Africa

African states are party to over 900 investment agreements, the vast majority of which have been signed with non-African countries.

The Economic Community of West African States (ECOWAS) Treaty, signed by Benin, Burkina Faso, Cape Verde, Gambia, Ghana, Guinea, Guinea-Bissau, Ivory Coast, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo, contains investment-state dispute settlement (ISDS) provisions, but no disputes have been registered to date

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 20% of all ICSID arbitration disputes have involved African states.

Egypt has been the fourth most targeted state worldwide with 26 registered ISDS cases against it. It is currently facing a dispute initiated by French utility services giant Véolia over a law increasing the minimum wage.

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.

Burundi and the Democratic Republic of Congo have been the most targeted in sub-Sahara Africa, both with four disputes all initiated by Belgian and US investors respectively.

(February 2017)

Bloomberg | 11-Jan-2016
Karuturi Global Ltd., one of the largest investors in Ethiopia’s farm industry, is challenging the termination of its project, claiming the government broke the terms of its agreement with the company.
Inter-Press Service | 29-Dec-2015
The heavily criticized legal mechanism, known as ISDS, is an important tool for European companies to pressurize developing countries. This year Uganda joins the rank of developing nations asking themselves: “Why have we ever signed this?”
Médias24 | 9-Dec-2015
Cheikh Al Amoudi appelle à trouver une solution amiable, et ce dans un délai de 4 mois, sans quoi il adressera une requête en arbitrage au Cirdi
Reuters | 9-Dec-2015
Egypt said on Sunday it would appeal an order by international arbitrators to pay $1.76 billion in compensation to state-owned Israel Electric Corp for halting gas supplies.
Jeune Afrique | 8-Dec-2015
L’Egypte a été condamnée à payer 1,76 milliard de dollars (1,61 milliard d’euros) d’indemnités à la Compagnie d’électricité d’Israël (CEI)
Médias24 | 30-Nov-2015
L’Etat est moins intransigeant sur les formes. Sur le fond, il maintient ses exigences de garanties et de remboursement intégral des créances publiques.
L’Economiste | 23-Nov-2015
Avec la procédure engagée actuellement au Cirdi, l’actionnaire majoritaire espère obtenir le gel du paiement des dettes.
All Africa | 13-Oct-2015
The East African Community partner states have agreed on the outstanding trade issues under the Tripartite Free Trade Area (TFTA).
CDR | 2-Oct-2015
What are the next steps for investment protection in South Africa, as the country draws up new legislation governing foreign direct investment following the termination of a number of bilateral investment treaties?
Jeune Afrique | 24-Aug-2015
Pursuant to the ruling of an Irish court, Airbus A320 of Congo Airways, RDC’s new national airline company, is blocked at Dublin airport. The Congolese authorities are not excluding the hypothesis of “vulture fund subterfuge”.

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