Menzies Middle East and Africa S.A. and Aviation Handling Services International Ltd. v. Republic of Senegal
ICSID · Investment (ICSID and treaty) · Senegal · 5 Aug 2016
Why it matters
This case clarifies that an investment code's arbitration clause does not automatically constitute consent to ICSID arbitration unless it is clear and unequivocal. It also confirms that a claimant cannot use a BIT's MFN clause to import arbitration consent from GATS, and that a company from a non-covered territory (British Virgin Islands) cannot invoke a BIT's protections. The decision reinforces the requirement of explicit state consent in investment arbitration.
Summary
Menzies Middle East and Africa S.A. (MMEA), a Luxembourg company, and Aviation Handling Services International Ltd. (AHSI), a British Virgin Islands company, brought an ICSID claim against Senegal. They alleged that Senegal expropriated their investment in Aviation Handling Services SA (AHS SA), a Senegalese ground handling company. The claimants argued that Senegal consented to arbitration through Article 12 of Senegal's Investment Code, which provides for arbitration under bilateral investment treaties (BITs). MMEA claimed it could rely on the Senegal-Netherlands BIT via the most-favored-nation (MFN) clause in the General Agreement on Trade in Services (GATS), since Luxembourg had no BIT with Senegal. AHSI argued it could use the Senegal-UK BIT. Senegal objected to jurisdiction, arguing that the Investment Code did not constitute a standing offer to arbitrate, and that neither claimant could invoke the BITs. The tribunal held that Article 12 of the Investment Code was not a clear and unequivocal offer to arbitrate; it merely referred to dispute resolution under BITs, which required a separate treaty. The tribunal also rejected MMEA's attempt to use GATS's MFN clause to import arbitration consent from the Senegal-Netherlands BIT, finding no evidence that GATS parties intended to include investor-state arbitration. For AHSI, the tribunal noted that the Senegal-UK BIT expressly excluded British overseas territories, so AHSI could not benefit from it. The tribunal therefore declined jurisdiction and ordered the claimants to pay all costs and Senegal's legal fees.
The detail
Parties: Menzies Middle East and Africa S.A. and Aviation Handling Services International Ltd. v. Republic of Senegal
Case number: ICSID Case No. ARB/15/21
Outcome: The tribunal declined jurisdiction over both claimants' claims. The claimants were ordered to bear all arbitration costs and reimburse Senegal's legal fees of EUR 631,053.69.
Applicable law: ICSID Convention; Senegal's Investment Code (Article 12); GATS; BITs between Senegal-Netherlands and Senegal-UK (not applicable); ICSID Arbitration Rules (2006)
Issues in play: The central issue was whether Senegal had consented to ICSID arbitration through Article 12 of its Investment Code, read together with GATS most-favored-nation clause and BITs. The tribunal found no clear consent for MMEA, and AHSI could not benefit from the Senegal-UK BIT as a British Virgin Islands company.
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