Mediation in Oilcode disputes

As an alternative to potentially costly and time-consuming litigation, the Oilcode provides a dispute resolution scheme for participants in the downstream petroleum retail industry.

The role of the Dispute Resolution Adviser

Under this scheme, the Dispute Resolution Adviser (DRA) is appointed to facilitate and expedite the resolution of disputes arising in relation to commercial activities outlined within the Oilcode.

The primary role of the DRA is to provide a central point of contact for the industry to resolve disputes. The dispute resolution scheme applies to disputes arising:

  • when a wholesale supplier fails to supply a declared petroleum product to a customer
  • between the parties to a fuel re-selling agreement
  • in relation to any of the provisions of the Oilcode about terminal gate price arrangements or a fuel re-selling business.

The extent of the DRA’s involvement will depend on the nature of the dispute. The DRA may make non-binding determinations for industry disputes under the Oilcode. Further information about the role of the DRA can be found on the DRA website. 

Cost of the mediation

The Oilcode specifies that, unless otherwise agreed, the parties are equally liable for the costs of mediation or other assistance to resolve the dispute. The parties are also liable to pay their own costs of attending meditation.

Preparing for mediation and what to expect

Mediation is essentially a well managed negotiation. It is wise to prepare for mediation, so that you are sure of your options. It is important during mediation to clearly state your requirements and concerns so that everyone understands what you need and why.

It may be helpful to consider:

  • your rights and obligations in relation to the dispute
  • the main issues you would like to discuss, and why they have not been resolved to date
  • what you would like to see happen
  • what you are prepared to do to achieve an outcome
  • how the dispute might be resolved if mediation is not successful
  • what costs are involved in each option, and how realistic the alternatives are.

At the end of mediation, the terms of any agreement reached will be recorded in a binding contract.

Alternatives to mediation

Although mediation is an effective way to resolve disputes, it may not always be the most appropriate action.

Any action taken under the Oilcode dispute resolution scheme does not affect the right of a party to a dispute to bring their own legal proceedings. In addition, the dispute resolution scheme does not prevent anyone from approaching the ACCC directly.

When a retailer or a supplier believes there has been a serious breach of the Oilcode, the affected party may be entitled to claim damages, or to obtain court orders to stop the contraventions or other orders, such as those requiring changes to the agreement. Industry participants should seek legal advice on these issues.

Court action can be costly and time consuming; it can damage relationships and there is no guarantee that it will provide the desired outcome. Given these aspects of court action, it may be more practical to try to resolve the dispute through the Oilcode dispute resolution scheme.

However, if you decide to bring legal proceedings against another party, remember that if you lose the case, you may be liable for some or all of the other party’s costs as well as your own. Pursuing court action should only be considered after obtaining independent legal advice. You should also seek an opinion on your prospects of success in any legal action. If you are unsure about the suitability of mediation consult your legal adviser.

Related topics on the ACCC website

Resolving disputes under the Oilcode
Who to contact when you have an Oilcode dispute?