Price War Meets Pandemic – Energy’s Perfect Storm in Latin America
Partner José Zapata joined an Inter-Dialogue webinar to discuss the difficulty of separating the effects of COVID-19 from those of low oil prices in addressing the multitude of force majeure claims for energy projects. Mr. Zapata explained that different jurisdictions have addressed this differently. Colombia and Peru are aligned in how to balance investor protection and respect for the rule of law during the crisis, whereas COVID-19 response measures have only recently kicked in, in Mexico. Mr. Zapata then explained the legal impacts for cross-border energy projects emphasizing the great uncertainty in how these scenarios will play out from a regulatory, contractual, and legal standpoint, pointing out that if all projects are in force majeure, nothing will move forward, which will only aggravate a situation in which continued supply of energy and fuel is needed.