Dispute resolution has a lot in common with long-distance endurance sports, such as that fixture of Finnish athletics, the 50-kilometre cross-country skiing event. Case in point, a dispute that we were handling that had its start in the 2008 financial crisis didn’t receive a final judgment until last year.
The number of disputes is on the rise again. The COVID-19 pandemic in particular has caused companies to encounter unforeseen and rapidly emerging risks. At the same time, Brexit, climate change, digitalisation, sustainability requirements and the general increase in regulation also breed conflict.
While these are not all novel phenomena, their legal impacts are largely uncertain. It is also true that few disputes are entirely unforeseen. The parties to an agreement are often already aware that the risks relating to the agreement could lead to a dispute when entering into the agreement.
Risks can be minimised through careful drafting. The COVID-19 pandemic has moved the spotlight of force majeure clauses from familiar natural disasters to infectious diseases. It has also highlighted how important it is to agree in as much detail as possible on what kinds of circumstances constitute a force majeure for the agreement at hand. For example, the impacts of Brexit can be anticipated by studying the legal instruments replacing the UK’s and EU’s regulations concerning conflict of laws and the recognition and enforcement of judgments.
The problems caused by climate change and regulatory reforms will be resolved over the coming years in both national courts and international arbitration proceedings. Finland has a comprehensive portfolio of investment protection treaties with various countries. These treaties guarantee both foreign and Finnish investors fair and equitable treatment by the signatory countries and could entitle companies to compensation, for example, if a country alters its regulatory framework in an unforeseeable and discriminatory manner.
Companies will continue to be subject to an increasing number of changes and unforeseen circumstances. Most of the confrontations arising from risks and consequences of the covid-19 pandemic remain ahead of us.