THE ARBITRABILITY OF ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) ISSUES

By Roderick R.C. Salazar III, Senior Partner – Fortun Narvasa & Salazar

In a course on International Commercial Arbitration that has been quite educational, fascinating and compelling, it is still interesting to look further into areas that may be the subject of an arbitration agreement. It is posited that arbitration as a mode of alternative dispute resolution should be a developing practice area of law and should not stagnate. It is proposed that for as long as commercial contracts themselves evolve, the field of arbitration should be open to include matters that are voluntarily agreed upon and consented to by the parties to a contract as being arbitrable. Thus, this paper looks into what is perceived to be a new matter in terms of whether these disputes are arbitrable.

This paper examines whether the current and growing interest by business entities on the matter of environment, social and governance (ESG) issues can be the subject of international commercial arbitration. If they are indeed arbitrable, the paper also looks into whether there have been actual arbitration cases involving these types of disputes.

This topic is timely given the rising concept of sustainable investing as part of the evolution of business investments and commercial agreements. The topic “environmental, social, and corporate governance” has never been as popular as it is today, according to Google Trends.1 ESG are key emerging trends and the coronavirus pandemic, in particular, has apparently intensified discussions about the interconnectedness of sustainability and the financial system. This is also quite noticeable in the issues arising from climate change and extreme weather-related events insofar as they impact on business enterprises. Contractual provisions are increasingly adapting to the mitigation and allocation of risks and invariably disputes arising from these provisions are developing. Thus, international commercial arbitration would likely be a preferred mode and forum for resolving such disputes.

Coupled with the already established yet continually developing field of arbitration, a discussion on whether ESG can be the subject of international commercial arbitration might prove useful and of added interest to students of the law and its practitioners. This paper submits that ESG issues may indeed be the subject of arbitration within the context of the arbitrability.

Arbitration: Arbitration is generally defined as an alternative (i.e. out of court) method of settling disputes where the Parties appoint a neutral or independent arbitrator (instead of going to court) or jointly appoint a Tribunal or Panel of three (3) arbitrators to make a binding (and final) decision to resolve the dispute.2 Arbitration is one of the methods of private dispute resolution whereby two or more parties agree to resolve their disputes through an arbitral tribunal. It is an alternative to adjudication by the courts established by law. Arbitration involves the creation of an agreement between contracting parties to appoint an arbitrator chosen voluntarily by the parties for resolution of their dispute.3

In particular, International commercial arbitration is an alternative method of resolving disputes between private parties arising out of commercial transactions conducted across national boundaries that allows the parties to avoid litigation in national courts.4 International commercial arbitration is a means of resolving disputes arising under international commercial contracts as an alternative to litigation and is controlled primarily by the terms previously agreed upon by the contracting parties, rather than by national legislation or procedural rules.5

Thus, because arbitration is purely consensual and involves the agreement of the parties, one point of interest is whether all types of disputes or issues are arbitrable. The matter of arbitrability comes in, and in this particular research point, whether ESG disputes or issues are arbitrable.

Arbitrability: Arbitrability indicates whether a dispute is “arbitrable”, i.e. capable of being settled by arbitration. Certain matters may involve “public” rights and concerns, or interests of third parties, and in such circumstances the resolution of disputes via a private proceeding may be contested,6 and hence, deemed not the proper subject of arbitration. An author claims “Arbitrability has a single and very precise meaning signifying the legal capacity of a claim or dispute to be the subject of arbitration rather than litigation or to borrow the language of the UNCITRAL Model Law and the New York Convention, signifying that a claim or dispute is ‘legally capable of being arbitrated.”7 Thus, the opposite term “non- arbitrable” connotes that the issue is within the strict purview of the courts to adjudicate and cannot be ruled upon by arbitrators in arbitration. A dispute that is not arbitrable renders the arbitration agreement invalid and therefore, the arbitral tribunal would lack jurisdiction and the award might not be capable of recognition and enforcement.

There are apparently two (2) types of arbitrability, i.e. subjective and objective arbitrability. Subjective arbitrability (or “arbitrability ratione personae”) concerns certain individuals or entities that are considered to be unable to submit their disputes to arbitration due to their status or function, such as states or local authorities while the objective arbitrability (or “arbitrability ratione materiae”) focuses on whether a certain subject-matter can be settled through arbitration.8 Commentators have drawn a well- established distinction between ‘objective arbitrability’ (or arbitrability ratione materiae), which depends on the subject matter of the dispute, and ‘subjective arbitrability’ (or arbitrability ratione personae), which relates to the aptitude of a party to submit disputes to arbitration.9 Subjective arbitrability answers the question of ‘who’ can or cannot resort to arbitration and is a type of arbitrability that typically arises when a state or a state entity is involved in the dispute while objective arbitrability relates to the question of ‘which’ matters can or cannot be submitted to arbitration. Criminal matters and matters relating to personal status (divorce, nationality, etc.) are typical examples of objectively inarbitrable disputes.10

While there are established rules on what makes a dispute arbitrable and it is also well-settled that “as long as an arbitration agreement exists, there will be a presumption of arbitrability, however, law may preclude certain types of matters from being arbitrated and these include: (i) Criminal law matters, family law matters, marriage related issues, property law issues. (ii) Matters involving rights in rem against rights in personam; (iii) Matters that cannot be arbitrated as a matter of public policy such as citizenship related issues and consumer protection matters.11 Also, it is generally accepted that the

parties to a contract may agree and consent to submit to arbitration almost every kind of dispute or issue that arises or may arise between them in the contract unless they fall under the recognized exceptions or even if at the time of the dispute itself, they may still disagree on whether in fact, the dispute is arbitrable.

Instances of non-arbitrable disputes include those relating to rights and liabilities arising out of criminal offences, matrimonial disputes (divorce, judicial separation, restitution of conjugal rights), testamentary matters (grant of probate, letters of administration and succession certificate), and tenancy matters governed by special statutes where tenants enjoy statutory protection. The above instances pertain to actions in rem.

It is to be noted that a right in rem is a right exercisable against the world at large. On the other hand, action in personam relates to action which determines the rights and interests of the parties themselves in the subject matter of the dispute. Generally, all disputes relating to rights in personam are amenable to arbitration. On the contrary, all disputes relating to rights in rem are adjudicated by public fora like courts or tribunals.

Some of the other instances of non-arbitrable disputes are (a) insolvency disputes, (b) internal company disputes which have to be addressed by a centralised forum, (c) grant and issue of patents and registration of trademarks being exclusive matters falling within sovereign or government function, (d) criminal cases, as they are offences against the State and not just against the victim.12

While there is almost a consensus that disputes of a purely commercial nature are capable of settlement by arbitration, views are more divergent when it comes to disputes involving matters that are not purely commercial, such as labour, intellectual property, insolvency and antitrust disputes.13 In the case of ESG issues, it is submitted that applying the objective arbitrability test, these matters are indeed arbitrable as they do not conflict with public policy, do not involve rights in rem, and are not criminal issues.

Admittedly, according to the doctrine of Kompetenz-Kompetenz, an arbitral tribunal is vested with the authority to decide upon its jurisdiction with respect to any given dispute. In arriving at such a decision, it will review and consider the respective arbitration agreement and it will apply general legal principles in respect of its jurisdiction. This decision will invariably and inevitably include an assessment as to whether the dispute at hand is arbitrable. In the matter of ESG issues, an arbitral tribunal therefore, would have to consider if a dispute arising from such an issue would be a proper subject of arbitration.

ESG: ESG is the acronym for Environmental, Social, and (Corporate) Governance, the three (3) broad categories or areas of interest for what is termed “socially responsible investors.” They are investors

who consider it important to incorporate their values and concerns (such as environmental concerns) into their selection of investments instead of simply considering the potential profitability and/or risk presented by an investment opportunity.14 ESG are standards for company’s operations that help guide an organization to do better and be more accountable about their environmental impact, social responsibility and organizational governance. The term ESG was coined in a 2005 study, “Who Cares Wins” developed by the world’s largest banks and institutional investors.15

ESG issues, since it was coined as a byword for industries, have played an increasing and more involved role in decisions of corporate entities relating to mergers, acquisitions, and divestitures. In one particular industry such as mining and metals, Ernst and Young recently listed in its Report on the Top 10 Business Risks and Opportunities for Mining and Metals in 2022 that for the first time in their annual report on the sector, mining and metals companies rank environment and social issues as their number one risk.16

In the area of manufacturing, it is said that:

In today’s global economy, manufacturers must adopt more sustainable and ethical business practices if they want to remain profitable. The importance of ESG and sustainability initiatives have reached a tipping point, particularly for manufacturing companies.

Whether you’re a small specialized firm or a large multinational manufacturer, there’s no hiding from investors, regulators and consumers that are growing increasingly vocal about companies’ environmental, social and governance (ESG) practices.

There are mounting pressures on multiple fronts from legislators, investors, consumers and the media. This includes consumers being more aware of sustainable goods, business to business (B2B) purchases putting more pressure on supply chains and their ESG practices, and the rise in C-suite and boards paying more attention to these concerns. 17

ESG are non-financial factors that are increasingly applied by investors as part of their analysis process in the identification of material risks and opportunities for growth. These factors are used to be

the basis of investments based on corporate policies and to encourage companies to be responsible actors in commercial contracts and economic development.

Environmental criteria consider how a company safeguards the environment, including corporate policies addressing climate change, energy use, waste, pollution, natural resource conservation, and treatment of animals, direct and indirect greenhouse gas emissions, management of toxic waste, and compliance with environmental regulations. The criteria can also help evaluate any environmental risks a company might face and how the company is managing those risks.18 These look into what impact a company has on the environment.

Environmental considerations are at the forefront of ESG as society, investors, employees, stakeholders and regulators demand that companies act as global citizens. This expectation manifests itself in choices about energy use and waste management, resource conservation, environmental risks, as well as socially responsible investments and charitable contributions.19

Social criteria examine how companies manage relationships with employees, suppliers, customers, and the communities where it operates. Areas that fall under ‘social’ include: Social impact such as: Impact investing and ESG funds; green, social and sustainable bonds; social development goals; working to achieve the UN’s Sustainable Development Goals. These also relate to Human rights, i.e. employee relations/policies, pay, reporting and training, human trafficking, investor and stakeholder engagement. A third item in the social criteria involves Business risk including data security and cyber risk management; sustainable insurance and recovery; and employee development and retention.20

Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights. ESG governance standards ensure a company uses accurate and transparent accounting methods, pursues integrity and diversity in selecting its leadership, and is accountable to shareholders.21 Areas that fall under ‘governance’ include: Corporate strategy such as – acquisition and divestment transitioning strategies towards net-zero objectives; aligning commercial and socially

responsible strategies; Corporate governance and behaviors to include Executive compensation and pay equity; transparency & disclosure; Anti-bribery and business ethics, etc.22

ESG Contractual Clauses: Risk management of ESG are addressed by companies through the adoption of ESG conditions in commercial contracts. The American Bar Association in 2018 launched the first version of model contract clauses (MCCs) aimed at the protection of human rights of workers involved in international supply chains, mainly through imposing representations and warranties to suppliers. An updated version of the MCCs were released in 2021, expanding the scope of ESG obligations to require buyers to engage themselves more proactively in the protection of human rights.23

The MCC, for example, offers a template clause for human rights due diligence, thus:24

Mutual Obligations with Respect to Combatting Abusive Practices in Supply Chains. As of the Effective Date of this Agreement, Buyer and Supplier each agree:

1.1 Human Rights Due Diligence.

(a) Buyer and Supplier each covenants to establish and maintain a human rights due diligence process appropriate to its size and circumstances to identify, prevent, mitigate, and account for how each of Buyer and Supplier addresses the impacts of its activities on the human rights of individuals directly or indirectly affected by their supply chains, consistent with the 2011 United Nations Guiding Principles on Business and Human Rights. Such human rights due diligence shall be consistent with guidance from the Organisation for Economic Co- operation and Development for the applicable party’s sector (or, if no such sector-specific guidance exists, shall be consistent with the 2018 OECD Due Diligence Guidance for Responsible Business Conduct (the OECD Due Diligence Guidance).

For Loan Agreements in Europe, ESG provisions really only emerged in their current form in mid-2020, driven by investor appetite for socially responsible lending. Since then clauses have developed from narrow, exclusively environmental, criteria to encompass a broader basket of ESG factors, such as:

commissioning and achieving a ‘top tier’ ESG rating by a third party rating provider
maintaining policies requiring monitoring of key environmental, social and governance indicators
achievement of zero net carbon emissions or percentage reductions in carbon emissions
assessment of supply chains for human rights abuses, modern slavery and poor labour standards
participating in initiative to improve local communities
maintaining a corporate code of 25

In Project Financing for Mining, examples of targets that a mining company must achieve as a financing condition and included as contractual provisions could cover:

improvements in the energy efficiency rating of buildings and/or machinery;
increases in the amount of renewable energy generated or used by the borrower; and
improvements in conservation and protection of 26

Thus, the same project financing contract may contain a specific clause on event of default if a sustainability-linked borrower does not achieve a certain (negotiated) percentage threshold of its performance targets and if it does not provide a sustainability compliance certificate. Grace periods may be considered by borrowers though will be resisted by lenders given the specific targets and timing of the delivery of the compliance certificate will be negotiated up front.27

International Commercial Arbitration and ESG Issues: A necessary consequence of this growing consciousness and concern about ESG and the inclusion of contractual clauses in international commercial contracts is the possibility of disputes arising therefrom. As industries and their players increasingly see the risks that they may face and the impact of these risks on their business, they must be able to pre-determine with some degree of certainty how they would be dealing with situations where disputes and claims come up. The referral to arbitration on breaches of ESG Clauses in commercial contracts cannot be an aforethought but has to be a well thought out clause arrived at after educated and judicious negotiations between parties.

This could be with respect to their commercial transactions with suppliers, debtors in the case of banks and fund lenders, and companies with cross-border contracts. Thus, as aforementioned commercial contracts are now likely to contain ESG clauses which, if breached, will also need to refer to arbitration provisions addressing them. It is posited that if a commercial contract contains

obligations relating to ESG, there necessarily has to be a dispute resolution clause which would preferably have to be an arbitration provision.

ESG clauses are novel, complex, and largely untested, factors that are likely to give rise to disputes about how they should be interpreted and applied. To the extent a dispute does arise and the underlying contract contains an arbitration clause, the dispute will be determined by arbitration.28 Freshfields further asserts that “several features of arbitration make it particularly well suited for use in exactly these cases as Arbitration allows the parties to choose specialist arbitrators who have the requisite knowledge and experience, for example, lawyers with expertise in human rights law in cases concerning supply chain regulation, or they may be engineers or other experts who understand the technology at issue in cases concerning the energy transition.”

Given the unique feature of neutrality of the forum and the flexibility of procedures, Freshfields also believe that Arbitration can provide the parties a dispute resolution process that accommodates their needs and the nature of the dispute. They give as an example that expert evidence may be given prominence and be tested more thoroughly by other experts. Then, they refer to the almost universal enforceability of awards through the New York Convention as providing peace of mind that the dispute will be resolved fully and finally through an enforceable award, thus assuring commercial certainty.

Similarly, Norton Rose submit that the effect of new climate related regulations on contracts is such that contractual representations and warranties in respect of compliance with such regulations to a securities exchange, for instance, for listed companies need to be made and if so breached, will render a company potentially liable.29 These contractual provisions would allow a company to be able to bring legal action for misrepresentation or breach of contract, or even include the breach of such obligations as material breaches of contract which entitles the company to terminate the contract.

Another law firm posits the advantages of arbitration as the right process for ESG, to wit: the procedural flexibility, the high levels of specialization of the arbitrators and the possibility of executing the awards in practically any country in the world under the New York Convention are some of the attributes of arbitration that make it an attractive and effective method for resolving conflicts, including ESG

disputes.30 It is their view that these qualities or arbitration proceedings allow the parties in the arbitration to set the rules that best meet their case needs, ranging from establishing the times for presenting the parties’ memorials to creating rules for presenting evidence, requesting documents and participating in hearings. In addition, it is perceived that the parties also play a vital role in the designation of arbitrators, who are experts in the matters at dispute and whose education and experience allow them to fully understand highly specialized and technically complex arguments and evidence.

As climate change and related goals become solidified in business to business, or joint venture agreements, or even as these feature into supply chain considerations and ESG concerns, there is an increasing potential for disputes. International commercial arbitration is an appropriate forum for dispute resolution as a result of its swift, confidential and enforceable nature. This can include resolution of force majeure claims such as those arising out of extreme weather events, damages for breach of representations or warranty with respect to climate change measures or standards, and even coverage disputes if climate change measures form part of the policy.31

The ABA offers the following model arbitration clause related to the earlier referred to model clause on Human Rights Due Diligence:

[In this clause, companies choose between arbitration (Alternative A) and litigation (Alternative B):] [Arbitration] [Litigation].

If and only if the parties (a) have chosen not to make use of Mediation under Section 8.5 to resolve the Dispute, or (b) have not, within [ ] days following the delivery of the Dispute Notice, resolved the Dispute using such Mediation, then the Dispute shall be settled [Alternative A for arbitration:] [by arbitration in accordance with the [name of rules of the arbitration institution] (the “Arbitration Rules”) in effect on the date of this Agreement.107 The number of arbitrators shall be [one] [three]. The seat of arbitration shall be [seat] and the place shall be [place]. The language of the proceedings shall be [language]. [The provisions for expedited procedures contained in [section or article] of the Arbitration Rules shall apply irrespective of the amount in dispute. The parties further agree that following the commencement of arbitration, they will continue to attempt in good faith to reach a negotiated resolution of the Dispute.

[Only for use with Alternative A for arbitration:] [Emergency Notwithstanding any provision of this Agreement or any applicable institutional rules, any party may obtain emergency measures at any time to address a Zero Tolerance Activity or any other imminent threat to health, safety, or physical liberty (including without limitation the holding of workers in locked barracks or the unavailability of accessible and unlocked emergency exits). In addition, a party may make an application for emergency relief to the [name of institution] (the “Arbitration Institution”] for emergency measures under the arbitration rules of the Arbitration Institution as in effect on the date of this Agreement.110 If and only if the arbitral tribunal does not have the power to grant effective emergency measures or other specific relief may a party apply for relief to a court of competent jurisdiction that possesses the power to grant effective emergency measures.] 8.8 [Only for use with Alternative A for arbitration:] [Arbitration Award. The arbitrator(s) may grant any remedy or relief set forth in Article 6 or elsewhere in this Agreement and that a court of competent jurisdiction could grant, except that the arbitrators may not grant any relief or remedy greater than that sought by the parties, nor any punitive damages. The award shall include compliance with a Remediation Plan as contemplated by Article 2 above. [The arbitration tribunal shall send a copy of each final order, decision and award to [title of official and name of institution] so that the public may have access to such documents, provided that, prior to sending any such document to such repository, such arbitration tribunal, in consultation with each of the parties, shall redact any information from such document that would (a) would reveal the identity of any party that wishes to remain anonymous; or (b) disclose any other information (including without limitation the amount of any award, any proprietary information or any trade secrets) that a party wishes to remain confidential.]]32

Moreover, there is now the Hague Rules on Business and Human Rights Arbitration which provide a set of rules for the arbitration of business and human rights disputes. The final text was officially launched at a ceremony in The Hague on 12 December 2019.33 The Hague Rules are based on the Arbitration Rules of the United Nations Commission on International Trade Law (with new article 1, paragraph 4, as adopted in 2013) (the “UNCITRAL Rules”), with modifications needed to address certain issues likely to arise in the context of business and human rights disputes.

The Hague Rules offer model clauses, such as:

Any dispute, controversy or claim arising out of or relating to this contract, or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the Hague Rules on Business and Human Rights Arbitration.

Note — Parties should consider adding:

The number of arbitrators shall be . . . [one or three];
The place of arbitration shall be . . . [town and country];
The language(s) to be used in the arbitral proceedings shall be . . . [select one or more languages].

These contractual provisions would allow a company to be able to bring legal action and refer to arbitration disputes for misrepresentation or breach of contract, or even include the breach of such obligations relating to the ESG commitments as material breaches of contract which entitles the company to terminate the contract.

At the same time, arbitration practitioners recognize certain limitations of the nature of an arbitration proceeding vis-à-vis the ESG issues, thus, that arbitration is essentially a private dispute resolution mechanism thereby posing challenges in cases where questions of public interest are concerned, such as those involving the environment and human rights. However, they continue on and recognized that these concerns can be addressed by adding features to arbitration such as allowing the publication of awards and permitting third-party interventions. Such steps can ensure that arbitration remains an effective way to resolve commercial disputes going forward, including in the ESG context.34

Still it is also recognized that another risk that may materialize is that the arbitral process may prove too slow to grant a company relief that it urgently needs, due to an unpredictable disruption. For example, if a company needs to force delivery-up of a good that is suddenly in short supply, it is likely that only an emergency arbitrator would be able to give this interim relief effectively and in time. But at the same time, they offer the logical solution to this which is to select an arbitral institution with favourable procedural rules regarding consolidation, joinder, and emergency arbitration.35

Moreover, despite the advantages of arbitration as a means of resolving ESG disputes, there are also criticisms of its suitability, for example, some authors point to a potential imbalance of resources between the parties that may be implied in ESG disputes in investment arbitrations (e.g., multinationals vs. governments), and to a lack of adequate standards of transparency in arbitration proceedings – primarily commercial – that involve the public interest as shortcomings of the arbitral proceeding, which in their view render it inadequate for resolving ESG disputes.36

Conclusion: As earlier discussed, the issue of arbitrability involves the question of whether a dispute is “arbitrable”, i.e. capable of being settled by arbitration. In order for an arbitration agreement to be valid, among the requirements is that the arbitrability of the subject matter. Using the elements of arbitrability, i.e. objective arbitrability, (or arbitrability ratione materiae), which depends on the subject matter of the dispute, it appears that if commercial contracts contain ESG obligations such as representations and warranties, undertakings to comply with environmental rules, adoption of governance policies and adherence to social contracts, then disputes or controversies relating to it are arbitrable.

The arbitration clauses need not even specifically refer to the ESG clause itself as such is part and parcel of the commercial contract. It is enough that the arbitration clause/agreement to arbitrate must be clearly drafted and contain all the details necessary to enable parties to approach an arbitral institution or a Tribunal to adjudicate their dispute. The Agreement must state: the precise scope of the Tribunal’s powers; i.e. (i) What are the issues that may be referred to arbitration; (ii) The Procedural Rules/Institution administering the arbitration; (iii) the seat of the arbitration; (iv) the number of arbitrators to adjudicate the dispute; and (v) the language of the arbitration; and if necessary (vi) the applicable law/proper law of the arbitration agreement.37

The fact that international commercial arbitration has been, for decades the preferred alternative mode of dispute resolution, the more recent inclusion of ESG commitments and obligations in international commercial contracts which are capable of being breached and therefore, the source of disputes, should be recognized and readily accepted as a matter capable of being arbitrated. As ESG grows as an important component of international commerce, so should the readiness to accept international commercial arbitration as the mode to resolve disputes arising from breaches of ESG obligations. Arbitral institutions, arbitral tribunals, arbitrators and parties themselves should now be more accepting of such a reality. An acceptance of such realization would contribute to an even stronger arbitration practice internationally and the enrichment of jurisprudence thereon.

– O –

BIBLIOGRAPHY:

CFA Institute – ESG Past & Present: The Accelerating Growth of Sustainable Investing
Gupta, Palash – International Commercial Arbitration – Lecture Notes, San Beda University, Graduate School of Law
Singh, Vijay, The Viewpoint: Arbitrability and non-arbitrability of disputes
Georgetown Law Library: International Commercial Arbitration Research Guide
Gualtier, Susan – International Commercial Arbitration
Eleni Bakalarou – Arbitrabillity
George Bermann: Arbitration Fundamentals – Arbitrability Trouble –
Elie Kleiman and Claire Pauly – Arbitrability and Public Policy Challenges
Anisha Padamshi – Importance of ESG in Manufacturing: 18 Statistics That Can Help Drive Value
Investopedia – Environmental, Social, and Governance (ESG) Criteria
Reed Smith, LLP – Environmental, Social and Governance
Herbert Smith Freehills – The Rising Importance of ESG and its Impact on International Commercial Arbitration
American Bar Association – Working Group to Draft Model Contract Clauses to Protect Human Rights in International Supply Chains American Bar Association Section of Business Law – BALANCING BUYER AND SUPPLIER RESPONSIBILITIES Model Contract Clauses to Protect Workers in International Supply Chains, Version 2.0
Winston & Strawn, LLP – ESG Provisions in Loan Agreements: Not Much COP?
Sebastian Crawford – ESG Issues in Mining Finance
Freshfields, The Rising Significance of ESG and the Role of Arbitration
Norton Rose, Climate Change and Sustainability Dispute
Monserrat Manzano and Anna Tomil; Von Wobeser – The Role of Arbitration in ESG Disputes
Dentons – International Arbitration, A Review for 2022, Canada and Beyond

1 https://interactive.cfainstitute.org/ESG-guide/esg-past-and-present-238UB-188148.html accessed on June 23, 2022

2 Gupta, Palash – International Commercial Arbitration – Lecture Notes 1, Page 2, October 16, 2021, San Beda University Graduate School of Law.

3 Singh, Vijay, The Viewpoint: Arbitrability and non-arbitrability of disputes https://www.barandbench.com/view-point/the- viewpoint-arbitrability-and-non-arbitrability-of-disputes accessed on June 22, 2022.

4 https://guides.ll.georgetown.edu/InternationalCommercialArbitration accessed on June 22, 2022. Georgetown Law Library 5 Gualtier, Susan – International Commercial Arbitration – https://www.nyulawglobal.org/globalex/International_Commercial_Arbitration.html accessed on June 22, 2022.

6 Eleni Bakalarou – Arbitrabillity: https://jusmundi.com/en/document/wiki/en- arbitrability#:~:text=Arbitrability%20indicates%20whether%20a%20dispute,of%20being%20settled%20by%20arbitration.&te xt=Although%20arbitration%20is%20a%20private,impact%20on%20any%20States%20involved. Accessed on June 22, 2022.

7 George A. Bermann: Arbitration Fundamentals – Arbitrability Trouble – https://scholarship.law.columbia.edu/cgi/viewcontent.cgi?article=4021&context=faculty_scholarship accessed on June 22, 2022

8 Id. Jus Mundi.

9 Elie Kleiman and Claire Pauly – Arbitrability and Public Policy Challenges, 2 January 2019 https://globalarbitrationreview.com/guide/the-guide-challenging-and-enforcing-arbitration-awards/1st- edition/article/arbitrability-and-public-policy-challenges citing Christophe Seraglini and Jérome Ortscheidt, ‘Droit de l’arbitrage interne et international’ (edition 2013) [Seraglini and Ortscheidt], pp. 529 and 530, para. 62. See also Piero Bernardini, ‘Chapter 17: The Problem of Arbitrability in General’, in Emmanuel Gaillard and Domenico Di Pietro, Enforcement of Arbitration Agreements and International Arbitral Awards: The New York Convention in Practice (edition 2008, by Cameron May), p. 503 – accessed on June 23, 2022.

10 Id.

11 Gupta, Palash – International Commercial Arbitration – Lecture Notes 2, Page 6, Oct. 30, 2021.

12 Supra, Singh.

13 Supra,Kleiman and Pauly citing Seraglini and Ortscheidt

14 https://corporatefinanceinstitute.com/resources/knowledge/other/esg-environmental-social-governance/ accessed on June 22, 2022

15 Anisha Padamshi – Importance of ESG in Manufacturing: 18 Statistics That Can Help Drive Value, December 2, 2021 – https://parsable.com/blog/esg/importance-of-esg-in-manufacturing-18-statistics-that-can-help-drive- value/#:~:text=Environmental%2C%20social%20and%20governance%20(ESG)%20are%20standards%20for%20a,social% 20responsibility%20and%20organizational%20governance. Accessed on June 24, 2022.

16 https://www.ey.com/en_gl/mining-metals/top-10-business-risks-and-opportunities-for-mining-and-metals-in-2022 accessed

on June 24, 2022.

17 Supra, Padamshi

18 Environmental, Social, and Governance (ESG) Criteria https://www.investopedia.com/terms/e/environmental-social-and- governance-esg-criteria.asp accessed on June 22, 2022.

19 https://www.reedsmith.com/en/capabilities/services/environmental-social-governance accessed on June 23, 2022.

20 Id.

21 Supra, ESG Criteria, Investopedia.

22 Supra, ReedSmith.

23 https://www.herbertsmithfreehills.com/insight/the-rising-importance-of-esg-and-its-impact-on-international-arbitration accessed on June 24, 2022.

24 https://www.americanbar.org/content/dam/aba/administrative/human_rights/contractual-clauses-project/mccs-full- report.pdf American Bar Association – Working Group to Draft Model Contract Clauses to Protect Human Rights in International Supply Chains American Bar Association Section of Business Law – BALANCING BUYER AND SUPPLIER RESPONSIBILITIES Model Contract Clauses to Protect Workers in International Supply Chains, Version 2.0 – accessed on June 24, 2022

25 Winston & Strawn, LLP – ESG Provisions in Loan Agreements: Not Much COP? https://www.winston.com/en/thought- leadership/esg-provisions-in-loan-agreements-not-much-cop.html accessed on June 24 2022.

26 Sebastian Crawford – ESG Issues in Mining Finance https://www.fieldfisher.com/en/insights/esg-issues-in-mining-finance- transactions accessed on June 24 2022.

27 Id. Freshfields, The Rising Significance of ESG and the Role of Arbitration – https://www.freshfields.com/en-gb/our- thinking/campaigns/international-arbitration-in-2022/the-rising-significance-of-esg-and-the-role-of-international-arbitration/ accessed on June 24, 2022.

29 Norton Rose, Climate Change and Sustainability Dispute https://www.nortonrosefulbright.com/en/knowledge/publications/2aa52320/climate-change-and-sustainability-disputes- supply-chains-perspective accessed on June 24, 2022.

30 Monserrat Manzano and Anna Tomil; Von Wobeser – The Role of Arbitration in ESG Disputes https://www.vonwobeser.com/images/PDF_news/2021/21_11_12_ARBITRAJE_ESG_ING.pdf accessed on June 24, 2022 31 Dentons – International Arbitration, A Review for 2022, Canada and Beyond. https://www.dentons.com/en/insights/articles/2022/june/3/-/media/787FB63C418841A2947E691D5AA41546.ashx accessed on June 24, 2022.

Supra, ABA Model Clauses.

33 https://www.cilc.nl/project/the-hague-rules-on-business-and-human-rights- arbitration/#:~:text=The%20Hague%20Rules%20on%20Business%20and%20Human%20Rights%20Arbitration%20Project, UN%20Guiding%20Principles%20on%20Business accessed on June 24, 2022.

34 Supra, Freshfields.

35 Supra, Norton Rose.

36 Supra. Von Wobeser.