24/10/2018

Guglielmo Verdirame in ICSID victory for the Republic of Kenya

In a significant victory, the Republic of Kenya has successfully defended claims worth around US$2 billion in investment arbitration proceedings.

Brought by mining investor, Cortec Mining Kenya Limited, under the 1999 Bilateral Investment Treaty between the UK and Kenya, the claims related to the alleged expropriation of a mining licence in respect of rare earth deposits in Mrima Hill, an area subject to various environmental and cultural protections in Kwale County, Kenya. Cortec claimed that Kenya unlawfully revoked a mining licence which had allegedly been granted to them in early 2013.

The arbitration took place under the auspices of the World Bank’s International Centre for Settlement of Investment Disputes (ICSID). The case was heard over two weeks in Dubai in January 2018. The Tribunal issued its award on 22 October 2018.

The Tribunal held that that the claimants had failed to comply with the applicable legal and regulatory provisions relating to the grant of mining licences under Kenyan law, and “showed serious disrespect for the fundamental public policies of the host country in relation to the environment and resource development”. The Tribunal dismissed all of the claimants’ claims and ordered them to pay the Republic of Kenya costs and ICSID fees in excess of US$3.5 million.

The Republic of Kenya was represented by a team from Attorney General’s office led by Ms Njeri Wachira, Deputy Solicitor General; Guglielmo Verdirame of 20 Essex Street Chambers; DLA Piper France and UK; and DLA Piper Africa member firm IKM Advocates, Nairobi.

The dispute had received considerable attention in the media, and the award has already gained widespread media attention throughout the legal and Kenyan press:

Global Arbitration Review

Reuters

IA Reporter

Citizen TV

Business Daily Africa

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