Assessing Damages and Mitigation Strategies in an Energy Trading Arbitration

Senior Managing Director Tomas Haug and Director Niko Czaplicki acted as quantum experts in an ICC arbitration concerning damages arising from the cancellation of an electricity supply contract between two energy trading companies.

NERA’s experts critically assessed the opposing party’s damages methodology, evaluating the definition of the relevant but-for and actual scenarios, the economic implications of alternative replacement strategies, and the evidential basis for the claimed losses. The engagement included assessing market risk and hedging behavior; comparing spot-market procurement with forward- and futures-based replacement strategies; quantifying damages under alternative counterfactual scenarios; and reviewing trading data, portfolio management practices, and the opposing expert’s economic modeling.