2026 Australian Arbitration Week Recap: Code, Copper and Carbon: Geopolitics and National Security Driving Arbitrations

Against a backdrop of rapidly evolving geopolitical conditions, companies are operating in an increasingly complex and uncertain environment. As states adopt more interventionist and nationalistic policies, tensions are emerging not only between investors and states but also between contractual counterparties, resulting in a growing number and variety of disputes.

These issues formed the focus of a panel session hosted by global law firm Herbert Smith Freehills Kramer during Australian Arbitration Week 2026.

The panel comprised:

• Benjamin Weiss (CEO, Veracity Worldwide);
• Phillip Solomon (Managing Director, Energy & Climate Practice, Berkeley Research Group);
• Gitta Satryani (Partner, Head of Disputes for Southeast Asia, Herbert Smith Freehills Kramer);
• Chad Catterwell (Partner, Herbert Smith Freehills Kramer); and
• Imogen Kenny-Bartlett (Senior Associate, Herbert Smith Freehills Kramer).

This article summarises the key themes explored through the panel's three pillars, Code, Copper and Carbon, which represent three explicitly interconnected industries (data, critical minerals and energy) and the unifying thread that is connecting them further: how increasing nationalism and heightened national security concerns are creating greater potential for arbitration disputes.

Setting the Scene: The Nationalisation of Everything

Mr Weiss opened the discussion by highlighting the interconnected nature of critical minerals, energy security and the rise of data hosting and artificial intelligence (“AI”). He then examined how the rise of economic nationalism has undermined a central assumption that many corporates relied upon for decades: that markets would continue to liberalise, capital would move freely, supply chains would become increasingly globalised, and governments would generally favour deeper economic integration. As a growing number of industries and assets are now characterised as matters of national security, governments have assumed a more active role in areas that were previously regarded as purely commercial. In Mr Weiss's view, this shift has fundamentally altered the operating environment for businesses. He further observed that the increasing conflation of private companies with the policies of their home states, and the broader blurring of the boundaries between the public and private sectors, has significant implications for commercial decision-making, international arbitration and investor-state disputes.

Mr Solomon then explained that repeated geopolitical supply disruptions have fundamentally altered corporate approaches to risk. Once viewed as isolated or temporary shocks, these disruptions are now incorporated into base-case planning. Russia's invasion of Ukraine in 2022 and the Strait of Hormuz crisis in 2026 produced two major state-driven supply disruptions in four years, demonstrating that markets may be hit by successive shocks before recovering from earlier disruptions. As a result, boards are increasingly willing to pay a “security premium” for supply arrangements that are diversified, contractually secure and geographically closer to home, prioritising resilience alongside cost efficiency. This has contributed to a renewed preference for long-term contracting, particularly in energy markets, where buyers accept higher fixed costs in exchange for protection from volatility and supply shortages. According to Mr Solomon, these costs are best understood as a form of insurance premium, one that many boards now regard as a necessary expense in an environment of heightened geopolitical uncertainty and increased dispute risk with “the new constant [being] volatility”.

Copper: Critical Minerals and Resource Nationalism

Opening the critical minerals discussion, Mr Weiss framed the issue as one of commercial viability versus commodity availability, describing a contest between competing industrial systems rather than simply a race for raw materials. He noted that China’s integrated mine-to-market model, linking infrastructure, finance and demand, remains unmatched, and argued that the key constraint on new supply is not geology but financeability, with political risk, demand certainty and commodity prices increasingly driving asset values.

Turning to the legal dimension, Ms Kenny-Bartlett focussed on the current wave of resource nationalism and related investment treaty disputes in which state intervention is increasingly influenced by geopolitics, targeted at critical minerals and diverging based on investor nationality. She cited disputes such as Cadence Minerals v Mexico regarding Mexico’s nationalisation of the lithium industry, and AVZ v Democratic Republic of Congo, in which the Congo reportedly declined to grant a mining licence to an Australian lithium company and instead awarded the rights to a Chinese entity.

Building on these themes, Mr Solomon explained that for these reasons, energy and resources companies are moving beyond a purely contractual approach towards one that combines contractual protections with active government engagement. While longer-term supply contracts and strategic reserve projects are becoming more common, he cautioned that government support itself can be volatile, noting that companies increasingly seek to contract around and insure against policy risk rather than rely on government backing alone.

Finally, from an Asian disputes perspective, Ms Satryani observed that many ostensibly commercial disputes are, in reality, geopolitical disputes. As critical minerals have become central to industrial policy, the energy transition and national security, parties are increasingly importing protections afforded by host states or investment treaty-style protections into commercial agreements and elaborate arbitration clauses in order to secure offshore and neutral dispute resolution fora given that a home-ground advantage or a fair hearing cannot be assumed in several relevant jurisdictions. Ms Satryani also noted a revival of stabilisation clauses and other contractual protections designed to address regulatory change. She observed that parties are increasingly drawing upon concepts, including legitimate expectation, fair and equitable treatment, and translating them into enforceable contractual rights, with economic experts becoming involved earlier to predict potential loss.

Carbon: Energy Security and State Intervention

Turning to the energy sector, Mr Catterwell observed that while the dominant theme in 2025 was the energy transition, 2026 has been defined by energy security. Mr Solomon explained that the energy “trilemma” of affordability, security and sustainability has shifted decisively towards security, with environmental objectives often relegated during periods of crisis. Although the Strait of Hormuz has partially stabilised, with oil flows recovering to around 92% of pre-conflict levels, LNG markets remain constrained, with approximately 20% of Gulf exports still unable to reach global markets. Energy prices therefore remain elevated, with diesel crack spreads exceeding US$100 per barrel. The consequences have been felt most acutely by import-dependent economies such as Pakistan, which are increasingly pursuing domestic energy security measures.

Mr Weiss identified energy as an indispensable pillar of the global economy and examined how national security concerns are increasingly shaping state conduct in this area. He cautioned that the geopolitical situation remains highly fluid, with recent military activity in the Strait of Hormuz underscoring how quickly conditions can deteriorate. He also noted that governments' responses to growing energy securitisation, including changes to energy and environmental policies, such as those recently seen in India, may generate a new wave of investor-state disputes as states seek to reconcile energy security priorities with existing investment commitments.

Turning to disputes, Ms Satryani observed that the anticipated wave of Strait of Hormuz-related arbitrations has not yet materialised. While the crisis initially prompted force majeure notices and reservations of rights, parties largely opted for pragmatic commercial solutions, including rerouting cargoes and sharing additional costs. As a result, the focus has shifted from crisis management to what she described as a “reckoning with the cost of resilience”, particularly in more vulnerable economies. She highlighted decisions made by different states to deal with price increases, e.g. LNG prices, creating potential tension with the economic assumptions underpinning investments in the energy sector. Ms Satryani also noted that joint ventures involving state-owned entities can generate unique governance disputes, particularly where foreign investors wish to challenge government measures, but state-backed partners are reluctant to act against broader government interests.

On the investor-state side, Ms Kenny-Bartlett confirmed that disputes are now arising from energy security measures as well as from the energy transition, particularly forced divestitures, citing PDVSA v Jamaica, which reportedly stemmed from Jamaica's compulsory acquisition of refinery interests following a failure to undertake mandated upgrades, and LITASCO SA v Republic of Bulgaria, in which Bulgaria's appointment of a special manager to oversee Lukoil's refinery operations has reportedly prompted threatened treaty claims. More broadly, she explained that export controls and other energy security measures may give rise to investor-state claims where they severely impact foreign investors or are implemented in a discriminatory or arbitrary manner.

Code: Data and Technology Sovereignty

Finally, the panel turned to the technology sector, where national security concerns are increasingly driving regulation and state intervention. Mr Weiss highlighted the growing importance of data sovereignty and shifting geopolitical alignments, noting that changing policy positions towards the United States and China have the potential to disrupt investments in sectors including data centres and subsea cables. He cited the Philippines' move away from Chinese telecommunications contractors as an example of how geopolitical considerations can reshape investment landscapes.

Mr Solomon then examined the energy implications of rapid data centre growth, describing the outlook as “not smooth sailing”. Data centres require reliable, round-the-clock power, yet growing demand is placing significant strain on existing energy systems. He pointed to forecasts showing data centre electricity consumption increasing sharply in several jurisdictions and warned that shortages of gas turbines, transformers, copper and network infrastructure could delay projects. These constraints, he suggested, may drive disputes over lost revenue, replacement power costs and the value of projects whose expected power allocations fail to materialise.

From the commercial disputes perspective, Ms Satryani noted that the sector is generating both traditional project disputes, including delays, commissioning failures and performance issues, and more complex shareholder disputes. The involvement of infrastructure funds, sovereign wealth funds and private equity investors with differing investment horizons is testing mechanisms such as pre-emption rights, valuation provisions, deadlock procedures and put options, particularly where power and regulatory constraints undermine original investment assumptions.

Ms Kenny-Bartlett concluded by observing that investor-state disputes linked to data sovereignty have already emerged. She cited reported claims arising from state decisions to restrict or exclude foreign telecommunications and technology providers on national security grounds including Huawei v Sweden and Hikvision v Canada. Looking to the future, she noted that data centres may be particularly exposed to sovereign risk given their capital-intensive nature, long operating lives and dependence on permits, grid access and government policy. She suggested that measures such as permit denials, restrictions on grid access, data localisation requirements, adverse tax measures, and the withdrawal of government incentives could become future sources of investor-state disputes.

Concluding Remarks

The panel's discussion illustrated that the convergence of geopolitics, national security and commercial activity is reshaping international arbitration in profound ways, particularly in the Code, Copper and Carbon sectors, where these dynamics are most acutely felt. In the author’s view, the disputes that flow from nationalistic state intervention, whether between private parties navigating disrupted contractual arrangements or between investors and states, will define the next generation of international arbitration practice. As the arbitration community grapples with questions for which existing frameworks were not always designed, the challenge for practitioners, arbitrators and policymakers will be to ensure that those frameworks remain fit for purpose in an era defined by geopolitical competition.

More coverage from the Australian Arbitration Week is available here.