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.

(April 2020)

Kluwer Arbitration Blog | 20-Jan-2020
Despite debates about crisis in investment treaty arbitration, most emerging market economies are concluding BITs that provide for ISDS and emerging market multinational companies appear to welcome ISDS.
The Citizen | 20-Jan-2020
The dispute is related to Canada-based company Montero Mining’s investment in the Wigu Hill rare earth element project.
Mining Technology | 20-Jan-2020
Australian mining company Indiana Resources has become the second company in a week to declare a dispute with the Tanzanian government over repossessed retention licences.
GlobeNewswire | 13-Jan-2020
The dispute arises out of certain acts and omissions of the United Republic of Tanzania, relating to the SMP Gold Project, says the company.
LesEco | 9-Jan-2020
Le géant américain estime qu’une récente démarche du Maroc a pour but de retarder le dénouement de l’affaire de la liquidation de la raffinerie.
The East African | 9-Dec-2019
Civil society groups are now calling on governments to reform their investor state dispute settlement because “it is being unfairly used by investors to sue states for millions of dollars.”
Daily Monitor | 5-Dec-2019
Most Bilateral Investment Treaties (BITs) are not just used by investors to inform their investment decisions, but are increasingly becoming tools used to sue States in a foreign or international court.
Ciar Global | 27-Nov-2019
Las demandas de arbitraje contra países africanos ya representan el 11% de todos los arbitrajes de inversiones conocidos y aumentaron en los últimos años.
Réalités | 25-Nov-2019
Le tribunal arbitral ordonne à l’Etat tunisien de remettre les états financiers de la banque à ABCI.
MENAFN | 7-Nov-2019
ICSID dismisses lawsuit filed by Egyptian company.

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