International Arbitration of Renewable Energy Disputes
Emma Johnson, Lucy McKenzie, Matthew Saunders
Published: 2021
Pages: 87
eBook: 9781787424685
Written for both a legal and non-legal audience, in light of the increased prevelance of these disputes, this Special Report considers the scope for disputes in the renewables sector, how they can be avoided, and how arbitration can best be deployed to prevent delay and help push energy transition forward.
The increase in renewable energy capacity globally and the complex and relatively untested nature of renewables projects and the contracts underlying them give rise to a wide range of potential disputes. International arbitration has long been the preferred dispute resolution forum for the energy sector and is well placed to be the leading process for resolving the many and varied disputes that can arise in the lifetime of a renewables project.
In light of the increased prevalence of renewable disputes, this Special Report considers:
• the defining characteristics of renewables projects;
• the scope for disputes to arise in the implementation of these projects at an inter-state, investor-state and commercial level;
• the suitability of arbitration to resolve these disputes, and how its processes can be adapted to resolve them in an efficient and effective way; and
• what the future of arbitration of renewable energy disputes might look like.
Written for both a legal and non-legal audience, this Special Report is relevant to those interested in learning about the scope for disputes in the renewables sector, how they can be avoided, and how arbitration can best be deployed to prevent delay and help push energy transition forward.
Table of Contents
Cover Page | Cover | |
---|---|---|
Title Page | 1 | |
Copyright Page | 2 | |
Contents | 3 | |
Introduction | 7 | |
I. An introduction to renewables projects | 11 | |
1. What is renewable energy? | 11 | |
2. The key players in renewables projects | 13 | |
2.1 The project company or consortium | 13 | |
2.2 The contractor(s | 14 | |
2.3 Operation and maintenance provider | 14 | |
2.4 The offtaker of energy produced | 15 | |
2.5 Other participants | 16 | |
II. Renewables projects: international law protection | 17 | |
1. International investment protection | 18 | |
1.1 Bilateral and multilateral investment treaties | 18 | |
1.2 Substantive protections | 19 | |
1.3 Reference to arbitration | 20 | |
2. The renewables cases against Spain, Italy and the Czech Republic | 22 | |
III. Common areas of dispute and contractual protections | 25 | |
1. Unique characteristics of renewables projects and the scope for disputes | 25 | |
1.1 Multiple players and contracts | 25 | |
1.2 New and emerging technology | 26 | |
1.3 No standardised contracts and the lack of precedent | 27 | |
1.4 Relevance of local law and the importance of stabilisation clauses | 28 | |
2. Common disputes in the main phases of a renewables project | 30 | |
2.1 Disputes in the development phase | 30 | |
2.2 Disputes in the construction phase | 31 | |
2.3 Disputes in the operation phase | 33 | |
IV. International arbitration | 35 | |
1. What is international arbitration? | 35 | |
2. A final and binding decision | 36 | |
3. A decision that can be enforced outside of the parties’ home jurisdictions | 38 | |
4. Arbitration is perceived as a more neutral forum for disputes involving parties from multiple jurisdictions | 38 | |
5. Appointing arbitrators with relevant expertise | 39 | |
6. Flexibility of process | 40 | |
7. Privacy and confidentiality | 40 | |
8. The choice of forum is clear | 41 | |
9. Types of relief available in arbitration proceedings | 41 | |
V. Getting the basics right: drafting an effective arbitration agreement | 43 | |
1. The scope of the clause | 43 | |
2. Multi-tiered arbitration clauses | 44 | |
3. The seat (or legal place) of the arbitration | 45 | |
4. The procedural rules that will apply | 46 | |
4.1 Ad hoc arbitration | 46 | |
4.2 Institutional arbitration | 46 | |
5. The tribunal | 48 | |
6. The choice of governing law | 48 | |
7. The law of the arbitration agreement | 48 | |
8. Provision for joinder and consolidation | 49 | |
9. Provision for confidentiality | 51 | |
10. The need for a quick resolution | 52 | |
10.1 Emergency arbitration | 52 | |
10.2 Expedited proceedings | 52 | |
10.3 Summary disposal of unmeritorious claims | 53 | |
VI.Top tips in resolving renewables disputes through arbitration | 55 | |
1. Use of experts | 55 | |
1.1 Identification of remedies and quantification of losses | 56 | |
1.2 The importance of early engagement | 58 | |
1.3 Tribunal-appointed experts | 59 | |
2. Joinder and consolidation | 59 | |
3. Document production | 60 | |
4. Case management techniques | 62 | |
5. ADR techniques | 63 | |
5.1 Mediation | 63 | |
5.2 Facilitation, conciliation and expert determination of key issues | 65 | |
6. Site visits | 65 | |
VII. Looking over the horizon: the future of renewables arbitrations | 67 | |
1. Energy transition: more claims | 67 | |
2. Modernised investment treaties | 68 | |
3. The impact of COVID-19 | 71 | |
4. Changes to arbitration | 73 | |
Notes | 74 | |
About the authors | 85 | |
About Globe Law and Business | 87 |
Overall, the report is a perfect guide for anyone who wants to get a full picture of the main issues relevant for renewable energy arbitration disputes as it accurately identifies the unique features of renewable energy projects which investors and practitioners have to pay special attention to.
Ioana Knoll-Tudor
Global Energy Law and Sustainability (Edinburgh University Press)
Emma Johnson
Partner, Ashurst LLP
[email protected]
https://www.linkedin.com/in/emma-johnson-28b4452a/
Emma Johnson is an international arbitration practitioner and advocate, and a partner at Ashurst in London. She was listed as a ‘Next Generation Partner’ in The Legal 500 2019, 2020 and 2021, and a ‘Rising Star’ in its international arbitration power list. Emma is qualified in England and Wales. She has experience of advising on arbitrations under all of the major arbitral rules, and she has particular experience of advising on energy and renewables disputes, arbitrations seated in or subject to the laws of Scandinavia, and African disputes, and has conducted advocacy before both civil and common law tribunals.
She also has public international law experience, having acted in proceedings for and against states, both under the ICSID Convention and before the International Court of Justice. Emma is a Member of the London Court of International Arbitration (LCIA), the Chartered Institute of Arbitrators (CIArb), the International Chamber of Commerce Young Arbitrators Forum (ICC YAF), the London Court of Arbitration Young International Arbitration Group (LCIA YIAG), the Arbitration Institute of the Stockholm Chamber of Commerce – Young Arbitrators Sweden (SCC YAS), the Swiss Arbitration Association – ASA below 40, Young ICSID and Arbitral Women.
Lucy McKenzie
Associate, Ashurst LLP
[email protected]
https://www.linkedin.com/in/lucy-mckenzie-79189858/
Lucy McKenzie is an associate in Ashurst’s dispute resolution practice in London. Lucy holds degrees in law and arts and is qualified in Australia. Lucy’s main focus is the resolution of disputes arising in construction and infrastructure projects and renewable energy projects. In the renewable energy sector, her recent experience includes acting in disputes involving a concentrated solar power plant, onshore and offshore wind farms, biomass projects and energy-fromwaste projects. Lucy has acted in international and domestic arbitrations, litigations, adjudications and mediations.
Matthew Saunders
Partner, Ashurst LLP
[email protected]
https://www.linkedin.com/in/matthew-saunders/
Matthew Saunders is a partner and head of Ashurst’s global international arbitration practice, based in London. Matthew is qualified in England and Wales and focuses on international arbitration relating to international projects in the water, energy and resources sectors, with a particular focus on investment treaty arbitration. He has experience advising a broad range of clients, including sovereign and federal governments, international energy businesses, multinational corporations and financial institutions. Most recently, he has advised extensively on force majeure and ‘change in law’ provisions in the context of COVID-19. He is a member of the London Court of International Arbitration (LCIA), the Chartered Institute of Arbitrators (CIArb) and the Association of International Petroleum Negotiators (AIPN). His practice covers both contract and investment treaty arbitration.