- Date
- 27 January 2024
- Jul 13, 2022
- 436
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This thread is for the general discussion of the Article The Houthi Attacks. Please add to the discussion here.
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Law firms need to advise clients on cost minimisation strategies which is especially important in a geopolitical environment that is so volatile. Moreover, global energy supplies are also severely restricted and with international sanctions supply chains are also heavily impacted. Traditionally, the ME has been seen as a holy grail for global energy supplies (especially oil & gas) but with the current situation in the region and with Iranian, Venezuelan and Russian oil banned from the global energy market, law firms need to be proactive and advice clients to look into other regions with strong oil extraction capabilities. This will benefit clients because it will give them a first-mover advantage (unpopular and untapped regions for energy often go unnoticed by the international community as the focus is solely or more generally on regions with a more established energy market) and secondly help in stabilising energy supply chains.
For law firms, this means more work for international trade lawyers specialising in advising sovereign clients. As energy is a macroeconomic concept, sourcing new regions for potential energy investments would require getting the necessary approvals from the host country's government to establish the relevant energy infrastructure. International trade lawyers would hence be required to draft bilateral agreements to establish a business consensus with both sovereign clients. Once this has been done, clients will need to collaborate with local energy companies to establish the infrastructure for energy extraction. This can either be in the form of an acquisition or a merger or if it is a completely new project (such as North West Guyana - which has recently been identified by Nicolas Maduro as a potential source of oil investment) or Houston (recently voted by the FT as the most innovative city for foreign investments in energy), arranging the necessary real estate infrastructure to assist clients with a strong base to carry forward their energy business operations will be essential. This would mean lots of transactional work for corporate, M&A and real estate lawyers who would draft/negotiate agreements to facilitate the deal terms as well as conduct due diligence to ensure consistency with legal rules.
I also think there would be work involved for dispute resolution lawyers as I don't think force majeure would come into play, especially in the case of Marlin Luanda which wasn't the first commercial vessel to be attacked by the Houthis. The opposite party can argue that the Houthi attacks on foreign commercial vessels started taking place much before Marlin Luanda was attacked and so Trafigura (the vessel owner) was bound to know the risks of navigating the vessel through a conflict-prone zone. Therefore, dispute resolution lawyers would be questioned on the legality of this stance and hence would be required to undertake substantial legal research concerning international maritime laws as well as on the enforceability of the force majeure clause given the ambiguity surrounding international shipping agreements. Finally, aviation lawyers will need to advise clients by suggesting options to airlift global energy supplies to mitigate risks. Aviation lawyers will hence be required to draft aviation agreements to assist clients in using commercial/military aircraft as a vehicle to safely transport energy supplies.
For law firms, this means more work for international trade lawyers specialising in advising sovereign clients. As energy is a macroeconomic concept, sourcing new regions for potential energy investments would require getting the necessary approvals from the host country's government to establish the relevant energy infrastructure. International trade lawyers would hence be required to draft bilateral agreements to establish a business consensus with both sovereign clients. Once this has been done, clients will need to collaborate with local energy companies to establish the infrastructure for energy extraction. This can either be in the form of an acquisition or a merger or if it is a completely new project (such as North West Guyana - which has recently been identified by Nicolas Maduro as a potential source of oil investment) or Houston (recently voted by the FT as the most innovative city for foreign investments in energy), arranging the necessary real estate infrastructure to assist clients with a strong base to carry forward their energy business operations will be essential. This would mean lots of transactional work for corporate, M&A and real estate lawyers who would draft/negotiate agreements to facilitate the deal terms as well as conduct due diligence to ensure consistency with legal rules.
I also think there would be work involved for dispute resolution lawyers as I don't think force majeure would come into play, especially in the case of Marlin Luanda which wasn't the first commercial vessel to be attacked by the Houthis. The opposite party can argue that the Houthi attacks on foreign commercial vessels started taking place much before Marlin Luanda was attacked and so Trafigura (the vessel owner) was bound to know the risks of navigating the vessel through a conflict-prone zone. Therefore, dispute resolution lawyers would be questioned on the legality of this stance and hence would be required to undertake substantial legal research concerning international maritime laws as well as on the enforceability of the force majeure clause given the ambiguity surrounding international shipping agreements. Finally, aviation lawyers will need to advise clients by suggesting options to airlift global energy supplies to mitigate risks. Aviation lawyers will hence be required to draft aviation agreements to assist clients in using commercial/military aircraft as a vehicle to safely transport energy supplies.
