Energy Arbitration and Emerging Claims in Post-Covid-19 times
David Y. Amakiri, Solomon U. Ezike
For the energy sector and its stakeholders, COVID-19 and the measures taken in response to it, could not have come at a more critical time. Considering the role of energy as a driver of economic activities, and the ongoing quest for a just transition to low-carbon economies, the impact of COVID-19 will be huge on the energy industry.
Over the years, investors in the energy industry have shown significant preference for arbitration as the mechanism of choice for resolving disputes1. In recent years, major arbitral institutions have witnessed a steady increase in disputes involving climate change and green technology-related issues. Expectedly, these have been intrinsically linked to the transition away
from traditional energy sources to increased investments in renewable energy sources, modernisation of power grids, and the improvement of energy storage. Undoubtedly, COVID-19 will give rise to multi-faceted ways through which some of these disputes would arise, and a shift on how they will be settled.
The responses of government to the novel coronavirus has snowballed into circumstances that can aptly be termed a new normal likewise are the ongoing efforts to transition to a low carbon economy. The effect of these combinations is a paradigm shift in the energy sector and the investments that underpin its linkages. Many aspects of these investments in the energy sector have also been thrown into murky waters arising from the hardship operators face now and the consequent inability to perform agreed obligations adequately.