Tag Archives: Africanpetroleum

ICSID Updates: African Petroleum Corporation Limited vs The Gambia

There have been updates on the international arbitration process between Norwegian oil and gas company African Petroleum Corporation Limited and Republic of The Gambia in ICSID.

We must read the updates in a certain order to understand what they actually mean. At least that’s how I interpret them.

First update

The first update applies to case number 17/38, but in effect applies to case number 17/39 and 17/40 as well. The following was announced on June 7, 2018:

“The Tribunal issues Procedural Order No. 1 consolidating ICSID Cases African Petroleum Gambia Limited and APCL Gambia B.V. v. Republic of The Gambia(ICSID Cases No. ARB/17/38), African Petroleum Gambia Limited and APCL Gambia B.V. v. Republic of The Gambia(ICSID Cases No. ARB/17/39), and APCL Gambia B.V. v. Republic of The Gambia (ICSID Cases No. ARB/17/40).”

The Procedural Order No. 1 simply means that the aforementioned cases will be bulked together and handled simultaneously.

Second update

Taking a look at cases 17/39 and 17/40, ICSID announced on June 7, 2018 an Outcome of Proceeding. The outcome reads as follows:

“The Tribunal issues a procedural order taking note of the discontinuance of the proceeding pursuant to ICSID Arbitration Rule 43(1).”

What is Rule 43(1)?

Settlement and Discontinuance

43(1) If, before the award is rendered, the parties agree on a settlement of the dispute or otherwise to discontinue the proceeding, the Tribunal, or the Secretary-General if the Tribunal has not yet been constituted, shall, at their written request, in an order take note of the discontinuance of the proceeding.

My analysis

African Petroleum Corporation Limited has been very clear since the dispute with The Gambia regarding oil blocks A1 and A4 begun last year. They will defend its blocks and have stated on several occasions that the Government of The Gambia is wrong in both law and fact.

As we have seen from Rule 43(1), African Petroleum Corporation Limited and The Gambia has agreed on a settlement of the dispute or otherwise to discontinue the proceeding.

Given African Petroleum Corporation Limited’s firm and resolute statements that they will defend their rights in The Gambia with necessary means, I come to the conclusion that what we have here is a settlement of the dispute. And one that is satisfactory to African Petroleum Corporation Limited.

As always, these are just my thoughts. Do your own due diligence and do not base your investments on anyone’s analysis but your own.

African Petroleum Corporation Limited – Updated Analysis: Moving Forward In Retrospect?

First and foremost, I take note of the chairman’s opening line. He says that the Company has returned to where it belongs – APCL has returned to drilling activities. I don’t think that we should underestimate this statement. It sends a clear message to the shareholders about what the Company’s focus is and underscore that drilling is de facto what the Company is about. Personally, I think that this message is of great importance given last year’s extreme focus on the ongoing disputes, which regrettably has continued throughout 2018. African Petroleum Corporation Limited underscores its focus on drilling activities in several parts of the report, albeit in different ways. I would say that this is the major message of the report. The Company is very clear about and underscore that they had successfully found a (major?) partner ready to step in and drill the prospects in both Senegal and the Gambia and had agreed Heads of Terms with this unnamed company. African Petroleum Corporation Limited also emphasizes that it accomplished this partnership in the context of “severe market conditions for offshore exploration activity since 2014, as well as a change of administration in both countries which resulted in uncertainty and delays.” The message that APCL wants to send is quite clear – the Company makes exploration drilling happen and are able do so even in the most extreme and severe circumstances (my interpretation). As long as the Company remains owners of its licenses, that is.
In addition, the first words under the headline “2017 results overview” are as follows.

“The Company’s focus during 2017 was to fulfil the drilling commitment of the Ayamé-1X well in Côte d’Ivoire with our partner Ophir Energy […]”.

A few more quotes from the report.

“During 2017, the Company returned to offshore drilling […]”.

“After a hiatus of five years without drilling, it was exciting for the Company to return to its essence of exploring high impact exploration targets.”

So, I would say that there is a case for arguing that the multiple mentions of “returned to drilling” is no coincidence.

To me, the reasons behind the focus on drilling are as follows and in no particular order.

  • APCL wants to send a clear message to its shareholders and potential future parners that the Company is all about exploration drilling, highly capable of fulfilling commitments. Potential partners shall have great confidence in APCL’s ability to do so. APCL wants to convey and really underpin that the company has a record of making it all the way to drilling and will continue on this path in the future. The Company makes it clear that it will drill in Sierra Leone. It was about to drill in The Gambia and Senegal and had a major oil company all partnered up when the governments in the two countries suddenly turned things around (Facing several major discoveries in the basins offshore West Africa, the political leadership of Senegal and The Gambia were courted by various oil majors expressing interest in the countries´ highly attractive licenses. Given the complex political history of these two nations, oil and gas in particular, it is not uncontroversial to believe that they likely saw an opportunity to attract large investments in their countries in exchange for (a chance to get in on) the nations’ licenses. We have seen heavy investments in The Gambia from China, to name but one example.)
  • The Gambia has been very clear and excplicit as to why they consider African Petroleum Corportion Limited to no longer be owners of oil block A1 and A4: The Company did not fulfil fulfil its commitment of drilling exploration wells, according to The Gambia.
  • In the report APCL is focusing more than what would normally be the case on the failed project in Côte d’Ivoire. In no less than 17 places, Ayamé is mentioned with the subsequent emphasis that the well was actually drilled. I would say that this is of major symbolic value to the company. It conveys a clear message to potential partners that the Company is making things happen and have the ability to acquire confidence from Goverments and States. That APCL is not about delaying or postponing commitments stipulated in contracts, but to exploration drilling.
  • It could very well also be an elegant yet simple and confident message to the international community, to ICSID and to the Governments of The Gambia and Senegal that “we know what we are doing, we have both history and contracts to prove it and the blame for not drilling is on two governments who has breached valid contracts”.

Moving Forward

Sierra Leone

African Petroleum Corporation Limited’s renewed excitement about the licences in Sierra Leone was reinforced shortly after the Company saw that extensions of its licenses were granted, after an independent assessment of resources verified the high prospectivity of the licences.

The Company is currently engaged in preliminary discussions with potentially interested parties and hopes to progress those discussions towards a commercial outcome in the coming year as it seeks a partner to share the risk and reward of these interesting licences.

Moving Forward in Retrospect

The Gambia & Senegal

The status of African Petroleum Corporation Limited’s licences in the Gambia and Senegal has almost taken a schizophrenic nature. There have been many sudden turnarounds (and from both sides, in all honesty) and what seemed to be a ready-to-drill operation suddenly turned 180 degrees. It is truly impossible to make any certain prognosis on what the outcome will be. The reason is simple: we do not have access to all the facts since most documentation are not public, such as the PSCs. But we can make qualified assessments since there are plenty of clues, non official information and last but not least statements from the Company itself. Since I have published my analysis on the situation in one of my previous articles I recommend you to give it a read before you continue.

In addition to my previous analysis on the outcome of the ongoing dispute I would like to add the following after reading the annual report of 2017.

“Requests for arbitration in respect of the dispute over the A1 and A4 licences in The Gambia were filed during the 4th quarter 2017. In Senegal, at the time of publication of this report, we await clarity regarding the government’s position but remain ready to invoke similar legal rights in respect of our licences. Based upon the legal advice that we continue to receive regarding our position across these licences, we are confident that these steps are wholly appropriate, legally valid and will lead to a successful outcome for the Company.” (Jens Pace, p. 6).

This statement has another nuance to it than previous ones. Legally valid are the key words here. It is simply a confident and very concise message from the Company. From a judicial perspective it probably can not be any clearer. After appointing legal expertise and reviewing the contracts, the Company does not put it mildly or leaves it open for interpretation or speculation: “our cases are legally valid.” Nothing more, nothing less. The following quote from the report underpins this analysis.

“What is certain though beyond a shadow of a doubt, is that we would not be progressing with arbitration proceedings if we did not feel that we had a strong case based on the legal rights of our PSCs. Furthermore, we would not be progressing down this route if we did not feel it was necessary and in the best interest of our Company and its shareholders.” (David King, p. 5).

To summarize – given the statements quoted above there really is not room for any other interpretation (from a judicial perspective) than that the Company has a legally valid and solid case. Based on these statements, the Company is simply saying that the outcome will be in its favour.

Something new?

This paragraph in the report which made me raise my eyebrows.

“While maintaining capital discipline in order to prioritise the above activities, the Company is actively considering new venture exploration opportunities and potential portfolio transactions with third parties. We look forward to reporting on our progress in all these areas in the coming months.”

This paragraph, contrary to the statements previously quoted, leaves plenty of room for speculation. I can only guess and speculate so I won’t comment further on the matter except for saying that I find this exciting. What new venture exploration is the Company referring to? What potential Portfolio transactions with third parties is intended? Is it simply Sierra Leone or something completely new? Is it a stand-by partnership/partnerships for the licenses in A1 and A4 in The Gambia and for ROP and/or SOSP in Senegal ready to kick in when the dispute and negotiations are completed?

Final words on the financial strength of the Company

From the report we can conclude that the Company is certain that it has the financial strength to proceed with the ICSID process as well as the initial exploration activities in Sierra Leone.

“We remain well funded and can comfortably cover our legal costs associated with Senegal and The Gambia, whilst also funding the initial exploration activity in Sierra Leone.”

“We are; however, pragmatic about the complexity, length and uncertain outlook of such processes, but remain steadfast in our belief that our decision to proceed along this path is in the best interest of our shareholders. Importantly, we are well funded to maintain this course until we achieve a satisfactory outcome. We remain open to meet with the respective governments to discuss a way forward that avoids the unnecessary waste inherent in these legal processes.” (p. 6).

Analys av APCL och licenserna i Senegal

Jag har börjat ta upp bevakningen av African Petroleum Corporation Limited igen. Efter en lång tid av motgångar och negativa besked för bolaget, kan jag nu skönja en positiv framtid för bolaget igen. Om optimismen kan leda till verkliga framgångar denna gång kan bara tiden utvisa och vi får vänta och se vad som komma skall. Men vi går onekligen en spännande tid till mötes. Anledningen är vad jag funnit efter att ha gjort en del efterforskning i media i Senegal och internationellt.

Jag inleder med att återge två av artiklarna. Därefter avslutar jag med en kort analys.

Senegalesisk och internationell media om APCL och licenserna i Senegal

Upstream.com – “Senegal licensing round now losing momentum”

En artikel av Upstream-journalisten Barry Morgan från februari 2018.

With revision of Petroleum Code stalled and recovery of acreage proving complex, government will struggle to launch auction next month”

The prospect of Senegal launching a licensing round in March, as desired by President Macky Sall, are receding because little progress has been made in revising the country’s Petroleum Code.

It also remains unclear what, if any, acreage can be recovered from smaller players that are unwilling to relinquish.

An overhauled oil and gas law, replacing the 1998 Petroleum Code, will be a pre-requisite for Sall’s preferred policy of bringing in more majors and state-owned oil giants to join BP and Total in participation with national oil company Petrosen.

Senegal has no time now for small players coming in only to flip the acreage, said Energy Minister Mansour Elimane Kane, who took up the post last August, having earlier headed the World Bank’s Multilateral Investment Guarantee Agency. “The new law will allow the government to work directly with the majors who will develop and produce our resources, rather than relying on juniors who would seek to sell out immediately after exploration. From this year on, all new contracts shall signed with majors,” Kane said.

A petroleum revenue management bill is also being considered but that, too, had yet to be presented to the National Assembly because it would provide for absolute transparency and seek to establish a Sovereign Wealth Fund, said Kane.

He said gas-fuelled industrial growth and power generation lies at the heart of government policy, aiming to distribute cheap fertiliser to farmers and sell excess power to other countries in the region — a similar ambition to that professed by neighbouring Mauritania. Kane and his Head of Hydrocarbons Aminata Toure — an ex-Petrosen geologist — have been trying to ease out smaller non-performing players, while Petrosen, under the stewardship of veteran oilman Mamdou Faye, has been trying to contain the damage caused by what is claimed to have been previous administrative neglect.

Still, there is little chance of freeing up a full selection of acreage any time soon because most minnows are in talks with farm-in partners and lenders, while those whose applications for first period extensions were either rebuffed or ignored are in no mood to roll over without a fight.

Letters of revocation issued last year by former energy minister Alassane Thierno Sall, allegedly without due process, have been contested by at least two players while Petrosen’s attempt to press the reset button by cajoling operators to re-apply for their own acreage has had marginal success.

Even out in undemarcated waters beyond currently allocated acreage, Total’s deal last year to study the exploration potential of the ultra-deep — in addition to its controversial award of the Rufisque Deep against vehement objection from incumbent African Petroleum — would strongly suggest the French major has secured right of first refusal.

It is possible a final draft of a new law may fall under parliamentary scrutiny this summer, but available acreage looks less likely to emerge. No round can be launched with the threat of arbitration and trespass suits hanging over the play.

http://www.upstreamonline.com/hardcopy/1427217/senegal-licensing-round-now-losing-momentum

African Energy Intelligence – ”Legal imbroglio between African Petroleum, Dakar and Total”

The Rufisque Offshore Profond permit granted to Total in May 2017 has become the subject of a headed dispute that could spiral out of hand.

Despite having its permits cancelled in both Senegal and Gambia (AEI 812), British junior African Petroleum (AP), headed by Jens Pace and founded by Australian magnate Frank Timis, is not prepared to admit defeat.

From conciliation to onslaught

According to our sources, nearly two months ago the oil firm mandated Parisian law office Betto Seraglini to strike up talks with the Senegalese State over the Rufisque Offshore Profond field. The permit had been assigned to Total in May 2017 at the end of the first exploration phase when Dakar refused to allow AP to enter the second phase.

AP asserts that Senegal had no legal grounds to withdraw the permit and is ready to pounce on any misconduct it might unearth to recover its asset. Betto Seraglini, well-known within Paris’ arbitration scene, is currently handling a conciliation process with Senegal, which only has until April 18 to find a resolution. Should these talks fail, the next step would be arbitration and could prove to be very costly for the country. Arbitration would also make life difficult for Total, slowing down the exploration work at Rufisque Offshore Profond for the duration of the proceedings.

Prime location

Rufisque Offshore Profond sits right next to the vast oil discoveries SNE and FAN on the Sangomar Deep Offshore operated by Cairn Energy, Woodside Energy and FAR. Several other companies also had their hearts set on Rufisque Offshore Profond, including American firms Kosmos Energy, Anadarko and ExxonMobil as well as British major Shell, Australian firm Woodside and China’s Citic. For that matter, Total’s victory directly resulted in the sacking of energy and mines minister Thierno Alassane Sall (AEI 793). Sall had preferred ExxonMobil’s bid over that of the French major.

Fisticuffs for SOSP

Senegal’s oil minister also refused AP’s request to enter the second phase of exploration on its other block Senegal Offshore Sud Profond (SOSP), located in the Casamance region. In the eyes of the oil ministry, now led by Mansour Elimane Kane, AP has not held any assets in Senegal as of December last year.

The conciliation process might see the junior recover SOSP if it decides to give up on Rufisque Offshore Profond. AP had a similar experience in Gambia where its two permits A1 and A4, located south of SNE and FAN (AEI 812), were removed last year by President Adama Barrow’s new government. It has also filed for arbitration before the ICSID to recover the blocks.

https://www.africaintelligence.com/aem/oil/2018/03/20/legal-imbroglio-between-african-petroleum-dakar-and-total,108299340-art?CXT=PUB

Avslutning

Först och främst kan jag konstatera att senegalesisk media verkar vara entydiga i sina slutsatser. Jag har läst flera artiklar utöver de två som presenteras här, bland annat dessa.

https://www.senenews.com/actualites/affaire-rufisque-offshore-profond-le-senegal-risque-gros_225971.html

https://www.pressafrik.com/Petrole-senegalais-Frank-Timis-revient-a-la-charge-et-menace-de-trainer-l-Etat-devant-la_a180146.html

https://www.vipeoples.net/Rufisque-Offshore-profond-Ecarte-Frank-Timis-menace-de-traduire-le-Senegal-en-justice_a47980.html

https://www.leral.net/Frank-Timis-patauge-toujours-dans-le-petrole-senegalais-sa-societe-African-Petroleum-va-refiler-70-de-ses-parts-sur_a203989.html

https://www.dakaractu.com/Rufisque-offshore-profond-Ecarte-au-profit-de-Total-Frank-Timis-menace-de-trainer-le-Senegal-en-justice_a149211.html

APCL har anlitat den framträdande advokaten Betto Seraglini som ombud i fallet mot Senegal. Via honom har APCL stipulerat en deadline till den 18 april för Senegal att presentera en lösning som är gynnsam för APCL. Samtidigt har APCL konstaterat att man kommer att ta fallet om licensen Rufisque Offshore Profond (ROP) till ICSID om någon lösning inte presenteras senast den 18 april.

Detta sätter stor press på Senegal. Anledningen är att ett skiljeförfarande i ICSID kommer hindra Total (som alltså ingått ”exploration and production sharing contract för oljefältet Rufisque Offshore Profond” med Senegal) från att gå vidare med oljeutvinningsprocessen i Rufisque Offshore Profond fram till att ICSID meddelar utgången i en ev kommande skiljeförfarande i ICSID. Vi kan konstatera att en ICSID-process tar lång tid och att ingen part gynnas av detta. Om APCL tar fallet till skiljeförfarande blir ROP fryst från all aktivitet.

Något som gör saken extra intressant är att en gammal nyhet återigen börjat florera i Senegal i samband med nyheten om att APCL tar upp kampen, nämligen den om att Totals vinnande bud på ROP var långt under övriga budgivares. Detta är varken folket eller media glada för. Tvärtom. Pitchen är att landets möjlighet till stora inkomster från detta oljefält riskerar skjutas upp ännu längre fram i tiden, samt att landet redan gått miste om stora summor på grund av att regeringen valde Totals bud, som alltså var mycket lägre än övriga storbolags som t.ex. Exxon.

Min slutsats av ovan nämnda är att Senegals president Macky Sall och hans regering är under press. Att få både media och folket emot sig i en fråga som rör landets oljeintäkter är inte vad man önskar. Att den gamla konflikten och missnöjet med avtalet med Total nu får nytt ljus kastat på sig är inte vad regeringen önskar. Det skrevs väldigt mycket om oegentligheter och mutor då Total vann budgivningen och vi har sett att dåvarande oljeminister avskedades när detta uppdagades av media. Om detta råder det delade meningar, men en uppfattning är avskedandet av energiministern Thierno Allasane Sall samma dag som Total tilldelades ROP beror på att han motsatte sig Aliou Salls ( bror till president Macky Sall) inflytande över energipolitiken och som påstås ligga bakom uppgörelsen med Total, samt för att han motsatte sig att regeringen skulle acceptera Totals låga bud och uttalade sig om detta i media. I detta framförs också på vissa håll att Frank Timis (grundare till APCL, som numera enbart är en av ägarna av bolaget) hade ett finger med i spelet genom sitt nära samröre med just presidentens bror och att APCL och Senegal gjorde en inofficiell deal om att APCL skulle få licensen för det andra oljefältet SOSP förlängt som ”plåster på såren”. Frank Timis sägs också ha erhållit en summa pengar för detta. Dealen ska ha varit att APCL inte skulle sätta sig emot att bli av med ROP eftersom man skulle få SOSP förlängt, och att APCL skulle avsäga sig rätten till ROP när Senegal officiellt meddelade att APCL fått rättigheterna till SOSP förlängt. Som vi alla vet blev så inte fallet, vilket skulle kunna förklara varför APCL hela tiden konstaterat att man fortfarande äger licensen till ROP. Redan samma dag som Total meddelade att man erhållit ROP släppte APCL en pressrelease om att man vidhåller sin legala rätt till ROP. Att allt detta nu kommer upp till ytan igen, i samband med APCLs nyligen offentliggörande av att man tar ärendet till ICSID om en lösning inte presenteras senast den 18 april, är förmodligen ingen tillfällighet.

Denna artikel tar upp vad jag nyss beskrivit.

https://senego.com/petrole-total-aurait-offert-une-misere-de-13000-dollars-aliou-sall-et-frank-timis-se-frottent-les-mains_486935.html

Sammanfattningsvis kan jag konstatera att jag återigen är hoppfull att APCLs agerande gentemot Senegal kommer generera en lösning som är fördelaktig för bolaget.

 

Short Update on the ICSID Proceedings and the Ongoing Arbitration Process Between African Petroleum and the Gambia

African Petroleum Corporation Limited (APCL) have lodged Requests for Arbitration (“RFA”) documents with the International Centre for the Settlement of Investment Disputes (“ICSID”) in order to protect its interests in the A1 and A4 licences in The Gambia, and that these RFAs have been registered and allocated case numbers by ICSID (ICSID Case No. ARB/17/38, ARB/17/39 and ARB/17/40). https://icsid.worldbank.org/en/Pages/cases/searchcases.aspx

Date of case registration

Date of registration was October 17, 2017. Hence, six weeks (48 days to be exact) has passed since the cases were registered.

Initial Proceedings: Preparation and registration at the ICSID

Remember from my previous article (https://robertveritas.wordpress.com/2017/09/08/icsid-proceedings-explained-and-analyzed/) on the ICSID Proceedings the following:

As soon as a party (in this case, African Petroleum) has filed a request for arbitration with the prescribed lodging fee, ICSID sends the request to the other party and reviews the request to determine whether it can be registered.

The Secretary-General of ICSID must determine whether the dispute is manifestly outside the jurisdiction of the Centre as soon as possible after the filing of the request for arbitration. This determination is made on the basis of the information contained in the request.

If one of the requirements in Article 25 of the ICSID Convention is manifestly lacking, the Secretary-General must refuse to register the request. Otherwise the dispute must be registered and the Tribunal can address objections.

The screening process takes on average three weeks, depending on whether ICSID needs clarifications, additional information or documentation from the requesting party.

Conclusions

Please note that the following is pure speculation on my part. Six weeks has now passed since the registration (fact).The cases have clearly been registered at ISCID. So my conslusion from this is that jurisdiction of the ICSID is established. This is the fundamental first step and without it it is not possible to go forward.

Step 1 – Number of Arbitrators and Method of Their Appointment

Parties should agree on the number of arbitrators on a Tribunal and the method of their appointment. If they cannot agree, ICSID’s default mechanism will apply.

The images below visualize the proceedings

3.1.3-Chart-Number-of-Arbitrators-and-Method-of-Their-Appointment-LP

To Agree or Not to Agree

3.1.3-Chart2-Number-of-Arbitrators-and-Method-of-Their-Appointment-LP

Proceedings if disagreement regarding Arbitrators

What are the Time Limits Stipulated by the ISCID Involved In These Initial Proceedings?

The date of registration triggers time limits (Of course, the parties are encouraged to inform ICSID of any agreement as to the number of arbitrators and the method of their appointment and to constitute a Tribunal as soon as possible).

60 days

The time limit concerning the method to constitute the Tribunal is 60 days from the date of registration.

90 days

The time limit to appoint the members of a Tribunal is 90 days.

Conclusion

Today (December 4, 2017) 48 days has passed since the date of registration. Hence, we should expect an update on the method to constitute the Tribunal within 12 days.

We should also expect an update regarding the appointment of the members of the Tribunal within 42 days.

That is only valid of course, if African Petroleum and the Gambia does not agree on a settlement of the dispute along the way.

Further reading on possible outcomes and statistics is presented in this article

https://robertveritas.wordpress.com/2017/09/28/icsid-statistics-african-states-apcl/

At the moment, this article is only avaliable in Swedish. However, there is an option to use Google Translate in the page.

ICSID del II – Statistik, fall och faktiska utfall (Afrikanska Stater)

Inledning

Vänligen läs mitt tidigare inlägg om ICSID för en detaljerad redogörelse av hur en ICSID-process ser ut.

Både Gambia och Senegal har skrivit under ICSID-konventionen.

Det står klart att dispyter mellan Gambia och internationella investerare kommer att hanteras av ICSID.

Gambia och African Petroleum Corporation har också varit inblandade i en liknande dispyt tidigare, också då gällande licenserna A1 och A4.

Under de senaste decennierna har internationella tribunaler tagit upp många av energisektorns problem och aspekter. Dessa har inkluderat fordringar enligt bilaterala avtal och sedvanlig internationell lag som handlar om expropriationer, orättvis och ojämlik behandling och det internationella brottet olaga eller
orättvis rättegång eller påföljd (denial of justice).

Afrikanska stater inblandade i 135 st av samtliga ICSID-fall

Av samtliga fall som varit föremål för behandling av ICSID har afrikanska länder varit inblandade i 22% av dem. Detta motsvarar 135 fall.

Gambia och Senegal har varit inblandade i 4 st fall vardera.

Av dessa 135 fall avgjordes 91 % under ICSID Convention Arbitration (när det inblandade landet är medlem i och/eller har ratificerat ICSID-konventionen.)

De 135 dispyterna som involverat en afrikansk stat har uppstått inom många olika ekonomiska sektorer.

Dispyter gällande olje-, gas- och gruvutvinning utgör hela 45 st av de 135 fallen

Den enskilt största sektorn som drabbats av dispyter i de afrikanska staterna är olje-, gas- och gruvindustrin. Dessa fall utgör hela 45 av de 135 fallen (33%). Av samtliga ICSID-fall under 2014 är motsvarande siffra 35%.

3. Fördelningen av områden
The 135 disputes involving an African State arose in the context of a variety of economic sectors

107 av de 135 dispyterna initierades av utländska investerare

Av de 135 dispyterna initierades 28 st (21%) av afrikanska investerare.

I de resterande 107 fallen initierades dispyterna av icke-afrikanska investerare, såsom African Petroleum Corporation Limited.

57 av 135 fall löstes genom att parterna kom överens, eller genom att processen avbröts, före ett beslut av ICSID

57 st (42%) av dispyterna nådde en lösning genom att inblandade parter kom överens eller genom att processen av en av anledningarna nedan avbröts (Dispute settled or proceeding otherwise discontinued) före ett beslut av ICSID-tribunalen.

Så här ser fördelningen ut (se begreppsförklaringar i slutet av texten).

34 st – processen avbröts på båda parternas begäran (discontinued)

11 st – processen avbröts på den ena partens begäran (discontinued)

7 st – Överenskommelse genom att båda parterna lämnar in en gemensam lösning och begär att ICSID ska bifalla detta utslag (Settlement agreement embodied in an award at parties’ request).

4 st – Processen avbryts pga misslyckande med att betala in den nödvändiga avgiften för processen (Proceeding discontinued for lack of payment of the required advances).

1 st – Processen avbryts för att någon av parterna inte uppfyller kraven om att agera inom sex månader (Proceeding discontinued for failure of parties to act).

4.png
Arbitration Proceedings under the ICSID Convention and Additional Facility Rules involving an African State Party – Outcomes:
7.png
Disputes Settled or Proceedings Otherwise Discontinued under the ICSID Convention and Additional Facility Rules involving an African State Party – Basis

 

78 av 135 fall avgjordes genom ett beslut av ICSID

De resterande 78 fallen (58%) avgjordes genom ett slutgiltigt beslut från en ICSID-tribunal. Här ser fördelningen ut så här:

I 17 st (22%) av besluten avgjordes pga att ICSID avfärdade jurisdiktionen (dispyten behandlades inte eftersom dispyten inte ansågs falla under ICSID-konventionen)

I 17 st (22%) av fallen beslutade ICSID att avfärda alla krav

I 44 st (56%) av fallen beslutade ICSID att bifalla hela eller delar av kraven

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Disputes Decided by Arbitral Tribunals under the ICSID Convention and Additional Facility Rules involving an African State Party – Findings

Sammanställning av samtliga skiljeförfaranden som involverar en afrikansk stat (*ICSID-beslut/Tribunal Rulings, överenskommelser/Settlement och avslutning/Discontinuances)

I bilden nedan skildras alltså en sammanställning av hur samtliga 135 fall som involverat en afrikansk stat har slutat.

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Arbitration Proceedings under the ICSID Convention and Additional Facility Rules involving a State Party involving an African State – Tribunal Rulings, Settlement & Discontinuances

 

Begreppsförklaringar (på engelska)

An arbitration award (or arbitral award) is a determination on the merits by an arbitration tribunal in an arbitration, and is analogous to a judgment in a court of law. It is referred to as an 'award' even where all of the claimant's claims fail (and thus no money needs to be paid by either party), or the award is of a non-monetary nature.

Settlement and Discontinuance
At any time before the award is rendered, parties may jointly request that the Tribunal discontinue the proceeding if they settle the dispute or for any other reason (Arbitration Rule 43). The Tribunal (or the Secretary-General if the Tribunal is not yet constituted) can issue an order taking note of the discontinuance of the proceeding (Arbitration Rule 43(1)). Alternatively, the parties can ask the Tribunal to render an award embodying the settlement agreement (Arbitration Rule 43(2)).  If so, the full and signed text of their settlement agreement must be filed with the Secretary-General.

Discontinuance at Request of a Party
If one party requests the discontinuance of the proceeding, the other party will be invited to state whether it agrees with the discontinuance (Arbitration Rule 44). If that party objects, the proceeding will continue. However, if that party agrees or does not object within the fixed time limit, the party will be presumed to have consented to the discontinuance.  Accordingly, the Tribunal or the Secretary-General will issue an order taking note of the discontinuance of the proceeding.

Discontinuance for Failure of Parties to Act
The proceeding is discontinued when the parties fail to take any steps for a period exceeding six consecutive months or such other period as the parties may agree with the approval of the Tribunal(Arbitration Rule 45). Usually, the parties are given notice approximately one month before the expiration of the six-month period. The notice allows the parties to act if they wish to avoid the discontinuance. If the parties take no action to continue the proceedings, the Tribunal or the Secretary-General may issue an order of discontinuance. This rule does not apply if a stay of the proceeding is agreed.

Discontinuance for Lack of Payment of Required Advances
Except in annulment proceedings, both parties are responsible for paying the advances to meet the costs of the proceeding unless the parties agree or the Tribunal decides otherwise (Administrative and Financial Regulation 14(3)(d)). Failure to do so may lead to the discontinuance of the proceeding.

If the amounts requested are not paid in full within 30 days of a request, the Secretary-General informs both parties of the default and gives either of them an opportunity to make the outstanding payment.

If any part of the required payment remains outstanding 15 days after notice of default is given, the Secretary-General may ask that the Tribunal stay the proceeding.

If any proceeding is stayed for non-payment for a consecutive period in excess of six months, the Secretary-General may ask that the Tribunal discontinue the proceeding (Administrative and Financial Regulation 14(3)).

The Tribunal’s decision to discontinue the proceeding will take the form of an order.

Effect of the Discontinuance
An order taking note of the discontinuance of the proceeding does not dispose of any of the claims raised by the parties.  The claims can therefore be raised again in subsequent proceedings.

Unlike the order, an award embodying the parties’ settlement agreement pursuant to Arbitration Rule 43(2) is an award under Article 53(1) of the ICSID Convention for the purposes of recognition and enforcement.

Källahttps://icsid.worldbank.org/en/Pages/process/Discontinuance-of-Proceedings.aspx

 

ICSID Part 1 – PROCEEDINGS EXPLAINED AND ANALYZED

To begin with, I will give you an overview of the main steps involved in an ICSID Convention Arbitration

The main steps involved in an ICSID Convention Arbitration

3.1.0-Chart-ICSID-Convention-Arbitration-LP.png

PREPARATIONS – About Screening and Registration at the ICSID

As soon as a party has filed a request for arbitration with the prescribed lodging fee, ICSID sends the request to the other party and reviews the request to determine whether it can be registered.

  • The Screening Process

The Secretary-General of ICSID must determine whether the dispute is manifestly outside the jurisdiction of the Centre as soon as possible after the filing of the request for arbitration. This determination is made on the basis of the information contained in the request.

If one of the requirements in Article 25 of the ICSID Convention is manifestly lacking, the Secretary-General must refuse to register the request. Otherwise the dispute must be registered and the Tribunal can address objections.
The screening process takes on average three weeks, depending on whether ICSID needs clarifications, additional information or documentation from the requesting party.

  • Registration

The notice of registration is sent to the parties and basic case details are posted on ICSID’s website. All significant steps in the proceeding are subsequently made publicly available under “Procedural Details” of that case.

STEP 1 – NUMBER OF ARBITRATORS AND METHOD OF THEIR APPOINTMENT

Parties should agree on the number of arbitrators on a Tribunal and the method of their appointment. If they cannot agree, ICSID’s default mechanism will apply.

The images below visualize the proceedings

To Agree or Not to Agree
3.1.3-Chart2-Number-of-Arbitrators-and-Method-of-Their-Appointment-LP.png
Proceedings if disagreement regarding Arbitrators

 

Party Agreement

The parties refer to the existing contract, treaty or law containing the consent to ICSID arbitration. Hence, this refers to a prior agreement the parties on the number of arbitrators and/or the method of their appointment.

MY ANALYSIS

APCL has continuously claimed that they shall utilize the dispute mechanism in the contract. So we should assume that there is a prior contract between APCL and Gambia that regulates this aspect concerning arbitrators and the method of appointment.  

If no prior agreement exist, ICSID invites the parties to agree on the number of arbitrators and the method of their appointment when ICSID registers the request for arbitration. 

Party disagreement (Default Mechanism)

If no agreement on the number of arbitrators and the method of their appointment is reached, either party may request the application of the default formula under Article 37(2)(b) of the ICSID Convention. The formula provides that:

  • The Tribunal consists of three arbitrators.
  • Each party appoints one co-arbitrator.
  • The parties attempt to agree on the third arbitrator, the President of the Tribunal.

In cases where the default formula applies, Arbitration Rule 3 sets forth the process by which the parties appoint the members of the Tribunal:

  • The first party to appoint an arbitrator also proposes a candidate to serve as President of the Tribunal.
  • The other party then appoints an arbitrator and either agrees to the appointment of the arbitrator proposed for President or proposes another candidate.
  • If a counter-proposal is made, the party making the first appointment then indicates whether it agrees to the new proposal for President.
  • The parties are not limited in the number of proposals or counter-proposals that can be made.

The parties may agree on a different method of constituting the Tribunal even after a party has raised the ICSID default formula.

The Tribunal

A Tribunal must always consist of a sole arbitrator or any uneven number of arbitrators. The parties are otherwise free to adopt any workable method of appointment that suits their needs, including provisions on time limits and special procedures. The parties do not need to appoint arbitrators from the ICSID Panel of Arbitrators.The most common agreements for three-member Tribunals are:

  • Each party appoints one co-arbitrator, and the parties attempt to agree on the third arbitrator, the President of the Tribunal. If the parties fail to agree, the Secretary-General (or the Chairman of the Administrative Council) of ICSID appoints the President.
  • Each party appoints one co-arbitrator, and the co-arbitrators attempt to agree on the third arbitrator, the President of the Tribunal. If the co-arbitrators fail to agree, the Secretary-General (or the Chairman of the Administrative Council) of ICSID appoints the President.

As part of their agreement on the method for constituting the Tribunal, the parties may agree to adopt a list procedure concerning proposed candidates. List procedures can be used for a sole arbitrator, the President of the Tribunal or all members of the Tribunal. Commonly used list procedures include:

  • The parties exchange a list of candidates; each party informs the other party of the candidate(s) whom it accepts or rejects.
  • The parties request that ICSID provide them with a list of candidates. Each party can strike a certain number of candidates and rank the remaining candidates. The candidate with the best ranking is appointed or, if two or more candidates have the same ranking, ICSID selects one of them.
ICSID supports parties’ efforts to agree on the method of appointment and will follow the agreed method and facilitate the process to the fullest extent possible.If the parties are unable to appoint all members of the Tribunal under the established method, either party may invoke the ICSID default mechanism for appointing the missing arbitrator(s).

Public access

The notice of registration is sent to the parties and basic case details are posted on ICSID’s website. All significant steps in the proceeding are subsequently made publicly available under “Procedural Details” of that case.

Time Limits

The date of registration triggers time limits (Of course, the parties are encouraged to inform ICSID of any agreement as to the number of arbitrators and the method of their appointment and to constitute a Tribunal as soon as possible).

60 days

The time limit concering the method to constitute the Tribunal is 60 days from the date of registration.

90 days 

The time limit to appoint the members of a Tribunal is 90 days.

MY ANALYSIS

A conclusion of the above mentioned is that neither party can delay the proceedings in this regard. A maximum of 60 days is allowed. If no agreement is reached within this period, ICSID has established rules in case of disagreement between the parties concerning the arbitrators and the method of appointment. See Default Mechanism above.

STEP 2 – FIRST SESSION

The purpose of the first session of the Tribunal is to ascertain the parties’ agreements or separate views on procedural questions such as the applicable arbitration rules, language(s) to be used, place of proceedings, and the procedural calendar. The session enables the Tribunal to set a schedule and establish specific rules for each case in a procedural order.

Time Limits

The first session should be held within 60 days after the constitution of the Tribunal, unless the parties agree otherwise (Arbitration Rule 13(1)). When each arbitrator is appointed, ICSID ascertains their availability to ensure a timely first session. Once the Tribunal is constituted, the Secretary of the Tribunal contacts the parties with proposed date(s) and venue (or a proposal for a telephone or videoconference) for the first session.

If the parties and the Tribunal cannot meet within the 60-day period and cannot agree on an extension of this time limit, the Tribunal will proceed without the parties but will take their written submissions into account.

The When and Where of the First Session

The first session can be held in person, by telephone or by videoconference.

The parties may agree on any location for the first session, provided that the Tribunal approves such venue and there are suitable facilities. The Tribunal often proposes a venue for the parties’ consideration.

If there is no agreement, an in-person meeting will take place by default at the seat of the Centre in Washington, D.C. (Article 63 of the ICSID Convention and Arbitration Rule 13(3)).

An increasing number of first sessions are held by telephone or videoconference to reduce costs and travel time. This decision is taken by the Tribunal and the parties considering factors such as the number of outstanding issues.

Issues to be Discussed

The first session addresses any matters of procedure that the parties and the Tribunal wish to establish at the outset of the proceeding.

The Secretary of the Tribunal circulates a draft agenda approved by the Tribunal to the parties for their comments well in advance of a first session. The draft agenda has been developed by the Centre taking into account standard procedural items, such as the procedural calendar (see Image below for an example). The agenda is often accompanied by a draft procedural order to guide the parties in reaching agreements on specific issues.

The first session sometimes includes oral submissions on a party’s request for bifurcation of the proceeding, request for provisional measures or a request to dispose of the matter because the claim is manifestly without legal merit.

The agreements reached and the procedural decisions taken by the Tribunal are included in a procedural order which is signed by the President of the Tribunal and circulated to the parties by the Secretary of the Tribunal promptly after the first session.

Example of a Procedural Calendar
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Example of Procedural Calendar (ICSID Convention Arbitration)

FINAL STEP – AWARD (i.e. ruling or outcome)

The award (or ruling/outcome) of the ICSID is final and binding and can be recognized and enforced in any ICSID Member State. There is no appeal against an award, but there are limited post-award remedies available under the Convention.

Once the presentation of the case is completed, the proceeding is declared closed and the award must be signed in the next 120 days, with the possibility of an extension of 60 days (Arbitration Rule 38 and 46).  Usually, the closure of the proceeding occurs after the Tribunal has deliberated and concluded that it has no further questions for the parties.

The questions before the Tribunal must be decided by a majority vote of the Tribunal members, but any member may attach an individual opinion (concurring, dissenting or other). The award must be signed by the Tribunal members who voted for it.

The award is rendered when ICSID dispatches certified copies of the award to the parties (Article 49 of the ICSID Convention, Arbitration Rule 48(2)). Additional certified copies of the award may be requested by the parties.

The parties may agree to publish the award on ICSID’s website.  When an award is not made public by the parties, the Centre will publish excerpts of the award’s legal reasoning (Arbitration Rule 48(4)). ICSID also publishes other material in the case with the parties’ consent.

FINAL FACTS AND ANALYSIS

In what circumstances can arbitrators be challenged?

Arbitrators can be challenged if it can be shown that they manifestly lack: (i) high moral character; (ii) recognised competence in the fields of law, commerce, industry or finance; or (iii) independent judgement. The decision to disqualify an arbitrator is made by the remaining members of the tribunal, and if it is divided, by the chairman of the tribunal. Challenges are typically advanced on the basis that an arbitrator is not independent and cannot, for some reason, exercise independent judgement.

MY ANALYSIS

I can only see this as advantageous APCL. Any arbitrator proposed by the Gambia will be disqualified if they lack either one of the above mentioned criteria. In my view, the most central to Apcl’s advantage is the second and third criteria. And since it is the chairman of the tribunal who has the final vote in case the remaining members of the tribunal are divided. Hence, I really can’t see how this procedure can be anything other than advantageous to Apcl. And the chairmen of ICSID tribunals are no amateurs susceptible to leverave, bribes etc. On the contrary. Indeed. Make no mistake about it. Have a look at the chairman of the last arbitration tribunal between APCL and Gambia. His experience speaks for itself. Oh, and he’s from Sweden. 

https://www.threecrownsllp.com/team/jan-paulsson/

The participating parts (the claimant and the respondent) both gets to nominate a member of the tribunal. Here are Apcl’s and Gambia’s accepted nominations last time in 2014. You be the judge of whose most merited.

APCL: Alexis Mourre.

http://www.leadersleague.com/en/news/alexis-mourre-new-head-of-icc-international-court-of-arbitration

Gambia: Loretta Malintoppi.

https://www.linkedin.com/in/loretta-malintoppi-993a9a10

How does a party go about enforcing an ICSID arbitration award?

Enforcement under the ICSID Convention is confined to the enforcement of pecuniary obligations, not other remedies such as specific performance. Enforcement is possible in any ICSID Contracting State, not just the Respondent Contracting State. In addition, it is possible to seek enforcement of monetary or non-monetary awards under the New York Convention. However, in practice, enforcement may not always be necessary. Following an ICSID award the host state will be subject to pressure from other states, and inter-governmental organisations such as the IBRD and the IMF, to comply. In practice, this means settlement is often achieved.

MY ANALYSIS

It seems clear to me that Gambia, in case of a negative outcome from their perspective, will not have much choice other than accepting it. As I’ve mentioned elsewhere before, the Gambia is dependent on international loans from the likes of IMF and the World Bank itself. They simply can’t afford not to comply. President Barrow has time and again both in actions and words proven that he is putting the Gambia back on the International Agenda and seeks approval and acceptance of international institutions. Furthermore, Gambia has under president Barrow’s command been granted credits.

This one is particularly interesting from African Petroleum’s Perspective.

http://www.worldbank.org/en/news/press-release/2017/05/31/world-bank-to-help-senegal-negotiate-complex-oil-gas-projects

Will ICSID assume jurisdiction on the dispute claimed by African Petroleum?

The applicable ICSID rules are found in the: (i) ICSID Convention of 1965; (ii) the ICSID Arbitration Rules; (iii) ICSID’s Administrative and Financial Regulations; and (iv) ICSID’s Institution Rules. This scattered approach is a result of the difficulty in amending the ICSID Convention; it is far easier to amend the ancillary rules permissible with two-thirds of the majority of ICSID’s Administrative Council. In addition, if an investor is relying on a bilateral or multilateral investment treaty (BIT or MIT) as the source of ICSID’s jurisdiction it is necessary also to consult the rules in the relevant treaty. If jurisdiction is founded on a contract or legislation, this instrument should also be checked. Ultimately, the tribunal has discretion as to the specific procedure applied, in accordance with the applicable ICSID rules.

The tribunal can determine its own jurisdiction. Jurisdiction will exist when there is a legal dispute arising directly out of an investment between a Contracting State and a national of another Contracting State. There must also be written consent to submit the dispute to ICSID, which may be found in legislation, a contract, or an investment treaty. The most common basis of consent is the existence of a BIT, this being used in 63 per cent of registered cases. By comparison, an investment contract between the host state and investor historically accounts for 19 per cent of cases.

Jurisdictional challenges are common in investment disputes. According to ICSID, tribunals decline jurisdiction in one in four disputes. Often a jurisdictional challenge will be determined separately. Only if the tribunal concludes that it has jurisdiction, will it proceed to hear the substantive claims.

MY ANALYSIS

APCL and the Gambia has an a bilateral investment treaty (BIT). This is an agreement establishing the terms and conditions for private investment by nationals and companies of one state in another state. Most BITs grant investments made by an investor of one Contracting State in the territory of the other a number of guarantees, which typically include fair and equitable treatment, protection from expropriation, free transfer of means and full protection and security. 

The distinctive feature of many BITs is that they allow for an alternative dispute resolution mechanism, whereby an investor whose rights under the BIT have been violated could have recourse to international arbitration, often under the auspices of the ICSID (International Center for the Settlement of Investment Disputes), rather than suing the host State in its own courts.This process is called investor-state dispute settlement.

So it is fairly certain that ICSID will assume jurisdiction of the dispute between APCL and Gambia. 

FINAL THOUGHTS

I strongly believe that African Petroleum Corporation without a doubt is the part that benefits most on the proceedings of the International Centre for the Settlement of Investment Disputes. The most important of the above mentioned arguments for that is the legal expertise and the highly skilled people of ICSID.

I believe that a positive outcome for APCL is likely.

APCL themselves have highly skilled judicial expertise.

APCL also have great experience both within the petroleum industry and its legal framework.

APCL has won a similar dispute before. They will likely win again.

But here it comes. It is completely depending on what the contract of the Oil licenses A1 and A4 contains and stipulates. Of that we know nothing. However, I would put my trust in the CEO of African Petroleum Coroporation Jens Pace and the rest of the management in APCL, and not in the very inexperienced State of Gambia. I leave you with quoting Jens Pace.

 

“[…] we, after taking external legal advice, are very confident of our legal position in terms of these licenses […]” 

21 august 2017

“[…] we are confident in our legal position and have made great efforts to proactively engage in sensible dialogue with the relevant authorities […]

4 september 2017.

 

Thanks for reading my blog.

Best regards,

RobertVERITAS

 

Sources:

https://icsid.worldbank.org/en/Pages/process/Arbitration.aspx

https://www.ashurst.com/en/news-and-insights/legal-updates/icsid-arbitration-what-actually-happens-in-icsid-proceedings/

 

UPCOMING POST

Part 2 of this story will soon be published.

It will present statistics of previous outcomes in ICSID arbitration proceedings between African Nations and foreign investors (like APCL).

 

Tänkvärt inför avgörandet

Tiden är snart inne då aktieägarna får klarhet i huruvida det blir en snabb lösning till APCLs fördel (enda möjligheten till en snabb lösning är ju att Gambia och APCL kommer överens om en förlängning eller att APCL går in i nästa fas av licenserna) eller om den juridiska processen initieras.

Även om APCL initierar en juridisk process betyder inte det att vi står inför en uttdragen process. Detta är inte min egen tolkning utan det baseras på fakta, bland annat med referens till den förra liknande juridiska dispyten gällande samma licenser i just Gambia (https://www.clydeco.com/firm/news/view/clyde-co-advises-african-petroleum-in-successful-outcome-to-icsid-proceedin)

Vi vet också att en eventuell juridisk process kommer att hanteras av the International Centre for Settlement of Investment Disputes (ICSID). Gambia har ratificerat den bindande konventionen. Således kommer rättsprocessen att hanteras av ICSID och följa the ICSID arbitral rules. Gambia har tidigare varit involverade i ett flertal dispyter gällande bland annat oljeutvinning och inom mining, varav en dispyt alltså var mot just APCL och samma licenser som är föremål för eventuell dispyt just nu. Utgången av den förra dispyten med APCL refererar jag till ovan.

https://icsid.worldbank.org/en/Documents/icsiddocs/List%20of%20Contracting%20States%20and%20Other%20Signatories%20of%20the%20Convention%20-%20Latest.pdf

Jag avslutar med att återge African Petroleums pressrelease från den 21 augusti 2017.

The Company confirms that it is yet to receive any formal feedback from the Gambian authorities regarding the status of its A1 and A4 licences.

The management notes the rhetoric in recent local press articles that state the licences have expired and are open acreage. As such, the management feels it appropriate to firmly reiterate, once again, that this is misleading and incorrect in both law and fact. African Petroleum has not received formal notification initiating the termination process as detailed in the licences, and therefore retains it’s rights under the A1 and A4 licences.

Whilst the management continues to seek a positive dialogue in the coming weeks, it is currently undertaking the necessary legal preparations to utilise the dispute resolution provisions of the licences in order to protect African Petroleum’s legal rights in relation to the licences and will formally initiate this process in early September unless formal positive feedback is forthcoming by the end of August.

Commenting on the update, CEO Jens Pace said: “It is clearly frustrating to be in a position where we feel it necessary to issue updates to the market on account of unconfirmed local media reports. We were given guidance by the President of The Gambia that formal feedback would be provided to the Company following cabinet level discussions and so we remain hopeful that this will be forthcoming. I reassure our shareholders that we, after taking external legal advice, are very confident of our legal position in terms of these licences. We are therefore taking the appropriate measures to ensure we move swiftly to protect our rights on these licences should we not receive formal feedback by the end of the month, or should that feedback not be in line with our expectations.”