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Annexure-I to the aforesaid letter listed some of the issues that have already arisen between the parties; which are as under:
(I) Whether the FDP implies a commitment of the contractor to produce particular or at a particular rate? (II) Whether the FDP implies a commitment of the contractor to do a series of development activities even if there is a difference of opinion between the Government and the Contractor as to the efficacy of these activities?
(III) Whether the FDP is revised pro tanto by WP & B’s from time to time approved by MC?
(IV) Whether the variation between the costs proposed in the FDP and the actual cost can be a basis for disallowing Capex? (V) Is the recovery of cost related in any manner to the estimates of production even if the costs are within the sanctioned budgets? (VI) Is the recovery of costs of facilities in any manner related to the attainment of production estimates of the FDP or the estimates of deposits or reservoir characteristics? (VII) Whether the FDP was a representation by the contractor to produce at a particular rate or to produce a particular quantity for a defined period, which by conduct became a binding contract between the parties?
(VIII) Would the drilling of additional wells result in increased production rates/volumes.
(IX) Did the approval of the WP & B’s [FY 2009-10 (RE) and 2010-11 (BE)] result in a modification of FDP?
(X) Were the reasons given by the MoPNG/DGH for declining approval to the WP & B’s for FY 2010-11(RE) and 2011-12 valid? (XI) If the answer to (IX) and (X) is in the negative, what is the consequence?"

13. On 16th April, 2012, Petitioners No.1 & 2 filed Arbitration Petition No. 8 of 2012 under Section 11(6) of the Arbitration Act, 1996 before this Court (hereinafter referred to as "A.P. No. 8"), seeking constitution of Arbitral Tribunal in terms of Article 33.5 of the PSC. After filing of this petition, correspondence ensued between the Petitioners and the Respondent, wherein the subject matter related to cost recovery of expenditure incurred by the Contractor for the years 2010-2011 was discussed. This was done through letters/notice dated 2nd May, 2012; 4th May, 2012 and 8th June, 2012. In the letter dated 2nd May, 2012, the Respondent makes a reference to the PSC dated 12th April, 2000 in the following terms: