On 30 August 2018 Laurence Shore, spoke at the 2018 East Africa International Arbitration Conference, which took place in Addis Ababa, Ethiopia.
The topic of his presentation was “Towards Regional Investment Arbitration?” in Africa. He addressed three main issues concerning investor-state disputes:
(i) Proliferation of regional investment instruments
In recent years, African States have promulgated a number of regional instruments that aim to redesign the balance of treaty arbitration, by placing obligations on investors, limiting their substantive protections, and strengthening the positions of host States. These regional instruments include the States’ adoption of regional investment codes and regional treaties. On a continental level, the Pan African Investment Code is the most notable example of redesigning the balance in the investment legal regime. For example, the Code expressly allows States to file counterclaims against investors.
(ii) Potential Procedural quagmire
In redefining the investor-State balance, the regional instruments may well exert a salutary influence on several matters, bringing human rights, corporate social responsibility and investor obligations at the center of foreign direct investment. However, the proliferation of these regional instruments may also create uncertainties, due to the overlapping of treaties. Investors and States may find themselves entangled in a legal web, with conflicting duties under national laws, investment contracts, regional instruments and bilateral investment treaties (“BITs”).
(iii) The enduring significance of Chinese foreign direct investment (“FDI”) in Africa and, specifically, Ethiopia
The importance of Chinese investment in Africa can be immediately perceived by looking at the African Union headquarters in Addis Ababa. The impressive building was a gift six years ago from the Chinese government. The headquarters building reinforces the importance of China for African States in terms of international investment and arbitration. Foreign direct investment from China closely tracks the upward curve of Ethiopia’s GDP over the past 15 years. Accordingly, international investment arbitration in Africa and Ethiopia in particular, will continue to be greatly influenced by the need to attract Chinese investors.
Regardless of the promulgation of intra-African BITs and intra-African treaties, the key for international investment arbitration still lies with the Africa’s need to attract foreign direct investment and investors.