Welcome to our latest update, focused on bringing you closer to the pulse of arbitration in Paris. In this edition we have curated key arbitration points that we believe are important for you, our clients:

• An in-depth analysis of the last decision of the French Court of Cassation on the legality of investments,
• A detailed look at the trend of post-election renegotiations of energy contracts in several African jurisdictions,
• Practical tips for effectively conducting virtual hearings in your arbitrations,
• An exploration of the intersection between arbitration and climate change, and
• A personal note on my recent engagement in Oslo discussing the protection of investments!

Enjoy the read! Please do get in touch if you have any feedback or questions.

Ioana

LATEST FRENCH ARBITRATION CASE LAW

ARBITRATION & LEGALITY: On 12 February 2025, the French Court of Cassation ruled that an arbitral tribunal can uphold its jurisdiction without examining the legality of the underlying investment.

The dispute involved the State of Libya and Turkish company Cengiz over housing projects disrupted by the 2011 Libyan uprisings. Despite allegations of corruptions at the time of the investment that were not mentioned during the arbitration, the French Court of Cassation confirmed the arbitral award that had ordered Libya to pay Cengiz over US$300 million in damages. The Court notably held that, in international investment protection, the host State’s consent to arbitration is derived from the continuous offer in a BIT, and that such offer to arbitrate is autonomous and independent from the validity of the investment.

Takeaway? This decision reinforces the principle of the autonomy of the arbitration agreement in investment arbitration, thus marking a significant affirmation of the protective scope of international arbitration for investors.

(Read my analysis of the French Court of Cassation’s decision here)

REGIONAL HIGHLIGHTS – Wave of post-election contract renegotiations in several African jurisdictions

Since President Bassirou Diomaye Faye’s election in March 2024, Senegal has initiated a significant shift in its approach to foreign investment by announcing its intention to renegotiate key mining and petroleum contracts. Recently, President Diomaye’s government further launched an ICC arbitration against ArcelorMillar to cancel their prior US$150 million arbitration settlement over an iron ore project, following allegations of fraud, corruption and money laundering. These developments reflect a broader trend among newly elected governments across Africa to assert greater control over the management of natural resources and economic terms – a shift that, while aimed at securing national interests, has not been without repercussions for foreign investors:

• Similar initiatives have indeed been observed in other African countries in recent years (such as the adoption of new mining regulations by the DRC in 2018, or Tanzania’s 2017 laws compelling mining companies to renegotiate their joint venture agreements), including Burkina Faso’s announcement in October 2024 to withdraw mining permits from foreign companies;
• These initiatives have stirred significant concerns among foreign investors, causing great apprehension about the predictability, security and economic viability of their investments, and driving them to contemplate recourse through international arbitration to safeguard their interests;
• Foreign investors keep an attentive eye on the many presidential and national assembly elections scheduled in various African countries in 2025 (Togo, Burundi, Gabon, Malawi, Seychelles, Tanzania, Côte d’Ivoire, Central African Republic, Cameroon, Equatorial Guinea);
• Going in the same direction, another trend has emerged across the continent in recent years, i.e. African states seeking to renegotiate nearly 900 bilateral and multilateral investment agreements that contain ISDS, to prioritize mechanisms that emphasize the states’ right to regulate and to ensure compliance with local domestic laws – as illustrated by the landmark Foresti v. South Africa ICSID case, which led to South Africa reviewing its BITs and further terminating some of these BITs,  and advocating for the New Africa Investment Protocol to exclude ISDS.

PRACTICAL TIPS – Conducting virtual hearings

The shift towards virtual hearings in arbitration has been significantly accelerated by the COVID-19 pandemic, leading to a surge in the recourse to online platforms for dispute resolution. Although this transition has shown their efficiency and flexibility, conducting hearings virtually comes with its own set of challenges and considerations. It is essential to approach virtual hearings with careful planning and adherence to best practices. Here are some practical tips for successfully holding virtual hearings in your arbitration procedures:

• Understand the platform: Choose a reliable and secure online platform (Zoom, Teams, etc.) that all participants – including your arbitral tribunal – are comfortable using. Familiarize yourself with its features, limitations, and security protocols to ensure a smooth hearing process;
• Prepare and sign a cyber protocol: Prior to the hearing, draft and agree upon a cyber protocol with all parties involved. This document should outline the procedures, technical requirements, and security measures for the virtual hearing, to make sure that everyone has a clear understanding of the process and standards to be followed;
• Conduct pre-hearing tests: Schedule test sessions with all participants to check the compatibility of hardware and software, internet connectivity, etc., and to familiarize everyone with the virtual hearing environment. This will allow you to address any technical issues well before the actual hearing;
• Manage documents effectively: Use a secure digital platform for sharing and accessing documents (bundles, exhibits, procedural orders, written submissions, etc.) during the hearing. Ensure that all participants have access to the necessary files and that there is a clear system for presenting and referencing these documents;
• Define rules for witness examination: It is essential to outline the procedures for the examination of witnesses and experts during the virtual hearing. This should include guidelines on how witnesses are introduced, the process for taking oaths remotely, and measures to ensure the integrity of witness testimony (such as camera setup requirements to show the witness's environment);
• Take advantage of best practices resources: Many arbitral institutions and organizations offer comprehensive resources (guidelines, checklists, protocols, etc.) on the best practices for holding virtual hearings. Delos, in particular, offers a detailed list of such resources;
• Agree on transcript and record tools: Prior to the hearing, you should agree with the other parties on recording the hearing, as well as on specific tools and procedures for the transcription of the hearing. This includes deciding whether real-time transcription will be used, the selection of a transcription service provider, and how the transcript will be shared among parties and the tribunal during and after the hearing.

SECTORIAL NEWS – Arbitration & Climate Change

The connection between efforts to mitigate climate change and international arbitration has become increasingly significant as states and corporations are confronted to the legal implications of global warming and environmental degradation, and seek to align with global climate targets set by international agreements. This shift has led to a surge in climate-related disputes in recent years, with arbitration emerging as a key forum for resolving such conflicts and addressing the legal challenges posed by the green transition – such as the focus on renewable energy projects, carbon trading, and the enforcement of environmental regulations:

• International legal framework: Major sources of international climate change law include the 1992 UN Framework Convention on Climate Change (UNFCCC), the 1997 Kyoto Protocol and the 2015 Paris Agreement. Other key legislations providing obligations relevant to climate change include the UN Convention on the Law of the Sea (UNCLOS), the Convention on Biological Diversity and the Escazú Agreement, the world’s first treaty that includes protection for environmental human rights defenders;
• Typology of climate change disputes: Climate change disputes encompass a wide range of issues, from contractual disputes arising out of the transition to green energy (risk allocation, environmental representations & warranties, supply chain, construction, etc.) to investor-state disputes triggered by changes in environmental regulation. The growth of carbon markets and green finance has also introduced new types of disputes, particularly around carbon credit transactions, the financing of environmentally sustainable projects, and even greenwashing disputes;
• Potential shift in ISDS mechanism: The increasing focus on state responsibility for climate change  suggests a move towards a more nuanced approach in ISDS – which seeks to rebalance investors’ rights with states’ obligations to address climate change to better align with global climate objectives;
• Recent case law: Notable recent examples of climate change arbitration include (i) Glencore v. Colombia, a dispute under the Colombia-Switzerland BIT that arose from the Colombian Constitutional Court’s decision to halt Glencore’s plans to alter a body of water traditionally used by an indigenous community (citing environmental and community impact concerns), and (ii) Ruby River Capital v Canada, a claim under the USMCA/NAFTA based on Canada’s decision to deny permission for the construction of an LNG plant following an environmental impact assessment;
• Pending ICJ’s first advisory opinion on climate change: After hearing held in December 2024, the ICJ is set to deliver her first advisory opinion on states’ obligations in respect of climate change in the next months. Around 100 states and organizations contributed to this two-week hearing, initiated by a request from Vanuatu due to its vulnerability to climate-induced disasters.

BY THE WAY

The past week has been truly remarkable as I had the pleasure of speaking at the seminar ”Emerging Unscathed: Protecting Your Investment Abroad” in Oslo. For this event, Addleshaw Goddard teamed up with the British Norwegian Chamber of Commerce and our local colleagues at Arntzen de Besche, who were nothing but exceptional hosts!

Our discussions were truly fascinating, exploring in particular how investment flows are reshaping emerging markets. We delved deep into the key aspects of investment protection through treaties and insurance, strategic approaches for businesses to structure their investments via ”Treaty Planning” (i.e., investing through jurisdictions with strong treaties), and the indispensable role of ISDS as a legal safeguard for investors’ rights and assets.

The entire experience was made even more memorable by the fact that it was my first visit to Oslo!