A Twist in Oil Patch Arbitration
Delegating a $12 million arbitration to accountants rather than lawyers in Apache v. YPF SA was the right call, writes Charles Sartain in the Gray Reed Energy & the Law blog. The problem was in the procedures and protections for a party believing the accountants got it wrong.
Sartain provides background: “Apache sold its entire business in Argentina to YPF for $700 million. The Sale and Purchase Agreement allowed for adjustments to the consideration based on a variety of factors. The parties traded accounting statements, and a dispute arose over a ‘Lock Box Working Capital’ amount and ‘Leakage.’ YPF contended that Apache owed $12 million.”
The parties submitted the dispute to KPMG, which found that Apache owned $98. million. Apache challenged the finding.