The energy sector is undergoing a paradigm shift as nations gradually drift away from the conventional energy sector and towards alternatives that are more environmentally oriented in view of the impact of global warming. Renewable energy projects, as important as they are in the environmental context, entail heavy investment, technological expertise, prolonged gestation periods, and foreign investment. These projects are more sensitive to disputes that may originate from changes in regulatory policies, breach of contract, protraction, policy change, and state action. International Commercial Arbitration has become an alternative method for resolving dispute, especially when the transaction include cross national boundaries. Currently, worldwide trends show that there has been a shift from treaty arbitration to contract arbitration due to the withdrawal of some countries from Investment Protection Regimes such as the Energy Charter Treaty. Disputes are arising from issues of changed government policies, withdrawal of support for renewable energy sources, to competing state priorities on energy security and economic issues. The Indian renewable energy market is no different in this regard. Large-scale renewable energy projects may have foreign parties as investors and financiers, which brings international commercial arbitration under the ambit of the Arbitration and Conciliation Act, 1996.Indian courts have gradually adopted a pro-arbitration approach by recognising foreign-seated arbitrations, granting interim relief, and facilitating enforcement of foreign arbitral awards under the New York Convention, subject to limited public policy scrutiny. This study emphasizes the evolving importance of international commercial arbitration in dealing with disputes that may arise from renewable energy initiatives. This research also finds that the importance of legal certainty, a stable framework, and judicial interpretive consistency cannot be overemphasized if the role of international commercial arbitration in sustainable investments is continue, including renewable energy projects.
Sakshi Pratyush (Thu,) studied this question.