INTRODUCTION
On the 01st September 2023 the Tanzania Petroleum Upstream Regulatory Authority (PURA) issued the Petroleum (Settlement of Disputes arising from Upstream Petroleum Operations) Rules, 2023 via Government Notice No. 620 of 2023. These Rules set the procedures relating to the settlement of disputes between parties engaged in Oil and Gas exploration or development operations either among themselves or in relation to themselves and third parties other than the Government.
This update therefore, highlights the key aspects brought about by the rules and its salient features towards dispute resolution.
ROLES OF DIRECTOR GENERAL IN DISPUTES RESOLUTION
The PURA Director General has been given a mandate to receive complaints from various categories of people including persons engaged in petroleum operations, persons affected by petroleum operations; or third parties.
The Director General is obliged to ensure that the complaint submitted is not frivolous or vexatious. Further, the Director General is also required to maintain the register of all complaints and disputes.
ESTABLISHMENT OF THE COMMITTEE
The PURA Dispute Resolution Committee is established to deal with dispute settlement. The Committee is composed of not more than 2 members from the Board of Directors of PURA, the head of the legal services or legal officer within PURA, a person from the relevant directorate or unit of the PURA and another person competent in dispute resolution. The Committee shall hold a meeting for the purposes of deliberation and determination of disputes submitted to it. The Committee is under obligation to prepare and submit reports on its activities to the governing board of PURA quarterly and annually.
FILING OF COMPLAINTS
A person aggrieved by any act or omission in respect of Oil and Gas exploration (petroleum exploration) or development operations can lodge a complaint to the Director General. The Rules allow authorized representatives to file complaints on behalf of the other person.
The Director General is required within 14 working days to issue a summons to the Respondent to present its defense. Equally, the Respondent is required to present its defense within 21 working days from the day of receipt of the summons.
Generally, the rules of civil procedures will apply with respect to the filing of defense and prosecution of the Complaint. For example, the Rules recognize the filing of third-party procedure, counterclaims and set-offs. Presentation of third-party notice is also allowed under the Rules. The proper procedures with respect to the determination of the third-party notice must be adhered to respectively.
Further, the Director General may also on his or her own motion or upon application of any party, is allowed to consolidate the complaints involving the same or similar issues and hear them together.
AMENDMENTS TO COMPLAINT, DEFENSE AND REPLY
Amendment to complaint and reply is allowed provided that the party requesting an amendment has provided a good cause to the Director General concerning the amendment and the other party is given an opportunity to equally respond thereto. If the amendment is allowed the party has to effect the amendment within the given time and not otherwise.
SCRUTINIZATION OF THE COMPLAINT
The Director General is required to scrutinize the pleadings within 14 days and make a preliminary examination, and in so doing have powers to reject a complaint or application which does not meet the requirements of these Rules.
INVESTIGATION AND MEDIATION PROCEDURE
The Director General shall within 30 days upon completion of scrutinisation of a complaint and preliminary examinations, investigate the Complaint.
In the event it appears to the Director General at any time during or after the investigation that there exists a meritorious complaint or defense and that the Respondent or Complainant has not considered the same, or has not considered it adequately, the Director General may, by notice, require the Parties to consider or reconsider the complaint or defense within 14 days from the date of receipt of the notification.
The Director General is required to submit the matter to a Mediator when the party has failed or refuses to consider or reconsider the complaint or defense despite notice being issued to him or her.
Moreover, where the Director General fails to resolve the matter, an officer of the Authority or any other person agreed between the parties, may be appointed by the Director General to act as a Mediator.
A settlement reached by the parties out of the Mediation must be reduced into writing and submitted to the Authority for registration. Upon registration, the Settlement Agreement shall be deemed to be an award of the Authority and enforceable.
REFERENCE OF COMPLAINT TO THE COMMITTEE
If the parties cannot reach an amicable settlement upon completion of scrutiny or mediation the Director General must refer the dispute to the Committee for hearing within 30 days.
The Director General must notify the parties within 7 working days after the complaint has been referred to the Committee. The Committee is allowed to hold its hearing in such places as it deems fit having regard to expeditious and economical conduct of the proceedings.
The Rules encourage Dispute proceedings to be quasi-conciliatory in nature, provided that where no conciliation is possible, the Committee shall consider the matter and make recommendations therein.
Where a conciliatory approach is not feasible, the Rules require normal hearing procedures to be adopted during the proceedings whereby parties will be given an equal chance to present and examine witnesses and make submissions (oral or written submissions).
The Rules require principles of natural justice to be adhered to as well as avoid formality and technicality of rules of evidence as much as possible, with a view of ensuring just, expeditious, and economical handling of proceedings.
NON-APPEARANCE OF PARTIES
The Rules delineate that in the event the Complainant fails to appear without justifiable cause, the dispute may be dismissed. Equally, if non-appearance is on the part of the Respondent, upon an application by a Complainant, the Committee may order the Complainant to proceed in the absence of the Respondent (ex parte proof).
The Rules allow the Complainant to make an application to set aside the dismissal order where a dispute is dismissed for non-appearance. Likewise, in any case in which an order is passed ex parte, a Respondent, may apply to the Committee to set aside such order.
INTERVENTION BY INTERESTED PARTY
The Rules allow any person who is interested in the dispute before the Committee to file an application to intervene in the proceedings at any stage before the conclusion of the hearing.
RECOMMENDATION OF THE COMMITTEE
Upon completion of the hearing, the Committee is required to make findings on the dispute and recommend to PURA for a decision within 30 working days from the date of completion of the hearing.
The PURA shall, upon receipt of the recommendation of the Committee, consider the recommendation and make the following orders or decree on the dispute:
- requiring a party to pay damages, whether specific or general;
- requiring a party to compensate the other party on specified terms and conditions;
- requiring a party to pay costs of another party or of a person appearing at the hearing or producing documents; (d) dismissing a dispute;
- requiring specific performance;
- requiring a party to refund any payment made; and
- any other orders as may be deemed reasonable and just
The decree issued by the Authority is enforceable as a decree or order of the Court (court within the local limits of the subject matter).
APPEAL TO THE FAIR COMPETITION TRIBUNAL (FCT)
The Rules allow any person who is aggrieved by the decision of PURA, or any other decision made in connection with the purpose of these Rules to appeal to the Fair Competition Tribunal within 30 days after the decision.
It is important to note that the Rules limit the grounds from which an aggrieved person can Appeal, that is:
- the decision made was not based on the evidence produced;
- there was an error in the law.
- the procedures and other statutory requirements applicable to the Committee were not complied with and the non-compliance materially affected the determination.
- the Authority did not have the power to make the award.
PENALTIES ON BREACH
The Rules provide a penalty of not less than TZS. 3 Million for a person who contravenes the provisions of these Rules. However, continuous breach of these Rules attracts a fine of TZS. 1 Million per day if the breach continues.
RULES OF EVIDENCE AND PROCEDURE
On matters of evidence, the Rules allow the Committee to rely upon the Evidence Act in cases where these Rules do not provide the manner of handling any aspect pertaining to evidence. Also, in case these Rules are silent on any matter of procedure, the Committee is allowed to regulate its procedures but also be at liberty to borrow the practice from the Civil Procedure Code or any other rules of procedure.
