Green technology disputes at the SCC Arbitration Institute

The SCC Arbitration Institute

Founded in 1917, the SCC’s mission is to facilitate trade and business by providing a neutral, independent and impartial venue for dispute resolution. The SCC changed its name from the Arbitration Institute of the Stockholm Chamber of Commerce to the SCC Arbitration Institute in November 2022.

The SCC maintains different rules that are regularly updated in line with recent developments in arbitration and the needs of its users. The Arbitration Rules and the Rules for Expedited Arbitrations apply to the majority of SCC cases. The Arbitration Rules apply to approximately 60% of the cases registered by the SCC every year, while the Rules for Expedited Arbitrations apply to approximately 30% of the annual caseload. In 2021, the Arbitration Rules applied to 62% of cases and the Rules for Expedited Arbitrations applied to 30% of them. Parties from 43 different countries appeared in SCC administered cases in 2021.

In addition to administering commercial arbitrations, the SCC is one of the leading international arbitral institutions administering disputes between investors and states based on investment treaties. To date, the SCC has registered 119 investment treaty disputes. The Arbitration Rules applied to 76% of those cases, with the majority being based on bilateral investment treaties (“BITs”) or the Energy Charter Treaty (the “ECT”). Sweden and the SCC are listed as a forum for investment treaty arbitration in 121 BITs, as well as in the ECT. Of these 121 BITs, 61 agreements provide that the Arbitration Rules are to apply to disputes arising from the agreement. The remaining 60 BITs nominate the SCC as an Appointing Authority under the UNCITRAL Arbitration Rules or Sweden as the seat of arbitration.²¹

The SCC also maintains procedures for the administration of arbitrations under the UNCITRAL Arbitration Rules, the SCC Mediation Rules, and the SCC Rules for Express Dispute Assessment (the “SCC Express”). The SCC Express, adopted in 2021, provides an alternative form of dispute resolution designed to meet a specific need identified among arbitration users. The SCC Express is a consent-based and confidential process

which offer parties a legal assessment of their dispute within three weeks, for a fixed fee.

Since the 2019 Report, the SCC has closely examined its role in the transition to a low-carbon economy. As a result, the SCC recently launched the SCC Sustainability Commitment, which sets out the measures taken by the SCC to provide dispute resolution services in line with its users’ ESG and sustainability requirements.²²

As set out in the SCC Sustainability Commitment, the SCC has taken measures to reduce its own carbon footprint by using a digital case management platform and encouraging carbon offsetting for arbitrators’ flights and reimbursing such expenses. The SCC has also facilitated virtual attendance at hearings and promoted online participation as an alternative to travel. Moreover, the SCC supports the Campaign for Greener Arbitrations as a signatory to the Green Pledge and has implemented the Green Protocols into its operations.²³

Further, the SCC provides efficient tools for the resolutions of climate- related disputes. The need for climate action is urgent and climate related disputes require efficient resolution in order for companies to keep up with the pace of the climate transition and focus their resources on business and climate goals. As noted in the 2019 Report, arbitration has an important role to play in putting power behind the words of commercial contracts in the green technology sector and the protection granted under investment treaties. Efficiency and expeditiousness are two of the SCC Rules’ cornerstone principles and they are enshrined in Article 2 of the Arbitration Rules and the Rules for Expedited Arbitrations. They require that “the SCC, the Arbitral Tribunal and the parties shall act in an efficient and expeditious manner”. The principles are reinforced by the fact that the SCC considers the arbitral tribunal’s efficiency and expeditiousness when determining the costs of the arbitration.²⁴ A similar mechanism applies to the arbitral tribunal’s apportionment of costs incurred by the parties and the costs of the arbitration between the parties. In that regard, the arbitral tribunal shall consider each party’s contribution to the efficiency and expeditiousness of the proceedings.²⁵

Further, the SCC Rules provide for flexible proceedings which can be tailored to accommodate the typically complex and international nature of climate related disputes. Other aspects that affirm the suitability of arbitration as an instrument for resolving such disputes include the fact that (a) arbitration allows for disputes to be resolved by arbitrators possessing relevant qualifications and expertise, and (b) arbitral awards are internationally enforceable under the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”). As one of the most successful international treaties with more than 160 parties, the New York Convention not only makes international recognition and enforcement of arbitral awards possible, but contributes to arbitration’s suitability in resolving climate related disputes—especially those involving cross-border investments and international elements.

The numbers of Green Technology Commercial Disputes

Number of cases

Using the methodology described above, the SCC registered 61 Green Technology Commercial Disputes between 1 January 2019 and 1 October 2022, accounting for 9% of the total cases registered by the SCC during this period.

This marked a significant increase in the number of Green Technology Commercial Disputes compared to the timeframe examined in the 2019 Report. There, the SCC registered 31 cases between 2014 and 2018, accounting for 3% of the total number of cases registered during that period.

The parties

The 2019 Report found that 62% of the disputes were domestic disputes, involving only Swedish parties. The remaining 38% were international disputes, where one of or both parties to the dispute were non-Swedish. The international disputes accounted for a larger share of the Green Technology Commercial Disputes identified in this report, with 52% of the cases involving only Swedish parties while 48% of them involved non-Swedish parties.

The 2019 Report identified eight business sectors to which the disputing parties belonged, showing that green technology companies pursued business in diverse sectors. In the 2019 Report, 61% of the parties who appeared in the identified cases pursued business activities in the renewable energy sector.

The renewable energy sector was the most common sector identified for the parties appearing in Green Technology Commercial Disputes in this report as well, with 56% of parties pursuing their main business activity within this sector. The percentage of parties pursuing business in this sector was higher in international cases than in Swedish cases.

Compared to the 2019 Report, a larger share of parties had carbon reduction as their main business activity. Such parties pursued a wide range of green business activities but were usually the proprietors of technological solutions designed to reduce the carbon emissions of industries or consumers. Parties pursuing their main businesses within the electrification sector, including various solutions to electrify processes and make the supply of electricity greener, were involved in Green Technology Commercial Disputes. Considering the ongoing efforts to electrify economies and the increasingly large investments being made in this sector, as implied by the BloombergNEF report mentioned above, it would be reasonable to assume that the number of disputes involving parties in the electrification sector will continue to increase. The business activities of some parties have been classified as green solutions, which include various sustainable processes and innovations. Other parties pursued commercial activities within the waste management sector and the green insurance sector.

Using the terminology set out in the introduction section of this report, the vast majority of the parties involved in the Green Technology Commercial Disputes pursued activities aimed at climate change mitigation rather than adaption. This is perhaps unsurprising considering that most climate investments are directed towards mitigation efforts. Further, the Green Technology Commercial Disputes identified involved both parties innovating and developing technologies with the potential to mitigate climate change and parties in more traditional sectors, such as construction and energy, which are undergoing significant transformation in response to increased regulatory demands.

Parties from 20 different countries appeared in the Green Technology Commercial Disputes examined in this report. Swedish parties appeared the most frequently. Besides private companies, individuals and state entities were also represented in the case load. As for the cases with state parties, these disputes primarily arose in relation to infrastructure or energy projects aimed at reducing GHG emissions.

Nationality of parties

The disputes

The Arbitration Rules applied to 90% of the cases, which is an increase compared to the cases examined in the 2019 Report. Meanwhile, the Rules for Expedited Arbitrations applied to 7% of the cases while the Mediation Rules applied to the remaining 3% of cases. The SCC Express Rules did not apply in any cases. As for the mediation cases, the disputes related to alleged deficiencies in construction works performed on renewable power plants and factories.

Overall, the amounts in dispute ranged from EUR 10,000 to EUR 95,508,426 with an average amount in dispute of EUR 9,989,403. The amounts in dispute in Swedish cases were generally lower than in international cases. In Swedish cases, the amounts in dispute ranged

from EUR 10,000 to EUR 58,324,113, with an average amount in dispute of EUR 5,877,824. In international cases, the amounts in dispute ranged from EUR 30,349 to EUR 95,508,426 with an average amount in dispute of EUR 14,526,317. This range effectively demonstrates the multi-faceted nature of climate related disputes. The Green Technology Disputes involved both disputes arising out of smaller contracts, such as agreements entered into by companies developing green innovations, and large contracts, such as construction agreements for renewable power plants.

The Green Technology Commercial Disputes examined in this report all arose out of various commercial agreements. The most common types of contracts in these cases were construction agreements and delivery agreements.

As for the types of claims presented in the Green Technology Commercial Disputes, most claims were categorised as claims for delivery or claims for damages due to non-delivery or non-performance.

Payment for delivery is given a wide meaning and includes all claims for specific performance based on contractual obligations to pay for goods, services or otherwise fulfil contractual payment obligations. The typical claims belonging to this category concerned payments for the goods or services of a green technology company. Other examples include claims for payment for delivery of biofuel, a claim for payment of a settlement amount agreed under a settlement agreement between a green technology company and one of its former employees, and a claim for payment of royalties to be paid for the sale of a green technology product.

Damages for non-delivery or non-performance typically included claims for damages due to unsatisfactory work, delay, or deficiencies in delivery. This category also includes other cases of alleged non-performance. One example is a case where the dispute concerned the amounts payable under a guarantee by various parties to a consortium agreement. The distinction between these categories is primarily made with reference to the nature of the claimant’s claim. It is not unusual for cases to include both claims for payment for delivery and claims for damages for non-delivery or non- performance. In some of the construction disputes relating to renewable plants for example it was not unusual for the claimant to claim payment for performed works, and for the respondent to present counterclaims based on costs incurred due to unsatisfactory work.

As for the claims categorised as determination of the scope of agreement, these mainly included declaratory claims requesting the arbitral tribunal to declare that contractual provisions applied to certain facts or events. An example of such claims is a dispute regarding a contract for the supply of renewable energy, where the claimant alleged that events which led to unfairness had occurred and had triggered a review clause in the contract. Another example was a dispute regarding whether an increase in the price of biofuel had been lawful under the contract. Yet another example was a dispute where the claimant requested the tribunal to determine that a license for a green technology only applied to certain industrial facilities. Another case illustrating the variety of claims in this category is a dispute concerning whether a green technology company was entitled to redeem the shares of one of its shareholders due to actions allegedly taken by the shareholder.

At the time of writing this report, final arbitral awards have been rendered in 31 Green Technology Commercial Disputes. The average time from the date of registration until the date that the final award was rendered in the Green Technology Commercial Disputes was ten months. The final award was rendered within 12 months in 77% of the cases examined in this report. This is notable when compared to the cases covered by the 2019 Report, in which the final award was rendered within 12 months in only 40% of cases. This is good news since one of the main advantages of arbitration is expeditiousness—something particularly important in Green Technology Commercial Disputes. However, it should be noted that a final award has not yet been rendered in 13 ongoing cases examined by this report.

Procedural features in Green Technology Commerical Disputes

Use of efficiency tools under the SCC Rules

As mentioned earlier in this report, efficiency and expeditiousness are cornerstone principles of the SCC Rules, which are designed to enhance the efficiency of proceedings.

For less complex cases that do not require voluminous written submissions or oral hearings, the Rules for Expedited Arbitrations provide a way to settle disputes in a time efficient manner and at a lower cost. The Rules for Expedited Arbitrations applied to 20% of the cases examined by the 2019 Report. The Rules for Expedited Arbitrations applied to 7% of the Green Technology Commercial Disputes examined by this report. These cases mainly involved smaller businesses that had developed green solutions with small amounts in dispute.

The Mediation Rules were used in two of the Green Technology Commercial Disputes examined in this report. Both cases involved Swedish parties only. This is interesting since mediation has not yet gained a strong foothold in the Swedish market. Mediation can be an efficient form of dispute resolution for green technology companies wishing to avoid the time and costs associated with conventional forms of disputes resolution.

The same is true for the SCC Express, adopted in 2021. The SCC Express was not applied to any of the Green Technology Commercial Disputes. Considering that one of the main areas of application for the SCC Express is where parties want to preserve their commercial relationship and time is of the essence, the SCC Express could certainly benefit many Green Technology Commercial Disputes.

Besides the general emphasis on efficiency and expeditiousness, the SCC Rules also contain specific tools designed to enhance the efficiency of proceedings. These include rules for multi-party arbitrations such as provisions on joinder of additional parties, consolidation of cases and claims arising out of multiple contracts in a single arbitration. Some 34% of the Green Technology Commercial Disputes were multi-party disputes involving multiple claimants or respondents. Examples of such cases are disputes concerning renewable energy power plants, which will oftentimes include multiple parties due to the size and structure of such projects, post M&A-disputes, where the underlying transaction included multiple buyers or sellers, and corporate disputes involving multiple shareholders. In most of the Green Technology Commercial Disputes examined, the parties remained the same throughout the proceedings. In some cases, however, the abovementioned provisions were utilised. One such case concerned whether the respondent, which was a shareholder in a green technology company developing an environmentally friendly material, was entitled to redeem the claimant’s shares in the company. The case was consolidated with an ongoing SCC arbitration relating to the same company. Another example is a case where the SCC decided to grant a request for joinder. The dispute arose from a share purchase agreement concerning the transfer of shares in a green technology company. The parties agreed that guarantors, which had guaranteed the performance of the seller under the agreement, should be joined to the arbitration. In another case, which concerned the construction of a wind farm, the SCC denied a request to join a subcontractor to the dispute.

Besides multi-party provisions, the SCC Rules provide other tools to enhance the efficiency and expeditiousness of the proceedings. One example is Article 39 of the Arbitration Rules, which allows the arbitral tribunal to decide one or more issues of fact or law by way of summary procedure if requested by the parties.²⁹ Summary procedure was not used in any of the Green Technology Commercial Disputes. The SCC Rules also contain provisions on the appointment of administrative secretaries of the arbitral tribunal.³⁰ Delegating tasks of an administrative or clerical nature to administrative secretaries can be a way to improve the efficiency and expeditiousness of the proceedings, especially in complex cases. Administrative secretaries were appointed in 11% of the Green Technology Commercial Disputes.

The importance of expertise

As mentioned earlier in this report, many of the Green Technology Commercial Disputes examined were technical in nature. Such disputes undoubtedly require expertise to be adjudicated in an efficient manner. Ensuring that such knowledge is available throughout the proceedings is one of the SCC’s priorities in contributing to the green transition by providing adequate dispute resolution services.

Making such expertise available starts with the appointment of the arbitral tribunal. Party autonomy is a one of the SCC’s cornerstone principles, so the parties have a great deal of influence over the appointment of the arbitral tribunal and the proceedings in general. The Arbitration Rules set out a default procedure for the appointment of arbitrators, which only applies if the parties have not agreed on another procedure. Where an arbitral tribunal is to consist of more than one arbitrator, each party appoints an equal number of arbitrators while the SCC appoints the chairperson.³¹ Where an arbitral tribunal is to consist of a sole arbitrator, the parties are given 10 days to jointly appoint the arbitrator, failing which the SCC makes the appointment.³² The same applies in cases using the Rules for Expedited Arbitrations, which are always decided by one arbitrator.³³ Under the Mediation Rules, the SCC solicits the views of the parties before appointing the mediator and will appoint any mediator jointly proposed by the parties.³⁴ Meanwhile, under the SCC Express Rules, the SCC takes any proposals made by the parties into consideration when appointing the neutral.³⁵

When appointing arbitrators, the SCC carefully considers candidates’ qualifications and specialisations. The SCC seeks to appoint arbitrators who have a good understanding of the subject matter of the dispute.³⁶ As mentioned in the 2019 Report, the SCC does not have a list or roster of arbitrators to choose from. Instead, it is free to appoint the arbitrator best suited to the dispute. This is beneficial in the fast-changing field of climate related arbitration as arbitrators with the necessary technical, regulatory, or sectorial knowledge can be appointed without limitations. As mentioned earlier in this report, many of the Green Technology Commercial Disputes examined concerned renewable energy and construction. In such cases, the SCC generally appointed arbitrators with experience from the renewable energy sector and/or with construction expertise. In the non-technical disputes of a more general commercial nature, arbitrators with expertise in the specific legal area relevant to the dispute were appointed. A minority of the Green Technology Commercial Disputes required specific knowledge within environmental law or climate issues. In such cases, the SCC appointed a chairperson who possessed adequate knowledge of the subject matter while complementing the expertise and qualifications of the arbitrators appointed by the parties. Should specific technical or environmental knowledge be needed, there is no requirement under the Swedish Arbitration Act, i.e., for arbitrations seated in Sweden, regarding the legal qualifications or training of arbitrators. However, it is unusual for arbitrators without legal training to be appointed in SCC cases. Since the SCC will usually appoint the chairperson of the arbitral tribunal or the sole arbitrator, who will have the main responsibility of conducting the proceedings, it rarely appoints arbitrators without legal expertise.

Once the arbitral tribunal has been appointed, the arbitral tribunal is given a wide mandate to conduct the proceedings as it considers appropriate provided that the arbitration is conducted in an impartial, efficient and expeditious manner while providing the parties with an equal and reasonable opportunity to present its case.³⁷ The arbitral tribunal shall hold a case management conference to establish the procedure and conduct of the arbitration.³⁸ The initial case management conference provides the arbitral tribunal and the parties with an opportunity to agree on procedures and rules of conduct tailored to the specific needs of Green Technology Commercial Disputes. Such decisions may concern inter alia written submissions, the format and length of the hearing, document production and the use of expert evidence. In fact, it is mandatory under the SCC Rules for the arbitral tribunal and the parties to seek to adopt procedures enhancing the efficiency and expeditiousness of the proceedings during the case management conference.³⁹

Settlement rate

Article 45 of the SCC Rules concerns settlements or other grounds for terminating the arbitration. Under this provision, the arbitral tribunal may, at the request of the parties, make a consent award recording the settlement of the parties. If the arbitration is terminated for any other reason before the final award is made, the arbitral tribunal shall issue an award recording the termination. The most common situation where arbitral tribunals render termination awards is when the parties withdraw their claims following a settlement.

As mentioned above, final arbitral awards have been rendered in 31 of the Green Technology Commercial Disputes examined. Of these awards, ten were either consent awards or termination awards rendered due to a withdrawal of claims following a settlement, resulting in a settlement rate of 32% in the Green Technology Commercial Disputes.

Methodology and findings

All investment treaty arbitration cases registered with the SCC between 1 January 2019 and 1 October 2022 were reviewed to identify cases where the investor had invested in the green technology sector in the respondent state’s territory. For the sake of consistency, this report uses the same definition of the term green technology as in the 2019 Report, i.e. “any process, product or service that reduces negative environmental impacts in support of the Paris Agreement on Climate Change”.

Applying this methodology, the 2019 Report found that 16 investment cases concerning green investments had been registered with the SCC between 2012 and 2018. All cases arose out of the ECT.

Two green investment treaty arbitrations were registered with the SCC between 1 January 2019 and 1 October 2022 (“Green Investment Disputes”). Contrary to the increase of Green Technology Commercial Disputes, the number of green investment treaty arbitrations registered with the SCC was significantly lower than in the 2019 Report. A few non-conclusive factors could have contributed to fewer cases being registered.

First, the registration of fewer investment treaty cases in the time period relevant to this report is to be expected considering that the overall time frame is shorter than the one examined in the 2019 Report. The influx of investment treaty cases also tends to fluctuate over time and it peaked during the time period examined by the 2019 Report, as shown in the figure below.

Second, intra-EU investment treaty arbitration has been called into question over the last few years. Considering that these developments have been the subject of extensive research, falling outside the immediate scope of this report, only a brief summary is provided for the sake of context.

In Achmea, the Court of Justice of the European Union (the “CJEU”) declared that arbitration clauses in international agreements between EU Member States, such as the arbitration clause present in a BIT between the Netherlands and Czechoslovakia which was subject to the preliminary questions referred to the CJEU, was precluded by provisions of EU law.⁴² Following Achmea, many arbitral tribunals found Achmea to not be an obstacle to intra-EU investment treaty arbitration and continued to uphold jurisdiction in a number of such cases, including some of the cases mentioned later in this report.⁴³ As a result of the CJEU’s ruling in Achmea, EU Member States declared that they would terminate intra-EU BITs existing between them. In its subsequent judgment Komstroy, the CJEU extended its findings in Achmea to intra-EU disputes brought under the ECT, interpreting Article 26(2)(c) of the ECT, according to which investors may refer disputes to arbitration, to not be applicable to investment disputes between EU-investors and EU Member States.⁴⁴

In a political context, formal discussions to modernise the ECT have been ongoing since 2017 with several rounds of negotiation taking place. On 24 June 2022, the signatories to the ECT reached an agreement in principle which concluded the negotiations. Among other things, the agreement in principle resulted in a proposal for the inclusion of provisions concerning sustainable development. The draft text was shared with the contracting parties on 22 August 2022 for adoption by the Energy Charter Conference on 22 November 2022. A number of contracting parties to the ECT, including Poland, Spain, the Netherlands, France, Belgium, and Germany have recently announced their intentions to withdraw from the ECT. Italy withdrew from the ECT in 2016, becoming the first country to do so. However, unilateral withdrawal from states does not immediately put an end to the protection the ECT grants investors. Article 47 of the ECT, commonly referred to as the sunset clause, continues to protect existing investments for 20 years after a host state’s withdrawal.

The impact of these factors, if any, on the number of Green Investment Disputes registered in the time period examined by this report cannot be determined at this time. At the same time, however, they cannot be ignored.

Specific procedural features

The 2019 Report observed two procedural features present in all five awards examined in that report. The first was that the cases required specific expertise in renewable energy, taxation and finance. The second was that the arbitral tribunals allowed third party participation through amicus curiae briefs. These features were present in the cases examined in this report as well.

As noted in the 2019 Report, besides the appointed arbitrators possessing the necessary knowledge and qualifications, expert evidence plays an important role in investment treaty cases concerning renewable energy. All of the awards examined in this report contain references to expert evidence presented by the parties. The expertise concerned legal, regulatory, and financial issues as well as issues quantum.

As an example of the use of quantum experts, in CEF Energia the claimant’s expert had submitted calculations of losses allegedly suffered by one of the claimant’s companies due to the respondent’s breaches of the ECT. The respondent’s expert had presented calculations which, according to the arbitral tribunal, did not question the correctness of the claimant’s expert, but instead approached the underlying methodology differently. The arbitral tribunal concluded that it preferred the methodology of the claimant’s expert and proceeded to examine the key assumptions used by the claimant’s expert in his calculations. The arbitral tribunal found that one key assumption in the calculations had to be changed following the arbitral tribunal’s findings on the merits and awarded the claimant an adjusted amount.⁶⁵

In SunReserve, the parties presented expert evidence from quantum experts as well.⁶⁶ The arbitral tribunal did not find it necessary to examine the parties’ respective submissions relating to the quantification of claimants’ alleged damages, including quantum expert reports, since it found that the claimants had not established the respondent’s liability under the ECT.⁶⁷ However, the award still contained references to reports from the quantum experts. For example the arbitral tribunal referred to the report of the claimants’ quantum expert in its considerations of whether reduced incentive tariffs resulted in unfair remuneration for any of the claimants’ power plants. The arbitral tribunal also considered both the reports and testimonies of the parties’ regulatory and quantum experts in determining whether the respondent’s enactment of one of the decrees that led to the dispute had frustrated the claimants’ legitimate expectations of a fair remuneration.⁶⁸

Similarly, the arbitral tribunal in FREIF Eurowind found that the respondent had not violated the ECT and international law and dismissed the claimant’s claims.⁶⁹ But references to the reports and testimonies of the parties’ financial experts were still made. The claimant’s primary claim on the merits was that the respondent had frustrated its legitimate expectations, which the arbitral tribunal found to be a component of the FET standard of the ECT.⁷⁰ Among other things, the arbitral tribunal’s determinations focused on whether the respondent had failed to honour the claimant’s expectation of a reasonable return on its investment.⁷¹ The arbitral tribunal found that a specific benchmark reasonable rate of return was understood by the claimant when it invested.⁷² Considering the expert evidence submitted by the parties, the arbitral tribunal concluded that the calculations of either parties’ experts resulted in an internal return on investment above the benchmark rate, which made it clear to the arbitral tribunal that the respondent hade not frustrated the claimant’s expectation of reasonable return.⁷³ In Green Power, the arbitral tribunal did not hear the claims on the merits since it found that it lacked jurisdiction to do so.

Experts also provided opinions on legal and regulatory issues in the cases in which arbitral awards were rendered.

In SunReserve for example, the parties presented Italian law experts and regulatory experts.⁷⁴ The claimants argued that the respondent had breached the FET standard under the ECT by violating the claimants’ legitimate expectations. To support their assertion, the claimants relied on a report from their Italian Law expert to show that contracts entered into with an “implementing body” were “individual and actual measures” on which investors’ legitimate expectations of fixed tariffs for 20 years were based.⁷⁵ Both the claimants’ and the respondent’s legal experts elaborated on the nature of these instruments.⁷⁶ In assessing the extent to which the instruments had created expectations for the claimants, the arbitral tribunal held that it was not convinced by the criticism of the respondent’s position presented by the claimants or their legal expert.⁷⁷ In the same case, the claimants’ legal expert elaborated on the hierarchical position of the Italian decrees that led to the claims in dispute in comparison to other sources of law.⁷⁸ It also relied on its regulatory experts to contend that certain measures the respondent implemented were arbitrary, discriminatory and inefficient.⁷⁹

In Green Power, the respondent submitted a legal opinion concerning its intra-EU jurisdictional objection.⁸⁰

As noted in the 2019 Report, third party submissions by amicus curiae have increased in investment treaty arbitration in general. The European Commission made submissions arguing against the jurisdiction of the arbitral tribunals in CEF Energia, SunReserve, and Green Power.⁸¹ In FREIF Eurowind, the European Commission submitted a request for leave to intervene as a non-disputing party in the arbitration, however, the arbitral tribunal did not allow the Commission’s request for leave.⁸²

References

¹ https://sccarbitrationinstitute.se/wp-content/uploads/2024/12/green-technology-disputes-in-stockholm.pdf

² Article 2.1(a) of the Paris Agreement.

³ UNEP (2022): Adaptation Gap Report 2022: Too Little, Too Slow – Climate adaptation failure puts world at risk (“UNEP Adaption Gap Report 2022”), Glossary, VIII.

⁴ IPCC 2022: Summary for Policymakers. In: Climate Change 2022: Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change [P.R. Shukla, J. Skea, R. Slade, A. Al Khourdajie, R. van Diemen, D. McCol- lum, M. Pathak, S. Some, P. Vyas, R. Fradera, M. Belkacemi, A. Hasija, G. Lisboa, S. Luz, J. Malley, (eds.)] (“IPCC 2022”), p. 10.

⁵ Ibid.

⁶ Ibid., p. 15.

⁷ Ibid.

⁸ Ibid., p. 17. A figure illustrating the regulatory increase is that according to one source, almost 3,000 climate change related laws and policies have been adopted globally. See Climate Change Laws of the World database, Grantham Research Institute on Climate Change and the Environment and Sabin Center for Climate Change Law, available at: https://climate-laws.org/.

⁹ IPCC 2022, pp. 21–43 and the IPCC press release dated 9 August 2021, available at: https://www.ipcc.ch/site/assets/uploads/2021/08/IPCC_.

¹⁰ UNEP (2022): Emissions Gap Report 2022: The Closing Window – Climate crisis calls for rapid transformation of societies (“UNEP Emissions Gap Report 2022”), Executive Summary, XVI.

¹¹ UNEP Adaption Gap Report 2022, Executive Summary, XII.

¹² UNEP Emissions Gap Report 2022, p. 65.

¹³ Article 2.1(c) of the Paris Agreement.

¹⁴ IPCC 2022, p. 17.

¹⁵ UNCTAD (2022): International Investment in Climate Change Mitigation and Adaption: Trends and Policy Developments, p. 4.

¹⁶ Ibid., p. 6.

¹⁷ The executive summary of the BloombergNEF report is available here: https://assets.bbhub.io/professional/sites/24/Energy-Transition-Investment-Trends-Exec-Summary-2022.pdf

18 Ibid.

¹⁹ UNEP (2020): Global Climate Litigation Report: 2020 Status Review, pp. 4–6.

²⁰ Lucy Greenwood, ‘The Canary Is Dead: Arbitration and Climate Change’, in Maxi Scherer (ed), Journal of International Arbitration, (© Kluwer Law International; Kluwer Law International 2021, Volume 38 Issue 3) pp. 309–326.

²¹ https://sccarbitrationinstitute.se/en/our-services/investment-disputes/.

²² Available here: https://sccarbitrationinstitute.se/en/resource-library/sustainability-commitment/.

²³ The Campaign for Greener Arbitrations is an initiative to reduce the environmental impact of international arbitrations. Read more about the initiative here: https://www.greenerarbitrations.com/.

²⁴ Article 49(3) of the Arbitration Rules and the Rules for Expedited arbitration.

²⁵ Article 49(6) and Article 50 of the Arbitration Rules and the Rules for Expedited arbitration.

²⁶ IPCC 2022, p. 52.

²⁷ Article 1 of the IED.

²⁸ Article 9 of the IED.

²⁹ The same provision is found in Article 40 of the Rules for Expedited Arbitrations.

³⁰ Article 24 of the Arbitration Rules and Article 25 of the Rules for Expedited Arbitrations.

³¹ Article 17(4) of the Arbitration Rules.

³² Article 17(3) of the Arbitration Rules.

³³ Article 18(2)–(3) of the Rules for Expedited Arbitrations.

³⁴ Article 6(1)–(2) of the Mediation Rules.

³⁵ Article 6 of the SCC Express Rules.

³⁶ SCC Policy on Appointment of Arbitrators Section II(4).

³⁷ Article 23 of the Arbitration Rules and Article 24 of the Rules for Expedited Arbitrations.

³⁸ Article 28 of the Arbitration Rules and Article 29 of the Rules for Expedited Arbitrations.

³⁹ Article 28(3) of the Arbitration Rules and Article 29(3) of the Rules for Expedited Arbitrations.

⁴⁰ https://sccarbitrationinstitute.se/en/our-services/investment-disputes/.

⁴¹ The Basic Features of Investment Treaties’, in Campbell McLachlan, Laurence Shore, et al., International Investment Arbitration: Substantive Principles (Second Edition), Oxford International Arbitration Series, (© Campbell McLachlan, Laurence Shore, and Matthew Weiniger 2017; Oxford University Press 2017) pp. 28–29.

⁴² Judgment of 6 March 2018, Achmea, C-284/16, ECLI:EU:C:2018:158, para. 60.

⁴³ See Crina Baltag and Stefan Dudas, ‘Chapter 3: Achmea, Arbitral Tribunals and the ECT: Modernisation or Regression?’, in Ana Stanič and Crina Baltag (eds), The Future of Investment Treaty Arbitration in the EU: Intra-EU BITs, the Energy Charter Treaty, and the Multilateral Investment Court, (© Kluwer Law International; Kluwer Law International 2020) pp. 23-42.

⁴⁴ Judgment of 2 September 2021, Komstroy, C-741/19, ECLI:EU:C:2021:655, para. 66.

⁴⁵ The final awards are publicly available at https://www.italaw.com/ and https://jusmundi.com/en/.

⁴⁶ Greentech Energy Systems A/S, Novenergia II Energy and Environment and Novenergia Italian Portfolio SA v. Italian Republic.

⁴⁷ CEF Energia, para. 2; SunReserve, para. 278.

⁴⁸ CEF Energia, paras. 97–98.

⁴⁹ SunReserve, para. 183.

⁵⁰ SunReserve, paras. 278–279.

⁵¹ SunReserve, paras. 283-286.

⁵² SunReserve, para. 444.

⁵³ FREIF Eurowind, para. 1; Green Power, para. 5.

⁵⁴ FREIF Eurowind, paras. 1–5.

⁵⁵ FREIF Eurowind, paras. 329–330.

⁵⁶ Green Power, para. 5.

⁵⁷ Green Power, para. 58.

⁵⁸ Green Power, para. 158.

⁵⁹ Green Power, paras. 165–166 and 172.

⁶⁰ Green Power, paras. 336–412.

⁶¹ Green Power, paras. 445–478.

⁶² SunReserve, paras. 99–102.

⁶³ FREIF Eurowind, para. 156.

⁶⁴ Green Power, para. 60.

⁶⁵ CEF Energia, paras. 268–284.

⁶⁶ SunReserve, para. 60.

⁶⁷ SunReserve, para. 1013.

⁶⁸ SunReserve, paras. 841-871.

⁶⁹ FREIF Eurowind, para. 691.

⁷⁰ FREIF Eurowind, para. 534.

⁷¹ FREIF Eurowind, para. 562.

⁷² FREIF Eurowind, paras. 566 and 568.

⁷³ FREIF Eurowind, para. 570.

⁷⁴ SunReserve, para. 60.

⁷⁵ SunReserve, para. 601.

⁷⁶ SunReserve, paras. 822-823.

⁷⁷ SunReserve, para. 829.

⁷⁸ SunReserve, para. 794.

⁷⁹ SunReserve, para. 925.

⁸⁰ See for example Green Power, para. 233.

⁸¹ CEF Energia, paras. 13–19 and 59; SunReserve, para. 41 and paras. 336–349; Green Power, paras. 27, 183–184 and 316–318.

⁸² FREIF Eurowind para. 54.