International disputes and arbitrations will increase in 2024

  • Market Insight 10 January 2024 10 January 2024
  • UK & Europe

  • Geopolitical risk

Geopolitical instability, driven by war, regime change, worsening political relations between superpowers, migration and climate change will lead to a greater frequency of large disputes.

2023 saw considerable geopolitical instability, with the continuation of the war between Russia and Ukraine, the outbreak of the Israel-Hamas war, and ongoing security issues (including coups) across parts of sub-Saharan Africa.

There has also been increased tension between Russia and the West and, to a lesser extent, between China and the West.

Migration continued to be a major area of concern in 2023, particularly into Europe and the US, driven by war, famine and, arguably, climate change.

Looking ahead to this year, there don’t appear to be immediate solutions to the Russia-Ukraine or Israel-Hamas conflicts, with the latter generating concern about the likelihood of greater regional instability.

Recent attacks by Houthi rebels in Yemen on merchant and military vessels in the Red Sea have escalated those concerns – particularly as around 12% of global trade (including 30% of global container traffic) passes through the region.

The global geopolitical landscape could be further complicated by a record election year in 2024, with more than two billion voters across 50 countries expected to head to the polls, among which the US and Indian elections will loom large.

And while COP 28 resulted in a semi-positive outcome on the issue of energy transition, it also exposed the tensions between energy-producing countries and those heavily reliant on fossil fuels, those trying to reduce reliance, and those worst affected by climate change.

Meanwhile, climate change disputes continue to increase, driven by claims prompted by interest groups, NGOs, shareholders, or other investors.

In our experience, geopolitical instability always increases the frequency of larger disputes. Changes of government, particularly lurches from one end of the political spectrum to the other, often lead to fundamental policy changes which can have a knock-on effect for corporate investors.

At the extremes, this can lead to the nationalisation or expropriation of assets, or regulatory complications which cause financial losses and damage relationships between businesses and governments. 

We have already seen a huge number of disputes arising from the Russia-Ukraine war, and we anticipate that major international disputes and arbitrations will be on the rise in 2024, driven by all of these factors.


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