The last few months have seen significant changes to mining regulations in various African states, giving rise to a concern that a regional trend of resource nationalism may be (re-)emerging. In this context it is important for companies associated with the mining sector to be aware of the protection international investment treaties may provide against the impact of resource nationalism on their assets, and how to maximise that protection before risks materialise. This bulletin briefly considers some of the last few months’ developments, before discussing how companies can use investment treaties to protect themselves against the risks they pose.
On 23 April 2014, the Tanzanian High Court ordered both parties in on-going ICSID arbitration proceedings, Standard Chartered Bank (Hong Kong) Limited (SCB HK) and the Tanzania Electric Supply Company (Tanesco), to refrain from “enforcing, complying with or operationalising” a decision made by the Tribunal in those ICSID proceedings on 12 February 2014.
This injunction was granted on an ex-parte basis. It is a clear breach of the ICSID Convention and of Tanzania’s international law obligations. If it is not reversed, it will be of significant concern to other international investors in Tanzania, and will likely discourage new investment.