A Look at the Future: the Growth of Telecoms Arbitrations in Africa
Arbitration in Africa: general considerations
Arbitration has been on the rise in Africa over the past two decades. This is clear from the relevant legislative updates across the continent; statistics made public by the most prominent international arbitration institutions, such as the International Chamber of Commerce (ICC), the London Court of International Arbitration (LCIA) and the International Centre for Settlement of Investment Disputes (ICSID), which have documented a steady increase in African parties to arbitration proceedings managed by these institutions; the upsurge of the accession by African countries to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention); and the proliferation of arbitral centres and institutions across the African continent.
Although only 10 Member States of the African Union had adopted the UNCITRAL Model Law in 2013, at the time of writing:
- these states have been joined by South Africa, arguably one of the most robust and powerful economies in the continent;
- the Organisation for the Harmonization of Business Law in Africa (OHADA) has updated its Uniform Act on Arbitration in 2017, bringing it closer to the Model Law (having continued to engage in the capacity-building in OHADA Member States); and
- various Member States have updated their arbitration legislation, adopting some of the solutions envisaged in the UNCITRAL Model Law.
However, the developments registered are not limited to the legislative updates made to the instruments governing arbitration. In fact, in 2010, the ICC reported that ‘over the last ten years, the number of African parties involved in cases filed with the ICC Court has grown by 82%’, thus confirming an increasing participation of African parties in arbitration proceedings. And where cases filed with the ICC in 2010 involved a record of 133 African parties, by 2020 the number had increased to 171 parties (with Nigeria and Egypt taking the lead). The LCIA, on the other hand, registered a similar pattern in cases dealing with African parties. Accordingly, where, in 2010, only 3.75 per cent of parties to the proceedings submitted to the LCIA were from Africa, in 2020, these represented 11.7 per cent of the total sum (with Nigeria, once again taking the lead).
Investment disputes involving African states have also increased over the last two decades. In 2020, ICSID registered a record of 58 cases of which nine involved an African state: Algeria, Benin, Cameroon, Egypt, Nigeria, South Sudan, Tanzania and Zambia. In its recent caseload statistics, ICSID reported on 13 cases launched in 2021 involving African states (three involving Egypt and three involving the Republic of Congo).
Despite this increase in African parties to (both investment and commercial) arbitration proceedings, the truth is that to date and at least in proceedings launched with the above referenced institutions, proceedings (especially those linked with high-value projects) are still seldomly seated in Africa. The fact that this is so seemingly stems from the fathomable resistance that parties have in relying on local courts (where there is still progress to make with regard to celerity, independence and arbitration expertise) to provide assistance throughout arbitration proceedings and more so, to rule on subsequent challenges of the relevant arbitral awards.
On the contrary, when possible (and this is not always possible since local laws often provide for mandatory seats in arbitration proceedings dealing with disputes in specific economic sectors found vital to the underlying economies), parties to international contracts still tend to seat their disputes in the most preferred seats for arbitration, such as London, Singapore, Hong Kong, Paris or Geneva, postponing contact with African courts to when enforcing the arbitral awards with local courts proves essential, or at least advantageous. As to recognising and enforcing foreign arbitral awards in Africa, it is worth highlighting that the increase of referral of disputes to arbitration has risen lengthways with the number of African countries acceding to or ratifying the New York Convention.
With Malawi’s accession to the New York Convention on 4 March 2021, 42 of Africa’s 54 states are now state parties to the Convention. The remaining 12 non-parties are Chad, Congo (Brazzaville), Equatorial Guinea, Eritrea, Eswatini, Gambia, Guinea-Bissau, Libya, Namibia, Somalia, South Sudan and Togo.
The steady uptake of the New York Convention across Africa is undeniably valuable to those investing in the continent since it is widely regarded as a key factor to boost economic growth and international investment. A recent study focused on scrutinising foreign direct investment inflows before and after a country accedes to or ratifies the New York Convention has concluded that accession or ratification increased foreign investment in the relevant country by approximately 10 per cent in the first four years and 11 per cent in the eight years after joining.
Yet, even with local courts’ intervention mostly reduced to this stage of proceedings and circumscribed to a set of requirements known to all, there have been examples of loose interpretations, by local courts, of the concept of (breaches of) public policy for the purposes of the Convention’s article V, 2(b)). This means that a given award may ultimately not be recognised and subsequently enforced against the defeated party. While it is not possible to anticipate from the outset how local courts will construe the concept of public policy – which in its own nature, is vague and manifests itself on a case-by-case basis – parties should be advised on this underlying risk when negotiating arbitration clauses.
To add to that, as African markets mature, governments and arbitration practitioners have been pushing for disputes to be settled in Africa and with resort to African institutions. Yet, while it is not clear whether these efforts will be fruitful in the long run – bearing in mind the above referenced concerns with the local judicial systems – the fact is that the number of arbitral centres or institutions across the continent has been growing sturdily. According to the updated list of African Arbitration Centers and Institutions as at 4 April 2020, Africa currently holds over 91 arbitral centres and institutions.
Having said this, and while the 2020 Arbitration in Africa Survey Report identified the Arbitration Foundation of Southern Africa (South Africa), Cairo Regional Centre for International Commercial Arbitration (Egypt), the Kigali International Arbitration Centre (Rwanda), Lagos Court of Arbitration (Nigeria) and the Nairobi Centre for International Arbitration (Kenya) as the most popular arbitral centres in Africa, the truth is that not all centres are active or functioning.
Looking at Angola, for instance, by the end of 2020, only the Centro de Resolução Extrajudicial de Litígios (CREL) was active and, according to local information, had hosted only five arbitrations. In Cabo Verde, since the setting-up of the Centro de Arbitragem e Conciliação da Câmara de Comércio Norte de Cabo Verde, and again according to local sources, only one case was launched and administered a dispute between two national companies regarding a lease agreement. In reality, local parties seemingly prefer to resort to ad hoc arbitrations in the belief that this will reduce the adjacent costs. Contrastingly, Mozambique’s Centro de Arbitragem, Conciliação e Mediação, instituted in 2001 – the only center functioning in Mozambique, with headquarters in Maputo and offices in Nampula and Beira – conducts an average of 15 cases per year, the gross majority of which are between local parties.
Although there has been an undeniable effort put into developing and increasing arbitration across the African continent in the past two decades, this tendency does not seem to be reflected yet end-to-end with a rise in disputes referred to arbitration in the telecommunications sector. This tendency could, in any case, change significantly in the near future given the significant changes the sector has been experiencing across the continent over the past decade, as is delved on below.
Overview of the telecommunications market in Africa
According to an ITU report, ‘Africa is the region where regulatory frameworks have evolved most over the past 10 years.’ In fact, G3 countries have increased steadily in numbers from 5 per cent to 52 per cent of African countries in slightly over a decade and whereas in 2007, more than 40 per cent of African countries were of G1 category, in 2018, only two LDCs (least developed countries) remained in this lowest tier. 5G also seems to be closer than it ever did. South Africa launched it in 2020 and ‘more deployments, although in infancy, are beginning to pop up elsewhere on the continent with trials conducted in Gabon, Kenya, Nigeria and Uganda. Lesotho, prior to the COVID-19 pandemic, was the only country with limited commercial 5G services.’ Also, recently, according to the Angolan Regulatory Authority, licences to use frequencies with a view to implementing 5G technology were granted to three mobile operators (Unitel, Movicell and Africell). Africa has also been a fertile ground for mobile money. Nigeria, Ethiopia and Angola are examples or countries where mobile money has been launched.
Now, while this is the case, one must keep in mind that Africa is a continent composed of more than 50 countries, and each of them has distinct levels of development. This is naturally reflected in the telecommunications sector. To illustrate this, we may look at the mobile penetration market. Although the mobile subscriptions rate has increased in most African countries (from 2015-2019), each mobile market differs from one country to another. For instance, the average of the mobile cellular subscriptions in Africa was, in 2019, 82.3 per 100 inhabitants. However, certain African countries – such as South Africa, Cabo Verde, Ivory Coast, Namibia and Senegal – exceed 100 per 100 inhabitants, while other countries – such as Equatorial Guinea, Angola, South Sudan and Ethiopia – have less than 50 subscriptions per 100 inhabitants. This means that there is so much diversity in Africa that the trends of certain African countries will not necessarily be followed by the remaining countries in the continent and this, of course, makes it difficult to anticipate trends globally.
In fact, the level of maturity of each country’s telecommunications market will differ depending on the stage of liberalisation it is at.
In broad terms, the initial stage of the telecommunications market was typically that of a public monopoly, where the government owned the operator and regulated its activities. After this initial stage, three waves of reform and liberalisation could be verified. The first wave was meant to privatise the national operators (a regulatory authority eventually being created at this stage). In the second wave (which could occur simultaneously with the first one), governments authorised the entry of new service providers and new services into the telecommunications’ market. This generally also involved the modification of the relevant licensing framework regulating the entry of new players, as well as the rules of the market. The third wave occurred when the incumbent operator’s exclusivity period finished and the market became fully competitive.
As mentioned above, each African country’s telecommunications market is at its own specific stage of development, and in some cases, this combines features of more than one of the above-mentioned stages. Below, we provide the example of three African telecommunications markets: Angola, Cabo Verde and Sao Tome and Principe.
In 2016, a new strategic plan for the licensing of the electronic communications operators was approved in Angola. According to such plan, there would be two main types of licences: (1) concession agreements for the provision of services and networks deemed ‘of special importance to the State’; and (1) licences for all other situations. The concessions were designed to generally function as global unified titles that would allow the provision of all services and networks, irrespective of the adjacent technology. Further to this, a new General Regulation for Electronic Communications was approved and, besides the issuance of concession agreements for operators already acting in the market, a new international public tender was opened for the fourth operator. According to the Angolan electronic communications’ regulatory authority, currently, there are three operators or service providers in the cellular mobile market, four operators or service providers in the fixed telephony market, four operators or service providers in the subscription TV market and five operators or service providers in the internet market. It is also worth highlighting that, recently, the frequencies 3.3-3.7GHz were allocated to the mobile operators specifically for the development of 5G. Although the state is still present in the share capital of certain operators, considering that (1) there is a regulatory authority; (2) there are various operators in each market; (3) various rules have been approved regarding not only licensing, but also many other aspects related to the functioning of the telecommunications’ market, (4) a recent international public tender was launched for a new operator, it seems that the market is heading to full competition, that is, to the above-identified third wave of liberalisation.
In Cabo Verde, the liberalisation process was initiated mainly by a 2005 statute that approved the general framework applicable to electronic communications services and networks and to related resources and services, as well as the powers of the national regulatory authority. Although still in force, this statute has been thoroughly amended three times. Currently, Cabo Verde has (1) an independent multisectoral regulatory authority; (2) a ‘general authorization’ as a rule for the provision of services and networks irrespective of the technology used or the service provided; (3) various rules directed to the regulation of the market; and (4) a number of operators in each market. According to the regulatory authority, there are three operators on the fixed telephony market, two operators on the mobile telephony market, two operators on the mobile internet market, one operator on the fixed internet market and four operators on the subscription TV market. 4G public tender was launched in the end of 2019. There is a clear intention to achieve a full competitive market, although the state still holds some shareholdings.
In the islands of Sao Tome and Principe, the first wave of liberalisation dates back to 2004 and included a telecommunications law; the creation of the multisector regulatory authority (in 2005); the concession of two licences to the incumbent operator (a fixed and a mobile licence in 2007); the approval of various rules applicable to the telecommunications market (mostly in 2007, 2009 and 2012); the opening of a public tender for a second operator (2012) and the granting of a licence to a new private operator in 2013. Additionally, at the end of last year, a public consultation for the introduction of 4G mobile communications networks was launched. Considering the above, this market seems to have passed the first wave of liberalisation mentioned and to be somewhere in the second wave.
These waves of liberalisation have, of course, paved the way for several areas of potential disputes that a state monopoly was not prone to trigger, linked with the creation of regulatory authorities, the enacting of innumerable statutes governing the new telecommunications markets, competition between public and private parties or only private parties, and the need for such parties to settle on certain areas (such as sharing of infrastructures and interconnection) and to comply with higher quality standards of the services provided to consumers.
Dispute log and trends in the african telecommunications sector
In 2010, the ICC reported that disputes in the telecommunications’ sector as a whole represented a total of 8.2 per cent of all cases launched that year and in 2015 these dropped to 5 per cent, the same being said of 2020, heavily contrasting with the construction and engineering sector that has consistently accounted for around a quarter of the cases handled by the institution over the past decade. The same pattern is found at the ICSID level where only 7 per cent of total cases, to date, originate from the ‘information and communication sector’.
On the other hand, of all the cases launched with ICSID that originate from the ‘information and communication sector’, only seven involve African states, namely, Algeria, Cabo Verde, the Democratic Republic of Congo, Egypt, Madagascar, Senegal and Sudan. Other than this, given that not all cases are accessible, there is data of a few other (non-ICSID) cases stemming or linked with this sector and involving African parties or states.
On this, it is worth pointing out that while these cases involve companies from the sector, their subject matters are not all linked with telecommunications per se. This is the case, for instance, with the dispute between Senegal’s Wari and the Luxembourg based Millicom International Cellular over a deal to sell the latter’s subsidiary in Senegal, Tigo, to the former and this was also the case with the ICC shareholder dispute opposing PT Ventures and the Cabo Verde State (though closely knitted with the ICSID case No. ARB/15/21 where PT Ventures claimed compensation for expropriatory measures, including the extinction of the exclusivity rights in the telecommunications concession agreement, and for other breaches of the Portugal-Cabo Verde BIT – including claims of breach of the FET standard and discriminatory treatment – with negative impacts on PT Ventures’ investment in Cabo Verde). This is also the case with the dispute opposing PT Ventures SGPS, SA against Vidatel Ltd, Mercury – Serviços de Telecomunicacões SA and Geni SA where PT Ventures began ICC arbitration proceedings pursuant to an arbitration agreement contained in the shareholders’ agreement, arguing that over the years, Vidatel, Mercury and Geni had conspired to side-line it from the management of Unitel. In particular, PT Ventures objected to being excluded from the board of Unitel and to the withholding of payment of dividends by the other three shareholders.
In any event, the growing liberalisation of the telecommunications markets across Africa and the fast-paced technological changes are undeniable incentives to the increase of disputes. According to ITU and the World Bank, ‘In the rapid formation of these new relationships [among service providers, network operators and end users] and deployment of new technologies, it is inevitable that some relations and technologies will fail’ and therefore, disputes will arise. Also, ‘turbulent changes . . . resulting . . . from a cycle of rapid market growth, followed by sudden, nearly catastrophic, financial collapse’ also brings disputes.
Accordingly, several sorts of disputes linked with the telecommunications’ market and all its players are expected to surface as the African markets mature. And whereas several sorts of disputes that usually surface in the underlying telecommunications’ sector are expected – and consequently, are likely to emerge in Africa – such as (1) disputes related to liberalisation such as the one that arose between PT Ventures and the Cabo Verde state (ICSID case No. ARB/15/21), (2) investment disputes, (3) interconnection disputes (4) radio frequency disputes (5) disputes between service providers or between these and regulators, (6) disputes with consumers among others, those linked with international gateways are also susceptible of surfacing in the long-run. This will typically occur when the underlying governments grant the monopoly of the international gateway operation to a single operator, leaving all international traffic to be routed via such international gateway and the relevant operator to be the sole entity allowed to negotiate and enter into international interconnection agreements with international carriers.
Naturally, though not all disputes emerging from this sector in Africa will be dealt with by arbitration – and in some cases, resorting to arbitration will be limited from the onset – it is worth pointing out, for instance, that the Cabo Verdean electronic communications’ law specifically mentions arbitration as a dispute resolution mechanism between operators and consumers and the licences issued for the two operators in Sao Tome and Principe (which were approved by a legal statute) also contain provisions governing potential arbitrations for certain types of disputes.
There is much effort being put into fomenting investment in the continent. With the advent of the Pan-African Investment Code in 2016, which will likely build momentum for African states to engage further in investment promotion, investment protection, investment facilitation and, perhaps, all the three combined, and the Agreement Establishing the Continental Free Trade Agreement, which entered into force on 30 May 2019, expectations are high for Africa’s already steady course on both the arbitration and the telecommunications’ fronts.
 Magda Cocco, Tiago Bessa and Carla Gonçalves Borges are partners, Marília Frias and Catarina Carvalho Cunha are managing associates, and Bernardo Kahn is an associate at Vieira de Almeida e Associados.
 Kenya (in 2015), Sudan (in 2016), Madagascar (in 2017), Tanzania (in 2021) and Ethiopia (also in 2021). See Lisa Bosman (ed), Arbitration in Africa: A Practitioner’s Guide, 2nd edition (©Kluwer Law International; Kluwer Law International 2021) p. xxxiv.
 ITU Global ICT Regulatory Outlook 2020, page 20 (https://www.itu.int/dms_pub/itu-d/opb/pref/D-PREF-BB.REG_OUT01-2020-PDF-E.pdf).
 ITU Global ICT Regulatory Outlook 2020, page 20 (https://www.itu.int/dms_pub/itu-d/opb/pref/D-PREF-BB.REG_OUT01-2020-PDF-E.pdf).
 Digital trends in Africa 2021, ‘Information and communications technology trends and developments in the Africa region 2017-2020’, ITU, p. 27.
 Omole, Ayobami, ‘Africa telecoms: This year’s highlights and the trends to watch in 2022’, 28 December 2021 (https://tellimer.com/article/africa-telecoms-this-years-highlights-and-the).
 Digital trends in Africa 2021, ‘Information and communications technology trends and developments in the Africa region 2017-2020’, ITU, p. 5.
 Moreover, the African continent, is in various aspects behind the world average. For instance, African active mobile broadband subscriptions per 100 inhabitants was 33.1 in 2019, ‘trailing far behind the world average of 75 per 100 inhabitants’. Also, Africa ‘compared with other regions, has one of the lowest fixed broadband subscriptions’ and has high prices for telecommunications and ICT services. (cfr. Digital trends in Africa 2021, Information and communications technology trends and developments in the Africa region 2017-2020, ITU, pp. 5 and 15.)
 Telecommunications Regulation Handbook, pp. 9 and 10.
 Presidential Decree 122/16, of 9 June 2016.
 The General Regulation for Electronic Communications was approved by Presidential Decree 108/16, of 25 May.
 Presidential Dispatch 200/21, of 23 November 2021.
 For instance, the infrastructure sharing regulation was recently reviewed by Presidential Decree 42/22, of 10 February 2022.
 Cf. Legislative Decree 7/2005, of 28 November 2005.
 Cf. Law no. 3/2004, of 2 July 2004.
 Cf. Decree-Law 14/2005, of 21 November 2005, that created AGER – Autoridade Geral de Regulação.
 The incumbent operator is called Companhia Santomense de Telecomunicações or CST.
 Decree 2/2007, of 4 September 2007 (fixed licence) and Decree 33/2007, of 7 December 2007 (mobile licence).
 The public tender was approved by means of Decrees 37/2012 and 38/2012, of 12 November 2012.
 Decree 6/2013, of 2 May 2013, that granted the licence to UNITEL STP.
 Cf. regulatory authority website, https://www.ager-stp.org/index.php/pt/actualidades/19-annonces/89-comunicado-2.
 As further explained in the Telecommunications Regulation Handbook, regulatory organisations may take various forms (including, single-sector regulator, converged regulator, multi-sector regulator) or may even be non-existent, in the cases where no entity is created and there is reliance on the competition rules. For further information, please refer to Telecommunications Regulation Handbook, pp. 14 et seq.
 Orascom TMT Investments S.à r.l. v. People’s Democratic Republic of Algeria, ICSID Case No. ARB/12/35.
 PT Ventures, SGPS, S.A. v. Republic of Cabo Verde (ICSID Case No. ARB/15/12).
 AAN Digital Services Holding Company (KSC) v. Democratic Republic of the Congo (ICSID Case No. ARB/19/24).
 Al Jazeera Media Network v. Arab Republic of Egypt (ICSID Case No. ARB/16/1).
 LTME Mauritius Limited and Madamobil Holdings Mauritius Limited v. Republic of Madagascar (ICSID Case No. ARB/17/28).
 Millicom International Operations BV and Sentel GSM SA v. The Republic of Senegal, ICSID Case No. ARB/08/20.
 Michael Dagher v. Republic of the Sudan (ICSID Case No. ARB/14/2).
 Angola (PT Ventures SGPS SA v. Vidatel Ltd, Mercury – Serviços de Telecomunicacões SA and Geni SA, ICC Case No. 21404/ASM/JPA (C-21757/ASM)) / Senegal (Millicom International Cellular SA v. Wari Group SA) / PT Ventures SGPS SA v. Vidatel Ltd, Mercury – Serviços de Telecomunicacões SA and Geni SA, ICC Case No. 21404/ASM/JPA (C-21757/ASM).
 Thomson Reuters Practical Law, Paris Court of Appeal upholds ICC award rendered by five-member panel appointed by ICC accessed on 20.04.2022: https://uk.practicallaw.thomsonreuters.com/w-029-5172?transitionType=Default&contextData=(sc.Default)&firstPage=true.
 Dispute Resolution in the Telecommunications Sector: current practices and future directions, cfr. https://www.itu.int/ITU-D/treg/publications/ITU_WB_Dispute_Res-E.pdf.
 Dispute Resolution in the Telecommunications Sector: current practices and future directions, page 1 of the report, page 15 of the pdf.
 Cf. Legislative Decree 7/2005, of 28 November 2005.