Examining Concept and Nature of Gas Price Review Clauses

Unlike many arbitrations, the arbitration of price reviews in natural gas industry is not based on allegations that one party has breached a contract or otherwise committed a legal wrong. Instead, arbitrators are asked to determine whether the economics of a contract should be adjusted and, if so, to establish a new price formula. Due to the complexity of revision of gas prices, the experts have significant role in these arbitrations. Expert advice will often be used extensively, particularly in establishing whether review has been triggered, and the existence of a significant/material change in the market. Regarding expert’s role, gas price arbitrations have specific nature. In this article, the specific nature of these arbitrations due to arbitrators` role in reviewing the terms of price adjustment in order to maintain the long-term contractual relations of the parties is examined by descriptive-analytical method and the interaction of these arbitrations with expert determination is reviewed. It`s established that despite the prominent role of experts, they are considered arbitration not expert determination as one of Alternative Dispute Resolutions (ADR).