Caso 1

While retaining the BIT practice of including ISDS provisions, the regional investment instruments take a more restrictive approach to allowing recourse to arbitration. They also allow counterclaims intended to achieve a more balanced access to investment dispute resolution. All the regional investment instruments confer on investors the right to bring direct claims against a host State but make this conditional upon attempting an amicable settlement of disputes. The FIP requires that (after failing to settle the dispute amicably), investors should exhaust local remedies before resorting to arbitration. However, the amendments to the FIP do not include an ISDS provision and provide

The CCIA Agreement obliges disputing parties to seek to resolve their disputes through amicable means, both before and during the cooling-off period.¹⁸³ The cooling-off period is a minimum of six months. If no alternative means of resolving a dispute is agreed, a disputing party is obliged to seek the assistance of a mediator to resolve it during the cooling-off period.¹⁸⁴ If three months before the expiration period of the cooling-off period the disputing parties have failed to agree on a mediator, the President of the COMESA Court of Justice, or his designate, shall appoint a mediator from the COMESA Secretariat’s list. The appointment shall be binding on the disputing parties.¹⁸⁵

The SADC Model BIT does not make it obligatory to resort to mediation, it does, however, provide that either disputing party may request mediation of the dispute after a notice of intent has been submitted, and the other disputing party may agree to such mediation.¹⁸⁶

Additionally, both the CCIA Agreement and the SADC Model BIT impose a three-year cut-off period for submission of an arbitration claim.¹⁸⁷ Like the FIP, the SADC Model BIT requires the exhaustion of local remedies before arbitration proceedings are commenced. If local remedies have been exhausted the time limit for bringing an arbitration claim under the SADC Model BIT is one year from the conclusion of the request for local remedies.¹⁸⁸ Moreover, the SADC Model BIT prevents the initiation of arbitration under a BIT if the issue in dispute would be covered by choice of forum clause contained in any investment law, regulation, permit or contract.¹⁸⁹

Whereas the CCIA Agreement and the SADC Model BIT provide investors with a choice of forum for bringing claims against a host State, including arbitration under the ICSID Convention and ad hoc arbitration under the UNCITRAL Arbitration Rules or under any other arbitration institution or rules,¹⁹⁰ they also attempt to limit the potential for multiple claims by including fork-in-the-road clauses that prevent an investor from choosing another forum after having initiated proceedings for a claim relating to the same subject matter.¹⁹¹

The CCIA Agreement and the SADC Model BIT allow host States to bring counterclaims against investors. Under the CCIA Agreement, the host State may do so as a defence, counterclaim, right of

183 CCIA Agreement, art 26(3).

184 ibid art 26(4).

185 ibid art 26(5).

186 SADC Model BIT, art 29.3.

187 CCIA Agreement, art 28(2) and SADC Model BIT, art 29.4.

188 SADC Model BIT, art 29.4.

189 ibid art 29.9(b).

190 CCIA Agreement, art 28(1) and SADC Model BIT, art 29.6.

191 CCIA Agreement, art 28(3) and SADC Model BIT, art 29.4(c).

SOAS/CRCICA Arbitration Conference, 2017

set-off or a similar claim.¹⁹² Under the SADC Model BIT, a host State may counterclaim for damages or other relief resulting from an alleged breach of the BIT.¹⁹³ The SADC Model BIT also allows the initiation of a civil action by the host State, political subdivisions or private entities in domestic courts against an investor or investment for damages arising from an alleged breach of the obligations set out in the BIT. ¹⁹⁴ In reformulating their dispute resolution provisions, the regional instruments attempt to shift the focus away from investment protection and towards investment facilitation.

6. Conclusion

Investment arbitration developed in response to the need to better protect foreign investors and their investments. This protection was achieved by establishing ICSID to provide a more effective forum for the resolution of investor-State disputes. Simultaneously, developed States drafted and concluded BITs mostly with developing States, which later offered arbitration under ICSID and are seemingly skewed in favour of investors. However, the prominence of ICSID as the preferred forum for ISDS and the proliferation of BITs as well as investment tribunal practice, have not been favourable to COMESA and SADC Members who have had to defend a relatively high percentage of ICSID arbitrations.

While COMESA and SADC Members signed several BITs at the height of their pursuit of FDI, they had little if any input in their drafting or the subsequent development of investment arbitration. In recognition of the failure of BITs as a tool for attracting FDI and the need to prevent the rise of investment arbitration claims, COMESA and SADC Members concluded regional investment instruments. It is evident from the content of these investment instruments that they are in response to the arbitral practice of investment tribunals as they shift the focus of their purpose away from the protection of investors and their investments.

This approach is apparent not only in the inclusion of specific provisions aimed at balancing out the rights and obligations of host States and investors but also in the limitation of coverage or omission of certain investment protection provisions. Viewed holistically, the deliberate shift away from an emphasis on protection demonstrates the changing role of these African States in the international investment regime from mere observers to fully fledged participants keen to shape the development of investment arbitration.

192 CCIA Agreement, art 28(9).

193 SADC Model BIT, art 19.2.

194 ibid art 19.3.

SOAS/CRCICA Arbitration Conference, 2017

SOAS/CRCICA Arbitration Conference, 2017

A case for a Regional Investment Court for Africa Chrispas Nyombi^



Abstract

Since the end colonial rule, African countries have sought self-determination, both on domestic and international fronts, but their participation in the international economic order has been, at best, abysmal. In a recent wave of international investment law reform, progressive measures have been pursued in Asia, the Latin American countries have denounced the Investor- State Dispute Settlement (ISDS) system en masse, while the European Union (EU) has proposed the creation of an Investment Court system. With the exception of South Africa, African states have been largely oblivious to these international investment policy departures. It is argued in this paper that Africa’s economic aspirations cannot be realised through inaction, rather a developmental mind-set must be harnessed, one that supports attracting Foreign Direct Investment (FDI) while preserving national regulatory space. This paper found that Africa has already embraced the new generation of investment policies that seek to create a balance between investors’ interests and national public policy, but at regional level. Africa is also undergoing a process of regionalisation in a bid to promote greater economic cooperation and harmonisation in trade and investment, with plans for a Continental Free Trade Area (CFTA) with all fifty-five African Union (AU) member states. It is argued in this paper that the regional integration and regulatory harmonisation at regional level creates a unique opportunity for the establishment a Regional Investment Court (RIC) in Africa, via a multilateral treaty on investment. The RIC is proposed as the way forward, after evaluating competing reform proposals, because it serves Africa’s current social-economic developmental aspirations, at a time when the institutions of international investment law are under increased scrutiny.