Championing Sustainability with Arbitration

Sustainability is often used to relate to meeting one’s needs without compromising the needs of future generations, however, sustainability also pertains to ensuring mechanisms are in place to keep things running effectively and efficiently.

With the rise of arbitration as means to resolve disputes, Jur champions sustainability with a lesser carbon footprint in providing its services while resolving disputes that focus on environmental, social, and governance (ESG) concerns. 

How arbitration enables sustainability

As climate change remains a primary concern in achieving a sustainable future, it has become a priority and an environmental necessity across all sectors, including legal tech. 

Firms, as well as the arbitration community, have started setting and implementing sustainability targets to reduce carbon emissions from work done. 

With the rise of digital arbitration, workspaces for arbitration have been reduced resulting in less consumption of water and electricity. Correspondence is also done electronically, without the need for hard copies of documents — unless utterly necessary. The use of video conferencing is also recommended when meeting with parties and conducting hearings, as opposed to land or air travel that is both time-consuming and not as environmentally friendly. 

Independent arbitrator Lucy Greenwood started the Green Pledge, where arbitration practitioners can pledge their commitment to minimize the environmental impact of their practice. 

A study showed that around 20,000 trees would be required to offset the carbon emissions resulting from medium-sized arbitration, so it’s very timely that those practicing arbitration take conscious steps against the environmental impact of international arbitration. 

Aside from the efforts of the arbitration community towards sustainability, governing bodies — LCIA and ICC — have reflected in their arbitration rules special attention to environmental sustainability-related procedural aspects. 

LCIA Arbitration Rules 2020 Article 4.1 makes it default to submit requests for arbitration and response through electronic means, while Article 4.2 requires electronic delivery of written communication to involved parties. 

In addition, Article 26 (1) of the draft ICC 2021 Arbitration Rules also contain a new environment-friendly provision that enables arbitral tribunals to decide that hearings may be conducted remotely by video conferencing. 

Provisions like those indicated above highlight the reduction of travel and waste in international arbitration proceedings. 

How sustainability cases are handled through arbitration 

With the practice of arbitration going toward more sustainable practices to lessen carbon emissions, companies worldwide also put forward ESG-related codes of conduct. 

Pressure is mounting on businesses in sectors and jurisdictions to include ESG-related clauses in their commercial contract, making them binding and enforceable to achieve sustainability goals for future generations. 

Arbitration clauses indicated in these contracts often involve governing energy, natural resources, infrastructure, and construction, and are meant to combat environmental challenges that fast-track climate change. 

As companies further strengthen their commitment to sustainable practices, those on the other end of the stick may not be able to fulfill the agreed-upon conditions stipulated in the contract — therefore, ESG clauses are broken that lead to dispute. 

Disputes fall into three main categories: 

  • Disputes arising from specific transition, adaptation or mitigation contracts entered into in order to meet specific climate change goals or commitments;
  • Disputes arising from contracts more generally: e.g., contractual performance has been affected by parties’ responses to changes in national laws and regulations/environmental impacts of climate change; and
  • Disputes in which parties have agreed to submit to arbitration after the dispute has arisen

Most of the time, companies tend to lean on arbitration to resolve disputes to protect involved parties from adverse reputational effects when cases are dealt with in courts. The confidential nature of arbitration prevents adverse reputational effects to parties. 

So as the arbitration community puts more emphasis on sustainable actions to lessen the carbon footprint of the sector, arbitration also helps ensure that ESG-related practices are properly implemented and these sorts of disputes are resolved. 

The role of Jur in this movement

The Jur Arbitration Platform allows stakeholders to conduct an arbitration at their comforts, with a streamlined process, organized correspondence with parties, and online appointments and hearings. 

Tech solutions do not only ensure the implementation of sustainable practices but also make it easier for involved parties to resolve disputes. 

It also promotes efficiency in the process, while practicing transparency to those involved and maintaining confidentiality from the public eye. 

Arbitration champions sustainability by enabling sustainability in its practice, and also in resolving ESG-related sustainability issues. Jur continues to find innovative solutions to champion sustainability for future generations and address immediately concerns on non-compliance with sustainability agreements.

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