Investment Treaty Arbitration

Investment Treaty Arbitration: Burundi

Overview of investment treaty programme

1. What are the key features of the investment treaties to which this country is a party?

Burundi

BIT Contracting Party or MIT

Substantive protections

Procedural rights

Fair and equitable treatment (FET)

Expropriation

Protection
and security

Most-favoured-nation (MFN)

Umbrella clause

Cooling-off period

Local courts

Arbitration

Belgium-Luxembourg
(13 April 1989)

Yes

Yes

Yes

Yes

No

3 months

No

Yes

United Kingdom
(13 September 1990)

Yes

Yes

Yes

Yes

Yes

3 months

No

Yes

Netherlands
(24 May 2007)

Yes

Yes

Yes

Yes

Yes

3 months

Yes

Yes

Mauritius (18 May 2001)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Qualifying criteria - any unique or distinguishing features?

2. What are the distinguishing features of the definition of “investor” in this country’s investment treaties?

Burundi

Issue

Distinguishing features in relation to the definition of ‘investor’

Seat of the investor/place of business

While most of Burundi’s investment treaties provide that a juridical person incorporated or duly organized according to the laws of a Contracting Party (ie, a country that is party to the treaty) is an ‘investor,’ two treaties (Belgium and Germany BITs) also require that such entities have their ‘seat’ within the territory of a Contracting Party. One treaty (UK BIT) requires that a juridical person have its ‘registered place of business within the Burundi scope of application’ of the treaty, without reciprocal obligation on the part of the other Contracting Party’s companies.

Control by a non-national

None of Burundi’s investment treaties expressly provide for protection of juridical persons that are owned or controlled by investors of a non-party. Only one treaty (Netherlands BIT) includes within the definition of ‘investor’ juridical persons not organized according to the laws of a Contracting Party, but directly or indirectly controlled by natural or juridical persons as defined in that treaty.

Permanent residents

The term ‘investor’ is normally defined to include only citizens of a Contracting Party, without addressing permanent residents.

Dual nationals

None of Burundi’s investment treaties expressly address dual nationals.

3. What are the distinguishing features of the definition of "investment" in this country’s investment treaties?

Burundi

Issue

Distinguishing features in relation to the concept of ‘investment’

Assets which qualify for protection

Most of Burundi’s investment treaties broadly define ‘investment’ to include ‘every kind of asset’ held by a national. With one exception (Belgium BIT), none of Burundi’s investment treaties expressly include indirect investments.

Indirect control of assets

None of Burundi’s investment treaties expressly include in the definition of ‘investment’ assets controlled indirectly by a protected investor.

Exclusion of certain assets

None of Burundi’s investment treaties expressly exclude from the definition of ‘investment’ certain types of assets.

Commencement of treaty protection

Most of Burundi’s investment treaties expressly protect all existing investment, including those that were made prior to the treaty’s entry into force (Germany, Belgium, UK and Mauritius BITs), implying that one treaty (Netherlands BIT) does not.

Admission/approval of an investment

Only one treaty (Mauritius BIT) requires that an investment, in order to be eligible for protection, must be in conformity with the laws and regulations of the Contracting Party in whose territory the investment is made.

Special formalities

None of Burundi’s investment treaties prescribe special formalities in connection with covered investments.

Substantive protections - any unique or distinguishing features?

4. What are the distinguishing features of the fair and equitable treatment standard in this country’s investment treaties?

Burundi

Issue

Distinguishing features of the fair and equitable treatment standard

Illustrations of the FET standard

All of Burundi’s investment treaties simply provide that each Contracting Party shall ensure fair and equitable treatment to investments, without being more prescriptive. Two treaties (Belgium and Mauritius BITs) specify that the standard applies to both direct and indirect investments.

Customary international law

None of Burundi’s investment treaties expressly equate the obligation to provide fair and equitable treatment with the concept of fair and equitable treatment under customary international law.

5. What are the distinguishing features of the protection against expropriation standard in this country’s investment treaties?

Burundi

Issue

Distinguishing features of the ‘expropriation’ standard

Right to regulate for a public purpose

While all of Burundi’s investment treaties provide protection against any form of expropriation without adequate compensation, one treaty (Belgium BIT) expressly reserves the right to take expropriatory action in exceptional cases where such is necessary in the public interest, safety or the national interest (but even in such cases, the host state must effect adequate and effective payment). One treaty (UK BIT) expressly calls for ‘prompt, adequate and effective’ compensation, two others (Belgium and Mauritius BITs) provide for ‘adequate and effective’ compensation, while yet another (Netherlands BIT) merely requires ‘just’ compensation.

Indirect expropriation

Only one of Burundi’s investment treaties (Netherlands BIT) expressly protects against indirect expropriation, without listing factors to be considered in determining whether there has been an indirect expropriation.

Limited right to arbitration

None of Burundi’s investment treaties limit the right to commence arbitration to situations where the dispute relates to the amount of compensation payable as a result of an expropriation of property.

Expropriation in accordance with the ‘due process of law’

None of Burundi’s investment treaties expressly require that any expropriation of an investment must occur under ‘due process of law.’ However, one treaty (Germany BIT) requires that the legality of any expropriation ‘be subject to review by due process of law,’ while another (Belgium BIT) requires expropriatory measures to be taken in accordance with a lawful procedure and yet another (Netherlands BIT) requires such measures to be taken in accordance with the good administration of justice or in conformity with legal rules (Mauritius BIT).

Taxation and expropriation

None of Burundi’s investment treaties list considerations to be taken into account to determine whether a taxation measure constitutes an expropriation.

6. What are the distinguishing features of the national treatment/most-favoured-nation treatment standard in this country’s investment treaties?

Burundi

Issue

Distinguishing features of the ‘national treatment’ and/or ‘most favoured nation’ standard

Common Exceptions to MFN treatment

With one exception (Belgium BIT), all of Burundi’s investment treaties expressly provide that the provision of ‘most favoured nation’ and/or ‘national’ treatment to an investment does not extend to the benefits of membership of a customs union, monetary union or free trade area, nor to taxation agreements and/or taxation legislation.

Scope of MFN treatment

Generally, the MFN protection contained within Burundi’s BITs applies to ‘investments’ and ‘investors,’ with two treaties (UK and Mauritius BITs) also referring expressly to ‘returns of investors.’ Two of Burundi’s investment treaties (Germany and Belgium BITs) also expressly extend protection to activities in connection with or associated with investments.

Limitation on national treatment

Except for the above-mentioned exception, none of Burundi’s investment treaties impose any limitation.

7. What are the distinguishing features of the obligation to provide protection and security to qualifying investments in this country’s investment treaties?

Burundi

Issue

Distinguishing features of the ‘protection and security’ standard

Scope

The formulation of the standard varies in Burundi’s investment treaties. Most provide for ‘full protection and security’ (eg, Germany, UK and Netherlands BITs). One treaty simply requires ‘protection and security’ (Mauritius BIT).

Customary international law on protection and security

The obligation to provide protection and security is limited in none of Burundi’s investment treaties to that required under customary international law. One treaty (Belgium BIT) expressly provides that the treatment and protection provided cannot be less favourable than those recognized by international law.

8. What are the distinguishing features of the umbrella clauses contained within this country’s investment treaties?

Burundi

Issue

Other substantive protections

Scope

Three of Burundi’s investment treaties contain an umbrella clause (ie, Germany, UK and Netherlands BITs). One treaty (Germany BIT) refers to investments ‘in its territory,’ whereas the others contain no territorial reference. Two treaties (Germany and UK BITs) refer to ‘nationals or companies of the other Contracting Party,’ whereas one (Netherlands BIT) refers simply to ‘investors of the other Contracting Party.’

Qualifications of the obligation

None of Burundi’s investment treaties featuring an umbrella clause contain any qualifications in relation to the umbrella clause.

9. What are the other most important substantive rights provided to qualifying investors in this country?

Burundi

Issue

Distinguishing features of any ‘umbrella clause’

Free transfer of payments

All of Burundi’s investment treaties contain a provision which requires the Contracting Parties to permit investors to transfer investments and investment returns freely, without exception.

Non-impairment

Most of Burundi’s investment treaties impose upon Contracting Parties an obligation not to impair the management, maintenance, use, enjoyment or disposal of investments (ie, Belgium, UK, Netherlands and Mauritius BITs).

Armed conflict/civil unrest

All of Burundi’s investment treaties guarantee investors of Contracting Parties ‘most favoured nation’ treatment in regards to compensation paid to investors of other states in the case of armed conflict or civil unrest. Those treaties also provide for ‘national’ treatment in such circumstances.

Transparency

None of Burundi‘s investment treaties contain any transparency provisions.

General exceptions

Some of Burundi’s investment treaties provide general exceptions to substantive protections where the State adopts measures for reasons of public security and order, public health or morality (Germany and Mauritius BITs)

Procedural rights in this country’s investment treaties

10. Are there any relevant issues related to procedural rights in this country’s investment treaties?

Burundi

Issue

Procedural rights

Fork-in-the-road

None of Burundi’s investment treaties contain a so-called fork-in-the-road provision, with the possible exception of two treaties (Netherlands and Mauritius BITs) which provide eligible investors with the option of litigation or arbitration.

Waiver of local remedies

None of Burundi’s investment treaties condition the right to commence arbitration on an investor having waived its right to pursue any cause of action arising from the same circumstances giving rise to the alleged breach of the treaty in the Contracting Party’s courts or tribunals.

Exhaustion of local remedies

The right to commence arbitration under Burundi’s investment treaties is not contingent on the exhaustion of local remedies.

ICSID or ad-hoc arbitration

Most of Burundi’s investment treaties provide a right of recourse to ICSID. One treaty (Netherlands BIT) also allows investors to pursue an arbitration claim through an ad hoc tribunal constituted in accordance with the UNCITRAL Rules.

Time limits

None of Burundi’s investment treaties require that a claim be commenced within a specified time of the investor having first acquired knowledge of the facts giving rise to the alleged breach.

Use of MFN to expand procedural rights

None of Burundi’s investment treaties expressly provide that MFN treatment does not encompass investor-State dispute settlement procedures or mechanisms.

Applicable law

Burundi investment treaties which provide a right to refer a dispute to ICSID are generally silent as to what law or laws are to govern the parties’ dispute (an exception to this is the Belgium BIT which provides that the tribunal shall decide the dispute in accordance with the law of the Contracting State party to the dispute, the treaty, the provisions of any applicable investment agreement, and the generally recognized rules and principles of international law). In such circumstances, the applicable law is likely to be determined in accordance with Article 42 of the ICSID Convention, which provides that in the absence of an agreement between the parties, the tribunal shall apply the law of the Contracting State party to the dispute (including its rules on the conflict of laws) and such rules of international law as may be applicable.

Confidentiality

Burundi’s investment treaties are silent on the issue of confidentiality.

Survival clauses

While the term of all of Burundi’s investment treaties is uniform (ie, ten years), the period during which a terminated treaty shall continue to be effective varies between 10 years (Belgium and Mauritius BITs) and 20 years (Germany and UK BITs), with one treaty containing a 15-year survival clause (Netherlands BIT).

11. What is the status of this country’s investment treaties?

Burundi

All of Burundi’s investment treaties have entered into force, with two exceptions: Burundi has concluded bilateral investment treaties with Comoros and Kenya on 18 May 2001 and 1 April 2009, respectively, which are not yet in force.

Practicalities of commencing an investment treaty claim against this country

12. To which governmental entity should notice of a dispute against this country under an investment treaty be sent? Is there a particular person or office to whom a dispute notice against this country should be addressed?

Burundi

Government entity to which claim notices are sent

The notice of a dispute against Burundi under an investment treaty should be sent to the Minister in charge of Foreign Affairs and International Cooperation

13. Which government department or departments manage investment treaty arbitrations on behalf of this country?

Burundi

Government department which manages investment treaty arbitrations

The Ministry of Justice and Keeper of Seals through the Department of Litigation is in charge of the management of investment treaty arbitration on behalf of Burundi.

14. Are internal or external counsel used, or expected to be used, by the state in investment treaty arbitrations? If external counsel are used, does the state normally go through a formal public procurement process when hiring them?

Burundi

Internal/external counsel

A combination of internal and external counsel has been used. The state does not normally go through a formal public procurement process when hiring external counsel.

Practicalities of enforcing an investment treaty claim against this country

15. Has the country signed and ratified the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States (1965)? Please identify any legislation implementing the Washington Convention.

Burundi

Washington Convention implementing legislation

Burundi acceded to the Convention on 5 December 1969.

16. Has the country signed and ratified the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (the New York Convention)? Please identify any legislation implementing the New York Convention.

Burundi

New York Convention implementing legislation

Yes. Law n°1/16 of 9 May 2014 on the membership of the Government of the Republic of Burundi to the Convention for Recognition and Enforcement of Foreign Arbitral Awards. However, the New York Convention will be implemented provided that the disputes arising from legal relationships, whether contractual or not, are considered commercial under Burundian law. The Convention entered into force for Burundi on 9 May 2014.

17. Does the country have legislation governing non-ICSID investment arbitrations seated within its territory?

Burundi

Legislation governing non-ICSID arbitrations

Law n°1/010 of 13 May 2014 on Civilian Procedure Code, in its Title VIII provides for arbitration in general.

18. Does the state have a history of voluntary compliance with adverse investment treaty awards; or have additional proceedings been necessary to enforce these against the state?

Burundi

Compliance with adverse awards

The investment awards need to get exequatur to be enforced in Burundi. However, it should be noted that Burundi has ratified the New York Convention, which should ease compliance with adverse awards. The State has preferred amicable settlement in respect of awards rendered against it.

19. Describe the national government’s attitude towards investment treaty arbitration

Burundi

Attitude of government towards investment treaty arbitration

Burundi is in favour of investment treaty arbitration, especially in the context of its policy of attracting investors and improving the investment climate as well as doing business in Burundi.

20. To what extent have local courts been supportive and respectful of investment treaty arbitration, including the enforcement of awards?

Burundi

Attitude of local courts towards investment treaty arbitration

Local courts are unfamiliar with investment treaty arbitration.

In Burundi, exequatur of such foreign arbitral awards should be applied for and granted if : (i) the foreign arbitral award does not contain any element which is contrary to public policy principles or public law in Burundi; (ii) the foreign arbitral award is final; (iii) the tribunal that rendered the foreign arbitral award did not obtain jurisdiction solely by reason of the plaintiff’s nationality; (iv) due process has been observed and the defendant was given an opportunity to defend itself in the proceedings resulting in the foreign arbitral award; and (v) a copy of the foreign arbitral award is submitted which satisfies the conditions necessary for its authenticity.

National legislation protecting inward investments

21. Is there any national legislation that protects inward foreign investment enacted in this country? Describe the content.

Burundi

National legislation

Substantive protections

Procedural rights

FET

Expropriation

Other

Local courts

Arbitration

Law n°1/24 of 10 September 2008 on Investment Code of Burundi

No

Yes

Yes

No

Yes

National legislation protecting outgoing foreign investment

22. Does the country have an investment guarantee scheme or offer political risk insurance that protects local investors when investing abroad? If so, what are the qualifying criteria, substantive protections provided and the means by which an investor can invoke the protections?

Burundi

Relevant guarantee scheme

Qualifying criteria, substantive protections provided and practical considerations

Multilateral Investment Guarantee Agency (MIGA)

Burundi has ratified the Convention establishing the MIGA on 10 March 1998. Under the treaty Burundi nationals and corporates are eligible, against payment of a premium, for political risk insurance from MIGA in respect of certain developing states, provided that certain conditions are met. The conditions for eligibility to MIGA are that the investment must be: (i) medium to long term in nature; (ii) support the host country development goals; (iii) comply with MIGA’s Policy on Social and Environmental; (iv) comply with sustainability and anti-corruption and fraud standards; and (v) financially viable.

Awards

23. Please provide a list of any available arbitration awards or cases initiated involving this country’s investment treaties.

Burundi

Awards

Mojzesz Lubelski v. Republic of Burundi , International Court of Arbitration of the International Chamber of Commerce (Award issued 30 October 1968).

Andover Resources NL v. Republic of Burundi , 20 June 2007, International Court of Arbitration of the International Chamber of Commerce (Discontinued by Andover resources NL in March 2009).

Entreprise Murenzi Jean et Cie (Emugeco) v. Republic of Burundi , 10 April 2007, Permanent Court of Arbitration (Award issued on 13 September 2009).

Antoine Goetz & Others v Republic of Burundi (ICSID Case No. ARB/95/3), Award on agreed terms, 2/10/1999, Belgium-Burundi BIT.

Antoine Goetz & Others v Republic of Burundi (ICSID Case No. ARB/01/2), Award of 6/21/2012, Belgium-Burundi BIT.

Joseph Houben v Republic of Burundi (ICSID Case No. ARB/13/7), Award of 1/12/2016, Belgium-Burundi BIT.

Pending proceedings

Tariq Bashir & SA Interpétrol Burundi v Republic of Burun di (ICSID Case No. ARB/14/31), registered on 12/12/2014, Belgium-Burundi BIT.

Reading List

24. Please provide a list of any articles or books that discuss this country’s investment treaties.

Burundi

N/A

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