Chris Kidd Head of Shipbuilding and Offshore Construction, Joint Head of Energy & Infrastructure, Partner
Brexit - what now?
We anticipate that, following the historic events that unfurled on 23 June 2016, you will now be wondering what Brexit means for your business.
In terms of the mechanics of the Brexit process, what happens to EU rights, agreements and treaties during the “exit period” and what happens after the exit negotiations, Philippe Ruttley (Partner and Head of EU and Competition Law) and Solange Leandro (Senior Associate, EU and Competition Law) have produced a full briefing which can be accessed here.
It is very difficult to say with any certainty at this stage how Brexit will affect the energy industry, as the “Leave” campaign is yet to articulate, and the UK yet to negotiate with the EU, what our relationship with the EU will look like going forwards. Will we follow the Norwegian or Swiss models or something similar? Or will we negotiate our own trade deals with the EU as Canada has done? Decisions will clearly need to be made regarding how the UK and EU will have access to each other’s energy markets and whether the UK will remain in the single energy market. This is all likely to take some time.
Given the reaction of the financial markets to Brexit, the fall in the oil price and the value of sterling, we look to be entering a period of instability and uncertainty, which is likely to have a knock-on effect in the near term on companies’ investment decisions. This could have an effect on UK energy projects which may be stalled or delayed.
As to the particular implications of Brexit for issues such as EU legislation (and UK legislation based on EU Directives) affecting the energy sector, renewables, climate change targets and policies, interpretation and termination of contracts, choice of law, dispute resolution (jurisdiction and enforcement) and arbitration, we will of course be monitoring developments closely and will continue to provide regular updates as the process for the UK’s exit from the EU unfolds.
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