ABSTRACT
The reaction to ADR application in investment disputes in the energy sector is analyzed in this chapter to further explore the use of ADR. To do such analysis, energy investment disputes were categorized according to their type, stage and amount.
The structure of the whole book required first to reveal the essentials of ADR and then the fundamentals of energy investment disputes to highlight the main material of this research in order to assess the applicability of the former to the latter. Therefore, the definition of energy investment disputes, causes, how they arise and their characteristics are placed at the beginning of this chapter because it is an integral part of this whole analytical core chapter, and for this reason, descriptive explanations seemed necessary and inseparable from this chapter.
Investment disputes in the energy sector were classified according to their types first. ICSID classification was adopted, and the disputes categorized on what protection mechanism is breached. This is indeed to display what type of disputes are more ADR-applicable and how specific ADR mechanisms can deal with particular dispute types.
Secondly, in order to find out in what stage of a disputes ADR can have the most success, disputes were divided into phases. The significance of early intervention is scrutinized to understand to what extent ADR can lead to a successful settlement in the case of early intervention since early settlement seems to prevent dispute escalation and accordingly helps the protection of investment relationships.
Third, the evaluation is based on whether the quantum of the subject matter at risk can affect the applicability of ADR and how an ADR method would adjust to a dispute below a certain amount, a threshold. In particular, disputes with small amounts at stake are assessed to seek a base for ADR practice.
Regardless of dispute type, stage or amount, there is a selection of barriers to ADR that are a threat to its potential practice. To comprehend to what extent ADR can react positively, these challenges are also required to be analyzed so as to frame the limits of ADR practice.
