The Principle of Sanctity of Contract in International Investment Agreements: the Role of Bilateral Investment Treaties in Africa

Abstract

The number of BITs signed between developing and developed countries in Africa has increased over the years. This is more so due to the large deposits of natural resources that a number of African countries are endowed with but for which they lack the skill, technological know-how, financial resources and capacity to exploit and hence require partnership with the foreign investors in the exploitation of these resources. The signing of bilateral investments treaties by an African host state is aimed at reassuring foreign investors that the host state is committed to the promotion and protection of foreign investments through legally binding obligations. The treaties therefore call for compliance with the obligations set out in the treaty and any attendant international investment agreement as an important element of investment protection and promotion. Despite the existence of BITs, African state parties have blatantly ignored, terminated or varied the terms of the international investment agreements entered into with foreign investors. Generally, a number of African state parties have failed to comply with their obligations under the treaties and the respective international investment agreements. This is evidenced by the increase in the number of investor-state disputes in Africa that are before various arbitral tribunals which point towards the general non-compliance of treaty obligations mostly by the African host states. The specific objective of this study is to analyse the role BITs play in ensuring compliance with legal obligations aimed at promoting and protecting foreign investments especially in the oil, gas and mining sector in sub-Saharan Africa. The methodology adopted in researching into this topic is based on analysis of case law, treaties, books, articles, journals, reports and online resources.