International arbitration in 2024 is being shaped by several key trends, including increased geopolitical instability, rising energy prices, and evolving regulatory landscapes. Disputes are arising from geopolitical crises, climate change, and economic uncertainties
Prompting a focus on ensuring contracts are robust and that force majeure clauses are up to date. Additionally, there’s a growing trend of utilizing arbitration for disputes related to digital assets, the rise of third-party funding, and the increasing use of specialized arbitration rules and AI.
Here’s a more detailed look at the trends:
1. Geopolitical and Economic Instability:
- The ongoing conflicts in Ukraine and the Middle East, coupled with major elections worldwide, have created significant market uncertainties.
- This has led to a greater emphasis on ensuring contracts are well-drafted and can withstand potential disruptions, including sanctions, trade tariffs, and changes in national policies.
- Companies are increasingly seeking damages through investor-state claims and political risk insurance policies.
2. Energy Transition and Climate Change:
- The shift towards decarbonization and renewable energy sources is generating new disputes related to energy transition, climate change, and ESG principles.
- This includes disputes related to treaty breaches, force majeure, and supply agreements in the energy sector.
- Long-term contracts are expiring, and companies are facing challenges related to the expiration of old contracts and the transition to new energy sources.
3. Digital Assets and Specialized Rules:
- Disputes involving digital assets are expected to set key precedents in 2024.
- There’s a growing demand for specialized arbitration rules tailored to specific industries and types of disputes.
- Arbitral institutions are updating their rules to include more stringent disclosure requirements and ethical guidelines for arbitrators.
4. Third-Party Funding and AI:
- Third-party funding is on the rise globally, but there’s also a growing focus on its regulation.
- Arbitration is leading the way in the use of AI, but this also presents unique challenges that need to be addressed.
5. Regulatory Developments:
- Several new arbitration rules have been launched, and there are ongoing proposals for the reform of national arbitration laws.
- The Kenyan courts have reaffirmed a pro-arbitration stance, reinforcing the enforceability of arbitration agreements.
- The International Organization for Mediation (IOM) was established, and there is a push to incorporate mediation clauses into government contracts.