International Arbitration of Renewable Energy Disputes

Ashurst Ashurst Ashurst

Introduction

I. An introduction to renewables projects

1. What is renewable energy?

2. The key players in renewables projects
2.1 The project company or consortium
2.2 The contractor(s)
2.3 Operation and maintenance provider
2.4 The offtaker of energy produced
2.5 The state
2.6 Funders
2.7 Insurers

II. Renewables projects: international law protection

1. International investment protection
1.1 Bilateral and multilateral investment treaties
1.2 The Energy Charter Treaty
1.3 Substantive protections
1.4 Reference to arbitration

2. The renewables cases against Spain, Italy, Czechia and Romania

3. A word of warning: ECT withdrawals

III. Common areas of disputes

1. Unique characteristics of renewables projects and the scope for disputes
1.1 Multiple players and contracts
1.2 New and emerging technology
1.3 No standardised contracts and the lack of precedent
1.4 New industry players
1.5 Regulatory landscape in flux
1.6 Unpredictability of the weather
1.7 Vulnerability to supply chain disruption
1.8 Relevance of local law

2. Common disputes in the main phases of a renewables project
2.1 Disputes in the development phase
2.2 Disputes in the construction phase
2.3 Disputes in the operation phase

3. Other areas of dispute
3.1 Price adjustment disputes
3.2 Joint venture disputes
3.3 Bribery and corruption
3.4 Greenwashing
3.5 Carbon credits and trading disputes
3.6 Financing disputes

4. Contractual protections aimed at mitigating disputes risk
4.1 Stabilisation clauses
4.2 Performance guarantees and minimum standards of performance
4.3 Representations and warranties
4.4 Design life obligations
4.5 Liquidated damages
4.6 Price review clauses
4.7 Variations, extensions of time and extra cost
4.8 Force majeure clauses
4.9 Defect rectification clauses
4.10 Limitation of liability clauses
4.11 Dispute resolution provisions

IV. International arbitration

1. What is international arbitration?

2. A final and binding decision

3. A decision that can be enforced outside of the parties’ home jurisdictions

4. Arbitration is perceived as a more neutral forum for disputes involving parties from multiple jurisdictions

5. Appointing arbitrators with relevant expertise

6. Flexibility of process

7. Privacy and confidentiality

8. The choice of forum is clear

9. Types of relief available in arbitration proceedings

V. Getting the basics right: drafting an effective arbitration agreement

1. The scope of the clause

2. Multi-tiered arbitration clauses

3. The seat (or legal place) of the arbitration

4. The procedural rules that will apply
4.1 Ad hoc arbitration
4.2 Institutional arbitration

5. The tribunal

6. The choice of law governing the contract

7. The law of the arbitration agreement

8. Civil law vs common law

9. Provision for joinder and consolidation

10. Provision for confidentiality

11. The need for a quick resolution
11.1 Emergency arbitration
11.2 Expedited proceedings
11.3 Summary disposal of unmeritorious claims

VI.Top tips for resolving renewables disputes through arbitration

1. Selecting the right arbitrator

2. The importance of the first Procedural Order
2.1 Document production
2.2 Confidentiality
2.3 Case management techniques

3. Educating the tribunal
3.1 Use of experts
3.2 Tribunal-appointed experts
3.3 Ringfencing relevant documents and witness evidence
3.4 Electronic exhibits and demonstratives
3.5 Site visits

4. Quantification of losses

5. Identification of remedies and defects rectification

6. Third party funding

7. ADR techniques
7.1 Mediation
7.2 Facilitation, conciliation and expert determination of key issues

8. Virtual hearings

VII. Looking over the horizon: the future of renewables arbitrations

1. Energy transition: more claims
1.1 Technology disputes
1.2 Regulatory change
1.3 Decommissioning disputes

2. Geopolitical factors

3. Intra-European investor-State arbitration

4. Changes to arbitration