Power purchase agreements affected by unexpected circumstances: lessons from real litigation

Abstract

Abstract This article analyses different situations that impacted an electricity system and resulted in claims related to power purchase agreements affected by unexpected circumstances. The analysis allows reaching lessons with a global scope that are useful to prevent the mentioned disputes or to deal with them. It concludes that power purchase agreements must be drafted using clear language, avoiding ambiguous clauses, with a careful distribution of risks, adequate mechanisms for solving disputes and according to the regulations that govern a specific contract. In the context of a dispute, it is important to consider the perks of negotiation, the background of the tribunal, the social consequences of the conflict and the rules governing the pertinent agreement.