Managing Energy Sector Arbitration: Expertise for a Successful Process
Energy sector projects are typically complex and often result in disputes.
Pál Kara, Senior Counsel & Former Group General Counsel at
MOL Group, explains how firms can successfully navigate arbitration processes.
Enco Insights, London - 17 November 2025
This briefing on energy sector arbitration explores issues including:
How should energy firms should go about building a good arbitration team?
How should external counsel to set realistic expectations with clients?
What are the key steps for in-house counsel preparing for their first major arbitration?
Sourcing the Right Expertise
Enco Insights: Let’s start by looking at how energy firms should go about building a good arbitration team. In your view, what is the right mix of skills, seniority, and perspectives for an effective energy industry arbitration team?
Pál Kara: In my experience, the following factors are vital to creating a good mix:
Aligning in-house and external expertise: Firms should aim to combine a dedicated in-house team and a professional external team - where both teams share the same ultimate goals: why the case is being arbitrated; what the best outcomes are likely to be; and how work to together to achieve them. Alignment of objectives and appropriate resource allocation are critical.
The key role of general counsel: These in-house professionals are key in melding together internal and external knowledge and skills, bringing together people from different backgrounds and cultures. In litigation, it’s not simply enough to have good quality ingredients with which to cook: you must also make sure the food is cooked well - and the chefs know what they are doing!
Enco: Are there any types of energy sector cases for which in-house counsel is better positioned, or which a client should not outsource legal expertise?
Pál: The answer depends on good early estimation of the management time required for the project and the availability of internal resources. External lawyers and experts can be a great help, but to assess their value, general counsel or lead lawyers should first understand:
The availability of top or middle managers to be part of the process
How much detail they need from stakeholders
What are the key decisions where non-legal managers must be involved
The extent of requests for disclosure of key documents.
Pál Kara is an Enco Expert Advisor and Expert Witness with deep expertise in change management and corporate governance.
Former Group General Counsel and current Senior Counsel at MOL Group - the Hungarian integrated oil, gas, petrochemicals and consumer retail company - Pál is an executive with extensive experience of the law affecting global petrochemicals organisations.
“A good team is a mixture of knowledgeable external and in-house counsel. However, the external counsel can - and should absolutely - familiarise themselves with the client’s needs, goals, and give the best professional advice to achieve them.”
Preparing for Energy Sector Arbitration
Enco: Energy disputes often involve highly technical or cross-border elements. How do you ensure the tribunal and legal team fully grasp the technical and commercial context of an energy project?
Pál: You should consider the following factors:
Ideally all - or at least one - of the arbitrators should be familiar with the broader technical, commercial and/or geopolitical context of the dispute.
Try to select top quality people, those who can write effectively about these issues - and have the necessary skills to properly present them to a tribunal. Strategic and case management skills, must be married together with excellent written and oral advocacy skills.
Keep in mind that an expert is not ‘yours’ or the other side’s; rather, they are invited to help the tribunal. Avoid superficial experts or those who claim to offer a very broad spectrum of expertise. If they prove to be less effective, you might lose credibility too.
Enco: How important is it for outside counsel to grasp the client’s operational and commercial drivers behind a dispute?
Pál: It is a must. A good team, in my experience, is a mixture of knowledgeable external and in-house counsel. However, the external counsel can - and should absolutely - familiarise themselves with the client’s needs, goals, and so give the best professional advice to achieve them.
The Energy Sector Arbitration Process
Enco: Let’s look at the arbitration process itself. What should energy firms’ first step be when arbitrating a legal dispute becomes inevitable?
Pál: Regardless of whether you are the claimant or the defendant, the very first thing to check out is the arbitration clause. This will ideally be clearly drafted and will help you navigate all the way through your arbitration case. From the arbitration clause you will learn key information including:
What is the governing law (i.e. which countries’ legal regimes will apply)
What is the venue of arbitration (which is very much relevant for any potential court assistance and oversight, annulment and others)
Whether the very dispute is subject of arbitration
How many arbitrators will judge your case and in what language.
“If you can, especially if you are the claimant, make sure that arbitration - as a last resort - is truly the best option to settle a dispute. Arbitration is a tool, it is not an objective in and of itself.”
Enco: Once a tribunal is formulated, what is typically the next step for energy firms?
Pál: Typically, the tribunal and the parties convene - either physically or virtually. They then discuss, and ideally agree, on the major milestones, including submission dates, hearing dates, translation issues, etc.
The tribunal then issues its first Procedural Order. This will guide both the parties and the tribunal during the whole process. Such orders are frequently completed, amended or interpreted, as the case requires.
Enco: Can there be any traps or bottlenecks for energy firms during a typical tribunal process?
Pál: Yes, many. Firstly, keeping to the deadline is almost always an issue. The more complicated the case, the easier it is to get in trouble with deadlines. Just imagine that even in a simple case, first the legal team must understand the facts, then must run interviews with many people who were involved.
For this reason, it is crucial to select only the most relevant experts and witnesses. Just because someone is an excellent manager or a good negotiator, it does not automatically make them a good witness. Often experts can prove to be less articulate, or not as knowledgeable as you hoped they would be. So, you must do your homework prior to finalising both the witness and expert list.
Enco: Is the end of an arbitration process always a positive development?
Pál: Only if you are lucky and have prepared and executed well: it happens frequently that the losing party is unwilling to pay the claim warranted by the award or perform other duties as prescribed in the award. Also, a winning party may not actually win in the classic sense. For example, if a claim of $100 million is only partially awarded an amount of $10 million, and the arbitration cost $5 million - is that really a victory?
In the first instance, you should always strive for amicable enforcement. However, if this fails over a reasonable timescale, in my experience, I advise against wasting further time - and move to enforcement as quickly as possible.
Enco: Reflecting on your arbitration experience, what’s one key lesson you would share with in-house counsel preparing for their first major arbitration?
Pál: If you can, especially if you are the claimant, make sure that arbitration - as a last resort - is truly the best option to settle a dispute. Arbitration is a tool, it is not an objective in and of itself.
It’s a big step, so take your time to think through all the pros and cons ahead of launching it. Once you are engaged, it is often difficult to exit the process.
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