Asset valuation in the context of international arbitration is often conducted because of a need for damages estimation (i.e., quantum). The valuation work often involves quantitatively and qualitatively considering what the future expectations were at the time of the breach to assess what the position of the parties would have been absent the contractual (or other) breach or change in circumstances that triggered the dispute. In a but-for situation, the value of an asset is, at least, partly determined by the parties’ future expectations. Damages, to the extent they exist, are, to some extent, a function of the deviation in outcomes between the actual circumstances and the but-for situation.
In this chapter, we discuss how the rapid and significant changes in the structure of the energy sector as a result of the recent energy crisis and societal action against climate change may impact asset valuation in an arbitration context, as well as the considerations arbitrators might have with regard to valuation evidence submitted to tribunals. We discuss how arbitrators, when thinking about what reasonable expectations might have been, will need to consider a broader range of possible future outcomes than is currently common.