21.08.2018 kl 07:26 10604

GAMBIA : How African Petroleum saved its arbitration

A want of troops this summer almost saw African Petroleum lose its battle with Gambia over the government's decision to withdraw two of the firm's permits last year (AEI 812). To add to the country's financial pressure, the Australian junior filed no less than three requests for arbitration before the ICSID, the World Bank's arbitral arm, last October, gambling that the legal fees would force Banjul to back down. It was a strategy that almost backfired on African Petroleum: in early July, Gambia was unable to come up with the initial funds required by the ICSID to open the three proceedings, meaning they were almost called off. Advised by Clyde & Co, African Petroleum then managed to urgently convince the arbitral institution to merge the three proceedings into a single case, and therefore reduce the costs to the country. Two of African Petroleum's three complaints against Banjul were therefore cancelled in August. The remaining case is vital for the junior, who lost two of its flagship West African permits in quick succession (also see here) and is having to answer to disgruntled shareholders. It is also proving to be particularly bothersome to Gambia, which will have trouble finding a buyer for the permits withdrawn from the junior while the arbitration is in process.

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