Comparative Law Researches

Comparative Law Researches

Analyzing the Legal Status of the Permanent Committee for Prevention and Resolution of Disputes in EPC Contracts in the Oil Industry and Its Comparison with Similar Institutions

Document Type : Original Research

Authors
Sajedeh Azizi 1
Majid Ghorbani Lachevani 2
Mohammad reza Afshari 3
1 Master's Student in Oil and Gas Law, Tehran Petroleum Faculty, Petroleum University of Technology, Tehran, Iran
2 Assistant Professor in Private Law, Tehran Petroleum Faculty, Petroleum University of Technology, Tehran, Iran
3 Assistant Professor in Private and Islamic Law, Faculty of Law and Political Sciences, Shiraz University, Shiraz, Iran
10.48311/clr.2025.101652.0
Abstract
Following the adoption of the 2024 General Conditions of EPC Contracts and the introduction of the Permanent Committee for Prevention and Resolution of Disputes under Article 75, a new institutional mechanism for dispute resolution has been established in Iran’s oil industry. This study, using a descriptive–analytical method and based on legal documents and official regulations, examines the legal status, duties, jurisdiction, and procedural role of the Committee within the multi-layered system of contractual dispute resolution. It further compares this body with similar domestic institutions—such as the Ministry of Petroleum’s Contractual Dispute Resolution Board—and international counterparts, particularly the Dispute Adjudication Board (DAB) in the FIDIC Silver Book. The findings indicate that the Committee is a distinctive, semi-consultative body with both preventive and curative functions that can manage disputes at an early stage through faster, less costly, and more technically informed processes. Comparative analysis with alternative dispute resolution (ADR) methods—including expert determination, mediation, mini-trial, and arbitration—shows that, while the Committee’s opinions are non-binding like mediation and expert review, it plays a more proactive role by providing advisory opinions and maintaining continuous oversight during contract execution. Despite its advantages—such as efficiency, technical specialization, and the preservation of business relationships—the Committee faces challenges including the lack of a fixed procedural framework, the non-binding nature of its decisions, and the absence of a clear fee mechanism for members. Strengthening its legal enforceability and establishing detailed procedural rules could significantly enhance the effectiveness of this new institution in managing EPC contractual disputes in Iran’s oil and gas sector.
Keywords
Permanent Committee for Prevention and Resolution of Disputes
EPC Contracts
Oil and Gas Industry
Alternative Dispute Resolution (ADR)
FIDIC
Subjects
 
7-2) منابع انگلیسی
A) Books
1.     International Chamber of Commerce (2017). Arbitration Rules.
2.     International Federation of Consulting Engineers (FIDIC) (2017). Conditions of Contract for EPC/Turnkey Projects (FIDIC Silver Book).
3.     Nigel, Pritchard and John, Scriven (2011). EPC Contracts and Major Projects, A Guide to Construction and other Project Contracts, London: Sweet & Maxwell.
4.     Oil and Gas Disputes Survey (2021).  Managing disputes risk – the in-house perspective.
 
B) Articles
5.     Gilbert, John (2021). “Dispute resolution in the oil and gas sector”, Reproduced from Practical Law, with the permission of the publishers. For further information visit: uk.practicallaw.thomsonreuters.com
 
[In Persian]:
A) Books
6.     Shiravi, A. (2023). International commercial arbitration, Tehran: Samt.
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10. Proceedings of the conference Dispute Resolution in the Energy Industry (2019). Tehran: University of Tehran.
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B) Articles
12. Asadollah Ranjbar,A. & Arjmand,A. & Hadavand, M. (2021). “Claims procedure in the FIDIC EPC contract sample and its comparison with the Iranian oil industry specific sample”, Jostarhaye Novin Hoghogh Edari, 2, pp. 229-256.
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C) Dissertations
19. Anisi, E. (2010). Dispute Resolution in International Contracting Contracts with Emphasis on the Terms of Construction Contracts of the International Federation of Consulting Engineers (FIDIC), Faculty of Law and Political Science, Allameh Tabatabaei University, Tehran, Iran.
 
D) Rules
20. General conditions of EPC contracts for industrial projects (2024)
21. Shiveh Nameye Hale Ekhtelafhaye Gharardadiye Sanaate Naft (2014) [In Persian]