[Code of Federal Regulations]
[Title 25, Volume 1]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 25CFR226.21]

[Page 631-632]
 
                            TITLE 25--INDIANS
 
     CHAPTER I--BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR
 
PART 226_LEASING OF OSAGE RESERVATION LANDS FOR OIL AND GAS MINING
--Table of Contents
 
Sec. 226.21  Procedure for settlement of damages claimed.

    Where the surface owner or his lessee suffers damage due to the oil 
and gas operations and/or marketing of oil or gas by lessee or his 
authorized representative, the procedure for recovery shall be as 
follows:
    (a) The party or parties aggrieved shall, as soon as possible after 
the discovery of any damages, serve written notice to Lessee or his 
authorized representative as provided by Sec. 226.18. Written notice 
shall contain the nature and location of the alleged damages, the date 
of occurrence, the names of the party or parties causing said damages, 
and the amount of damages. It is not intended by this requirement to 
limit the time within which action may be brought in the courts to less 
than the 90-day period allowed by section 2 of the Act of March 2, 1929 
(45 Stat. 1478, 1479).
    (b) If the alleged damages are not adjusted at the time of such 
notice, Lessee or his authorized representative shall try to adjust the 
claim with the party or parties aggrieved within 20 days from receipt of 
the notice. If the claimant is the owner of restricted property and a 
settlement results, a copy of the settlement agreement shall be filed 
with the Superintendent. If the settlement agreement is approved by the 
Superintendent, payment shall be made to the Superintendent for the 
benefit of said claimant.
    (c) If the parties fail to adjust the claim within the 20 days 
specified, then within 10 days thereafter each of the interested parties 
shall appoint an arbitrator who immediately upon their appointment shall 
agree upon a third arbitrator. If the two arbitrators shall fail to 
agree upon a third arbitrator within 10 days, they shall immediately 
notify the parties in interest. If said parties cannot agree upon a 
third arbitrator within 5 days after receipt of such notice, the 
Superintendent shall appoint the third arbitrator.
    (d) As soon as the third arbitrator is appointed, the arbitrators 
shall meet; hear the evidence and arguments of the parties; and examine 
the lands, crops, improvements, or other property alleged to have been 
injured. Within 10 days they shall render their decision as to the 
amount of the damage due. The arbitrators shall be disinterested 
persons. The fees and expenses of the third arbitrator shall be borne 
equally by the claimant and Lessee or his authorized representative. 
Each Lessee or his authorized representative and claimant shall pay the 
fee and expenses for the arbitrator appointed by him.
    (e) When an act of an oil or gas lessee or his authorized 
representative results in injury to both the surface owner and his 
lessee, the parties aggrieved shall join in the appointment of an 
arbitrator. Where the injury complained of is chargeable to one or more 
oil or gas Lessee, or his authorized representative, such lessee or said 
representative shall join in the appointment of an arbitrator.
    (f) Any two of the arbitrators may make a decision as to the amount 
of damage due. The decision shall be in writing and shall be served 
forthwith

[[Page 632]]

upon the parties in interest. Each party shall have 90 days from the 
date the decision is served in which to file an action in a court of 
competent jurisdiction. If no such action is filed within said time and 
the award is against Lessee or his/her authorized representative, he/she 
shall pay the same, together with interest at an annual rate established 
for the Internal Revenue Service from date of award, within 10 days 
after the expiration of said period for filing an action.
    (g) Lessee or his authorized representative shall file with the 
Superintendent a report on each settlement agreement, setting out the 
nature and location of the damage, date, and amount of the settlement, 
and any other pertinent information.

[39 FR 22254, June 21, 1974, as amended at 41 FR 50649, Nov. 17, 1976. 
Redesignated at 47 FR 13327, Mar. 30, 1982, as amended at 55 FR 33115, 
Aug. 14, 1990; 64 FR 13896, Mar. 23, 1999]