Dispute resolution center: Arbitration and climate change
Climate change is rapidly becoming a significant issue for public and private entities and organizations. While certain industries such as energy, logistics, manufacturing, and construction may feel a direct impact from climate change, from actual environmental impacts to increased regulation to mitigate such, it could be safe to say that all organizations would have to face climate change in some form.
As such, myriad disputes, from emissions to human rights and investor protection, could arise from contracts and agreements among commercial entities, state governments, and investors, institutional dispute resolution centers or otherwise. With the complexities of such disputes, especially those involving state actors, greater flexibility in dispute resolution through arbitration allows experts on this matter to settle disputes and also issuing the final decision faster than usual can help to control, suspend the production of the industry to the extent that we are all “safe”. Likewise, alternative dispute resolution, particularly arbitration, is often the preferred method to settle such conflicts.
How does climate change lead to disputes?
Climate change as a cause of action for a dispute can come in many forms. This could include demands for changes in policies or operations as they relate to climate change or for compensation due to damages from climate change due to a lack of such policy or operational changes. Furthermore, parties to a contract or agreement could come into conflict due to responses to climate change regulations or from climate-related circumstances disrupting the execution of said contract.
Arbitration is an ideal forum for dispute resolution as it provides flexibility in selecting arbitrators from dispute resolution centers so that relevant climate change expertise can be drawn upon to help adjudicate. Furthermore, through an arbitration clause or agreement, parties can specify arbitration services to handle multiple claims by multiple parties. Another benefit of arbitration is the confidentiality it affords the involved parties. Whereas court proceedings are often in the public eye, risking reputation and business secrets. While dispute resolution centers are held in private and often with stated confidentiality set in place to prevent publicity. Another significant benefit is that arbitral awards that involve parties in multiple jurisdictions may be enforced either through an underlying treaty or by the New York Convention on Enforcement of Arbitral Awards.
Investor-state/third-party arbitration related to climate change issue
International investments have their own inherent risks, and climate change is one of them, particularly with cross-border energy, exploration, and related projects. If a country, through its climate-related laws and measures, are seen to interfere in an investment to its detriment, international arbitration, such as investor-state dispute settlement, can be preferable to the difficulties in finding an international court as an appropriate forum to resolve matters. Examples of such in action include numerous investor-state arbitrations regarding energy transitions from coal. Expert arbitral tribunals are key to navigating the intricacies of the energy industry as well as bi- and multilateral trade agreements.
State-state arbitration related to climate change
Governments, as with individuals and organizations, do use arbitration as a means to settle disputes, such as in the Indus Waters Kishenganga Arbitration between Pakistan and India. This is why many trade agreements, bilateral and multilateral, accommodate and outline arbitration as a way to ensure a neutral forum to resolve disputes with appropriate technical expertise. Where such agreements do not address climate change issues, there is the Paris Agreement and the UN Framework Convention on Climate Change. Both climate treaties offer provisions for climate-related arbitration; however, it is up to individual governments to agree to and adopt such provisions.
Arbitration and climate change in the future
Climate change and its global impacts are gaining recognition as a significant factor in business and international relations, leading to increased pressure, publicly and politically, for the establishment of agreed-upon dispute resolution options and procedures. Arbitration communities are identifying and addressing how arbitration can help facilitate change and assist in resolving disputes stemming from climate change. They can develop and foster innovative solutions, including leveraging online dispute resolution technology as well as deploying third-party funding to help expedite proceedings that may need financial assistance.
Parties concerned with the implications of climate change on their current or future contracts and agreements should consult a trusted arbitration expert, such as those at the THAC, the well-known dispute resolution center in Thailand.
THAC has expertise regarding climate change in arbitration
The Thailand Arbitration Center (THAC) is a world-class dispute resolution center that keeps abreast of climate change-related developments that impact alternative dispute resolution, particularly arbitration in all its forms. Concerned parties can avail themselves of THAC’s resources and experts on arbitration, including as it relates to climate change issues. Furthermore, THAC, located in central Bangkok, is easily accessible by public transport and major roadways, including from major international airports. Along with its convenient location, THAC also has state-of-the-art facilities fully equipped for online dispute resolution and remote hearings, making it ideal for cross-border as well as local ADR proceedings. These international-standard services include a full range of administrative support, all available at affordable rates. For further information, please feel free to contact us at [email protected] or +66 (0)2018 1615. THAC is looking forward to helping you.