Introduce Climate Considerations to Dispute Resolution
Clause encouraging parties to arbitration to create all documents in electronic form and conduct all hearings remotely or virtually, where possible.
What this clause does
Drives sustainable practice in arbitration and reduces greenhouse gas emitting behaviors in proceedings. This clause can be used in any commercial agreement.
Recitals
(A) The parties [have signed up to the Race to Zero and] acknowledge their common intention to:
1. achieve their respective net-zero targets*; and
2. align with the objectives of the UNFCCC’s Paris Agreement, in particular pursuing efforts to limit global temperature increase to 1.5 degrees Celsius above pre-industrial levels and achieve net zero or net negative emissions by 2050 or sooner.
(B)The parties agree to pursue (A) in a manner that promotes a just transition to a low carbon economy and results in a progressive reduction of greenhouse gas emissions year on year.**
* [Drafting note: Tailor as appropriate to parties and consider just transition. For definitions of Net Zero Targets and Science-Based Targets, see TCLP’s Glossary.]
** [‘The Carbon Law’ in Exponential Roadmap Initiative’s The 1.5°C Business Playbook, p.5; and J. Rockström et al., A roadmap for rapid decarbonisation, Science 355.6331, pp.1269-1271 (2017).]
Clauses
Dispute management
[Drafting note: this clause contains short form green dispute resolution clauses. For more detailed green dispute resolution drafting, please refer to Guilia's clause. There are also the following England and Wales clauses: [Emilia’s Protocols] Green Litigation and Arbitration Protocols, [Mia’s Clause] Low Carbon Arbitrations and the Campaign for Greener Arbitration’s Model Clause and Green Protocols.]
[Drafting note: Capitalized terms relate to either a defined term in this clause or a defined term in the main agreement that this clause is designed to be inserted into.]
1. If a dispute arises under or relating to this contract:
1.1 all notices and communications between the parties will be sent by electronic means, provided that, if a party is unable to effect or confirm delivery of the notice or communication electronically, it will use reasonable endeavors to the extent practicable; and
1.2 the parties shall use Electronic Bundles for all meetings and hearings, to the extent practicable.
2. The obligation at clause 1 is subject to any party’s obligation to the contrary found in any relevant court or tribunal order, procedural rule, practice direction or court guide.
3. Where a hard copy bundle is used at any stage in a dispute, the parties undertake to:
3.1 print double-sided;
3.2 use environmentally-friendly toner and ink;
3.3 use recycled paper;
3.4 use cardboard (non-plastic) tabs, dividers and folders; and
3.5 subject to any legal obligations to retain copies, dispose of the bundle by recycling it in a secure and confidential manner.
4. Within [1 (one) month] of the resolution of any dispute or at a relevant stage of a dispute, the parties undertake to appoint an independent third party [for example, the Carbon Trust] to calculate the Carbon Footprint.
5. The independent third party’s costs shall be [shared equally by the parties OR paid by the losing party].
6. Within [6 (six) months] of receiving the independent third party’s calculation of the Carbon Footprint, [the parties OR the losing party] undertake to offset the Carbon Footprint by:
6.1 planting Native Trees; or
6.2 purchasing carbon credits from a project:
(a) that has been verified in accordance with [insert name of voluntary standard] or from a United Nations Framework Convention on Climate Change (UNFCCC) clean development mechanism [or [successor OR equivalent] UNFCCC mechanism];
(b) where the emissions of Greenhouse Gasses avoided, reduced or removed by the project are additional;
(c) that prioritizes removing Greenhouse Gasses from the atmosphere rather than avoiding or reducing third party emissions of Greenhouse Gasses;
(d) that for Greenhouse Gas removals, uses storage methods with a low risk of reversal over millennia[.OR; and
(e) that takes account of a just transition and addresses wider social and ecological goals.]
Definitions
Electronic Bundles means a bundle of documents in electronic format for use by the parties, court or tribunal (as required). The bundle shall be in a user-friendly format which includes but is not limited to sequential pagination and bookmarks appropriate for each document.
Carbon Footprint means the total annual scope 1, 2 and 3 emissions relating to the proceedings. Scope 1, 2 and 3 emissions are as defined by the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, as updated periodically.
Greenhouse Gasses means the gasses that trap thermal radiation in the Earth’s atmosphere. They are specified by the United Nations Framework Convention on Climate Change in Annex A to the Kyoto Protocol and may be updated periodically.
Native Trees means those species of trees which, since the last ice age, have grown in the geographic area now called [Italy] and which are listed as native on the [insert relevant forestry body] website.
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