Model clause

Choice of Green Governing Law Clause

Leo & Molly's Clause

A climate-friendly governing law clause, requiring that the governing law is interpreted in a manner consistent with the objectives of the UNFCCC and the Paris Agreement.

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Why use this?

Contracting parties are also increasingly looking for ways to address the climate crisis in the resolution of their disputes, although there is a lack of relevant contractual mechanisms to apply these climate laws as standard practice.

Leo & Molly’s clause has been developed from the ICC’s model governing law clause for the resolution of green disputes. The clause is intended to build upon the ICC’s model clause and strengthen its impact by favouring green outcomes over purely legalistic ones.

How it promotes a net zero future

A green governing law clause would help build a body of case law and practice wherein disputes are resolved according to "green" principles and laws which address the climate crisis. It would also ensure that, in the event of a dispute between contracting parties, stringent, effective and far-reaching laws and regulations on climate change are considered and enforced by arbitration tribunals.

Disclaimer - please read

The clauses on this website (and published in our Climate Contract Playbook) have been prepared in good faith on a pro bono basis and are free to download and use. The clauses have been drafted and edited by a variety of lawyers and, as such, the approaches to drafting may not conform to any particular drafting norms. We acknowledge this as a consequence of the collaborative drafting process.

The clauses on this website (and published in our Climate Contract Playbook) are provided on an ‘as is’ basis and without any representation or warranty as to accuracy or that the clauses will achieve the relevant climate goal or any other outcome.

This website (and the Climate Contract Playbook) does not comprise, constitute or provide personal, specific or individual recommendations or advice of any kind, and does not contain legal or financial advice. The clauses are precedents for legal professionals to use, amend and negotiate using their professional skill and judgement and at their own risk.

While care has been taken in the drafting of these clauses, neither The Chancery Lane Project nor any of its contributors owe a duty of care to any party in relation to their preparation and do not accept any liability for any errors or omissions, nor for any loss incurred by any person relying on or using these clauses or any other person. Users should use their own professional judgement in the application of these clauses to any particular circumstance or jurisdiction or seek independent legal advice.

At present, all the clauses are based on the laws of England and Wales. We encourage the conversion of these precedent clauses for use in other jurisdictions.

The clause

Additional Definitions

Climate Objective means the ultimate objectives of the United Nations Framework Convention on Climate Change, the Paris Agreement and related agreements, and in particular limiting the increase in global temperatures to 1.5 degrees Celsius above pre-industrial levels and achieving net zero emissions by 2050 or sooner (in line with the best available science and increased climate ambition).

Additional Clause

1. GREEN GOVERNING LAW

[For inclusion in arbitration clauses in commercial agreements.]

1.1. This Agreement shall be governed by, and all disputes relating to or arising in connection with this Agreement or the subject matter thereof shall be resolved in accordance with, the laws of [chosen jurisdiction]]. The parties agree that this Agreement shall be construed in a manner that is consistent with the Climate Objective and any dispute shall be resolved in the manner most closely aligned with the Climate Objective.

1.2 The Parties agree that in the case of inconsistency between the Climate Objective and the laws of [chosen jurisdiction], the Tribunal should interpret and/or modify [chosen jurisdiction] law so that it is aligned with the Climate Objective. Where that is not possible, the Tribunal shall be empowered to disregard those laws, regulations, guidelines, practices or other directives that are incompatible with the Climate Objective, save for mandatory rules of [chosen jurisdiction] law.

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