Sukma Andrina: Safeguarding green technologies

The Paris Agreement sends a clear signal that we need to transform to a low carbon economy. It means that we need to expand the use of cleaner energy while at the same time continue innovating energy efficiency. We need to implement sustainable agriculture, and perhaps, find a new way of transporting ourselves. The list could go on. All of these require technology and investments.

As an environmental lawyer, I was curious about how legal infrastructure can support and protect green technology and investments. Specifically, how alternative dispute resolution mechanisms such as arbitration could play a role.

I just completed a study on how arbitration has been used by green technology companies. It was part of my assignment as a consultant at the Arbitration Institute of the Stockholm Chamber of Commerce (SCC). The SCC has handled international disputes since the 1970s, and one of the most common users of its arbitration services is energy companies.

My findings show that more and more green technology companies are resorting to arbitration at the SCC to resolve their disputes. Most of the disputes arose under commercial contracts, such as construction agreements and delivery agreements. Meanwhile, disputes with the highest values mostly arose under an investment treaty.

These companies pursued a wide range of business activities from renewable energy, sustainable waste management, organic food production to environmental insurance. The size of the companies and the dispute varied significantly. It could be said that arbitration at the SCC is an attractive mechanism to resolve disputes involving green technologies.

One of the reasons is that arbitration offers expeditious process. In green technology cases that I studied between 2014 - 2018, on average, it took 16 months from registration of a case to rendering an award. Meanwhile, the shortest dispute took only 6 months.

Another reason is the SCC Arbitration Rules allow parties to choose its own decision-maker, the arbitrator. Anyone could be an arbitrator as long as they are impartial, independent and have the expertise needed in the case. Parties are not bound to a list of arbitrators in choosing an arbitrator. This principle is all the more important for disputes involving green technology, for they very often entail technical questions. For example, some of the cases had raised questions such as the lifespan of a renewable energy installation, the cause of error in a biogas plant, and many more. The ability to choose an arbitrator who has the expertise to decide on technical questions, in my opinion, enhances the quality of the outcome of the case.

We all know that fighting climate change requires innovative and out-of-box solutions. I learned from this study that arbitration could be one of the missing pieces of the puzzle. Green technology companies, as one of the motors to fight climate change, need an efficient and effective mechanism to put force behind the words of their contracts. Arbitration could safeguard the technologies and investments by doing precisely that.

Sukma Andrina
Former consultant at the Arbitration Institute of the Stockholm Chamber or Commerce

About the author
Sukma Andrina is a lawyer and researcher with main interests in sustainable development. Between 2015 - 2019, Andrina worked as a consultant in SCC where she conducted research and managed projects focusing on the interplay between international arbitration and sustainable development. She came to Sweden in 2013 as a Swedish Institute Scholar. Andrina holds Master of Laws in International Environmental Law from Stockholm University, Master of Laws in American Legal System from the University of Minnesota Law School and Bachelor of Law from the University of Indonesia.