The majority of international arbitrations involve disputes within the energy sector. Yet, international arbitration mechanisms of dispute resolution – whether in the private or public domain are in the midst of transformation. In recent years a series of developments in international arbitration have prompted important questions about the cost and efficiency of this form of dispute settlement. And, even more fundamentally, whether and how arbitration is different from other forms of dispute settlement such as litigation. In the public law domain, international investment treaty arbitration has become a lightning rod for criticism which has prompted a variety of responses from various players operating in that regime. With this context in mind, this presentation considers some of the key developments taking place in both international commercial arbitration and investment treaty arbitration.

Because of the significance of the commercial relationship between Canada and the United States of America (US) in the energy sector, this paper focuses on evolutions in arbitration that particularly affect the North American region. The ultimate objective of this contribution is to illuminate prospective advantages and disadvantages associated with these developments as a means by which to help users of international arbitration in the energy sector.

After an introductory section (I), this paper considers developments within Canada and the US that affect, or have the potential to affect, international arbitration. In so doing, it will examine efforts to harmonize international commercial arbitration legislation across Canadian jurisdictions and consider some of the issues that have recently been the subject of consideration in Canadian Courts, including competing and overlapping claims, arbitrator disclosure requirements, and jurisdiction to set-aside awards (Section II). This discussion will be followed by consideration of the developments taking place within the US that affect international arbitration, including U.S.C. Section 1782, non-signatories, arbitrability, and emergency arbitrators (Section III).

Having addressed developments affecting international commercial arbitration within North America, this contribution will then examine the reformations taking place in investment treaty arbitration. Since NAFTA’s inception in 1995 Canadian and US investors operating in the energy sector have had access to the arbitration mechanism established in Chapter 11. But, the new NAFTA deal appears to forego any form of investor-state dispute settlement under its investment chapter. This contribution will outline these changes and then discuss the implications of this change for energy investors in the North American region (Section III). Following this discussion, we consider the broader policy direction that Canada and the US seem to be taking with respect to dispute settlement in international investment law. In so doing, this section will consider Canada’s recent adoption of an investment court under CETA and how this new form of dispute settlement might impact energy sector investors (Section IV). Section V will provide some concluding remarks.