Home Insights Australian Arbitration Week 2022: the role of arbitration in a rapidly evolving geopolitical landscape

Australian Arbitration Week 2022: the role of arbitration in a rapidly evolving geopolitical landscape

The continuing role of arbitration as a peaceful means for resolving investment, commercial and inter-state disputes impacted by (or borne out of) geopolitical conflicts, was the focus of a key panel discussion hosted by Corrs during Arbitration Week 2022.

Panel participants included Catherine Amirfar, partner at Debevoise & Plimpton in New York, Professor Laurence Boisson de Chazournes, University of Geneva, School of Law, Jonathan Redwood SC, Banco Chambers and Twenty Essex Chambers, and Nick Warner AO PSM, consultant to Corrs with a long career in public service as an Australian diplomat, leading intelligence official and senior advisor to the Prime Minister. The panel was moderated by Corrs’ Nastasja Suhadolnik and Cara North.

The panellists were asked to consider a range of issues focused around:

  • the contexts and trends set to influence the need for arbitration in resolving disputes effectively and by peaceful means;

  • how geopolitical tensions and divergent state interests open doors to new arbitral claims; and

  • the potential implications of geopolitics on arbitral practice and procedure.

Key themes

The current geopolitical landscape and what is to come

Nick Warner set the context for the discussion, providing a sobering exposition of current and anticipated geopolitical tensions which, in his words, can only be described as “a confluence of calamities”. The points he made included that:

  • the future outlook depends (to an extent) on the ability of the United States to rebuild a sense of political bi-partisanship and overcome internal political divisions;

  • the future geopolitical landscape will be informed by China’s ambition to bolster its economy, become a middle income country by 2035 and to supplant the US as a dominant global military power;

  • the Russian invasion of the Ukraine heralds a new era in global relations, and marks the beginning of a reordering of global power. In particular, a decoupling of global economies and the emergence of two main economic arrangements: one led by China, backed by Russia and the other, led by the US and backed by the EU;

  • the impact of climate change cannot be understated. It is set to have a wide range of catastrophic impacts, including disease outbreaks, water and food shortages, and mass migration, largely by developing nations;

  • technological advancement may produce not only opportunities but also challenges that will need to be grappled with. The rapidly increasing importance of artificial intelligence could serve as a predictor of military supremacy which may become just as important as the possession of nuclear weapons or perhaps more so; and

  • cyber security is critically important given the increasing deployment of cyber warfare by an ever wider group of terrorist organisations and state actors.

Uncertainty breeds disputes

The panel was united in its view that the geopolitical forces will breed wide-ranging, complex, and long-standing disputes in all contexts – private, investor state, and state to state.  As Jonathan Redwood SC observed, private contracts are not well adapted to unprecedented uncertainty.and the same might be said of international treaties (highlighting the importance of the work undertaken by, for example, the Chancery Lane Project and the United Nations Framework Convention on Climate Change).  

The panel provided an overview of areas of potential dispute, including:

  • in the context of the Ukrainian invasion, claims for human rights violations, economic claims before the World Trade Organisation, and claims concerning terrorist financing;

  • in the context of climate change and its potential for mass displacement and social and economic devastation, claims for human rights violations, maritime disputes (which might come before the International Tribunal for the Law of the Sea), and economic claims before the World Trade Organisation;

  • agriculture and food supply, as the impacts of climate change heighten concern over food and water security;

  • investment treaty disputes, with Ms Amirfar of Debevoise & Plimpton predicting that the combined effect of prevailing geopolitical tensions will drive an impulse to resource nationalism, which may see state expropriation or other measures that contravene investor protections;

  • an increasing encroachment on media freedoms, which are, according to Ms Amirfar, being increasingly threatened by state sanctioned intimidation and targeting of journalists, undermining their crucial truth-telling function, noting that such conduct may also sound in an action against the state for breach of applicable investor protections;

  • a proliferation of energy disputes, particularly  relating to new forms of energy. These disputes would be driven by:

    • supply chain pressures;

    • uncertainty associated with the cost and performance of necessarily new technologies;

    • legislative intervention in long-term arrangements as domestic security concerns focus on energy security;

    • joint venture disputes, as historic arrangements are forced to adapt to the rapid transition to renewable energy and a heightened focus on ESG (environment/social/governance) concerns; and

    • an increasing number of disputes arising in the context of M&A, sparked by the rapid rate of change which may result in local and global conditions shifting during a transaction;

  • financial market and insurance disputes which, historically, have been under-arbitrated in Australia when compared to the trend in other jurisdictions;

  • claims associated with cyber-security and data privacy breaches;

  • cryptocurrency, with the volatility in the market making the area ripe for dispute; and

  • insolvency, particularly in the construction industry as supply constraints and labour shortages heighten pressures on an industry already operating on narrow margins.

Current dispute resolution mechanisms alone are not enough but arbitration does help

Arbitration has, and will continue to have, limits. That is apparent from the advent of both world wars, despite the terms of The Hague Conventions; and, in a more modern context, as Ms Amirfar observed, arbitration is not presently ready for the massive damage that will be occasioned by climate change. So, while the current mix of formal dispute resolution mechanisms can assist by themselves they are not enough.

Professor Boisson de Chazournes emphasised the critical role negotiation, diplomacy and economic sanctions play in facilitating a peaceful resolution of global disputes. Russia’s backflip on the Ukrainian export of grain to Turkey was cited as a recent example.

Our current mix of formal dispute resolution mechanisms may not be perfect but history teaches us that they can and will assist in the peaceful resolution of disputes (or at least specific issues in dispute).

Referring to Argentina’s maritime border dispute with Chile, which spanned seven years from 1977, Ms Amirfar lauded the ability of arbitration to assist parties in resolving discrete disputes and to set aside the distraction of any broader and wider-ranging breakdown in their relationship for that purpose.  

This was evident in the context of the South China Sea Arbitration, where the resolution of a discrete dispute by arbitration also provided an opportunity for opposing parties to engage in a wider dialogue which may not have otherwise been available.

Ms Amirfar and Professor Boisson de Chazournes also agreed that mass claims commissions are important; though the need to secure funding for such commissions heightens the importance of state engagement in the process.  

Flexibility in the practice and procedure of arbitration is needed 

In view of the multitude of formal international dispute resolution fora available, together with the massive increase in the number of complex and broad disputes, there is a risk of a multiplicity of proceedings and/or that a particular body’s jurisdiction is unduly narrow so it cannot properly dispose of the issues in dispute between the parties.  

In such circumstances, Professor Boisson de Chazournes called for a more practical approach to the question of jurisdiction (including, for example, through the exercise of incidental jurisdiction) and for a degree of complementarity between different bodies.

The complication posed by sanctions also raises the importance of procedural and administrative flexibility. An example of such flexibility is the United Kingdom’s recent decision to permit the London Court of International Arbitration to administer disputes in relation to (and therefore receive funds from) sanctioned individuals.  

In the context of legal advisors, while the present sanctions do not directly prohibit the provision of legal advice to affected individuals, they do prevent payment for that advice. Further, some legal advisors have taken a principled approach of denying representation to certain individuals, regardless of any applicable sanctions.  

While Professor Boisson de Chazournes acknowledges an advisor’s right to choose (noting that no equivalent of the common law ‘cab rank rule’ applies in an international context), she encouraged a more nuanced focus on the legal representative’s role: to advise, and not to ‘represent’ or advance the individual or state in question.

The international commercial community also ought to be flexible about where it prefers to resolve its disputes. As Mr Redwood SC observed, the prospect of declining US influence, and increasing Chinese assertiveness in its region, might raise questions about the ongoing attractiveness of the US and Hong Kong as seats for dispute resolution; and raise the prominence of alternatives, including Australia.

Confidence and engagement in arbitration is crucial

Just as consent forms the backbone of international commercial arbitration, state engagement in international dispute resolution mechanisms is crucial for their survival. As Ms Amirfar explained, where a state or individual refuses to participate in an arbitral hearing (which is often a precursor to a refusal to accept validity of an award) the implications are broader than the immediate dispute. If ongoing and widespread, such conduct has the potential to present a systemic challenge to the system as a whole.

Key takeaways

The inescapable conclusion from the panel’s discussion was that, at a time when the world is facing a period of massive upheaval, we are likely to see wide-ranging, complex and significant disputes emerge in all spheres.  

Our existing methods for resolving disputes are not, and cannot be, perfectly adapted to what will be an unprecedented environment.  But history tells us that, even with its limitations, arbitration plays a vital role in facilitating resolution of some of the world’s most entrenched problems. That is particularly so when paired with other forms of dispute resolution.  

The panel’s reflections make clear two critical points to ensure arbitration is an effective tool to navigate these emerging disputes: it must have the confidence of parties, whether individuals, organisations, or states – without consent, arbitration becomes powerless; and it must be flexible, able to adapt to a rapidly changing world.


Nastasja Suhadolnik

Head of Arbitration

Cara North

Special Counsel

Samuel Kay

Senior Associate



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