SAMDANI QURESHI AQLAAL (SQA)’s Post

🤩 Fantastic analysis by Julius Bizimungu Africa Finance Today on the challenges African countries face with exorbitant investor-state dispute settlement #ISDS claims. Grateful for the insightful coverage of the #CSOInvestmentForumUganda and for quoting me 🙌: Verbeek laments that this system is harming sustainable development in #Africa since it allows foreign investors to claim compensation from governments, compensation he suggests is in the millions and potentially billions that African governments have to pay to foreign investors from North America and Europe. “While Africa is in dire need to get financial support to bring about structural transformation, actually what we see is that financial flows are reversing [through these mechanisms],” he notes. SEATINI UGANDA SOMO Both ENDS ActionAid Nederland https://lnkd.in/e5GXJpez

This week, UN Trade and Development (UNCTAD) issued its latest briefing, showing that the number of treaty-based investor–state dispute settlement (ISDS) cases has more than doubled in the past 10 years. ISDS is a mechanism that allows foreign investors to sue host governments in international arbitration tribunals for alleged violations of their rights under the treaty. According to UN Trade and Development (UNCTAD), there were fewer than 600 known ISDS cases at the end of 2013, against more than 1,300 at the end of 2023. In 2023 alone, claimants initiated at least 60 new arbitration cases. Developing countries faced the majority of investor–state disputes, often brought by claimants from developed countries. This is consistent with previous reports that have been issued, exposing the double standard in international investment treaties. Treaties with ISDS provisions enable multinational corporations to challenge national policies designed to protect environmental standards, public health, and labour rights often through international arbitration mechanisms that prioritise investor protections over the well-being of local communities and ecosystems. ISDS provisions in many investment agreements have been widely criticised for undermining countries’ sovereignty and ability of countries to regulate industries in the public interest. Africa has particularly been a big victim of this for many years. Countries like Rwanda, Tanzania, DR Congo, Egypt, Libya, Zimbabwe, and Algeria, among others, have recently been confronted with exorbitant investor-state dispute claims. These disputes are often arbitrated at the International Centre for Settlement of Investment Disputes (ICSID) in Washington, a World Bank affiliated settlement body.  At the Civil Society Forum underway in Uganda, African trade and investment experts have been clear: the current investment architecture is one-sided and the current investor-state dispute settlement mechanism must be reformed. As the former Minister of Trade and Industry of South Africa, Rob Davies, told me, the current system has caused a “package of troubles” to Africa as opposed to attracting investments. The system has collectively cost most African governments billions of dollars in arbitration. Failure to reform or dismantle the current investment architecture risks stalling Africa’s progress. Check out Africa Finance Today's exclusive analysis and coverage on this. https://lnkd.in/eY_R_GKr

This week, UN Trade and Development (UNCTAD) issued its latest briefing, showing that the number of treaty-based investor–state dispute settlement (ISDS) cases has more than doubled in the past 10 years. ISDS is a mechanism that allows foreign investors to sue host governments in international arbitration tribunals for alleged violations of their rights under the treaty. According to the UN Trade and Development (UNCTAD), there were fewer than 600 known ISDS cases at the end of 2013, against more than 1,300 at the end of 2023. In 2023 alone, claimants initiated at least 60 new arbitration cases. Developing countries faced the majority of investor–state disputes, often brought by claimants from developed countries. This is consistent with previous reports that have been issued, exposing the double standard in international investment treaties. Treaties with ISDS provisions enable multinational corporations to challenge national policies designed to protect environmental standards, public health, and labour rights often through international arbitration mechanisms that prioritise investor protections over the well-being of local communities and ecosystems. ISDS provisions in many investment agreements have been widely criticised for undermining countries’ sovereignty and ability of countries to regulate industries in the public interest. Africa has particularly been a big victim of this for many years. Countries like Rwanda, Tanzania, DR Congo, Egypt, Libya, Zimbabwe, and Algeria, among others, have recently been confronted with exorbitant investor-state dispute claims. These disputes are often arbitrated at the International Centre for Settlement of Investment Disputes (ICSID) in Washington, a World Bank affiliated settlement body. At the Civil Society Forum underway in Uganda, African trade and investment experts have been clear: the current investment architecture is one-sided and the current investor-state dispute settlement mechanism must be reformed. As the former Minister of Trade and Industry of South Africa, Rob Davies, told me, the current system has caused a “package of troubles” to #Africa as opposed to attracting investments. The system has collectively cost most African governments billions of dollars in arbitration. Failure to reform or dismantle the current investment architecture risks stalling Africa’s progress. Check out Africa Finance Today's exclusive analysis and coverage on this. https://lnkd.in/efTfEkYx

A legal development? What impact will it make in international investment arbitration in 2025? The English Court of Appeal recently ruled that sovereign immunity cannot be invoked to resist the enforcement of ICSID awards in the case of Border Timbers Ltd & co. v Republic of Zimbabwe (2024). This landmark decision reinforces the binding nature of arbitration awards under the ICSID Convention, highlighting the primacy of international arbitration in resolving disputes between investors and states. Why This Matters For international arbitrators, states, and investors, this ruling underscores the importance of understanding the legal framework governing the recognition and enforcement of ICSID awards: 1. For Arbitrators: A robust understanding of enforcement ensures arbitrators can craft awards that are enforceable in jurisdictions worldwide, safeguarding the credibility of international arbitration. 2. For States: States must acknowledge their obligations under the ICSID Convention. Sovereign immunity cannot shield them from compliance, emphasizing the need for careful treaty commitments and responsible dispute resolution practices. 3. For Investors: Investors can be assured that their rights under ICSID awards will be upheld, providing a stable and predictable framework for protecting cross-border investments. This decision is a significant affirmation of the ICSID framework, promoting confidence in the rule of law and reinforcing the enforceability of arbitration awards globally. Let’s continue the conversation: What are your thoughts on this development? How do you see this decision shaping the landscape of international investment arbitration? #ICSID #Arbitration #SovereignImmunity #InvestmentLaw #RuleOfLaw #InternationalArbitration

Under the recently signed Bilateral Investment Treaty ("BIT") with the United Arab Emirates ("UAE"), the time frame for foreign investors to seek international arbitration has been reduced from five years to three years. This is a departure from India’s model BIT, and it brings new opportunities and challenges. The new BIT broadens the scope of protected investments to include shares and bonds, thereby extending protections beyond traditional foreign direct investments ("FDI"). This broadening of scope is a critical aspect of the treaty, as it allows investors holding portfolio investments, such as shares and bonds, to access the Investor-State Dispute Settlement ("ISDS") mechanism, ensuring recourse to international arbitration in case of disputes. The reduction of the arbitration window from five to three years is a significant legal change. While this move is intended to expedite the dispute resolution process and enhance efficiency, it also has legal implications for the domestic dispute resolution system. By reducing the period within which investors can seek arbitration, India may face increased pressure to resolve disputes internally within a shorter time frame, failing which the disputes would automatically be escalated to international arbitration. This shortened period could potentially limit India’s ability to address disputes domestically, thereby increasing the likelihood of international arbitration claims. The inclusion of shares and bonds as protected investments broadens the treaty’s ambit, diverging from India’s model BIT, which traditionally excluded portfolio investments. This shift is notable as it extends protections to a wider array of financial instruments, including those that may not directly contribute to long-term economic development. The expanded definition of investments aligns with international standards but also raises concerns regarding India's exposure to claims involving passive financial holdings. With $19 billion of UAE investments in India and $15.26 billion of Indian investments in the UAE since 2000, the BIT is positioned to further strengthen the economic partnership between the two nations. The treaty seeks to strike a balance between investor protection and state regulatory autonomy, ensuring that while investor rights are safeguarded, the state retains sufficient policy space to regulate in the public interest. The provisions related to the minimum standard of treatment and non-discrimination are intended to provide investors with a fair and equitable environment, while also ensuring that the state can legislate and implement policies without undue restriction. The India-UAE BIT is expected to boost investor confidence by assuring a predictable dispute resolution framework and establishing an independent forum for arbitration. #arbitration

Cosco notifies Peru of the existence of a dispute over the exploitation of the Chancay port and opens negotiations aimed at avoiding international arbitration Executive summary:  Cosco Shipping Ports Chancay Peru S.A. (Cosco) has notified the Peruvian Ministry of Economy and Finance of an investment dispute with the country, thereby setting in motion a six-month negotiation period under the China-Peru Free Trade Agreement. The move is aimed at reaching an amicable settlement and avoiding international arbitration, following a lawsuit filed by the Ministry of Transport and Communications (MTC), which revoked the port service exclusivity granted to Cosco until 2021. The Tenth Specialised Administrative Court later found the MTC's annulment suit inadmissible due to legal flaws, and gave the prosecution five days to remedy the deficiencies. In spite of the controversy, work continues on the Chancay port project, which is seen as crucial to Peru's commercial future, and both sides remain committed to its timely completion. Cosco Shipping Ports Chancay Peru S.A. (Cosco) has notified the Peruvian Ministry of Economy and Finance of an investment dispute with the country. This notification triggers a six-month negotiation period, as outlined in Article 138.1 ...

Cosco notifies Peru of the existence of a dispute over the exploitation of the Chancay port and opens negotiations aimed at avoiding international arbitration Executive summary:  Cosco Shipping Ports Chancay Peru S.A. (Cosco) has notified the Peruvian Ministry of Economy and Finance of an investment dispute with the country, thereby setting in motion a six-month negotiation period under the China-Peru Free Trade Agreement. The move is aimed at reaching an amicable settlement and avoiding international arbitration, following a lawsuit filed by the Ministry of Transport and Communications (MTC), which revoked the port service exclusivity granted to Cosco until 2021. The Tenth Specialised Administrative Court later found the MTC's annulment suit inadmissible due to legal flaws, and gave the prosecution five days to remedy the deficiencies. In spite of the controversy, work continues on the Chancay port project, which is seen as crucial to Peru's commercial future, and both sides remain committed to its timely completion. Cosco Shipping Ports Chancay Peru S.A. (Cosco) has notified the Peruvian Ministry of Economy and Finance of an investment dispute with the country. This notification triggers a six-month negotiation period, as outlined in Article 138.1 ...

🇽🇰 👩⚖️ Significant changes to the protection of foreign investors and their investments were introduced with the 2024 Law on Sustainable Investments which entered into force in September 2024. This law introduces several changes that may affect the dispute resolution process between foreign investors and the state of Kosovo. Notably, it broadens the definition of foreign investors while removing the principle of dual nationality, eliminates open consent to arbitration, and grants Kosovo the right to seek compensation for damages caused by investors. ©️ Wolters Kluwer: International Arbitration & Mediation ✍️ Anjeze Gojani and Kujtesa Nezaj-Shehu #adr #arbitration #kosovo #disputeresolution

📢 ARBITRATION & STAY OF ANNULMENT PROCEEDINGS (bis): Can annulment proceedings be stayed pending a decision in foreign criminal proceedings? The Paris Court of Appeal addressed this question in a decision dated 30 April 2024. 🚢 The dispute concerned a drilling contract concluded between PDVSA Servicios, a subsidiary of the Venezuelan oil and natural gas company, and Petrosaudi Oil Services, a company based in Barbados, whereby Petrosaudi undertook to equip and operate a drilling vessel on behalf of PDVSA in exchange for a fee. 💲 Claiming the contract was unbalanced and resulted from acts of corruption and fraud, PDVSA initiated arbitration to declare it void and obtain damages. Petrosaudi responded with counterclaims for payment of invoices. After an UNCITRAL tribunal ruled in favour of Petrosaudi and ordered PDVSA to pay $380 million (plus interest), PDVSA sought to annul the award before the Paris Court of Appeal. ⏸️ However, before the annulment proceedings were closed, PDVSA requested a stay pending the outcome of a criminal case in the High Court of Malaysia involving Petrosaudi. PDVSA argued that the outcome of the Malaysian case – which had been delayed due to the discovery of new evidence (the declaration of a witness) – could provide information relevant to the annulment proceedings and demonstrate links between the amounts to be paid to Petrosaudi and alleged money laundering activities. ⚖ Citing Article 377 CPC, the Court first clarified that a request for a stay constitutes a procedural exception that must be raised before any defence on the merits, unless its cause is revealed after the conclusions on the merits (§20). The Court then noted that PDVSA’s request was based on press articles, although PDVSA had already mentioned these proceedings in its initial submissions (§22). The Court rejected the request considering that the press articles did not constitute new elements that could justify a stay, and as the Malaysian case was already known to PDVSA at the start of the annulment proceedings, the Court decided that the request was overdue (§24). 📌 Takeaway? This decision shows the interaction between arbitration and criminal proceedings and confirms that while French courts have the discretion to assess the appropriateness of staying annulment proceedings pending a decision in foreign courts, in the interest of good administration of justice; such requests must be submitted in a timely manner – either at the onset of the annulment proceedings or as soon as the parties become aware of the related foreign proceedings. #internationalarbitration #Frenchcourts

Against the backdrop of the recent arbitral awards against Nigeria, our Managing Editor, Jide Akintunde, spoke with Isaac M. Ibikunle, Harvard Law School-educated expert on arbitration and litigation, on the issue of investment disputes between Nigeria and some foreign investors in the country. Ibikunle sheds light on some other pending international arbitrations involving Nigeria and Korean National Oil Corporation, Eni, and Nigerian Agip, and advised on what might be a strong defence for Nigeria in two of these cases. More importantly, he advised on how to avoid or better manage disputes with foreign investors in the country. https://lnkd.in/gmJ5qQBU