The Lunch DIScussions on 10 October 2024 featured a lively discussion with perspectives from South Africa, Namibia, Morocco and Tunisia – all important partners for Germany’s energy transition and the ambitious plans to build a global green hydrogen industry.
Arbitration is the dispute resolution mechanism of choice for green hydrogen and renewable energy projects. This applies also to projects in Africa. Panelists Michelle Porter-Wright (South Africa), Hugo Meyer van den Berg (Namibia), and Meriem Rezgui (Tunisia), with moderators Hartmut Hamann and Kilian Bälz, discussed how arbitration frameworks across the continent are evolving to meet the demands of the energy transition. The discussion emphasised the vital role of countries such as South Africa, Namibia, Tunisia, and Morocco as partners in Germany’s ambitious efforts to build a global green hydrogen industry and concluded with the finding that the DIS Rules are largely unknown and that it is a task to change that.
Michelle Porter-Wright began by exploring South Africa’s established arbitration framework, which has become a key tool for managing disputes in the renewable energy and green hydrogen industries. She highlighted that the Arbitration Foundation of Southern Africa (AFSA) Rules are widely applied in commercial/construction disputes, including those involving energy projects. South Africa’s legal system is arbitration-friendly and provides the flexibility needed to handle technical disputes that arise in sectors such as green hydrogen. Michelle also underscored the country’s tendency to favor amicable settlements before disputes escalate to arbitration, although, when arbitration proceeds, the process is shaped by South Africa’s strong local litigation culture. She stressed the importance of integrating technical expertise in arbitration to handle the complexities of hydrogen projects, where disputes over technology performance and compliance with regulatory standards can be particularly intricate.
Hugo Meyer van den Berg shed light on Namibia’s approach to arbitration, noting its similarities to South Africa’s framework but also highlighting key differences. In Namibia, arbitration plays a critical role in resolving disputes, especially as the country ramps up its green hydrogen production capacity. Unlike in South Africa, Namibian arbitrators often take a more active role in facilitating settlements, making the process more hands-on and adaptable to local needs. Hugo emphasised that Namibia’s energy infrastructure is expanding, with significant investments in renewable energy, particularly in green hydrogen, and that arbitration is essential to managing the technical and commercial challenges posed by these large-scale projects. Namibia’s flexibility in incorporating expert input ensures that disputes are resolved efficiently, especially those involving technological advancements in hydrogen storage and safety standards.
Meriem Rezgui then provided an overview of the Tunisian and Moroccan perspectives, focusing on the unique potential of both countries in the green hydrogen sector. She detailed how Tunisia is positioning itself as a key player in North Africa’s green hydrogen economy, leveraging its abundant solar and wind resources. Tunisia is poised to meet both domestic energy needs and Europe's increasing demand for clean hydrogen. Meriem highlighted the critical role arbitration will play in managing the complex commercial and technical disputes that will inevitably arise as Tunisia continues to attract international investments. Tunisia’s arbitration environment, which relies heavily on International Chamber of Commerce (ICC) Rules, is well-suited to handle the growing number of green energy projects.
Meriem also explored Morocco’s ambitious "Offre Maroc" initiative, which is positioning the country as a leader in green hydrogen exports to Europe. Morocco’s extensive renewable energy infrastructure, backed by significant solar and wind resources, is central to its plan to produce cost-competitive green hydrogen. The Moroccan government’s focus on international partnerships and innovation in hydrogen technology has made the country an attractive destination for foreign investors. However, with the scale and complexity of Morocco’s projects, arbitration will undoubtedly be crucial in resolving disputes related to project execution, financing, and technology performance. Like Tunisia, Morocco also favors ICC arbitration, providing a solid framework for managing the legal challenges associated with its energy transition.
A key topic of debate during the discussion was the relevance and potential need for a tailor-made set of dispute resolution rules specific to the renewable energy and green hydrogen sectors. While some panelists argued that the unique technical and regulatory challenges in these industries could benefit from specialized arbitration rules, there was no consensus on whether such rules are necessary. The idea of creating customized arbitration rules that could address the complexities of these sectors—such as disputes over hydrogen production efficiency, safety standards, or environmental impacts—was met with both support and skepticism. Advocates for such rules believe that they could provide more streamlined and focused solutions, but others pointed out that new, specialized rules would need to be thoroughly tested before being widely adopted.
Additionally, the panelists emphasised that convincing stakeholders to embrace new, untested rules can be difficult, especially when existing frameworks like ICC and AFSA already offer flexibility to incorporate technical expertise. Stakeholders may be reluctant to switch to new rules without a proven track record, particularly in industries as high-stakes as renewable energy and hydrogen, where large investments are on the line. The discussion highlighted that, while specialized arbitration rules may eventually gain traction, they would need to demonstrate clear advantages over existing frameworks to overcome resistance from investors and project developers.
The panel also addressed the integration of expert knowledge in arbitration, which is vital for resolving the technical disputes inherent to the hydrogen and renewable energy industries. All panelists agreed that arbitration allows for the appointment of arbitrators with industry-specific expertise, as well as expert witnesses who can clarify technical matters such as hydrogen production efficiency or safety benchmarks. This flexibility makes arbitration an ideal dispute resolution mechanism for industries like green hydrogen, where technological complexity is a significant factor.
As a response to the question raised during the Q&A session regarding the limited use and application of DIS arbitration rules in Africa, particularly in green hydrogen and renewable energy projects, the panelists acknowledged that the DIS rules remain relatively underutilised and lesser known across the continent. Local arbitration institutions, such as the AFSA, along with the more prevalent use of ICC arbitration rules, have largely overshadowed the DIS framework. The latter lacks the visibility and promotion necessary to position itself as a primary option for dispute resolution in Africa. All the panelists concurred that this lack of awareness stems from the DIS’s limited presence, outreach, and engagement within the African arbitration community. In that regard, The DIS should actively strengthen partnerships with African arbitration bodies and develop targeted capacity-building initiatives. By investing in tailored marketing strategies and increasing its presence across the continent, the DIS can enhance visibility and encourage greater use of its services within Africa’s arbitration community.
In conclusion, the Lunch DIScussion underscored the pivotal role arbitration will play in supporting Africa’s expanding renewable energy and green hydrogen sectors. As Africa solidifies its role in the global green hydrogen economy, countries like South Africa, Namibia, Tunisia, and Morocco are well-positioned to meet the legal and technical challenges that accompany their ambitious energy transitions, supported by robust arbitration frameworks and expert-driven dispute resolution processes. DIS as an institution and the DIS Rules, however, are widely unknown and it will be a task to change this.
Meriem Rezgui