Summary

Reproduced from www.worldbank.org/icsid with permission of ICSID.

Introduction

1. This arbitration was commenced by a Request for Arbitration against the Republic of Mozambique dated 8 May 2017 in accordance with the Convention on the Settlement of Investment Disputes between States and Nationals of Other States dated 18 March 1965 (the "ICSID Convention") and the Agreement Between the Government of the Italian Republic and the Government of the Republic of Mozambique on the Promotion and Reciprocal Protection of Investments dated 14 December 1998 (the "BIT"). The International Centre for Settlement of Investment Disputes ("ICSID") registered the Request on 14 July 2017.

2. The Claimants are three companies (together referred to as the "Claimants" or "CMC") 1 :

a. Cooperativa Muratori & Cementisti - CMC Di Ravenna Società Cooperativa ("CMC Ravenna"), a company incorporated under the laws of Italy with its head office in Ravenna, Italy;

b. CMC Ravenna S.C.R.L. Maputo Branch ("CMC Maputo"), a branch of CMC Ravenna registered in Mozambique; and

c. CMC Africa Austral, LDA ("CMC Africa Austral"), a wholly owned subsidiary of CMC Ravenna incorporated under the laws of Mozambique with its head office in Maputo, Mozambique.

3. The Respondent is the Republic of Mozambique (the "Respondent" or "Mozambique").

4. This dispute arises out of the participation by the Claimants in a project to reconstruct a portion of the principal north-south highway in Mozambique. The Claimants entered into a contract with Mozambique's national roads administration, Administracão Nacional de Estradas ("ANE"), financed by the European Development Fund (the "EDF"), to rehabilitate approximately 106 kilometers of that highway designated as "Lot 3."

5. The Claimants completed the work on the Lot 3 portion of the highway in 2007, and entered into a period of discussions with ANE and the project engineer (the "Engineer") concerning certain elements of additional compensation they asserted to be due to them for that work.

6. The Engineer's determination of the amounts due to the Claimants was issued in May of 2009. Unhappy with certain of the Engineer's conclusions, the Claimants entered into discussions with ANE to seek additional compensation. ANE ultimately made an offer on 30 October 2009 to settle the Claimants' claims for EUR 8,220,888, to which the Claimants responded in a letter dated 2 November 2009. The Claimants characterize their 2 November 2009 letter as an acceptance of ANE's offer. The Respondent characterizes that letter as a counteroffer that ANE did not accept, as a result of which ANE's settlement offer expired.

7. To the extent the amount offered in ANE's letter of 30 October 2009 exceeded the amount awarded by the Engineer, it was never paid to the Claimants, although demands, discussions, and correspondence on the subject continued from 2010 well into 2016.

8. The Claimants commenced this arbitration in 2017, asserting that the conduct of ANE and the Government of Mozambique with respect to the failure to pay the amount offered by ANE in its letter of 30 October 2009 breached a number of the obligations to investors from Italy that Mozambique agreed to in the BIT. The Respondent contends that this Tribunal lacks jurisdiction to consider those claims, and that the claims are in any event without merit.

9. This Award first describes the procedural history of this arbitration, and then describes in more detail the factual background out of which the Claimants' claims arise. Next, it considers each of the Respondent's objections to the Tribunal's jurisdiction, and concludes that the Tribunal has jurisdiction to consider those claims. Finally, the Award examines each of the Claimants' claims on the merits, and finds no liability to the Claimants on the part of the Respondent for any of those claimed breaches of the BIT.