Permanent Court of Arbitration Proceeding

In a case before the Permanent Court of Arbitration, a state entity engaged Brattle to review the cost recovery practices of a contractor hired by the state to develop multiple areas in the state under an oil and gas production sharing agreement. Under the agreement, the contractor was entitled to recover its costs, after which the state and the contractor shared profits based on the individual revenues and costs of each of the development areas. Brattle’s accounting expert explained deficiencies in the contractor’s methodology of allocating common costs related to multiple development areas to individual development areas, resulting in an overall understatement of profits accrued to the state. In addition, Brattle’s expert addressed the appropriate rate of prejudgment interest given references to multiple currencies in the underlying documents in the case.