ICC Arbitration and ADR Commission Report on Resolving Climate Change Related Disputes through Arbitration and ADR

The ICC Commission on Arbitration and ADR, with the support of the ICC Commission on Environment and Energy, has created a task force on “Arbitration of Climate Change Related Disputes” (the “Task Force”). Climate change related disputes, for the purpose of the Task Force and this Report, require the existence of a valid and binding agreement to arbitrate whereby parties agree to resolve disputes relating to climate change.

The Task Force had the following missions:

  • To explore whether, and if so, how ICC Arbitration and other dispute resolution services are currently used to resolve climate change related disputes.
  • To ascertain what, if any, specific features are required for a dispute resolution mechanism to effectively resolve climate change related disputes.
  • To review the ICC Arbitration Rules, Mediation Rules, Expert Rules and Dispute Board Rules in the context of climate change related disputes in order to consider whether it would be appropriate for ICC to offer any additional guidance and suggest sample wording for dispute resolution clauses and procedure.
  • To prepare a report that summarises the Task Force’s findings, taking into account that such output could consist of a summary of the issues discussed and proposed solutions for consideration by parties, potential parties, counsel and tribunals alike.

The Task Force members include business representatives, lawyers, arbitrators, arbitral institutions, in-house counsel, NGO representatives, business and industry groups and academics.

 The purpose of this Report is to examine the role for Arbitration and ADR in the resolution of international disputes related to climate change. The Report first defines climate change related disputes (Section II), providing case studies as appropriate, and then explores current, potential use and benefits of ICC Arbitration and ADR services to resolve such disputes (Sections III and IV) and identifies six broad features that potentially enhance the existing procedures to further improve their effectiveness for resolving climate change related disputes (Section V). These features, which parties to a climate change related dispute (together with arbitral tribunals as the case may be) may wish to take into account, where appropriate and on a case-by-case basis, include:

  • Securing relevant expertise, scientific, technical or otherwise, to ensure that decisions reflect sound and up-to-date knowledge in a new and fast-moving area.
  • Highlighting opportunities to use faster and more effective procedures commensurate with the complexity, urgency and special sensitivities of a collaborative climate change response.
  • Exploring the opportunity for integration of climate change policy, commitments or law into the dispute resolution procedure.
  • Weighing the possible benefits of some increased measure of transparency.
  • Considering options for third party involvement in the dispute resolution procedure.
  • Addressing the role of costs in ensuring that appropriate stakeholders are able to participate in the dispute resolution process.

Hypothetical cases are used throughout this Report to demonstrate the potential circumstances in which climate change related disputes may arise. These are illustrative and not exhaustive examples. In addition, in Section 5 dealing with specific procedural features of climate change related disputes, sample language is provided to assist parties or tribunals to put in place those features, as appropriate.