Guide to Energy Arbitrations

The Global Arbitration Review’s Guide to Energy Arbitrations[1] maintains its heavy publication pace with what is now its fifth edition (2022) published in the midst of continuing challenges in the energy markets relating to the aftermath of the COVID-19 pandemic, the disruption of the energy supply caused by Russia’s invasion of Ukraine and the impact and responses to Russian sanctions imposed as a result. The field of dispute resolution in the energy sector in troubled times stands to particularly benefit from the deep roots as well as the sheer breadth and scope of this leading compilation edited by J. William Rowley as General Editor together with Doak Bishop and Gordon E. Kaiser, all ably assisted by an array of leading counsel and arbitrators as contributing authors.

This is a book about international arbitration as spanned by its leading sector, energy, “the poster boy of arbitral globalization.”[2] There is thus much to learn for any international arbitration practitioner from the insights and experience of the authors and thoroughness of this book.

The book combines useful practical insight and advice, sharp analysis of cases and key developments and valuable predictions for the future all provided by people in the trenches. It aims to be not a textbook, but the essential desktop reference work for practitioners and actors in the field as well as parties and policy-makers.

As in the earlier editions, the foundational chapters in the book have been updated both topically as well as in terms of developments and leading cases. This fifth edition ensures that nothing is missed by the energy arbitration practitioner, from a panorama of the field in the Preface to authoritative decisions from international and national courts and tribunals, to new international instruments and key developments since the last edition in 2020. Reflecting ongoing developments in the international arena, the work adds a chapter on liquefied natural gas (LNG) arbitrations.

Chapter 1 serves as an introduction to the topic and the area for any reader providing an overview of the international energy industry and energy-related investment disputes. The chapter begins with the nature of the energy industry, the role played by supranational organizations such as Organization of the Petroleum Exporting Countries (OPEC), and the evolving roles and influence of “host states” and national oil companies. The second part is devoted to energy related investment disputes touching on topics such as the various applicable international instruments and the role of bilateral investment treaties.

Part I, “Investor-State Disputes in the Energy Sector” (ISDS) consists of a chapter on taxation-related ISDS covering energy investment disputes and “the state’s exercise of its sovereign right regarding its tax regime.” The piece by three contributors from Dentons focuses on when disputes relating to taxation can be brought under The Institute of Internal Auditors’ (IIA) consideration as to when a taxation measure may be a breach of protection standards under an IIA and then undertaking a thorough review of arbitral decisions from Latin America, India, Mongolia and Africa.

Part II, “Commercial Disputes in the Energy Sector” consist of five chapters with the timely addition of a chapter by K&L Gates lawyers Ben Holland and Steven Sparling on LNG arbitrations. The disputes covered include disputes surrounding energy facilities, offshore vessel construction, regulated utilities, disputes under The North American Free Trade Agreement (NAFTA) and The United States-Mexico-Canada Agreement (USMCA) and the aforementioned LNG related disputes.

Chapter 3, “Construction Arbitrations Involving Energy Facilities” and Chapter 4, “Offshore Vessel Construction Disputes” have been revised and updated. The former concerns itself with commercial arbitrations between participants in construction projects for energy facilities underlining the fact that commercial arbitration has become the principal means for the resolution of this type of dispute. Doug Jones ably teases out the unique commercial considerations applying to energy facilities, including those with political and economic implications such as terms of trade, subsidies and taxes. With respect to offshore vessel construction disputes, the authors from Haynes and Boone begin by explaining why arbitration is the preferred method of resolving maritime related construction disputes, primarily under the London Maritime Arbitrators Association (LMAA), reviewing the types of disputes that most commonly arise with respect to offshore vessel construction as well as how they are resolved. The chapter concludes by offering valuable strategies for successful resolution of this type of dispute by arbitration.

Chapter 5, “Disputes Involving Regulated Utilities” is offered by Gordon E. Kaiser with a slight change of title in this edition, from arbitration of regulated activities to arbitration involving regulators. The chapter reflects the centrality of public utilities, generators, transmitters and distributors, all subject to regulatory oversight and entering into contracts with each other as well as with third parties as part of carrying out their (regulated) activities. Many of these contracts will contain arbitration clauses. Kaiser’s focus here then is on the special problems that arise in disputes involving regulated utilities, such as jurisdiction and parallel proceedings, often pitting regulators against arbitrators, and highlighting the contrasting approaches of U.S. and Canadian courts and regulators in the area. Fundamentally, should disputes involving a regulated utility be subject to arbitration? And if so, are there limits or constraints?

The chapter in the last edition titled “NAFTA Energy Arbitrations,” also by Kaiser, has been rightly expanded here to include arbitrations under the USMCA, NAFTA’s replacement as of July 2020. The author updates NAFTA energy arbitrations to date, including a number of legacy arbitrations under the transitional provisions, and then considers the implication on the energy sector of the elimination in the new agreement of Chapter 11 of the NAFTA which gave private investors the right to bring claims in the host country. The Chapter 11 mechanism in giving foreign investors and the arbitration panels hearing their claims a means to override domestic law had left both Canada and the U.S. unhappy, as Kaiser notes. Cases such as Mobil Oil,[3] Mercer International[4] and Mesa Power[5] starkly illustrate the problem as it arose in the energy sector. The state-to-state dispute resolution process contained in NAFTA’s Chapter 20, on the other hand was maintained and even slightly improved. The Chapter concludes with a review of the available remedies for aggrieved investors in the absence of a Chapter 11-like mechanism such as de facto or disguised expropriation and other common law basis for relief grounded in concepts such as good faith in contractual performance and misfeasance in public office.

Chapter 7 is new in terms of emphasis. It expands upon a topic introduced earlier reflecting the importance of LNG in today’s world. Here, the authors build upon an earlier chapter by Steven P. Finizio and his colleagues at WilmerHale (in the third edition) providing a detailed overview of arbitrations in this particular sub-sector of the energy market, one which has gained significant geopolitical importance as a result of the invasion of Ukraine with Russia being the world’s largest exporter of pipeline natural gas. The conflict has led to significant growth in the LNG market in a short span of time and created a pressing need to build or expand existing facilities for receiving or re-gasifying LNG. The chapter primarily looks at the types of LNG related disputes that may lead to arbitration such as failure to deliver, missed cargo, oversupply effects, rescheduling and diversion, terminal capacity/use issues, pricing disputes, and a variety of force majeure circumstances.

Part III is titled “Contractual Terms” and includes, as previous editions did, chapters on the evolution of Natural Gas Price Review Arbitrations and Gas Price Review Arbitrations. In the first, Chapter 8, Stephen P. Anway, George M von Mehren, Michelle Glassman Bock and Max Rockall lay out the evolution of price review arbitrations since the mid-1990s, including an interesting history and analysis of the price review clause, as well as an overview of the current state and the anticipated future of price review arbitration cases, “the highest-value commercial disputes in the world today.” In their “Asia-the future is now” section the authors provide an update on what they had earlier predicted would become the new “battleground for LNG price review arbitrations,” China, Japan and South Korea, the world’s three largest importers of LNG. Citing the impact of external events such as economic crisis and the Russian-Ukrainian conflict, the authors emphasize the outsized role of external events, rather than changes in contractual terms, legal rights or the actions of parties, as the primary drivers of change in this type of energy arbitration.

In Chapter 9, “Gas Price Review Arbitrations,” Marco Lorefice of Edison SpA, expands on his previous chapter in the Fourth Edition providing valuable insight based on personal experience in price review cases and long-term gas sales and purchase contracts. After a helpful explanation of the nature of such disputes (distinct from force majeure or economic hardship claims) and of the price review process, Lorefice emphasizes that gas price review arbitrations are “not just a legal dispute.” Rather, “a significant part of the dispute…is based on market economics, algebra and sophisticated calculations.” The chapter includes new material on triggers, its relationship with the contract sales price as well as a detailed analysis of issue relating to jurisdiction and admissibility.

Closing the book is Part IV, “Procedural Issues in Energy Arbitrations,” following previous editions of this work. Chapter 10 contains a comprehensive review and update of major developments on multi-tier dispute resolution clauses as jurisdictional conditions precedent to arbitration, an increasingly important topic in international arbitration of all types, by Bennet Jones lawyers Vasilis F. L. Pappas and Artem N. Barsukov, a topic first covered in the 2017 edition of this work. The authors offer a comprehensive review of the treatment of such clauses by both national courts in various countries as well as by arbitral tribunals. The chapter closes with a useful set of practical guidelines for both arbitration practitioners and transactional lawyers.

The Conclusion in Chapter 11 offers thoughtful and stark commentary by Kaiser. In “The Challenges Going Forward” the author reminds us of earlier comments on the very real challenges faced by energy arbitrations ranging from rising costs, duplicate proceedings, creeping partisanship and what he refers to as the public policy conflict: the rights of private investors colliding with national legislation, at times hampering the ability of host countries to pursue their legislative and policy agendas, a problem most starkly illustrated under NAFTA but not, the author notes, confined to North America. The challenge for international energy arbitration today, Kaiser explains, comes from the shift in the energy landscape from fossil fuels to renewables. Renewable energy has dramatically changed energy markets and policy globally and in Kaiser’s view this shift is also changing “the face of arbitration.” The impact of incentive programs established by national governments to spur the shift to renewables resulted in a wave of challenging arbitrations (100 cases in two years!) which, together with the aforementioned public policy conflict, has led to a full-blown backlash against international arbitration. The result is states increasingly attempting to micromanage the rules, practice and procedure of international arbitration as reflected in new provisions in the new USMCA limiting the scope of fair and national treatment and full protection and security and, most importantly, in the restriction on the use of the most favoured nation (MFN) clause to import standards and jurisprudence from other treaties. As Kaiser sees it, the next few years can be expected to be just as challenging as the last few: the consequences of the failure to meet the Paris Agreement emission targets become evident and reverberate through the energy arbitrations world and the full implications (and perhaps the after-math) of war in Europe, will act as incentives to develop new technologies as well as new sources of energy. The anticipated massive new investment in energy will demand a lot from the international arbitration process.

Energy and resources sector arbitrations have made up the majority of international arbitrations in the last few years. This can be expected to continue in the years ahead if not to increase. Global Arbitration Review’s Guide to Energy Arbitrations as it has been since 2015 continues to be the practitioners timely guide to both legal and macroeconomic developments as well as advocacy and practice in this important area of international arbitration.


* Ralph Cuervo-Lorens is a partner and regulatory lawyer at McMillan LLP. He is co-chair of the firm’s National Environmental Group and a member of the firm’s Natural Resources & Energy Group as well as it’s Complex Disputes and Regulatory Regimes Group.

  1. J William Rowley, Doak Bishop & Gordon E Kaiser, The Guide to Energy Arbitration, 5th ed (London, UK: Law Business Research Ltd, 2022), online: Global Arbitration Review <>.
  2. Ibid.
  3. Mobil Investments Canada Inc. v Canada, 2020 ICSID ARB/15/6; Mobil Investments Canada Inc. and Murphy Oil Corporation v Canada, 2015 ICSID ARB(AF)/07/4 [Mobil Oil].
  4. Mercer International, Inc. v Canada, 2018 ICSID ARB(AF)/12/3 [Mercer International].
  5. Mesa Power Group LLC (USA) v Government of Canada, 2016 PCA 2012-17 [Mesa Power].


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