Disputes in the Energy Sector UK
As part of this month’s Legal Focus on disputes in the Energy Sector, Lawyer Monthly speaks exclusively to John Merrett, Deputy President and Secretary of the Electricity Arbitration Association.
Responding to the electricity industry
ohn began by explaining the needs for a tailor-made scheme. He said: “Over 20 years ago the foundations for the modern electricity industry were laid. The Electricity Arbitration Association
(EAA) was then created to provide a means whereby disputes amongst all types of participants, including retail customers, could be resolved satisfactorily. After widespread consultation, rules were drawn up which not only reflected best practice but pioneered innovative techniques which are today taken for granted. The Association was able to call on people to act as arbitrators and other forms of dispute solvers who were knowledgeable about the industry and experienced in cost-effective means of resolving disputes.
“The continuous development of the electricity industry and the contribution of new participants has given rise to a multitude of contractual relationships amongst generators, buyers, sellers and distributors and increased activity by regulators.
“Recent arbitrations and expert determinations have arisen from straightforward recovery of commercial invoices to questions of the cost of environmental measures, “force majeure” and construction projects.
“The number of enquiries and subject matter of disputes filed with the EAA indicate that there is a continuing role for an independent body to help resolve disputes; one which will act in the best interests of all parties, offer up-to-date techniques of ADR and cost effective arbitration.”
John went on to outline the services provided by the Association. He said: “The EAA maintains a list of suitably qualified and independent arbitrators and neutrals who can be called on to assist in resolving disputes.
“They may be experienced lawyers or experts in areas such as energy economics, computing, electrical engineering, competition law or construction claims. If parties are unable to agree on the identity of such persons, the President will make the necessary appointments.
“The President of the Association is His Honour Humphrey Lloyd QC, a former Judge of the Technical and Construction Court of the High Court in England and Wales and now once again a practising arbitrator. He has been active in the world of arbitration for forty years.
“As the Deputy President and Secretary of the Association, I myself was for some twelve years until recently, the Arbitration Consultant to the UK National Committee of the International Chamber of Commerce and I have a substantial knowledge of people suitable for appointment. Appointments are made by the President on the advice of the Deputy President.”
John continued: “The Awards of arbitrators are binding under the laws of England and Wales. The determinations of experts and recommendations of mediators can also be binding if the parties so wish. The users of the EAA Rules and procedures do not have to be members of the Association and the Association charges no fee for its services. Its modest costs are borne by contributions from the electricity industry.”