THE international oil and LNG shipping industry has been anticipating an increase in legal disputes linked to the shift away from fossil fuels, reports Hong Kong's Asia Business Law Journal.
Introducing new and unpredictable regulations and driving the adoption of untested solutions has been a focal point.
However, geopolitical uncertainty introduces additional complexity and risk to energy shipping markets.
These trends appear poised to contribute to the growth of legal disputes for an extended period.
'Recent geopolitical events have caused a dislocation in global energy markets at a time when the world was struggling to recover from pandemic-driven supply chain disruptions. For example, price and supply volatility and the entry of alternative suppliers have seen a rise in disputes as counterparties seek to exit or renegotiate contracts that are no longer financially viable,' said Helmsman director Maureen Poh.
'The impact of sanctions, as well as price caps, asset seizures, and other measures, has expanded the complexity and cost of compliance. Sanctions may also impede the ability to perform pre-existing contracts and spur an increase in force majeure and hardship claims, suspensions, and terminations. This increases the likelihood of disputes.'
'Amid the uncertainty, the energy market is in the midst of an epochal transition away from fossil fuels - one whose progress has been driven by political considerations that carry their own legal risks. For example, disputes may arise over failure to meet climate action targets,' said Ms Poh.
SeaNews Turkey
Introducing new and unpredictable regulations and driving the adoption of untested solutions has been a focal point.
However, geopolitical uncertainty introduces additional complexity and risk to energy shipping markets.
These trends appear poised to contribute to the growth of legal disputes for an extended period.
'Recent geopolitical events have caused a dislocation in global energy markets at a time when the world was struggling to recover from pandemic-driven supply chain disruptions. For example, price and supply volatility and the entry of alternative suppliers have seen a rise in disputes as counterparties seek to exit or renegotiate contracts that are no longer financially viable,' said Helmsman director Maureen Poh.
'The impact of sanctions, as well as price caps, asset seizures, and other measures, has expanded the complexity and cost of compliance. Sanctions may also impede the ability to perform pre-existing contracts and spur an increase in force majeure and hardship claims, suspensions, and terminations. This increases the likelihood of disputes.'
'Amid the uncertainty, the energy market is in the midst of an epochal transition away from fossil fuels - one whose progress has been driven by political considerations that carry their own legal risks. For example, disputes may arise over failure to meet climate action targets,' said Ms Poh.
SeaNews Turkey