CDR, 20 May 2026
by Robert Li
North Africa flirting with increased ISDS?
Do this year’s two new ICSID filings against Egypt and Tunisia mean a resurgence of investment disputes is likely in the region?
The International Centre for Settlement of Investment Disputes (ICSID) features fresh filings related to North Africa this year, with Egypt and Tunisia named as respondents to new investment arbitration claims. After ICISD’s 2024 figures put North Africa in the lead concerning Africa-wide investment arbitration, how is the region faring in the broader investor-state dispute settlement (ISDS) context?
2026 cases
Filed at ICSID on 19 February, the case of Al Oroba for Real Estate Investment Company and others v Egypt is categorised as a construction project dispute. Three of the claimants are also Egyptian, with the fourth being an Emirati entity which explains the invocation of the 1997 bilateral investment treaty (BIT) between Egypt and the UAE. It is the first ICSID case against the country in nearly five years and Diamond McCarthy in Washington, DC, is advising the claimant in conjunction with Dubai-based IAA Middle East Legal Consultants.
Tunisia’s latest ICSID case has been brought by UK-based Shell Tunisia Upstream and Tunisian entity Shell Tunisia LPG. Registered on 7 April, it invokes the UK and Tunisia BIT with the subject “explotation (sic.) of mineral substances” in the oil, gas and mining sector. The claimant is being advised by Eversheds Sutherland in France.
Egypt’s expert experience
Speaking to CDR, Clyde & Co Middle East dispute resolution partner Sherif Maher who splits his time between Dubai and Cairo, says: “North Africa has a long and active relationship with ISDS. In particular, countries like Egypt have been frequent respondents due to broad BIT networks and sustained foreign investment, meaning ISDS is a familiar feature of the investment landscape.”
On pure ICSID numbers, Egypt is the clear leader and relative expert in the region, having been on the receiving end of 39 filings to date; thereafter there is a sharp tail-off before Sudan and Tunisia feature with five and four, respectively, followed by Libya (which is not currently an ICSID signatory) and Algeria with one each. Morocco and Mauritania do not feature at all, with Western Sahara’s status as non-self-governing territory likely explaining its exclusion from the framework.
“Tunisia was one of the first signatories of the ICSID Convention signing it back in 1966. This reflects both the region’s openness to foreign investment and its historical exposure to investment disputes,” says Maher, who also points out ICSID is not the be-all and end-all of ISDS: “ICSID is dominant, but not exclusive. United Nations Commission on International Trade Law (UNCITRAL) and SCC Arbitration Institute (SCC) arbitrations are also widely used. It is worth noting that both Egypt and Tunisia are parties to the Arab Investment Agreement and the Organisation of the Islamic Conference Investment Agreement and both provide for ad hoc arbitration.”
“The Cairo Regional Centre for International Commercial Arbitration (CRCICA) in Egypt has also been a hub for many of the claims brought under the Arab Investment Agreement, and recently ISDS cases brought against Libya and Sudan were heard under CRCICA,” Maher adds.
Regional quirks
In spite of Egypt’s many public cases against it previously, the broader North Africa region does not seem to be a hotbed of investment disputes currently: until this year, Egypt had had no new ICSID filings against it for four years, while Tunisia’s 2024-filed case was the first to be filed in over a decade.
Hogan Lovells partner Markus Burgstaller, who advised Slovakia in the now-notorious Achmea case and has previously advised on arbitration involving Nigeria and Algeria, highlights the region’s comparative lack of in-demand natural resources, particularly those related to mining, as a possible reason for this: “If you go further south, Sub-Saharan Africa, as opposed to North Africa, is the big story where the real growth is. There have been recent cases against North African countries, but we have seen more significant growth backed up by statistics in Sub-Saharan Africa,” he says. ICSID’s own latest caseload statistics published in January bear this out, pitting the Middle East and North Africa (MENA) region’s 5% against Sub-Saharan Africa’s 24%.
ISDS is by no means a universally accepted international framework, with critics asserting its inherent unfairness to developing countries, and a handful of states choosing to withdraw from it altogether or threatening to do so. Yet there is little clear evidence of this antagonism in North Africa: “I don’t see there is specific hostility to [ISDS] – the general trend in investor-state arbitration is that you see newly negotiated treaties […which] have a local litigation requirement, and investment guarantees are more restrictive,” Burgstaller observes.
He puts the new treaties in historical context: “In the 1990s, we had broad investment treaties like the Energy Charter Treaty (ECT), but once governments became aware of the fact these treaties do have financial consequences if claims are lost, many countries renegotiated and tried to renegotiate them, or terminated them such as in South Africa and Indonesia. We have not seen as far as I know in North Africa a widespread termination of investment treaties, it is just embedded in the general trend of countries becoming more aware that investment treaties can be not just beneficial, but if the government does not comply with its obligations, it can have financial consequences if claims are brought successfully against them.”
Key cases
“Egypt has been involved in several high-profile energy and infrastructure cases, and Algeria and Morrocco have also faced prominent disputes linked to regulatory frameworks,” offers Clyde & Co’s Maher. “Libya has seen notable post-conflict claims, [but] investors always have difficulties in enforcement against it as it is not a party to the ICSID Convention.”
The case of Strabag v Libya – Libya’s only case registered at ICSID – was made possible under the ICSID Additional Facility rules which apply when the dispute is outside the remit of the ICSID Convention. Based on the Austria-Libya BIT, the 2015 claim and subsequent enforcement efforts stemmed from Strabag’s losses related to disrupted construction of roads and infrastructure during the Arab Spring movement, which began around 2010 and affected many states in the region.
“It is a significant case that certainly is well known for interpretation of ‘umbrella clauses’ and the reasonably broad interpretation of investment protection standards enshrined in these treaties,” says Burgstaller. “But it also shows that enforcement of awards, if there is not voluntary compliance, might take a long time.”
Before the Al Oroba case was filed in February, the most recent ICSID case against Egypt was Heidelberg Materials et al v Egypt, a still-pending case submitted in October 2021. Invoking the BITs between Egypt and France, Germany and Italy, the dispute centres on the Egyptian government’s alleged involvement in anti-competitive practices in the cement industry.
Riding the wave?
So could this year’s newly filed cases signal a new wave of investment arbitration appearing on the horizon for North Africa?
“To the extent that the Arab Spring’s ‘democratic wave’ did not lead to modern democracies, […the North African region is] not known for being high on human rights and particularly democratic institutions – these [factors] tend to generate disputes and autocratic tendencies [which] might lead to more [disagreements],” Burgstaller postulates, but he is sceptical at the prospect of an imminent burgeoning ISDS caseload: “It is certainly not a region that tends to be discussed as a particularly big growth market, as opposed to Sub-Saharan Africa.”
Similarly, Maher does not predict a strong ISDS upturn happening any time soon in the region, particularly as governments are not immune to the risk disputes pose: “A steady pipeline of cases is likely, rather than a sharp resurgence. Ongoing economic reform, currency pressures and energy transition policies will continue to generate disputes, particularly in infrastructure and energy.”
“At the same time states are also becoming more sophisticated in managing and settling risk earlier,” he concludes.
