We represented Defendants and Counter-Plaintiffs Frontera Resources Georgia Corporation and Frontera Resources Corporation in an international arbitration involving a significant oil and gas exploration lease. Claimants in the arbitration were GAC Energy Corporation and GAC International.
This matter involved a dispute over GAC’s performance related to a 2002 farmout agreement for an ownership interest in an oil and gas license area held by Frontera in the Republic of Georgia. Frontera conditionally assigned GAC an interest in its Block 12 license area under the farmout agreement. To earn the ownership interest, GAC had to complete certain financial and work obligations. GAC defaulted on its obligations, however, prompting a reassignment of its conditional interest in 2004. The dispute arose when GAC initiated this arbitration in 2007 contending that it had earned a portion of the defaulted interest.
The arbitrator ultimately found that GAC failed to complete its obligations under the farmout agreement and rejected GAC’s claims for either an interest in Block 12 or $19 million in restitution. The arbitrator also denied GAC’s claim for a partial ownership interest under the doctrine of “substantial performance.”