Africa

African states are party to over a thousand investment agreements, the vast majority of which have been signed with non-African countries.

In 2006, Members of the Southern African Development Community (SADC) (Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland) signed the SADC Finance and Investment Protocol that also includes the ISDS mechanism. Only two claims have been registered under these terms, both against Lesotho (but the governments in the region do not typically disclose such information). In 2016 amendments to the protocol were adopted. They eliminated ISDS provisions (only state-to-state arbitration remained) and narrowed the scope of investors’ rights.

In South Africa, shortly after settling a dispute with foreign mining companies over its new post-apartheid mining rules (Piero Foresti & Others case), the government began to withdraw from bilateral investment treaties (BIT) that include ISDS, arguing they belonged to a bygone era. It claimed BITs focus on the interests of investors from developed countries and do not address concerns of developing countries.

The South African government decided to develop a new model BIT and strengthen its domestic legislation in regard to the protection offered to foreign investors, such as compatibility of BIT-type protection with South African law. South Africa also sought to incorporate legitimate exceptions to investor protection where warranted by public interest considerations.

Provisions of South Africa’s new model BIT have been incorporated into SADC’s. This model sets out provisions that mitigate the risks of earlier treaties and leaves open the option for state-to-state dispute settlement in addition to investor-state dispute settlement procedures.

In 2014, voices from the Namibian government cast doubts on the correlation between foreign direct investment and investment treaties including ISDS. They argued that ISDS represented a risk for developing countries, due to important legal fees and awards which can pose a significant budgetary threat. Further, statistics show most claimants come from developed countries.

About 11% of all arbitration disputes have involved African states.

In 2013, an arbitration court ordered Libya to pay US$935 million in a dispute over a land-leasing contract for a tourism project, making it one of the largest known awards to date.

Egypt has been the fifth most targeted state worldwide with 34 registered ISDS cases against it. Tanzania has been the most targeted country in sub-Sahara Africa with six disputes, all of which were initiated by European investors.

Photo: Hansueli Krapf / CC BY-SA 3.0

(April 2020)

AFTINET | 4-Jun-2018
Veolia has finally lost its claim against Egypt over a waste management contract dispute in which they claimed compensation for an increase in the minimum wage under a new labour law.
RFI | 2-May-2018
Pouvoir recourir à l’arbitrage, c’est une des clauses qu’exige une compagnie lorsqu’elle signe un contrat dans un pays étranger, pour ne pas dépendre des juridictions locales.
Morocco World News | 2-May-2018
The US-based private equity firm Carlyle, is suing the Moroccan government for over USD 400 million in the ICSID, claiming the sum is equivalent to the profit lost when Morocco’s sole refinery went bankrupt three years ago.
Medias24 | 2-May-2018
Le fonds d’investissement et ses entités menacent le Maroc d’un recours devant le CIRDI. Ils réclament le remboursement de plus de 400 millions de dollars, montant correspondant à leur créance sur la Samir.
Defi Media | 26-Apr-2018
Quantum Global menace de recourir à un arbitrage international si le contentieux avec les autorités locales n’est pas résolu dans un délai de six mois.
Daily Nation | 24-Apr-2018
The government risks losing up to Sh500 billion in an international arbitration case against mining firm, Cortec, after it failed to provide Sh100 million in the second mini-budget to pay a UK-based law firm representing it in the case.
Observatoire des Multinationales | 18-Apr-2018
Le groupe français a décidé une nouvelle fois, après l’avoir fait contre l’Argentine, l’Égypte ou encore la Lituanie, de saisir un tribunal arbitral international.
Defi Media | 9-Apr-2018
La double nationalité de Dawood Rawat lui prive de l’opportunité de saisir le tribunal de la Cour permanente d’arbitrage pour réclamer des dommages d’un milliard de dollars américains à l’état mauricien.
Kluwer Arbitration Blog | 28-Mar-2018
Whilst arbitrations involve African parties or interests, most of these arbitrations have their seat outside Africa.
Financial Post | 22-Mar-2018
The dispute offers another example of the rising tensions between mining companies and the government leaders in cash strapped countries where they operate.