The Law and Economic Basis of Enforcement of Governance of Private Joint Venture Network Markets: the case of NZEM

Abstract

The purpose of this paper is to point out the feasibility of joint ventures contracting out of using Courts to resolve disputes and to explain and assess the enforcement of the rules that form the governance of the New Zealand Electricity (spot) Market (NZEM). This market has no basis in statute. It includes a panel that has the responsibility for enforcement of the rules and for the interpretation of them in the context of any dispute. In this paper we Examine the enforcement regime in relation to contract law Examine implementation features of the enforcement regime Set out the operation of rule enforcement in NZEM in terms of the law andeconomics approach to enforcement with a view to assessing the efficiency of this sort of joint venture governance arrangement Show how the joint venture contract and its enforcement satisfy competition law and Demonstrate the importance of the voluntary nature of NZEM and of the ability of participants to alter the contract for the operation of this contract spot market.