Treaty-based Investor-State Dispute Settlement (ISDS) cases are growing in popularity, with studies showing that 68 cases were initiated in 2020 against 43 countries.[1]
Peru and Croatia were the most frequently cited respondents in these proceedings, with Denmark, Norway, Papua New Guinea and Switzerland sitting as respondent states for the first time. In the past ten years, Argentina (with 62 cases), Venezuela (with 54 cases) and Spain (with 53 cases) have been the most widely cited respondent states.
However, cases in which African countries sit as the respondent are on the increase. The Investment Arbitration Reporter released their West Africa Round-up this month, which listed Ghana, Angola, the Republic of Congo and Nigeria as respondent countries with active investment arbitrations.
Ghana, which initially fought jurisdiction of a UNCITRAL tribunal in Cassius Mining v Ghana, has, in October 2023, consented to the arbitration and a chairman being appointed. A preliminary issues hearing took place on 4 December 2023; the results are unknown.
Xtra-Gold Resources (a Bahama-based entity) is poised to launch proceedings of approximately USD 11.7 million against Ghana over a licence fee dispute. Xtra-Gold has stated that if they cannot come to an agreement with the government, they intend to launch proceedings under the arbitration clause of the Ghanaian Mineral Act.
In June 2023, a US District Court in the district of Columbia refused to accept jurisdiction in a claim that Aenergy SA, a Portuguese entity, stated in relation to a breach of contract. The Court said that the claim was “forum shopping” on Aenergy’s part and reiterated that the claim had previously been dismissed for forum non conveniens ground in New York. The claim surrounds the misappropriation of property in Angola.
Separately, Angola and China have recently entered into a new Bilateral Investment Arbitration.
A third-party creditor recently approached the Paris Court of Appeal seeking to set aside two ICC enforcement awards against the Republic of Congo (which the ICC revision tribunal also refused to set aside) where the claimant, Commisimpex, had seized and sold the Congolese Presidential aircraft. The claims were dismissed on 2 November 2023, and Commisimpex secured EUR 7.1 million out of the sale to settle its claim.
Nigeria recently settled a USD 3 million enforcement relating to a previous construction award. Separately, the Nigerian Ministry of Petroleum successfully had an USD 11 billion award overturned by the High Court of Justice in the Business and Property Courts of England and Wales with the court finding that the arbitration was tainted by fraud and bribery. The consequential hearing was held on 6 December 2023, while the result is unknown, the state was seeking that the awards be set aside in full while the claimant sought that the matter be remitted to the tribunal.
With an uprise in the arbitrations coming out of Africa, and with only 37% of all concluded cases being held in favour of the State in the last 10 years, the obvious questions is: how the successful claimant would be able to enforce their arbitral awards against third-world nations, where it is not as simple as walking up to a bank for collection. In many cases, litigation parties need to get creative, as Commisimpex did against the Republic of Congo. Gherson can help assess your initial claim as an investor and follow it through enforcement until you claim is satisfied.
Gherson’s Litigation and Arbitration Team are highly experienced in advising on international investor-state disputes. Please do not hesitate to contact us for further advice, send us an , or, alternatively, follow us on Twitter, Facebook, or LinkedIn to stay up-to-date.
The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.
©Gherson 2023
[1] United Nations UNCTAD IIA Issues Note September 2021 issue 4