Default Clauses in Joint Operating Agreements: Recent Guidance from the English Courts

摘要

The enforceability of default clauses in joint operating agreements (JOAs) governed by English law has been a source of contention in the oil and gas industry for many years. In this article, the authors reassess the enforceability of such clauses by considering recent developments in the common law rule against penalties, equitable relief from forfeiture and the insolvency law principles known as the "anti-deprivation rule " and the "pari passu rule". Whilst the model form operating agreements used in the industry have not themselves been tested in the English courts, recent case law provides an opportunity to review the traditional arguments in a slightly different light.