Investment Treaty Arbitration: Gambia

ECOWAS Energy Protocol

Yes

Yes

Yes

Yes

Yes

3 months

Yes

Yes

Guinea (not in force)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Mauritania (not in force)

Yes

Yes

Yes

Yes

Yes

3 months

Yes

Yes

Morocco

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Netherlands

Yes

No

Yes

Yes

Yes

No

No

Yes

OIC Investment

No

Yes

Yes

Yes

Non

Compulsory conciliation - period undetermined

Yes

Yes

Switzerland

Yes

Yes

Yes

Yes

Yes

12 months

No

Yes

Qatar (not in force)

Yes

Yes

No

Yes

No

6 months

Yes

Yes

United Kingdom (not in force)

Yes

Yes

Yes

Yes

Yes

3 months

Yes

Yes

Seat of investor/substantial business activities

While the majority of Gambian investment treaties provide that a juridical or legal person need only be constituted under the law of a Contracting Party to qualify as an ‘investor’, a number of Gambian investment treaties impose further requirements. The Switzerland BIT provides that ‘legal entities’ must also ‘have their seat, together with real economic activities’ in the territory of a Contracting Party and the Morocco BIT requires a ‘legal person’ to have its ‘head office’ in the territory of either Contracting Party. The Qatar BIT requires companies and other legal entities incorporated in Qatar, but not those in The Gambia, to also have their headquarters in Qatar.

Third-party legal persons

The Switzerland BIT provides that ‘legal entities established under the law of any country’ may qualify as ‘investors’ under that BIT, provided that they are controlled, directly or indirectly, by nationals (natural persons) of a Contracting Party or by legal entities that have their seat, together with real economic activities, in the territory of a Contracting Party. The Netherlands BIT does not contain a definition of ‘investor’, but with respect to the definition of ‘nationals’, provides that legal persons not constituted under the law of a Contracting Party may qualify as a ‘national’ under the treaty if they are controlled, directly or indirectly, by national persons with the Nationality of that Contracting Party, or legal persons constituted under the law of that Contracting Party.

Residents

The ECOWAS Energy Protocol includes in its definition of ‘investor’ any natural person who resides or establishes an office in the area of a Contracting Party in accordance with its laws.

Eligible assets

The majority of Gambian investment treaties contain the typically broad formulation of ‘every kind of asset’ to qualify an ‘investment’. The Guinea BIT adds that these assets must be ‘invested in connection with economic activities.’ The multilateral Organisation of the Islamic Conference Treaty, to which The Gambia is a party, defines ‘investment’ as ‘the employment of capital.’ ‘Capital’ is defined separately, and very broadly, as all assets, ‘including everything that can be evaluated in monetary terms.’ The definition also states that this extends to everything pertaining to such assets including, inter alia, profits accruing from such assets, undivided shares and intangible rights.

Indirect control of assets

Only one investment treaty to which The Gambia is a party, the ECOWAS Energy Protocol, includes in its definition of ‘investment’ assets owned or controlled directly or indirectly by an investor.

Commencement of treaty protection

While all of The Gambian investment treaties (save for the Organisation of the Islamic Conference Treaty, which is silent on rationae temporis) expressly provide for protection of investments made prior to the entry into force of those agreements , the Guinea and Mauritania BITs, and the ECOWAS Energy Protocol, state that those treaties do not apply to disputes that have arisen prior to their entry into force.

Admission/compliance with national law

The Mauritania BIT limits the term ‘investment’ to those ‘admitted’ in the territories of the parties in accordance with the relevant laws, regulations and administrative practices, while the Guinea, Morocco and Qatar BITs also provide that protected ‘investments’ are those invested in accordance with national laws and regulations.

Formulations of the FET standard

While the majority of Gambian investment treaties provide no more than that the parties must accord fair and equitable treatment, two treaties do contain further particularities. The Guinea and Morocco BITs both link FET to most-favoured-nation treatment (the references to FET in the Guinea BIT are found within that treaty’s MFN article). These treaties provide that the parties must accord FET that is not less favourable than that which is accorded to investors of any third State.

Indirect expropriation

A number of Gambian investment treaties, both bilateral (Switzerland, Qatar and the Netherlands BITs) and multilateral (the Organisation of the Islamic Conference Treaty) explicitly provide protection against indirect expropriation.

Expropriation in accordance

with the ‘due process of law’

While the majority of Gambian investment treaties provide that any expropriation must be carried out ‘in accordance with’ or ‘under’ due process of law, the Qatar BIT does not contain any such requirement. The Organisation of the Islamic Conference Treaty provides that it is ‘permissible’ to expropriate when, inter alia, such expropriation has been carried out ‘in accordance with the law’ (as opposed to ‘in accordance with the due process of law).

Exceptions to MFN treatment

All Gambian investment treaties contain exceptions to MFN obligations under those treaties with respect to privileges accorded pursuant to customs unions, free trade areas, monetary unions and other similar international agreements. With the exception of the Switzerland BIT, such exceptions also apply to international tax agreements. While some treaties provide that the exception applies to international tax agreements generally (see the UK, Qatar and Morocco BITs), others specify the type of taxation agreement that is exempt. The Netherlands BIT provides that advantages accorded under double taxation agreements are not covered by the MFN article, while the Organisation of the Islamic Conference Treaty provides that the MFN obligation does not extend to privileges provided pursuant to ‘mutual tax exemption arrangements.’

Scope of national and MFN treatment

The majority of Gambian treaties afford national and MFN treatment to ‘investments’ and ‘returns’ from such investments (the Mauritania and Morocco BITs do not, however, stipulate ‘returns’ as being covered by the national treatment and MFN clause). The UK, Morocco and Guinea BITs also provide that the national and MFN treatment protections apply to the ‘management, maintenance, use, enjoyment or disposal of their investments.’ The Netherlands BIT specifically provides that, in addition to applying generally, the national and MFN treatment obligation extends to taxes, fees, charges and to fiscal deductions and exemptions for investors engaged in economic activity.

Scope of national and MFN treatment restricted to FET

The Switzerland BIT provides that the parties shall ensure fair and equitable treatment to investors and their investments and that ‘this treatment’ shall be no less favourable than that afforded to national investors and investors of the MFN. This could therefore be construed as limiting the obligation to provide MFN treatment to one to provide FET no less favourable than FET provided to investors of the MFN.

Formulations of the standard

All except for two of The Gambian investment treaties (Qatar and Switzerland BITs) contain the obligation to provide protection and security. The majority of those treaties contain the common formulation of the standard whereby the obligation is one to provide ‘full protection and security.’ The Organisation of the Islamic Conference Treaty, however, provides that the obligation is one to provide ‘adequate’ protection and security, the Netherlands BIT provides for full ‘physical’ protection and security (thereby potentially limiting claims to those relating to physical rather than legal protection and security), and the ECOWAS Energy Protocol provides for the ‘most constant’ protection and security.

Formulations of the standard

All except four of The Gambia’s investment treaties (the Guinea, Switzerland and Qatar BITs and the Organisation of the Islamic Conference Treaty) contain umbrella clauses. For those treaties that do contain umbrella clauses, the wording is very consistent, obliging parties to observe any obligation it may have entered into regarding an investor and its investment.

Armed conflict/civil strife

All of The Gambia’s investment treaties, save for the Organisation of the Islamic Conference Treaty, contain compensation for losses provisions. These provisions provide that compensation or restitution awarded to investors due to armed conflict or civil strife will be just as favourable as that awarded to nationals of the host State or of nationals of the MFN.

Free transfer of payments

All Gambian investment treaties contain a provision requiring the Contracting Parties to permit the free transfer of payment sand returns relating to investments. The free transfer provisions in the majority of these treaties (though not the Netherlands, UK, Switzerland and Qatar BITs) are subject to the laws and regulations in force in the territories of the Contracting Party. The Morocco BIT provides that the guarantee of free transfer only operates after the payment of tax.

Non-impairment by unreasonable or discriminatory measures

All Gambian investment treaties, save for the Qatar BIT and the Organisation of the Islamic Conference Treaty, contain a provision prohibiting Contracting Parties from impairing, by unreasonable or discriminatory measures, the management, maintenance, use, enjoyment or disposal of investments.

Fork-in-the-road provisions

Only the Qatar BIT contains what could be described as a fork-in-the-road clause. While the wording of this clause is not the same as typical fork-in-the-road clauses, it states that once an investor has chosen either local litigation, ICSID arbitration and ad hoc arbitration, the investor cannot then avail itself of the other two options. It would seem therefore to have the effect of baring an investor from international arbitration once it has brought its claim before the local courts. The Organisation of the Islamic Conference Treaty likewise prevents investors from bringing claims to international arbitration once they have been submitted to the national courts.

Negotiation/cooling-off periods

All of The Gambia’s investment treaties, save for the Netherlands BIT, contain either compulsory conciliation (Organisation of the Islamic Conference Treaty) or mandatory settlement periods to be observed prior to the lodging of claims. These periods are either 3, 6 or in the case of the Switzerland BIT, 12 months.

International arbitration fora

Of The Gambian investment treaties only three do no not provide a choice of international fora, with the Switzerland and the Netherlands BITs providing only for ICSID arbitration and the Organisation of the Islamic Conference Treaty providing only for ad hoc international arbitration. Three treaties provide for a choice between ICSID and ad hoc arbitration (see the Morocco, Qatar and Guinea BITs), while the Mauritania BIT provides for a choice between ICC and ad hoc arbitration. The ECOWAS Energy Protocol, in addition to ICSID and ad hoc arbitration, provides investors with the option of having claims administered by the Stockholm Chamber of Commerce and the Organisation for the Harmonisation of Trade Laws in Africa.

Government entity to which claim notices are sent

Claim notices should be sent to the Ministry of Justice or the Office of the President.

Government department that manages investment treaty arbitrations

The government departments that manage investment treaty arbitrations are the Ministry of Justice and the Office of the President.

Internal/external counsel

Yes, external counsel are used by the state in investment treaty arbitrations. It is not known whether the state normally goes through a formal public procurement process when hiring external counsel.

Washington Convention implementing legislation

The ICSID website states that the Gambia has signed and ratified the ICSID convention, though sources indicate that this issue is under dispute in an ongoing ICSID arbitration.

New York Convention implementing legislation

No, The Gambia has not signed and ratified the New York Convention. However, the New York Convention is scheduled to The Gambian Alternative Dispute Resolution Act (2005), and pursuant to Article 56 of that Act, the provisions of the New York Convention apply to the recognition and enforcement of foreign arbitral awards in The Gambia.

Legislation governing non-ICSID arbitrations

There is no legislation specifically governing investment arbitrations seated within the Gambia. All arbitrations seated within the Gambia are governed by the Gambian Alternative Dispute Resolution Act (2005).

Compliance with adverse awards

There is only one investment treaty arbitration in which The Gambia was a respondent that has concluded, Alimenta S.A. v. Republic of The Gambia (ICSID Case No. ARB/99/5). This matter settled. Therefore The Gambia has to date not been called upon to comply with any adverse award against it.

Attitude of government towards investment treaty arbitration

The Gambia has a cooperative attitude towards investment treaty arbitration. In a number of concluded arbitrations to which it was a party, such as Alimenta S.A. v The Gambia, African Petroleum Gambia Limited (Block A1) v Republic of The Gambia and African Petroleum Gambia Limited (Block A4) v Republic of The Gambia, settlements were reached.

Attitude of local courts towards investment treaty arbitration

This question is not strictly applicable as the local courts have not been called upon to enforce an investment treaty arbitration award. However, The Gambian judiciary is seen generally to be supportive of parties seeking to enforce international arbitral awards, including those against the government. In the case of Luis Diaz de Losada Construction Company Limited v. The Gambian Government, The Gambian Supreme Court ordered the enforcement of an ICC award against the government.

The Gambia Investment and Export Promotion Agency Act, 2010

No

Yes

Yes – right to employ foreign personnel, right to transfer funds

Yes

Yes – local arbitration under the Gambian Alternative Dispute Resolution Act (2005) and ICSID arbitration are both provided for under the Act.

Settled

Alimenta SA v Republic of The Gambia (ICSID Case No. ARB/99/5).

African Petroleum Gambia Limited (Block A1) v Republic of The Gambia (ICSID Case No. ARB/14/6)

African Petroleum Gambia Limited (Block A4) v Republic of The Gambia (ICSID Case No. ARB/14/7)

Carnegie Minerals (Gambia) Limited v Republic of The Gambia (ICSID Case No. ARB/09/19)