“International arbitration was designed to efficiently manage global disputes. However, We don’t actually have 180 plus arbitration regimes because of enforcement issues,” observes Dr. Velimir Zivkovic from the University of Warwick during a recent Platforum9 session on the topic. Joined by esteemed international arbitration expert, Matej Pustay, Partner at Squire Patton Boggs, both highlighted how 2024 marked significant shifts in international arbitration, with increasing fragmentation across multiple fronts.
The Intra-EU Dispute Evolution
A notable development in 2024 was the emergence of new Tribunal decisions upholding intra-EU jurisdictional objections. After years of Tribunals consistently rejecting these objections, three awards have now accepted the argument that agreements to arbitrate between EU investors and EU states are incompatible with EU law.
However, enforcement remains fractured. While Swedish courts have upheld these objections, the Swiss Supreme Court and U.S. courts have taken contrary positions, allowing enforcement of intra-EU awards. This divergence highlights the increasing complexity of navigating international arbitration enforcement.
Geopolitical Impact
The Russia-Ukraine conflict continued to shape arbitration practice in 2024, particularly through disputes involving Gazprom. Two main categories emerged:
- Disputes over Gazprom’s decision to charge in rubles rather than euros
- Claims arising from delivery failures due to Nord Stream issues and transport restrictions
More broadly, the concept of “geopolitical impartiality” gained traction, with parties challenging arbitrators based on their nationality or public statements about global conflicts. This has led arbitral institutions to seek arbitrators from neutral jurisdictions, potentially diversifying the traditionally Western-dominated arbitrator pool.
Energy Charter Treaty Developments
2024 saw significant movement away from the Energy Charter Treaty (ECT), with multiple EU states and others withdrawing. While much attention focused on the exits, less discussion centered on the treaty’s modernization efforts aimed at protecting renewable energy investments.
The vacuum created by ECT withdrawals has led to interesting developments:
- Increased focus on specific national regimes for renewable investments
- Revival of investment contracts between states and investors
- Growing emphasis on contractual protections rather than treaty-based rights
Looking Forward
The experts suggest these trends signal broader shifts in international arbitration:
- Movement away from multilateral frameworks toward bilateral and contractual arrangements
- Growing importance of enforcement strategy in arbitration planning
- Need for practitioners to adapt to increasingly complex geopolitical considerations
For young lawyers entering the field, these changes present both challenges and opportunities. While international arbitration remains somewhat of a “closed club,” the field’s dynamic nature and its position at the intersection of law, politics, and business make it an exciting career path.
As Zivkovic concludes, “Everything that happens in one way or another tends to reflect sooner or later in the field of international arbitration.” This observation suggests that while the system may be fragmenting, its fundamental importance in resolving international disputes remains unchanged.
