The webinar opened with a presentation by Diamana Diawara (Director, ICC Arbitration and ADR, Africa) of the main provisions of the 2021 ICC Rules of Arbitration, focusing on practical aspects of arbitration proceedings resulting from the 2021 revisions including the possibility of electronic filings and notifications, and remote conduct of hearings. It also addressed the new provisions aiming at preserving the integrity and efficiency of arbitral proceedings, such as equal treatment of the parties in the constitution of arbitral tribunals, disclosure of third-party funding, closer supervision of party representation, the expansion of the scope of application of the Expedited Procedure Provisions, and the easing of conditions for the joinder of additional parties and consolidation of parallel proceedings.

Access to arbitration in the extractive sector in Africa

Habibatou Toure (Lawyer, Habibatou Toure Law Firm, Senegal) first discussed the place of amicable settlement in states - mining investors disputes. Ms Toure stressed that amicable settlement (mediation and conciliation) is generally included in extractive agreements (i.e. mining and petroleum agreements) through multi-tiered clauses, but noted that the amicable settlement provisions are not generally well drafted in Africa, and the host states representatives are not trained on mediation and conciliation proceedings.

In addition, Ms Toure noted that amicable settlement is preferred by businesses for many reasons, such as its reasonable costs, its contribution to the maintenance of a close business relationship between parties involved and its assistance to the continuity of extractive projects.

Ousmane Cisse (Managing Director, Société des Mines du Sénégal) was interviewed by the moderator Mahamat Atteib, on the criteria for choosing arbitration to solve mining disputes, the main types of mining disputes as well as the internal challenges states and state-owned companies face when preparing and managing arbitration proceedings. After a brief presentation of state-owned mining companies in Senegal, the speaker identified criteria as to the type of arbitration (institutional or ad hoc), rapidity of proceedings, the arbitration costs, and the seat of arbitration. Mr Cisse noted that most ISDS disputes relate to delayed performance of mining activities, equitable treatment of investors, withdrawal of mining rights and change of law by host states. To conclude, the speaker identified institutional instability at the governmental level as a factor preventing States and state-owned entities to collect relevant information relating to the dispute in which they are involved and to manage proceedings efficiently.

Paul-Jean Le Cannu (Senior Counsel, Team Leader, ICSID) addressed the issue of access to arbitration by third parties with an example of local communities affected by extractive projects. He noted the importance of the extractive sector in ICSID arbitration,1 as well as the correlative challenge of transparency in investment arbitration. He highlighted two procedural tools to manage third parties’ access to ICSID arbitration in the extractive industry:

  1. The possibility for a third party to join the arbitral proceedings as a disputing party. This possibility is not, however, provided by the ICSID Convention or ICSID Arbitration Rules and it consequently remains difficult for a third party to join voluntarily, given the central place of consent in arbitration.

  1. The possibility for a third party to join the arbitral proceedings as a non-disputing party according to Article 37(2) of the ICSID Convention.2 This provision grants the possibility for a non-disputing party to provide a written submission on an issue related to the dispute before the arbitral tribunal. Such written submission, which provides a perspective different from that of the parties, should help the tribunal in deciding the dispute. Arguments and evidence provided in such submissions may affect the rights and obligations of the parties and potentially influence the outcome of the arbitration.

Main disputes in arbitration relating to the extractive sector in Africa

The second session was moderated by Marie Andrée Ngwe (Principal, Cabinet Marie Andrée Ngwe; Présidente du Comité permanent du Centre de Médiation et d'Arbitrage du Groupement Interpatronal du Cameroun (GICAM)). Martial Akakpo (Partner, Martial Akakpo & Associés; Member, ICC Court) first discussed the issue of non-performance of contractual obligations in the extractive industry and force majeure. After a distinction was made between the concept of force majeure and ‘cas fortuit’ and (ii) between the common law and civil law jurisdictions,3 Mr Akakpo addressed two situations:

  1. Absent explicit clauses of force majeure, a reference is made to the classic criteria of ‘exteriority’ (beyond the control of the obligor), ‘unpredictability’ (it could not have been reasonably foreseen at the time the contract was concluded) and ‘irresistibility’ (its effects cannot be avoided by appropriate measures). Such criteria are provided by many legislations, including the French Civil Code,4 and the UNIDROIT principles of International Commercial Contracts.5 If force majeure is established, the contract is suspended, amended or terminated depending on the duration of the force majeure event and the nature or duration of its effect on the agreement.
  2. In the case of a force majeure clause, the arbitral tribunal is invited to interpret and implement such clause. In practice, the speaker noted that force majeure clauses in extractive agreements concluded by African States do not generally specify how they are implemented, the modalities of the notification of the force majeure event or its consequences.6 For instance, the absence of response from a party to the notification of force majeure duly provided by its counterparty affected by the force majeure event cannot prevent a force majeure clause to produce its legal effects according to ICSID ‘jurisprudence’.7

Mouhamed Kebe (Managing Partner, Geni & Kebe; Member, ICC Court) focused on the change in law made by the African host states. He first referred to the issue of expropriation, changes regarding tax provisions. By references to known cases,8 Mr Kebe showed that a change in law by the host states, despite the stabilization clauses in extractive matters, could be qualified as a direct/indirect expropriation by arbitral tribunals.9 The change of tax provisions applicable to extractive investors by breaching stabilization clauses could lead to the indemnification to mining companies according to ICSID ‘jurisprudence’.10

The change made by host states regarding human rights, environmental issues and issues of public interest receive different treatment before arbitral tribunals. Such issues are generally raised by both non-governmental organizations that join arbitral proceedings as amici curiae,11 and host states including by way of counterclaims or defences before investment tribunals.12 These changes do not always give rise to indemnification before arbitral tribunals due to the right of host states to regulate these matters as provided in international investment treaties.

In the same vein, Thomas Granier (Counsel, Asafo & Co., Paris) demonstrated that public interest (i.e. environment protection, prohibition of corruption,13 security and health interests) is increasingly taken into account in commercial arbitration, and raised by African states before arbitral tribunals as a main claim (not a counterclaim) on the basis of the provisions of extractive contracts.14

The local communities’ rights to health and security are generally breached during artisanal mining activities whilst the latter are performed in mining rights areas. In this situation, the legal issue is whether the holder of the mining rights or the host states may be regarded as responsible for such breach. It should be noted that the mining investor may be considered as liable in this context before arbitral tribunals on the ground of its obligation of due diligence as recognized by some domestic laws and international customary law.

Mr Granier concluded that at the step of execution, the arbitral award may be challenged if rights at stake in the arbitration proceedings are tainted by corruption on the ground of violation of international public order.

Q&A session

The Q&A session addressed the role of the ICC Court regarding the new provision to ‘encourage’ parties to settle their dispute amicably (Appendix IV(h)(i) of the ICC Arbitration Rules), and how the arbitral tribunal can do so without exceeding its mandate.

Participants raised questions as to whether the COVID-19 pandemic was a force majeure event. The speakers noted that, in absence of specific contractual provisions, arbitral tribunals should proceed on a case-by-case basis, taking into consideration the effects of the pandemic on the situation at stake.15

Speakers noted that, even where there are no specific environmental and human rights obligations under BIT or domestic laws, there is a trend in the jurisprudence to comply with human rights requirements on the basis of international public order.16

Finally, on the issue of stabilization clauses, speakers noted that their content including issues relating to human rights may be limited by contractual provisions, national extractive laws,17 international rules (including a new generation of BITs involving African states),18 regional treaties (e.g. the ‘African Charter on Human and Peoples' Rights’),19 and also soft law instruments (such as the ‘OECD Guidelines for Multinational Enterprises’20 or the ‘UN Guiding Principles on Business and Human Rights’).21


1
Thirty percent of the ICSID cases filed in 2020 originated from the Oil, Gas & Mining industry. See ‘2020 ICSID Annual Report’, at p. 29: ‘Historically, the extractives and energy sectors have accounted for the largest share of cases, and this trend continued in FY2020’;

2
Art. 37(2) provides: ‘After consulting both parties, the Tribunal may allow a person or entity that is not a party to the dispute (in this Rule called the “non-disputing party”) to file a written submission with the Tribunal regarding a matter within the scope of the dispute. In determining whether to allow such a filing, the Tribunal shall consider, among other things, the extent to which: (a) the non-disputing party submission would assist the Tribunal in the determination of a factual or legal issue related to the proceeding by bringing a perspective, particular knowledge or insight that is different from that of the disputing parties; (b) the non-disputing party submission would address a matter within the scope of the dispute; (c) the non-disputing party has a significant interest in the proceeding. The Tribunal shall ensure that the non-disputing party submission does not disrupt the proceeding or unduly burden or unfairly prejudice either party, and that both parties are given an opportunity to present their observations on the non-disputing party submission’.

3
Many civil codes of francophone African countries including Senegal, Chad and Cote d’Ivoire adopt the definition included in French Law (Art. 1218 of the Civil Code). Under common law jurisdictions, there is no definition of Force Majeure, but the concept generally refers to clauses which relieve a party from performance of its contractual obligations where that performance is impacted by events beyond its control.

4
Art. 1218 of the French Civil Code defines Force Majeure as an event beyond the control of the debtor, which could not reasonably be foreseen at the time of the conclusion of the contract and the effects of which cannot be avoided by appropriate measures, prevents the performance of his obligation by the debtor: ‘Il y a force majeure en matière contractuelle lorsqu'un événement échappant au contrôle du débiteur, qui ne pouvait être raisonnablement prévu lors de la conclusion du contrat et dont les effets ne peuvent être évités par des mesures appropriées, empêche l'exécution de son obligation par le débiteur. Si l'empêchement est temporaire, l'exécution de l'obligation est suspendue à moins que le retard qui en résulterait ne justifie la résolution du contrat. Si l'empêchement est définitif, le contrat est résolu de plein droit et les parties sont libérées de leurs obligations dans les conditions prévues aux articles 1351 et 1351-1’.

5
Art. 7.1.7 of Unidroit Principles of International Commercial Contracts (2016): (1) Non-performance by a party is excused if that party proves that the non-performance was due to an impediment beyond its control and that it could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences. (2) When the impediment is only temporary, the excuse shall have effect for such period as is reasonable having regard to the effect of the impediment on the performance of the contract. (3) The party who fails to perform must give notice to the other party of the impediment and its effect on its ability to perform. If the notice is not received by the other party within a reasonable time after the party who fails to perform knew or ought to have known of the impediment, it is liable for damages resulting from such non-receipt. (4) Nothing in this article prevents a party from exercising a right to terminate the contract or to withhold performance or request interest on money due.

6
Some international codifications however include explicit provisions on the implementation of the clause. See the ‘ICC Hardship and Force Majeure Clauses’ are available at https://iccwbo.org/publication/icc-force-majeure-and-hardship-clauses/. See also Prof Dr H. Ercument Erdem, ‘Revision of the ICC Force Majeure and Hardship Clause’ (Chapter 5), Hardship and Force Majeure in International Commercial Contracts, Dossier XVII, ICC Institute of World Business Law (ICC, 2018).

7
ICSID Case No. ARB/07/2, RSM Production Corporation v. Central African Republic, § 23.

8
Ad hoc arbitration, Libyan American Oil Company v. The Government of the Libyan Arab Republic, Award of 12 Apr. 1977; ICSID Case No. ARB/77/1, AGIP S.p.A. v. People's Republic of the Congo.

9
See also Eduardo Silva-Romero, Audrey Caminades, ‘Actualité des clauses de stabilisation’, in Le Contentieux Extractif (ICC Publication E770, 2015).

10
ICSID Case No. ARB/95/3, Antoine Goetz et consorts v. République du Burundi; ICSID Case No. ARB/01/5, Société d'Exploitation des Mines d'Or de Sadiola S.A. v. Republic of Mali.

11
See e.g., ICSID Case No. ARB/05/22, Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania.

12
See e.g., ICSID Case No. ARB/15/29, Cortec Mining Kenya Limited, Cortec (Pty) Limited and Stirling Capital Limited v. Republic of Kenya; ICSID Case No. ARB/18/21, Bay View Group LLC and The Spalena Company LLC v. Republic of Rwanda (pending).

13
LCIA Case No. 142683, Vale v. BSGR, Award of 4 April 2019, available at https://jusmundi.com/en/document/decision/en-vale-s-a-v-bsg-resources-limited-award-thursday-4th-april-2019, arbitration involving a private mining company and underlying mining rights obtained by corrupted means.

14
ICC Case, Republic of Chad v. CNPC, 2013. The dispute finally amicably settled. See also ‘China’s CNPC Agrees to Pay $400 mln to Settle Chad Dispute – Chad Minister’ (Reuters, 27 Oct. 2014).

15
Colmar, 6e ch., 12 mars 2020, n° 20/01098.

16
See Pierre Lalive, Ordre public transnational (ou réellement nternational) et arbitrage international, Revue de l'Arbitrage, 1986, Vol. 1986, Issue 3, pp. 329 - 374

17
Art. 72, 2019 Senegalese Petroleum Code.

18
E.g. Morocco - Nigeria BIT (2016), Art. 13(4).

19
https://au.int/en/treaties/african-charter-human-and-peoples-rights

20
Available at https://www.oecd.org/corporate/mne/. According to II: General policies: ‘A. Enterprises should … 5. Refrain from seeking or accepting exemptions not contemplated in the statutory or regulatory framework related to human rights, environmental, health, safety, labour, taxation, financial incentives, or other issues’.

21
https://www.ohchr.org/en/issues/business/pages/wghrandtransnationalcorporationsandotherbusiness.aspx