Climate change and energy transition to heat up Middle East disputes landscape
ESG risk among topics discussed at ADGM’s flagship RESOLVE event in Abu Dhabi
Climate change and energy transition disputes are likely to create a ‘tsunami of change’ for the region’s dispute resolution community, according to the CEO of the Abu Dhabi Global Markets (ADGM) courts.
Speaking at ADGM’s flagship disputes event RESOLVE, CEO Linda Fitz-Alan said: “We have rarely seen anything like the spectrum of what is coming in climate change and energy transition disputes and the pressure points that are emerging and requiring urgent action from regulators in this space.”
More than 900 delegates attended the event, including many senior disputes lawyers and in-house counsel from across the UAE and further afield. The event focused on four key themes: sustainability; digital change and AI; financial compliance issues including anti-money laundering and sanctions; and the evolving infrastructure of the UAE and possible disputes.
Pinsent Masons also used the event to launch the regional results of its survey on energy arbitrations that it conducted with London’s Queen Mary University.
The survey showed that 29% of respondents expect the Middle East to see the most significant increase in disputes. Price volatility of commodities and energy drove recent disputes, while energy infrastructure construction and supply chain issues remained prominent. The survey also highlighted energy transition disputes, sanctions and regulations as operating activities in this area.
Arbitration is the preferred method to resolve disputes, with 72% of respondents saying it is the go-to solution for their disputes. The survey showed the main reasons respondents choose arbitrations are neutrality (63%), choice of arbitrator (60%) and enforceability of awards.
London remains the most popular centre for resolving energy disputes, for "the stability of its common law", said Nesreen Osman, a partner at Pinsent Masons, who presented the findings alongside colleague Jed Savager. Singapore was next most favoured, while Paris and Geneva also remained popular. Stockholm's popularity had fallen away, owing to the impact of sanctions on Russian parties.
Energy transition disputes, ESG risks and climate change litigation were all discussed in a session chaired by Arbitra International's Jessica Crow, noting that Dubai's COP28 would act as a stocktaking meeting to assess progress against previous targets.
Hailing it as a ‘watershed moment’, Crow predicts ESG implementation will be a big challenge for corporates. Cleary Gottlieb's Laurie Achtouk-Spivak and Sydney barrister Duncan Miller SC of 7 Wentworth Selborne Chambers, also highlighted attempts to link human rights litigation with alleged failures to meet ESG regulatory goals, with cases against Shell in the Netherlands and the recent Client Earth litigation in London both highlighted.
Miller pointed out such cases carry reputational risk as well as legal consequences. Even if corporates won, he said, the cases would be embarrassing given increased consumer and regulatory scrutiny arising from allegations of greenwashing.
The event also heard from crypto, AI and infrastructure dispute experts and closed with a wide-ranging fireside chat with former US secretary of state Hillary Clinton.
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