, one or more investors holding the underlying upstream concession/PSC also own the rights to the natural gas reserves. As a result, the upstream owners build the infrastructure which is necessary both to extract the natural gas from the ground as well as to monetise
PRECEDENTS
1 What must you do if you are invited to a trade association meeting? Insist on an agenda before attending a trade association meeting and always review the agenda in advance. Satisfy yourself that the agenda topics are permissible under competition law by reminding yourself of the permitted and non-permitted areas for trade association meetings (see What are the permitted areas for trade association meetings? and What are the non-permitted areas for trade association meetings? below). If in doubt about the legality of any topic seek legal advice. If legal advice is not available in time, do not attend the meeting. [You must inform [insert, eg the legal department] if you are joining
PRACTICE NOTES
This Practice Note was originally drafted by Christopher Kerr-Smiley, Legal Director at Womble Bond Dickinson, but is now maintained by Lexis+® UK Private Client. Trusts are commonly used by private individuals as a way to hold assets, generally in order to preserve and protect those assets for the benefit of others, usually family members, but sometimes for their own benefit as well. Commercial lawyers will often come across trusts in this context, where one or more parties to a transaction on which they are advising are holding assets in a trustee capacity. However, the use of the legal relationship which is created by a trust extends far beyond the family situation. Trusts are found in many different commercial contexts, such as pension trusts, employee benefit trusts and unit trusts. They are also used in lending transactions, eg syndicated loans, and many smaller charities operate through a trust structure. See Practice Note: Commercial uses of trusts. The issue of the extent to which traditional equitable principles apply in commercial contracts was considered in
PRACTICE NOTES
There is no general right to damages caused by unlawful administrative acts. However the court does have a discretion in certain circumstances to award damages in successful claims, which it will only exercise where it is just and appropriate to do so. This Practice Note explains how a public authority can deal with an application for damages in judicial review proceedings and when such an application may arise. It includes a checklist summarising the key considerations for defending a damages claim in judicial review proceedings. Jurisdiction to make a monetary award in an application for judicial review Senior Courts Act 1981 The judicial review procedure does not create any new right or remedy in damages. The court’s discretion to award damages is confined to cases where the claimant has also established a private law cause of action in the course of judicial review. See: R (Quark Fishing Ltd) v Secretary of State for Foreign and Commonwealth Affairs [2005] UKHL
NEWS
Arbitration analysis: The Hong Kong Court of Appeal refused leave to appeal from the refusal of a stay under section 20 of the Arbitration Ordinance (AO). Section 20(9) of the AO provides that no appeal shall lie from the refusal of a stay except with the leave of the first instance judge, which had been refused. Although invited to do so, the Hong Kong Court of Appeal declined to provide obiter guidance on the threshold for granting a stay under section 20 of the AO. While recognising the issue as one of general significance, the Hong Kong Court of Appeal instead deferred a discussion to a case in which the issue can be properly raised. The current Hong Kong position to require the court to stay an action when there is a prima facie case of an arbitration agreement is not without its difficulties, particularly as this case demonstrates, where it was contended that the arbitration agreement was forged. Written by Paul Starr, partner at King & Wood Mallesons.
NEWS
EU Law analysis: In Budapest Főváros IV Kerület Újpest Önkormányzat Polgármesteri Hivatala v Nemzeti Adatvédelmi és Információszabadság Hatóság, the Court of Justice ruled that national supervisory authorities have the power to order data controllers to erase unlawfully processed personal data, even if the data subject has not directly asked for this. The court also stated that, when data processing is unlawful, the national supervisory authority can order the erasure of personal data whether the controller collected the data directly from data subjects or from third parties. This ruling could have a significant impact on future data-driven products and services, as businesses may not only end up with significant fines but may also be obliged to delete valuable datasets that violate the EU GDPR, even without any request from a data subject. Written by Kinga Kálmán, Junior Associate, Ádám Simon, Senior Associate, and Bálint Halász, Partner at Bird & Bird.
NEWS
Local Government analysis: Optima Health (Optima) challenged the decision by the Department for Work and Pensions (DWP) to exclude its bid from a mini-competition procedure due to non-compliance with a requirement not to exceed maximum framework prices (the Decision). Mr Justice Freedman, sitting in the English High Court, dismissed the challenge finding that the Decision was lawful in the circumstances. Written by Andrew Dean, head of UK Procurement and Public Law and Hafsah Akhtar, trainee solicitor at Clifford Chance.
Q&As
Validity of a clause providing that licence or tenancy will automatically renew for a further fixed term unless the licensee or tenant has served a written notice to terminate the licence or tenancy It is not unusual for a tenancy agreement to contain a break clause (known more formally as an option to determine the tenancy). However, a break clause is an option for one or either party to terminate the tenancy while the tenancy is still in its fixed term. For example, a tenancy with a two-year fixed term may contain a break clause providing that either party can terminate the tenancy at the one year mark. Alternatively, a tenancy agreement
Q&As
Assured tenancies (ATs) replaced Rent Act 1977 tenancies as the main form of private residential security of tenure on 15 January 1989 under the Housing Act 1988 (HA 1988). A landlord is only entitled to take back possession of a property let on an AT, if it is able to establish a ground under HA 1988, s 8 and Sch 2 (Section 8 ground), and the court is either then obliged in respect of a mandatory ground, or exercises its discretion in respect of a discretionary ground, to order possession (see Practice Note: Terminating assured and assured shorthold tenancies—pre-Renters' Rights Act position — Section 8—pre-Renters’ Rights Act 2025). The requirements for an AT are set out at HA 1988, s 1. An assured shorthold
Q&As
While proceedings under the Trusts of Land and Appointment of Trustees Act 1996 are dealt with under the Civil Procedure Rules 1998 (CPR), SI 1998/3132, proceedings under Schedule 1 to the Children Act 1989 (ChA 1989) and section 17 of the Married Women’s Property Act 1882 are subject to the Family Procedure rules 2010, SI 2010/2955. A Part 36 offer (ie made under CPR 36) will therefore only be effective as to costs in relation to proceedings that are subject to the CPR. See also Practice Note: TOLATA 1996—Part 36 offers. Even where the parties are spouses or civil partners, Crozier v Crozier is authority that while the parties can