Thoughts on the Arbitration of Price Redetermination under Gas Purchase Contracts in Alberta
AbstractThis article discusses the use of arbitration in Alberta in relation to the problems of price redetermination under gas purchase contracts. Various price redetermination clauses allowing arbitration are discussed in detail, and the rationale behind such clauses is analyzed. The author then discusses the method of appointment of arbitrators, and in particular, the dangers and effects of appointing "biased" arbitrator. In order for arbitration to work quickly and effectively, the author suggests that pre-arbitration agreement is necessity and he outlines certain essential conditions which should be determined before dispute proceeds to arbitration. The "commodity value concept" and its role in determination of prices in gas purchase contracts is examined, followed by review of recent Western Canada arbitration awards. Finally, the author summarizes the involvement of the Alberta Gov ernment in the matter of price redetermination, and in particular, examines the question of whether or not the proposed amendments to The Arbitration Act are constitutionally valid.
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