Correlation of Paris agreement and International Commercial Arbitration

In 2015 United Nations Framework Convention on Climate Chang (UNFCCC) the Paris
Agreement was adopted by the first time, that all nations were committed to ambitious efforts to
combat climate change and adapt to its effects. The Paris aim is to lower the global temperature
by 2 degree Celsius above pre- industrial levels i.e. Mitigation and to enhance the ability of the
nations to deal with the impacts of climate change that is to adapt climate changes. Paris
Agreement also aims to support the developing nations and the nations who are in danger to
adapt such changes. The task force of ICC had broader view to foresee the climate change
related disputes, and also tried to include any dispute arising out of or in relation to the effect of
climate change and its policies.
As per the IPCC Special Report on Global Warming of 1.5 degree Celsius published on 2018 it
stated that the Climate change is one of the biggest challenge of all time. Therefore, to combat
this challenge all the are required to rapid and far reaching transitions of energy, Urban
Infrastructure, land, industrial system to avoid the worst effects of Climate Change. 1 So as the
new rapid changes to land, infrastructure and industrial systems that are arising out from the
global response to climate change will give a new scope of investment and contracts, accordingly
this will give a rise to contractual a legal dispute. Such disputes can be categorized as –
1. Contracts in relation to Specific transition, adaption or mitigation contracts.
Here the contract can be executed between the investor, industry body, funder, state etc. in
conformity with the Paris Agreement commitments. These contractual terms are can be
reinforced through appropriate and effective dispute mechanism. The contacts shall be expressly
made with a clause relating to UNFCCC such as Green Climate Fund (GFC), agreements reacted
to low emission projects. 2
2. Contracts not in relation to Specific transition, adaption or mitigation contracts.
As every business activity and contractual relationship is capable of being impacted by energy
and other systems transition, mitigation or adaptation measures and/or the environmental impacts
of global warming, those contracts that have no direct impact on the climate change or have no
specific climate related purpose may pre date the Paris Agreement.
commercial disputes with a climate change related genesis are increasingly likely to be brought
by businesses as they adjust to increasing regulation of emissions following the entry into force
of the Paris Agreement. Disputes in the context of asset divestment, new renewable energy
investments, carbon trading and pricing, and increasingly stringent environmental
representations and warranties are some of the issues that are emerging.
The Potential use of arbitration in Climate Change related disputes.
The Task Force’s mandate is first to explore how ICC Arbitration and ADR services are
currently used to resolve disputes that potentially engage climate change and related

1
The IPCC Special Report “Global warming of 1.5˚C” (Oct. 2018), p. 15.
2
Green Climate Fund proposal toolkit (2017), p. 3.
environmental issues. As the Paris Agreement and the IPCC Special Report are relatively recent,
disputes arising out of “rapid and far-reaching transition to energy, land, urban and infrastructure
and industrial systems”19 are not yet reflected in past and existing ICC cases. Nevertheless, three
important aspects of existing ICC cases are instructive:
(i) ICC Arbitration and ADR are frequently adopted in commercial contracts concerning energy,
land use, urban and infrastructure and industry with these sectors representing a large portion of
ICC cases;
(ii) climate change related investment is rapidly increasing and systems transition of the scale
proposed by the IPCC will recalibrate regulatory risk and investment strategy in sectors where
ICC Arbitration and ADR are already prevalent; and
(iii) climate change mitigation and adaptation, and systems transition as a whole, may cause
environmental impact and ICC Arbitration and ADR are increasingly being used to resolve
environmental claims.

CGA: pathway to greener arbitration

Lucy Greenwood in 2019 founded the Campaign for Greener Arbitration in 2019 with an aim to
reduce the carbon foot print on international arbitrations. This campaign is led by a Steering
Committee from the arbitration community. This campaign runs on the set of protocols so that
the goal of developing practical steps which could be implemented to accomplish the
Campaign’s Guiding Principles. There are several green protocols are suggested and some are as
under:-
1. The green protocol for Arbitral proceedings.
This protocol suggests the measures to conduct arbitral proceedings in more environmental
friendly manner. This protocol can be initiated by the parties or by the tribunal a well. Here the
parties can do remote proceedings, less use of travel, avoiding printings on paper etc.
2. The green protocol for law firms and Legal Service Providers.
This protocol has focused on the firm’s day to day operations. Here the forms are required to
motivate their employees to work eco-friendlier. The firm shall make an ‘Green Ambassadors’
who shall make new policies on working of Firms do that the environment depletion can be
reduced. Firms shall also use incentive programs for the employees so that they can be
encouraged to use this protocol.
3. The green protocol for Arbitrators
Here the independent arbitrators are required to seek guidance from this protocol. They are
expected to reduce the travel, energy etc. so that the wastage of resources can be reduced. The
arbitrators expected to integrate the Conduct rules with Green Protocols.
4. The green protocol for Arbitration Institutions
In the protocol the institutional representatives are required to provide guidance for both internal
and external operations of the firm. The institutions shall try to motivate the parties and
arbitrators to conduct the proceedings remotely, and try to provide such infrastructures as well.
5. The Arbitration Hearing Venues
The facilitators of conducting arbitral proceedings are required to adopt this protocol. They
are encouraged to use technological platforms to promote digital representations of cases and
file sharing so that the paper works can be reduced. They shall also use clean energy while
conducting such proceedings.
So this campaign can successfully be achieved by only implementing to rules i.e reduce the hard
copy bundles and travel least as possible. The Campaign also plans to expand its research to
consider usage of E-Mails and energy consumption, as well as other aspects of an international
arbitration practice beyond those analyzed in the initial impact assessment.