By Suzy H. Niki\u00e8ma
\n13 August 2008<\/p>\n
An ICSID<\/span> tribunal has declined jurisdiction in a dispute over a failed construction contract between the Democratic Republic of Congo (DRC) and two U.S. investors. Two members of the three-person tribunal held that the dispute began when the investment was under the control of a Belgium company, therefore disqualifying the claimants from seeking protection under the US-DRC bilateral investment treaty.<\/p>\n The claim arose out of the alleged non-payment of invoices under a construction contract between the DRC and SAFRICA, a Belgium company at the time that the contract was concluded in the early 1990s. (The exact date of the contract is unknown, as the contract was lost at some point in the 1990s during the civil strife that gripped the country. But the tribunal concluded that a contract existed on the basis of \u201cindirect proofs\u201d and the conduct of the parties).<\/p>\n In 2000 SAFRICA was sold to a company constituted under the laws of the Cayman Islands, but controlled by an American investor, the Blattner family. In 2004, the debt was transferred an American company, African Holding.<\/p>\n The two claimants, SAFRICA and African Holding, alleged that the DRC breached its obligations under the US-DRC BIT<\/span> when it announced in 2005 that it would not pay the full amount of debt claimed by the investors.<\/p>\n In declining jurisdiction, the majority of tribunal determined that \u201cthe events giving place to the dispute\u201d \u2013 i.e., the non-payment of invoices – stretched back to the early 1990s, when the company was under Belgium control. As such, the co-arbitrators ruled that the claim was outside their jurisdiction for reasons of ratione temporis<\/em> (temporal jurisdiction).<\/p>\n In a dissenting opinion, Otto de Witt Wijnen disagreed on the grounds that the events that occurred before 2000 were not \u201clitigious in nature.\u201d According to Mr. Wijnen, the non-fulfilment of a contract does not in itself constitute a dispute.<\/p>\n Source: decision on jurisdiction in\u00a0African Holding Company of America, INC et Soci\u00e9t\u00e9 Africaine de construction au Congo SARL (SAFRICA) v. R\u00e9publique D\u00e9mocratique du Congo<\/a><\/p>\n