International Arbitration Newsletter - March 2019 | Regional Overview: Middle East and Africa

Angola

Angolan mobile carrier Unitel loses ICC dispute against Brazilian Oi 

PT Ventures, a subsidiary of Brazilian telecoms group Oi, has won a US$650 million ICC case against its fellow shareholders in Angolan mobile carrier Unitel.

The dispute relates to the acquisition by Oi in a majority stake in PT Ventures as part of its merger with Portugal Telecom in 2014. PT Ventures (who has a 25% stake in Unitel, Angola’s largest mobile phone carrier) filed its ICC claim a year later against the other Unitel shareholders, who asserted counterclaims

According to Oi, the tribunal concluded in its award that the other Unitel shareholders had breached the shareholders’ agreement by denying PT Ventures’ right to appoint the majority of Unitel’s board members since 2006.

According to Unitel, the tribunal also dismissed as unfounded a claim for more than US$241 million corresponding to alleged losses in respect of allegedly harmful transactions concluded by Unitel before 2014.

Democratic Republic of the Congo

Congo hit by ICC award in favour of South African oil company

South African oil exploration company Divine Inspiration Group (DIG Oil) has been awarded US$617 million in an ICC claim against the Democratic Republic of the Congo over the state’s failure to honour two production-sharing agreements dated 2007, covering three blocks in the Central Basin, a 800,000 square kilometre region of forests and wetlands in central DRC.

The dispute also relates to the oil company´s interest as part of a consortium that secured the second production-sharing agreement in 2008, for a single block in the eastern part of the DRC. The former government of President Joseph Kabila failed to approve DIG Oil’s contract for the Central Basin and transferred the permit for the eastern block to a group of companies owned by Israeli businessman Dan Gertler.

Egypt

Petrolceltic threaten treaty claim against Egyptian General Petroleum Corporation

According to a recent press release, UK energy company Petroceltic has threatened to bring an ICSID claim against Egyptian state-owned entity Egyptian General Petroleum Corporation (EGPC) if it fails to pay its debts under various gas sales agreements.

The underlying dispute relates to eight producing oil fields across 14 development concessions around Egypt’s Nile Delta managed by Mansoura Petroleum Company, a joint venture between Petroceltic and EGPC. Petroceltic says that its claim relates to EGPC’s inability to pay its debts as they fall due for payment.

Iraq

Iraqi ex-minister denied permission to challenge Pakistani treaty claim award

The High Court in London has recently refused an application by Iraqi-UK national, former ex-minister Ali Allawi, for an extension of time to pursue a belated challenge to an investment treaty UNCITRAL award in favour of Pakistan that required him to pay  £3 million in costs.

The judge dismissed his assertion that he had been given high-level assurances that Pakistan would not seek to enforce the award against him.

Allawi’s BIT claim, reportedly worth US$70 million, concerned his approximately 10% interest in Progas Pakistan Limited, a company that built a large import terminal for liquid petroleum gas (LPG) at Port Qasim in Karachi. The company became insolvent following regulatory changes in Pakistan that capped LPG prices and the terminal was acquired by a Pakistani state-owned entity.

Kuwait

Swiss investor brings treaty claim against Kuwait

Swiss entity Conseil Economique Des Pays Musulmans (Economic Council of Muslim Countries) has filed an UNCITRAL investment treaty claim under the 1998 Switzerland-Kuwait bilateral investment treaty against Kuwait before a tribunal at the Permanent Court of Arbitration in The Hague.

The case relates to the claimant’s interest in a company that entered into a contract with the Kuwaiti state related to the health services industry.

Tajikistan

Austrian investor brings cotton claim against Tajikistan

Austrian cotton investor Alois Schönberger has filed a claim against Tajikistan at ICSID under the 2010 Austria-Tajikistan bilateral investment treaty.

The dispute relates to a dispute with Tajikistan’s state-owned Agroinvestbank (AIB) and the investor, who invested in Tajikistan in 2013 through his Hong Kong-registered company Super Perfect Investments, which entered into a contract to buy 20,000 metric tons of cotton from Tajik company Levakan-M. The state-owned bank provided a SWIFT guarantee of up to US$11 million regarding Levakan-M’s contractual obligations to deliver the cotton.

According to the businessman, Levakan-M subsequently breached its contractual obligations and failed to deliver the cotton or return the money paid and AIB refused to honour the guarantee.

In 2017, the Swiss Chmaber of Arbitration Institution issued an award in favour of Super Perfect, which Schönberger said as of January 2018 was worth US$20 million. AIB refused to pay the award, prompting Schönberger to lodge a complaint with the EBRD in early 2018, alleging that AIB’s conduct placed EBRD in violation of its own policies.