By Jason Czerwiec[1]

The energy sector is experiencing unprecedented transformation, and with it, the landscape of international dispute resolution is evolving at breakneck speed. This reality was front and centre at the GAR Live: Energy Disputes 2025 conference, held on July 2nd at the London offices of King & Spalding, where leading practitioners, arbitrators, and in-house counsel gathered to examine how these seismic shifts are reshaping the world of energy arbitration.

Setting the Stage: Testing Times for International Arbitration

The conference opened with introductory remarks from Barbara Benzoni of Eni and Michael Polkinghorne of White & Case, setting the tone for what would prove to be a day of frank discussion about the challenges facing the arbitration community. The keynote address by Rt Hon Sir Peter Gross, aptly titled “Testing Times,” provided a sobering analysis of the current threats to international arbitration.

Sir Peter discussed a spate of recent cases where arbitral awards have been annulled in domestic courts and domestic sanctions brought against arbitral participants for pursuing relief in that forum. He emphasised that Russian actions targeting international arbitration are a serious threat to the rule of law and require collective opposition from all arbitral stakeholders. In particular, he advocated for stronger indemnity clauses to be put into international agreements and institutional rules, pointing to the GAR-LCIA 2024 “reset” roundtable as a reform model, but he questioned whether such measures could truly protect arbitrators from politically-driven domestic policies.

The New Reality: Arbitration in Unprecedented Times

The first substantive panel, “Arbitration in a New Era,” brought together diverse perspectives on how the current global environment is reshaping energy disputes. Moderated by Ajey Chandra of Baker & O’Brien, the discussion revealed just how profoundly sanctions, supply chain disruptions, tariffs and geopolitical tensions are affecting the arbitration landscape.

Tom Canning from Milbank provided an insightful framework for understanding sanctions-related disputes, identifying four distinct categories: force majeure cases, jurisdictional and enforcement questions, asset expropriation matters, and what he termed “unexpected” cases. His case study of a multinational restructuring following Russian sanctions offered a glimpse into the complex legal and commercial challenges practitioners now face regularly. Perhaps most importantly, his warning to prepare for future disputes once sanctions are eventually lifted suggested that the current disruption represents just the beginning of a longer-term transformation. Untangling the Gordian Knot of sanctions and counter-sanctions regimes now in play may prove just as difficult for businesses to navigate as the current quagmire.

The gas industry perspective, as outlined by Michelle Bock of Squire Patton Boggs, revealed a sector grappling with unprecedented volatility. She identified four key trends: (1) extreme price volatility, (2) increased emphasis by commercial parties on contract optimization, (3) Europe’s renewed focus on renewables for energy security, and (4) smaller, less experienced firms entering long-term gas contracts. In doing so, she also illustrated how market disruption is creating entirely new categories of disputes that practitioners must navigate.

Dan Bodle of Dentons brought attention to supply chain security issues impacting the energy market, particularly regarding critical minerals that are essential for renewable energy infrastructure. He noted that many of the contracts being entered into to rectify sudden shifts in global supply chains are long-term agreements rather than short to medium term hedges. His prediction that realignment to normal commercial conditions would be gradual, creating a “new normal” for energy contracts, suggested that the current disruption is not a temporary aberration but rather a fundamental shift in how energy markets operate.

The global renewables landscape received particular attention from Joaquin Terceno of Eversheds Sutherland, who contrasted the US approach under the Trump administration with global trends. His discussion of policies that have frozen offshore wind leasing, accelerated nuclear licensing, fast-tracked fossil fuel development, and frozen $20 billion in federal grants for renewable projects stood in stark contrast to the continued global investment growth documented in IEA investment reports, particularly in Southeast Asia, Pakistan, Turkey, and Brazil.

Mike Williams of Chevron provided the essential in-house perspective, emphasizing that clients increasingly seek “thought partners” who can help strategize avoid disputes rather than simply win them. His observation that instability has always characterized the global energy business served as a reminder that while the current challenges are unprecedented in their scope, the fundamental need for sophisticated legal counsel remains constant. The bottom line, he said, is that he needs to bring a project from point A to point B with minimal legal and reputational cost attendant.

Paradigm Shift or Business as Usual: Damages in Energy Disputes

The discussion of damages in energy disputes, moderated by Lucy Grigoriadi of Frontier Economics, was the subject of the second panel of the day. The panel brought together economists, lawyers, and damages experts to examine how traditional valuation methods are adapting to new market realities. The discussion revolved around the complex intersection of legal theory and economic reality in the current environment.

Arman Sarvarian of the University of Surrey highlighted a fundamental tension at the heart of many current disputes: the conflict between states’ investment commitments and their decarbonization goals. His reference to cases such as RWE v Netherlands and Uniper v Netherlands in the fossil fuel space, combined with rising renewables sector cases evident in ECT Secretariat statistics, illustrated how states’ regulatory approaches to energy transition are creating new categories of investment disputes.

The panel’s discussion of regulatory changes affecting long-term fossil fuel investment valuation proved particularly timely, with Carlos Lapuerta of Brattle pointing to US EIA commodity price forecasting using “High, Low, and Medium” scenarios with wide price variances in government forecasting scenarios. This uncertainty in long-term price projections could make damages quantification increasingly complex and contentious in fossil fuel investment disputes. For his part, Stuart Amor was more bearish on the utility of protracted multiple scenarios analysis in damages quantification. He noted that the best commodity price forecasts that are commercially available at present already take these risks into consideration.

The panel, especially Dr. Sarvarian and Barton Legum, had much to say on the topic of damages in investor state disputes. They highlighted an endemic disconnect between legal theories of investment treaty breach and the valuation of “investments” as they are defined within the parameters of many treaty disputes. This problem is particularly acute where, as in many energy disputes, the investment at issue is largely unproven or in the early stages of development. The International Law Commission’s decision in April-May 2025 to include compensation for damage caused by internationally wrongful acts in its future work highlights this tension. Their decision to appoint Martins Paparinskis as Special Rapporteur for this study, following his proposal for updating 2001 Articles on State Responsibility, is particularly noteworthy. This development suggests that the international legal framework for damages may itself be evolving to address contemporary challenges and that Paparinskis’ substantial body of scholarship may point the way forward. This is certainly a significant space to watch for energy investors and disputes practitioners in the coming years.

The panel also delivered technical recommendations for delivering “a good damages award”. They mentioned pre-hearing expert “teach-ins” and joint expert models with legal criteria “switches,” reflected a growing recognition that traditional approaches to damages quantification may need some practical adaptation. Surprisingly, the panel did not see a role for AI technologies, in their current form, in this technical advance. In fact, there was unanimous opposition to their use for damages quantification, coupled with broad agreement on the enduring importance of human expertise in determining and presenting these complex calculations to the tribunal.

The Renewable Revolution: Opportunities and Challenges

The renewables panel, moderated by Leilah Bruton of Three Crowns and comprised of practitioners and several in-House counsel, provided insights into what is arguably the most dynamic sector in energy today. The discussion revealed both the enormous opportunities and significant challenges facing renewable energy development.

Stefan Stockinger of OMV discussed his company’s strategic investments in geothermal energy and hydrogen plants around traditional infrastructure, highlighting how established energy companies are adapting to the transition. His focus on early-stage IP-focused startups in the holistic renewables space illustrated the venture capital nature of much current renewable energy investment.

Gregory Travaini of ENGIE outlined a more conservative approach, mixing renewables with conventional sources for derisking from volatility and supply security issues. His observation of increased VC and investment fund activity suggested that the renewables sector is attracting capital from beyond traditional energy investors, bringing new perspectives and risk tolerances to the market.

The infrastructural challenges facing renewable energy deployment received particular attention from Berceste Elif Duranay of the Energy Disputes Arbitration Centre, who addressed power grid infrastructure as a major transition bottleneck. She noted that the difficulty in developing “smart” grids, which allow for instant reaction to consumption and supply shocks, highlights the holistic nature of the technical challenges of renewable energy integration and adoption – providing fertile ground for upstream, midstream, and downstream disputes.

Mark Beeley of Orrick provided a practitioner’s taxonomy of renewables disputes, identifying supply chain risks (particularly offshore wind transport limitations), complex financing arrangements, grid connection issues, and tighter profit margins leading to construction shortcuts. His systematic approach to categorizing these disputes suggested that renewables arbitration is developing its own specialized practice areas.

The panel’s foresightful discussion on regulatory risks highlighted a key imbalance: while technical challenges in renewable energy are increasingly surmountable, legal and regulatory frameworks are lagging behind technological progress. This wrinkle is leading to a host of arbitrations in both the investor-State and commercial contexts.

Nuclear Energy: A Great Transformation

The nuclear energy panel, moderated by Paolo Bertoli of Cleary Gottlieb, addressed what many consider the most complex and politically sensitive area of energy law. The discussion revealed how nuclear energy is experiencing a renaissance driven by climate concerns and energy security considerations.

Veijo Heiskanen of Arbitra & Heiskanen Legal provided a framework for understanding nuclear disputes, identifying upgrade/revitalization disputes and new NPP construction disputes as the two primary categories. His observation that regulator involvement as active third parties, combined with predominant state ownership, creates imbalanced relationships highlighted the unique challenges facing nuclear energy arbitration as the single most regulator energy commodity.

Ximena Vazquez-Maignan of White & Case provided crucial market development analysis, noting Europe’s declining NPP construction capability. She emphasized that China is building a strong lead in traditional nuclear, with 28 of 60 traditional NPPs under construction sited in China. She also detailed the technical differences between traditional NPPs and small modular reactors (SMRs), the latter of which are coming online in the 2030s. She suggested that the nuclear industry is preparing for a fundamental technological shift that will likely generate new categories of disputes.

The regulatory complexity of nuclear energy received particular attention from Claire Morrissey of Nuclear Restoration Services, who discussed regulatory hurdles from a UK decommissioning perspective. She noted that there are over 4,000 pieces of relevant legislation impacting UK projects alone. She was adamant that even with technology developments, these regulations will remain largely unchanged. The tripartite principles of safety, security, and safeguards are the bedrock of the nuclear industry, and present a regulatory maze that nuclear energy projects must navigate now and forever if they are to come to fruition. Furthermore, the panel’s emphasis on shifting public attitudes toward community development benefits suggested that nuclear energy disputes may increasingly involve broader stakeholder concerns extending beyond even traditional safety parameters or private commercial considerations.

Learning from the Past: How to Lose an Energy Arbitration

The final panel, “What Would You ‘Not’ Do? – How to Lose an Energy Arbitration,” provided practical insights from seasoned practitioners on common pitfalls in energy arbitration. Moderated by Wendy Miles KC of Twenty Essex, the discussion offered valuable lessons from the trenches of complex energy disputes.

Tom Cameron of Carter Ruck emphasized the importance of engaging independent experts early in complex organizational disputes, particularly with state-owned enterprises where leadership incentives may conflict with rational outcomes. His insight into the behavioural dynamics of SOE disputes provided valuable guidance for practitioners navigating these challenging cases.

Paula Hodges KC and Ruth Byrne KC, both discussed the dynamics of energy consortium disputes. They highlighted the complex stakeholder management challenges facing many energy projects and, consequently, many energy disputes. They each emphasised a unified strategy among multiple parties to prevent counterparties from exploiting disagreements, with Paula noting the importance of harmonizing arguments and Ruth emphasizing the importance of promoting minority stakeholder involvement and access to information.

Wolfgang Peter of Peter & Kim addressed the growing problem of arbitrator challenges creating systemic mistrust, noting that parties often engage in what Emmanuel Gaillard identified as (seven) “dirty tricks” through frivolous challenges to strategically delay arbitrations or remove influential wing arbitrators. He also called for parties to focus on essential dispute points as a matter not just of arbitral efficiency, but also of maintaining credibility.

The panel concluded with each panellist offering one key “irksome” misstep to avoid. They admonished practitioners to ensure client presence during expert discussions, to maintain credibility while avoiding outlandish arguments, to set realistic damages targets with clients and coordinate them with “consumer-friendly” experts, to always remember enforcement and real-world impacts of awards, and to avoid aggressive correspondence with counterparties that undermines the arbitral process.

Looking Forward: The Future of Energy Arbitration

The GAR Live: Energy Disputes 2025 conference painted a picture of a profession in transition, adapting to unprecedented challenges while maintaining its core mission of providing effective dispute resolution. The discussions revealed both continuity and disruption in traditional approaches, with practitioners developing new expertise while drawing on staid and steady fundamental legal principles.

Perhaps most significantly, the conference highlighted how the boundaries between commercial and investment arbitration are blurring as states balance climate goals against investment commitments. This evolution suggests that energy arbitration practitioners will need to develop hybrid skill sets, combining traditional commercial arbitration expertise with investment treaty knowledge and regulatory understanding.

The increasing volatility driven by sanctions regimes, supply chain vulnerabilities, regulatory uncertainty, and tensions between decarbonization commitments and investment protection requires practitioners to develop deeper understanding of energy markets, regulatory frameworks, and geopolitical dynamics. The message from leading practitioners was clear: adaptability and continuous learning are essential for success in the new energy dispute landscape.

As the energy sector continues its transformation, so too must the dispute resolution mechanisms that serve it. The conference demonstrated that while the challenges are unprecedented, the arbitration community’s commitment to effective dispute resolution remains strong. The future of energy arbitration will likely be characterized by greater complexity, higher stakes, and more diverse stakeholder involvement, as well as continued innovation in legal practice and procedure.

The energy transition is far from complete, and the disputes it generates will continue to test the limits of traditional arbitration practice. However, the insights shared at GAR Live: Energy Disputes 2025 suggest that the arbitration community is rising to meet these challenges with the expertise, creativity, and commitment to justice that has long characterized the profession.

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[1] Jason Czerwiec is a US-qualified lawyer in Linklaters’ London office, practising in the firm’s International Arbitration group. He has broad experience in investment treaty arbitration, commercial arbitration, and US Federal court commercial litigation.

***The views expressed above do not necessarily reflect the author’s or the speakers’ opinions on the relevant issues and should not be attributed to them or their associated firms or chambers.***