Clyde & Co defeats billion dollar ICSID claim for the Republic of Cameroon

Clyde & Co International Arbitration Partner Nadia Darwazeh and the Paris team have successfully defeated an ICSID claim brought against the Republic of Cameroon by the Delaware-incorporated company Hope Services LLC.

Hope Services LLC alleged that it owned and controlled companies that built an online platform called Hope, which aimed at gathering donations in order to fund community projects in Cameroon. However, this platform never went online and no projects were ever financed on the territory of Cameroon.

At the outset of the case, the Paris team was successful in obtaining the bifurcation of the arbitration proceedings on the basis that the Tribunal lacked jurisdiction. The Republic of Cameroon raised several objections to the Tribunal’s jurisdiction, including that the Claimant did not own or control the alleged investment. The Republic of Cameroon also argued that this case constituted a clear abuse of right of ICSID proceedings and also contested the authenticity of a number of documents that Claimant produced during the proceedings.

The tribunal, composed of Germany’s Maxi Scherer as chair, France’s Pierre Mayer and Chilean-Lebanese Nassib G Ziadé, declined its jurisdiction under the US-Cameroon bilateral investment treaty. The Tribunal ruled in its award, which is available here, that Hope had failed to show that it owned or controlled the alleged investment.

Roger Bafakan, Conseiller Technique No. 3 at Cameroon’s Ministry of Economy, Planning and Regional Development and Mougnal Sidi, Director of Legal Affairs and International Commitments of the State at Cameroon’s Ministry of External Relations, consider the Tribunal’s decision to be “correct, fair and in compliance with the clauses on the protection and promotion of investments.”

Clyde & Co partner Nadia Darwazeh comments on the decision that “Cameroon’s position has been vindicated, namely that this case should never have been brought. The case is a prime example of an individual trying to misuse the system, which is meant to protect genuine investors”. Sophie Grémaud, Clyde & Co Counsel, adds “This is a well-structured decision which is enjoyable to read. The Tribunal’s decision confirms that a claimant cannot hide behind an amalgam of companies in an attempt to unduly benefit from the protection of the US-Cameroon BIT”.

The Clyde & Co Paris team was composed of Partner Nadia Darwazeh, Counsel Sophie Grémaud, associates Sarah Lucas and Antoine Lerosier, and jurist Dilara Khamitova.

Gide Loyrette Nouel acted for Hope Services.