Critical minerals disputes take center stage at Istanbul Arbitration Days

Experts gathered at Istanbul Arbitration Days warned on Thursday that intensifying global competition for critical minerals is fueling state intervention in mining sectors and raising the specter of investment disputes, as governments increasingly treat these resources as strategic assets rather than simple commodities. Berceste Elif Duranay, founding partner at Duranay Law, said resource nationalism was not new, but the strategic importance of minerals and the speed of government responses had changed significantly. "Critical minerals are increasingly being treated as strategic assets rather than simply commodities," Duranay said, noting that vulnerabilities exposed by the COVID-19 pandemic and geopolitical developments since 2022 had fundamentally altered how governments viewed access to energy and raw materials.

Regulatory measures and arbitration risks

Cem Kalelioglu, a partner at Pinsent Masons, said governments worldwide were increasingly using measures ranging from state ownership in mining investments to export restrictions and local-content requirements. "If they are implemented in a discriminatory, arbitrary way ... I think that will lead to a lot of investor-state arbitration," Kalelioglu said, adding that laws being enacted could keep arbitration practitioners busy over the next decade. Dogan Eymirlioglu, head of arbitration at Balcioglu Selcuk Eymirlioglu Ardıyok Keki Attorney Partnership, said states had broad room to regulate critical minerals for purposes including national security, energy transition, environmental protection and industrial development, but regulation should be clear, prospective and generally applicable.

Ismail Pilavci, head of legal affairs at Oksut Madencilik, highlighted the long-term nature of mining investments, saying investors could reasonably expect a degree of regulatory stability. Investors should protect their legal position while seeking to preserve a constructive relationship with regulators when disputes arise, he said. Measures that become confiscatory, discriminatory, arbitrary, retroactive or contrary to specific commitments made to investors could create treaty liability, Eymirlioglu added.

Istanbul's growing arbitration role

In a keynote address, Khawar Qureshi KC, head of McNair International, said international arbitration was at a "critical crossroads," identifying neutrality, technology, and cost and delay as key challenges facing the field. Qureshi said geopolitical developments were creating difficulties for some parties in accessing established arbitration centers and called for greater flexibility. "We should each and every one of us promote and support regional centers such as Istanbul," he said, pointing to the city's position at the crossroads of Europe and Asia and its longstanding role as a bridge between different cultures. Qureshi said competition among arbitration centers was healthy and regional centers were increasingly important amid disruptions affecting key routes for international trade.