GLOBAL ARBITRATION IN THE ENERGY SECTOR
CD: Could you outline some of the key trends in energy sector arbitration over the past 12 to 18 months? Are there any particular industries with more or fewer disputes?
Gonzalez: One of the key trends in the energy sector over the past 12 to 18 months has been disruption – specifically, disruptions affecting the construction of energy projects. One of the interesting trends stemming from the pandemic is that the interpretation and application of the force majeure contractual provisions in construction contracts has had to evolve. Although the coronavirus (COVID-19) pandemic is certainly no longer an unknown and unexpected event, the effects of force majeure, from labour to supply chain issues, are still impacting projects in new and different ways, hence leading to more disputes. The handling of disputes has also been disrupted. At the beginning of the pandemic, 100 percent of disputes were being handled virtually, and now there are more hybrid hearings. However, even with hybrid hearings, there are still issues given that some parties, witnesses or arbitrators are available in person while others are not. And this is creating a debate about whether there is a fair and balanced hearing process.
Phillips: Today, there is more gamesmanship, strategy and tactics that are needed in hybrid hearings, from arbitrator selection to routine arbitral processes. It is a really interesting time to be handling disputes within the energy sector.
Jan-Mar 2022 issue
NERA Economic Consulting
Hogan Lovells, LLP