Published On: Tue, Jul 14th, 2020

Kenya prevails at ICSID as WalAm energy case against Kenya is dismissed.

Kenya declares win in a geothermal energy dispute after the tribunal ruled in favour of Kenya. Had the ruling been in favour of WalAm, the case would have cost Kenya’s already stretched tax payers at least  $340 million. The arbitration brought against Kenya by  WalAm Energy Inc a Canadian /US Geothermal company commenced  proceedings against the Kenyan government seeking compensation for $340 million after the government of Kenya revoked the company’s tender award to explore for geothermal power in Suswa fields. The investor raised the issue of violation of their legitimate expectations noting that the nature and content of legitimate expectation in arbitration proceedings is of great importance in investments agreement as it seeks to protect foreign investors against changes of host state laws and policies. The company’s 30 year contract was awarded in 2007 by the Ministry of Energy under the then Minister – Kiraitu Murungi but was cancelled in 2012 by the Government of Kenya and Suswa fields repossessed. Former Attorney General Githu Muigai contested the claims, saying that the company had no capacity to carry out the exercise and had lied in their application and had no capacity to carry out the exercise.

Over 65 mining and energy contracts were cancelled by the Government in 2015 and classified as non -compliant and having been granted without complying with the requirements of the mining act and regulations.

According to the tribunal, the case lacked merit and therefore stood dismissed.

Another ICSID case that made headlines in Kenya was Cortec vs the Republic of Kenya which was also dismissed and ruling made in favour of Kenya in 2018. This win is of great encouragement to Kenya and Africa as we move to promote the development of International Arbitration to resolve investment disputes.  The ruling also sends a warning for international investors who fail in transparency, lie in their applications for tenders.

 

 

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Kenya prevails at ICSID as WalAm energy case against Kenya is dismissed.
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