2022 was another challenging year for many of our clients and the global economy more generally. From the disruption and fallout caused by the Russian invasion of Ukraine to soaring energy prices and inflation, businesses around the world are facing significant new hurdles and complex legal challenges, many of which are driving new trends in international arbitration.

In this report, we explore the following key themes that we predict will influence the arbitration landscape in the year ahead. These have been identified by international arbitration specialists from across our global network to help clients and arbitration users plan for the coming months.

• The legal and economic repercussions from Russia’s invasion of Ukraine have significantly impacted businesses across a wide range of sectors worldwide and the number of Russia-related arbitrations – both investment treaty and commercial – is expected to rise. To maximise the prospects of successful enforcement, strategic and creative planning will be key. (Arbitration arising out of Russia’s invasion of Ukraine)
• Significant supply chain disruption will continue to cause difficulties for major global projects. We expect an increase in disputes over the operation of key contractual provisions, such as price escalation, currency fluctuation and nominated supplier clauses, as well as parties invoking legal concepts of frustration, force majeure and/or change in circumstances. (The global supply chain crisis and construction arbitration)  
• In the LNG sector, the wider energy market volatility is expected to give rise to increasing gas pricing disputes and other contractual disputes, as buyers and sellers try to navigate the severe market fluctuations and supply issues facing the industry, as well as the effects of sanctions and other political issues. (LNG disputes gather on the horizon amid market volatility).
• The energy crisis is also impacting the pace and progress of energy transition plans. We consider the challenges and opportunities presented by energy transition in Latin America, which are expected to give rise to growing numbers of energy-related disputes in the region during the coming year. (Energy transition: the current landscape in Latin America and what to expect in 2023)
• The future of the Energy Charter Treaty (ECT) looks uncertain in light of the number of states that have announced their intention to withdraw from the treaty. Prudent energy investors will want to consider alternative options to protect their investments against unlawful government intervention. (Withdrawal from the ECT: one step forward, two steps back?)
• The drive towards transparency in international arbitration is expected to continue with more arbitral institutions amending their rules to provide for greater public access to information about arbitral proceedings, including the existence of any third-party funding. (Drive towards greater transparency)
• Diversity remains a key theme in 2023 as efforts are increasingly being made to address broader diversity goals beyond gender. Two important developments pave the way for further progress: the requirement to take diversity into account when appointing arbitrators has been codified, for the first time, into the arbitration rules of two institutions; and the launch of the Equal Representation for Experts Pledge to address diversity in the appointment of expert witnesses. (Progress towards diversity continues to gather pace)
• The eagerly awaited reform of the Arbitration Act 1996 is another key development to watch for in 2023. The outcome of the Law Commission’s public consultation, expected to be published in the first half of the year, will reveal which of the initial proposals are likely to be enacted. The provisions relating to summary judgment and jurisdictional challenges will be of most interest to commercial parties. (Reform of the Arbitration Act 1996)
• Following the US Supreme Court’s clarification that section 1782 discovery is not available in commercial arbitration, there remains uncertainty with respect to investment arbitrations. We expect many more decisions on this issue in the coming year as the lower courts grapple with the question of whether an investment arbitration tribunal is sufficiently governmental to qualify for 1782 discovery. (Section 1782 discovery: some answers, but more questions)
• The number of life sciences disputes being referred to arbitration is on the rise – partly due to the growth in the life sciences industry generally, but also the realisation within the industry that many of the features of international arbitration are well-suited to resolving sectoral disputes. (International arbitration in the life sciences sector)
• Considerations of cybersecurity and data protection are continuing to gain importance in international arbitration. We expect parties to increasingly adopt cybersecurity and data protection measures in their individual proceedings and institutions to continue to encourage their adoption through their rules or policies. (Data protection and cybersecurity in international arbitration remain in the spotlight)
• Our final trend relates to the increasing number of international tax disputes being resolved by arbitration. With the global economy facing challenges, we expect there to be more examples of aggressive taxation by financially distressed governments in the coming year and therefore more foreign investors reconsidering their tax risks and options for dispute resolution. (Increasing ‘internationalisation’ of tax disputes)

If you would like to discuss any of the topics covered in the report, please reach out to us, the authors of the trends or your usual Freshfields contact.

We look forward to navigating the challenges and opportunities presented by these developments with our clients in the year ahead.

Boris Kasolowsky

Global Co-Head of International Arbitration Group

 

Noiana Marigo

Global Co-Head of International Arbitration Group & Co-Head of Latin America Practice

 

Ashley Jones

Senior Knowledge Lawyer, London