2026 PAW: Concession Contracts in Times of Energy Transition: Arbitrating Complex Disputes in a Fragmented Regulatory Landscape

During Paris Arbitration Week 2026 (PAW), White & Case LLP hosted a the panel Concession Contracts in Times of Energy Transition: Arbitrating Complex Disputes in a Fragmented Regulatory Landscape organized by the Brazilian Arbitration Committee (CBAr) to mark its 25^th anniversary. The event brought together arbitration practitioners from across jurisdictions, with a notable presence of Spanish and Portuguese-speaking participants.

Opening remarks by Gustavo Gaspar Nogueira (White & Case) and Lucas Diniz (CBAr) emphasised that, unlike previous editions focused primarily on French and Brazilian perspectives, this year’s discussions aimed to adopt a broader comparative outlook.

Moderated by Munia El Harti Alonso (Ius + Aequitas Trial Lawyers), the panel featured Julian Fouret (HFW), Athina Fouchard Papaefstratiou (AFP Arbitration), Lucas De Ferrari (White & Case), and Lauro Gama (Lauro Gama & Associados). The discussion explored how energy transition is reshaping concession contracts and the disputes arising from them. The panel was closed with final remarks from Cristiana Gonçalves Correia (White & Case) and Guilherme Carneiro Monteiro Nitschke (TozziniFreire).

1.      A Structural Shift: From Treaty Protection to Contractual Risk Allocation

Fouret opened the discussion by situating renewable energy investment within a longer historical trajectory. He explained that, over the past two decades, many states had relied on regulatory incentive schemes, particularly feed-in tariffs, to attract private investment by guaranteeing fixed returns. According to him, these frameworks were often coupled with protections under instruments such as the Energy Charter Treaty (“ECT”), allowing investors to rely on arbitration in the event of regulatory change.

He suggested that, over time, the limitations of this model became increasingly visible. Referring to Spain as an example, he noted that the 2013 reforms addressing the tariff deficit led to numerous claims exceeding €1.5 billion, which, in his view, illustrated the financial and political exposure created by treaty-backed regulatory guarantees. He also observed that enforcement challenges within the European Union (“EU”) further complicated this framework.

Against this background, he indicated that states have progressively moved towards more market-based and contract-driven mechanisms. In particular, he described the growing use of competitive auctions, under which investors bid to supply electricity at the lowest price, with remuneration determined through contractual arrangements rather than fixed tariffs.

In his account, these mechanisms shift regulatory risk into contracts, expose investors more directly to market conditions, and reduce reliance on post hoc dispute resolution. He referred to Spain’s post-2013 auction model as an illustration, noting that it has enabled the allocation of significant renewable capacity at lower prices

Looking more broadly, he pointed to similar developments across Europe, including the increasing use of power purchase agreements and financial support from institutions such as the European Investment Bank. He characterised this evolution as a move away from treaty-based protection towards contractual risk allocation and more competitive market structures.

2.      France’s Nuclear Policy and Emerging Market Tensions

Turning to France, Fouret recalled that the country has historically relied heavily on nuclear energy, which accounts for a significant share of its electricity production. He emphasised that the sector remains largely state-controlled.

He noted that recent policy developments suggest a renewed commitment to nuclear energy, including significant planned investment and regulatory adjustments aimed at facilitating new projects. At the same time, he observed that France appears to be lowering its targets for wind and solar energy.

In his view, this policy shift may affect investor confidence in the renewable sector and potentially slow project development, particularly in light of constraints such as grid access and evolving tender conditions. He also suggested that reallocating public investment towards nuclear energy could limit resources available for other energy sources.

From an arbitration perspective, Fouret indicated that the key issue is not the prioritisation of nuclear energy itself, given that the sector has not traditionally been open to foreign investment, but rather how this policy interacts with the renewable market. He suggested that concerns could arise if state-backed entities benefit indirectly from their position in the nuclear sector when competing in renewable tenders.

While he noted that similar issues had arisen in past disputes, including those related to Germany’s nuclear phase-out. He observed that the withdrawal of EU Member States from the ECT reduces the likelihood of comparable treaty-based claims. Nonetheless, he suggested that questions of equal treatment may still emerge depending on how France structures access to subsidies, tenders, and infrastructure.

3.      Mapping Disputes Across the Life Cycle of Concessions

Papaefstratiou then proposed a structured overview of disputes arising throughout the life cycle of concession contracts. She began with the early stages, noting that disputes may arise during the bidding process, where concerns about transparency, fairness, and political influence are frequently raised. She also highlighted the “winner’s curse,” explaining that winning bidders may overestimate project value, leading to difficulties later in long-term concessions.

With respect to contract negotiation, she emphasised the challenge of managing change. She observed that concessions often span decades, while political cycles, regulatory frameworks, and commodity prices evolve much more rapidly. In her view, this mismatch requires contractual mechanisms such as price review clauses or, more exceptionally, stabilisation clauses, to allow adaptation over time.

She then turned to the post-award phase, particularly the process of obtaining permits. According to her, disputes may arise due to administrative fragmentation, changes in political priorities, or community opposition, often linked to environmental concerns. At this stage, she noted, disputes may fall outside contractual frameworks and raise questions in domestic courts or investment arbitration, including whether an investment exists and how damages should be assessed.

Moving further along the life cycle, she referred to disputes relating to the withdrawal of licences, including where conditions precedent is not fulfilled. She observed that tribunals have sometimes taken differing approaches to compensation, including in cases where projects had not fully materialised.

At the operation stage, she identified a range of disputes between concession holders and states. These include the refusal of exploitation licences, sometimes linked to financing difficulties or changes in government policy, as well as disputes over royalties and fiscal terms. She described what she referred to as a pattern of “asymmetric disappointment,” whereby states seek greater returns in favourable market conditions, while investors seek relief when conditions deteriorate.

She also pointed to disputes arising from regulatory changes, including increased obligations relating to local content, environmental protection, and decommissioning. In addition, she noted disputes linked to the transfer or renewal of concessions, where new conditions imposed by states or altered bidding procedures may give rise to challenges.

Finally, she addressed disputes at the end of the concession, particularly regarding decommissioning obligations. She observed that disagreements often concern the scope of restoration duties and that enforcement against concession-holding entities may present practical difficulties.

Papaefstratiou concluded by suggesting that many disputes stem from the long duration and relative rigidity of concession contracts, which may not always provide sufficient mechanisms for adaptation over time.

4.      Fragmentation and the Pressure on Contractual Mechanisms

Ferrari approached the discussion from a practitioner’s perspective, focusing on what he described as the fragmentation of concession disputes in the context of the energy transition.

He suggested that such disputes rarely arise from a single act, but rather from the interaction of multiple actors and legal regimes. He identified four layers of fragmentation:

• Institutional, involving different state bodies such as regulators, ministries, and grid operators;

• Normative, reflecting the coexistence of contracts, domestic law, regulatory frameworks, and financing arrangements;

• Value, linked to the multiple interfaces within complex projects;

• Temporal, arising from the long duration of concessions and changing economic and political contexts.

In his view, these layers complicate both liability and remedies, making disputes less binary and more dependent on the cumulative effect of state conduct.

He identified several recurring categories of disputes, including:

• Tariff and payment disputes;

• Regulatory change and stabilisation disputes;

• Termination or cancellation of concessions;

• Failures in permits or state support;

• Construction and interface disputes;

• Offtake and dispatch-related disputes.

He also highlighted key contractual mechanisms that could help dealing with these disputes, including change-in-law clauses, stabilisation clauses, and force majeure provisions, noting that their interpretation increasingly depends on contractual drafting rather than treaty standards.

Referring to Brazil, he concluded that, despite the absence of a traditional investment treaty framework, the country has attracted significant investment through contract-based arbitration, suggesting that such mechanisms may function effectively without reliance on ISDS.

5.      The Future: Towards the Contractualisation of Investment Protection

Closing the panel, Gama addressed what he described as a broader shift in investment protection. He suggested that, while the traditional system based on bilateral investment treaties and investor–state dispute settlement (ISDS) has played an important role, it has also faced increasing criticism, including concerns about legitimacy, cost, and its impact on regulatory autonomy, particularly in the context of the energy transition.

In his view, this has led to a gradual rebalancing towards contractualisation, whereby investment protection is increasingly structured ex ante through contract design rather than relying solely on treaty-based remedies.

He referred to the ongoing joint project between the International Institute for the Unification of Private Law ("UNIDROIT") and the International Chamber of Commerce (“ICC”), which aims to develop principles and model clauses for international investment contracts. According to him, this initiative builds on the UNIDROIT Principles of International Commercial Contracts and seeks to provide a flexible, neutral framework adaptable to the hybrid nature of modern investment disputes.

He explained that the project addresses key issues such as the balance between investment protection and the state’s right to regulate, economic equilibrium and change of circumstances, and the integration of sustainability and ESG obligations into contractual frameworks.

He suggested that the use of model clauses may contribute to greater harmonisation in practice, as similar contractual structures lead to more consistent interpretation by tribunals.

In conclusion, he characterised the current evolution not as a replacement of treaty-based protection, but as a shift from ex post adjudication to ex ante contractual structuring, particularly suited to the long-term, regulatory-sensitive nature of energy transition projects.

6.      Conclusion

In conclusion, the panel suggested that concession contracts are inherently prone to disputes, given their long duration, capital intensity, exposure to political change, and connection to public interest and natural resources. It was further observed that, while investors have traditionally relied on treaty-based protection, there is a growing shift towards contract-based risk allocation. In that context, emerging instruments such as the UNIDROIT–ICC initiative were presented as potentially facilitating this transition, including through greater use of renegotiation and adaptation mechanisms.

This post is part of Kluwer Arbitration Blog’s coverage of Paris Arbitration Week 2026.