France: Latin America: A Fertile Land For Energy Arbitration

Latin America has seen an increase in investments within the energy sector specifically in renewable energy, with this increase expected to continue over the next few years. With the risk of potential drastic regulatory or policy changes, investors are facing risks on their capital-intensive and long-term projects which would result in claims presenting challenges on damages valuation.

This article from Law Business Researchwas first published in September 2022. The entire publication is available at: https://globalarbitrationreview.com/review/the-arbitration-review-of-the-americas/2023/article/latin-america-fertile-land-energy-arbitration

"Major investments have been realised in the past decades in the energy sector in Latin America, particularly in renewables. Further significant investments are expected in the coming years. Considering the traditional political instability in the region, with major swings that could result in drastic regulatory changes, investors are facing risks on their capital-intensive and long-term projects. The expected result of this combination of investments, political instability and regulatory changes would be a wave of both investment and commercial arbitration cases in the region. These claims would present some challenges on damages valuation.

The importance of arbitration in Latin America has been continually increasing over the past decades. The energy sector - traditionally the source of a large number of arbitration cases worldwide - is expected to produce even more disputes in the coming years, based on the significant investments made in the sector (in particular in renewable energy), the global focus on energy transition and the instability of the political and regulatory landscapes in some parts of the region."