African Dispute Resolution

This essay discusses the opportunity the proposed multilateral investment court (‘MIC’) presents for states to holistically address the imbalances in international investment law by granting local communities a binding international remedy for corporate human rights violations and other investment-related harms. It argues that concerns about granting local communities such a right are overstated especially since it can be done with sufficient guardrails to prevent an upset to the ISDS system. For African states, this should be a priority in the MIC negotiations given corporate abuses of their local communities, especially in natural resource-rich areas, and their obligation under Article 21(5) of the African Charter on Human and Peoples’ Rights 1981 (‘African Charter’) to prevent or remedy such exploitation.

In March 2018, African nations embarked on a historic journey to reshape their trade landscape through the African Continental Free Trade Area (AfCFTA). Originally scheduled for implementation in mid-2020, a pandemic-induced delay pushed the launch to January 2021. Aggregating over 1.2 billion people, the AfCFTA promises to create a massive market with a combined GDP of over $3 trillion. With 54 signatories and 47 countries ratifying the agreement, the AfCFTA aims to foster a pan-African free trade zone, enhance regional development prospects, and promote intra-African trade. Key mechanisms are progressively dismantling trade barriers and promoting investment. This blog post delves into the current state of investment dispute settlement (ISDS) mechanisms across Africa, the potential of the AfCFTA and its investment protocol to catalyse change, and the need for a balanced multilateral approach. Through collaboration, innovation, and a commitment to equity, Africa can create a new paradigm for investment dispute resolution that truly reflects the continent's values and aspirations.

The Investor-State Dispute Settlement (ISDS) system in its current form has been viewed as being malignant to the Global South. Africa in particular, has been a strong critic of the system with the most radical action against ISDS coming from South Africa, which has stated that investment arbitration awards are “directly opposed to the legitimate, constitutional and democratic policies of the country”. The United Nations Commission on Trade Law (UNCITRAL) has now mandated its Working Group III (WG3) to lead ISDS reform efforts. One of the key areas of reform under the purview of WG3 is the inconsistency, incoherency, unpredictability and incorrectness of investment arbitration awards.