Gross Overriding Royalty Agreement
In our experience, over the past two decades, a new mechanism and practice in royalties are being developed, in which players in the sector are producing a levy to sell them for capital investments. These royalties generally have the form of a GORR on the donor`s interest in labour and have become an important part of the financing structure for oil and gas development. Given the risks associated with upstream resource development, the investing party will endeavour to protect its interests as much as possible by ensuring that the agreement characterizes the GORR as an interest in the land. On the issue of a Vesting order, the Court of Appeal considered the appeal judge`s opinion that the Tribunal would have been empowered to issue the 235Co free movement decision to surrender the licence rights to 235Co, «whether or not the licence fees were of interest to the land.» The central question was whether, in accordance with paragraphs 100 and 101 of the Court of Justice Act («CJA») and Section 243 of the Bankruptcy and Insolvency Act («BIA»), its intrinsic jurisdiction or the text of the Vesting decision, the judge was competent to authorize a sale granting the ownership shares of 235Co. The Court of Appeal held that these provisions do not expressly authorize a court to remove real property from the hands of a third party. In light of the inherent jurisdiction of the Supreme Court, the Court of Appeal held that a party must, under the law of demining and the common law, have a valid and independent property or property right for a court to adopt a decision of free movement that falls on the real estate shares of a third party. Courts have always held that the jurisdiction of the supreme courts inherent in it does not confer the power to remove real estate from third parties simply because the court considers it fair by other stakeholders. On the contrary, it has the power by the courts to transfer ownership to a party who is otherwise entitled to it or independently. Bankruptcies in the oil and gas and mining industries are already complex, as assets, business and the current regulatory environment are already complex. In normal negotiation between creditworthy parties, if a given royalty is of interest to land, it is an incident of the underlying estate and binds the purchaser of such an estate. Conversely, where the licence fee is only enforceable and the contract is not transferred to the purchaser, the seller retains the obligation to pay (regardless of the fact that he no longer owns the interest on which the royalty is to be paid) or is at least liable under the contract that created the royalty.
In both cases, the royalty holder has legal action to enforce the payment of the royalty, although creating an interest in the land provides greater security. However, in the event of insolvency, the liquidator, liquidator or debtor may exempt the enforcement contracts, so that the licensee retains only an unsecured claim against the estate. For example, a B.C. court recently found that a particular gorrr was a purely contractual licence fee and that the assets of a restructuring could be sold and transferred to the purchaser freely and freely of the licensing agreement. 18 This finding allowed the debtor to terminate the licence agreement in order to increase the prospects for restructuring. 19 If the Court of Justice had found that the royalty was an interest in the land, it would have survived the insolvency and the obligation to pay would have hired the purchaser. It is therefore clear why the characterization of royalties is essential for the taker: an interest in the land will always protect his right to payment.