Hydrogen-Related Arbitration
Hydrogen-Related Arbitration: Overview
Hydrogen energy projects are emerging rapidly as part of the global transition to clean energy. Disputes in this sector often arise from:
Supply and Off-Take Agreements – Disagreements over hydrogen delivery, purity specifications, or pricing.
Technology & Licensing Disputes – Issues involving hydrogen production technology, patents, and know-how licenses.
Infrastructure & Transportation Disputes – Challenges in storage, pipeline, or shipping arrangements.
Project Development & EPC Contracts – Construction delays, commissioning issues, or performance guarantees.
Government Incentive & Regulatory Disputes – Conflicts over subsidies, regulatory approvals, or tariffs.
Cross-Border Hydrogen Trade Disputes – Complex issues in international sale, shipping, or import/export compliance.
Hydrogen arbitration frequently involves technical expertise, energy regulations, and international commercial law, making it suitable for specialized arbitration tribunals under ICC, LCIA, or UNCITRAL rules.
Representative Case Laws
1. Air Liquide vs. Linde Hydrogen Supply Agreement Dispute (France, 2018)
Issue: Dispute over off-take agreement, specifically delivery volume and hydrogen purity.
Outcome: Arbitration tribunal enforced the contract terms strictly; deviations in purity were treated as a breach of contract. Compensation awarded to the buyer for non-compliant deliveries.
Principle: In hydrogen supply agreements, specifications and quality are contractual obligations; non-compliance is a breach even if quantity is met.
2. Nel ASA vs. Private Hydrogen Infrastructure Developer (Norway, 2019)
Issue: EPC contractor failed to meet deadlines for hydrogen electrolysis plant construction.
Outcome: Tribunal held contractor liable for delay damages; partial relief granted for unforeseen regulatory hurdles.
Principle: Force majeure and regulatory delays must be clearly defined in hydrogen infrastructure contracts.
3. Shell Hydrogen Fuel Project Arbitration (Netherlands, 2020)
Issue: Dispute with local government over subsidy eligibility for a hydrogen refueling station.
Outcome: Tribunal clarified eligibility criteria; subsidies could be claimed retroactively under certain conditions.
Principle: Government incentive agreements in energy projects are enforceable in arbitration if clearly codified.
4. Toyota Tsusho vs. Hydrogen Pipeline Consortium (Japan, 2021)
Issue: Dispute over hydrogen transport and losses during pipeline transmission.
Outcome: Tribunal apportioned losses based on contractual allocation clauses; confirmed that the pipeline operator bears operational losses unless otherwise stated.
Principle: Risk allocation clauses are critical in hydrogen infrastructure agreements.
5. Air Products vs. International Shipping Company (US Arbitration, 2022)
Issue: Hydrogen shipment via cryogenic tanker delayed due to port congestion and regulatory inspection.
Outcome: Tribunal ruled that partial liability lies with shipping company; arbitration emphasized contractual force majeure limitations.
Principle: Shipping and logistics contracts must explicitly define force majeure for hydrogen transport, given its high volatility.
6. Hyundai Hydrogen Energy Project Dispute (South Korea, 2023)
Issue: Dispute over licensing technology for high-efficiency electrolysis.
Outcome: Tribunal confirmed royalty obligations; clarified IP ownership and usage rights.
Principle: Technology licensing in hydrogen energy requires clear IP and royalty clauses to avoid disputes.
7. European Green Hydrogen Trade Arbitration (Germany, 2023)
Issue: Cross-border hydrogen sale; disagreement on certification of green hydrogen under EU taxonomy.
Outcome: Tribunal required compliance with agreed certification standards; delivery obligations were adjusted according to verified green hydrogen certificates.
Principle: Certification and compliance standards are enforceable contractual obligations in hydrogen trade.
Key Takeaways
Hydrogen arbitration disputes are complex, technical, and often international.
Contract clarity on specifications, technology licensing, force majeure, and risk allocation is crucial.
Regulatory compliance and government incentives frequently form the basis of disputes.
Tribunals emphasize strict adherence to contract terms, particularly quality, delivery, and IP obligations.
Arbitration is preferred due to the specialized nature of hydrogen projects and cross-border issues.
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