Oded Besserglik v. Republic of Mozambique
ICSID · Investment (ICSID and treaty) · Mozambique · 28 Oct 2019
Why it matters
This case underscores the critical importance of verifying treaty entry into force before initiating investment arbitration. The tribunal held that a BIT's entry into force requires strict compliance with its notification provisions, and that a State's conduct (e.g., listing the treaty on websites) does not substitute for formal notification. It also illustrates the consequences of a claimant's counsel being aware of the treaty's non-entry into force before filing.
Summary
Oded Besserglik, a South African national, invested in a joint fishing venture with Mozambican state-owned entities Emopesca and Sulpesca. He brought an ICSID Additional Facility arbitration against Mozambique under the Mozambique-South Africa BIT and the Mozambique Investment Law. Mozambique objected to jurisdiction, arguing the BIT never entered into force because neither party had notified the other of completion of internal procedures as required by Article 12(1). The tribunal agreed, finding no evidence of notifications. It rejected Claimant's estoppel argument, holding that Mozambique's listing of the BIT on websites did not constitute a binding representation. The tribunal also dismissed claims under the Investment Law because it did not contain a standing offer to arbitrate. Notably, the tribunal found that Claimant's counsel had been informed by South Africa in 2011 that the BIT was not in force, which weighed against awarding costs to Claimant. The tribunal dismissed the claim and ordered each party to bear its own costs.
The detail
Parties: Oded Besserglik v. Republic of Mozambique
Case number: ICSID Case No. ARB(AF)/14/2
Outcome: Tribunal dismissed the claim for lack of jurisdiction because the Mozambique-South Africa BIT had not entered into force; each party bears its own costs.
Applicable law: Agreement Between the Government of the Republic of South Africa and the Government of the Republic of Mozambique for the Promotion and Reciprocal Protection of Investments (signed May 6, 1997); Mozambique Investment Law No. 3/93; ICSID Additional Facility Rules
Issues in play: The central issue was whether the BIT had entered into force under its Article 12, which required both parties to notify each other of completion of internal procedures. Mozambique argued no notifications were exchanged, while Claimant argued ratification had occurred and Mozambique was estopped from denying entry into force.
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