Wigu Hill Expropriation by the Government of Tanzania
Montero Claim CAD$90 million in Damages at ICSID Tribunal
Montero commenced exploration activities on the Wigu Hill Rare Earth Element project in March 2008 under a Prospecting License and spent over CAD$17 million on exploration works in the discovery and development of the project. In 2015 a five-year Retention License was awarded by the Tanzanian Government (“Tanzania”) on the property.
The Retention License was expropriated by Tanzanian in 2019, when all previously issued Retention Licenses, which had been cancelled by the Mining (Local Content) Regulations 2018, were put to tender. Montero made repeated attempts to reach an amicable solution with Tanzania with no success. Montero filed a request for arbitration with the ICSID on January 8, 2021, in order to preserve its rights. On February 9, 2021, ICSID registered Montero’s request for the institution of arbitration proceedings to resolve the illegal expropriation matter. The arbitral tribunal was constituted on November 18, 2021, with the appointment of the President, and appointees from Montero and Tanzania.
In June 2022, Montero submitted its Memorial on the Merits (“Memorial”) to the ICSID arbitral tribunal. The Memorial contains the basis for compensation of CAD$90 million which includes interest, that continues to accrue. The damages claimed are for the unlawful expropriation and mistreatment of Montero’s investment in Tanzania which is in breach of the Agreement for the Promotion and Reciprocal Protection of Investments (“BIT”) signed between Canada and Tanzania in 2013.
On October 24, 2022, Tanzania submitted its Counter-Memorial on the Merits (“Counter-Memorial”) where it responded to Montero’s arguments and claims.
On November 17, 2022, Montero and Tanzania (the “Parties”) also submitted their respective requests for production of documents. The Parties submitted responses to the other party’s objections on January 9, 2023.
On January 30, 2023, the arbitral tribunal issued its decision on requests for the production of documents and the parties were ordered to produce these by March 1, 2023.
On July 1, 2023, Montero filed its reply to Tanzania’s Counter-Memorial and Tanzania will file its rejoinder on October 1, 2023. The hearing on the merits in Montero’s ICSID arbitration proceedings was to be held in December 2023, in Washington DC, but was postponed by the President of the tribunal.
On the June 10, 2024, the Tribunal confirmed that the hearing will take place from November 25th to 29th 2024, at the Paris Arbitration Centre, Paris, France.
Montero has engaged Timothy Foden of Boies Schiller Flexner (UK) LLP to act as co-counsel with Mr. Thierry Lauriol of Jeantet AARPI as legal counsel in the arbitration against Tanzania. Dr. Neal Rigby of SRK Consulting (USA) Inc. has been engaged as quantum expert. The Company has secured dispute funding of US$2.32 million from Omni Bridgeway.
Montero is one of a number of companies that have filed arbitration procedures with ICSID against Tanzania for the expropriation of Retention Licenses.
Australian Stock Exchange listed Indiana Resources Ltd (ASX:IDA) (“Indiana”) announced on July 14, 2023, that it has been awarded US$ 109.5 million in its ICSID arbitration case against Tanzania and in addition Tanzania ordered to repay US$ 3.8 million in legal costs and expenses. Indiana’s claim was for the loss of the Ntaka Hill Nickel Project. Indiana’s arbitration proceedings were conducted in February 2023 in Washington, DC, USA.
In July 2024 Indiana announced that it had reached a settlement with Tanzania for US$90 million, with a payment schedule of US$35 million received, US$25 million due by October 25, 2024, and US$30 million due by March 30, 2025.
(https://indianaresources.com.au/).
Toronto Venture Exchange listed Winshear Gold Corp. (TSXV:WINS) (“Winshear”) has an ICSID arbitration claim of CAD$124 million against Tanzania for the loss of the SMP Gold Project. Winshear’s arbitration proceedings were conducted in Washington, DC, USA, in February 2023.
In October 2023 Winshear announced it had reached a settlement with Tanzania for US$30 million with funds received the same month (https://winshear.com/news/).
For further information can be obtained from the ICSID website.
(https://icsid.worldbank.org/services/arbitration/convention/process/overview).
The ICSID Convention has been ratified by 158 States, including Tanzania. An award issued by an ICSID tribunal is enforceable in any one of those 158 member States as if it were a judgment of one of their own courts. Partly because of this, States often comply voluntarily with the payment terms of such awards.