On September 6, 2005, the Firm achieved a significant victory for its client, Oil Basins Limited, a Bermuda corporation, in an international arbitration proceeding against BHP Billiton Limited, the world's largest mining company, Esso Australia, and related Australian entities. Oil Basins prevailed in the arbitration, asserting that pursuant to 1960 royalty and consulting agreements expressly construed under New York law BHP was obligated to pay Oil Basins a substantial overriding royalty on oil and gas that it produced and recovered in the "Blackback" field, an offshore area located in the Gippsland Basin of Bass Strait in Victoria, Australia. In addition to its rival interpretation of the contracts, BHP defended against the royalty claim in part on the basis of the New York Rule Against Perpetuities. Our primary responsibility as co-counsel with Australian barristers and solicitors was to prepare elaborate legal expert opinions construing both United States and New York law concerning overriding royalties, mineral leases, oil and gas jurisprudence, contract construction and enforceability, issue preclusion, conflicts of law, and the Rule Against Perpetuities, and subsequently to prepare and assist in presenting five legal experts in an almost 4 week long hearing in Melbourne, Australia in April 2005.
Unless now settled, the arbitration will continue for the purposes of determining damages owed to Oil Basins and awarding Oil Basins the costs of the arbitration and reasonable attorney's fees.
The Simpson Thacher team included Peter Thomas, Millie Kalik, Seth Kruglak, Allyson Rothberg, and paralegal Wendy Colon. Mr. Neil Young QC acted as Oil Basins' lead barrister. Arnold Bloch Leibler acted as Oil Basins' solicitors in Melbourne.