Société d'Investigation de Recherche et d'Exploitation Minière v. Burkina Faso
ICSID · Investment (ICSID and treaty) · Burkina Faso · 19 Jan 2000
Why it matters
This early ICSID case is significant for its detailed analysis of fraud (dol) in state contracts, affirming that a state can annul a contract for fraud even after termination. It also clarifies the limits of the 'Nemo auditur' maxim, holding that it does not bar restitution where the contract's purpose is not immoral, and that the fraudulent party may still recover capital contributions but not profits from its own wrongdoing.
Summary
SIREXM, a mining company, entered into a convention with Burkina Faso to exploit gold deposits. The convention was later terminated by the state. SIREXM initiated ICSID arbitration claiming breach of contract. Burkina Faso counterclaimed that the convention was void due to fraud (dol) because a senior mining ministry official was a hidden shareholder in SIREXM, and that the contract violated public order. The Tribunal, applying Burkina Faso's Civil Code (Article 1116), found that the non-disclosure of the official's interest constituted fraudulent manoeuvres that vitiated the state's consent. It held the convention null and void for dol and for being contrary to public order. The Tribunal rejected Burkina Faso's argument that the 'Nemo auditur' maxim prevented restitution, finding that the contract's purpose (mining) was not immoral, and that the maxim does not automatically bar restitution. It ordered each party to return what they had received: Burkina Faso could reclaim the mining sites and assets, while SIREXM was entitled to reimbursement of its capital contributions to the joint venture company (CEMOB). However, SIREXM's claims for site valorisation and lost profits were denied, as allowing such recovery would reward the fraudulent party. The decision underscores that fraud can annul a state contract and that restitution is available even to a fraudulent party for capital investments, but not for profits or enhanced value.
The detail
Parties: Société d'Investigation de Recherche et d'Exploitation Minière v. Burkina Faso
Case number: ICSID Case No. ARB/97/1
Outcome: The Tribunal declared the mining convention null and void due to fraud (dol) and violation of public order. It ordered restitution of capital contributions to SIREXM but denied compensation for site valorization or lost profits.
Applicable law: Burkina Faso Civil Code (Article 1116 on dol), general principles of contract law, ICSID Convention
Issues in play: The case involved the collision between the principle of contractual validity and the nullity of a contract procured by fraud (dol) and contrary to public order. The Tribunal also considered the application of the maxim 'Nemo auditur propriam turpitudinem suam allegans' (no one can benefit from their own wrongdoing) in the context of restitution after annulment.
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