The International Centre for Settlement of Investment Disputes (ICSID) has granted Morocco’s request for a provisional suspension of a July arbitration award in the ongoing dispute between Morocco and the Swedish energy company Corral Petroleum.
The ICSID had initially ordered Morocco to pay Corral $150 million in damages related to the seizure of its majority-owned Samir refinery in Mohammedia.
Corral, which had invested heavily in the Moroccan refinery, had alleged that the government’s actions amounted to an expropriation without adequate compensation, in violation of the bilateral investment treaty between Sweden and Morocco.
Following the July ruling, both parties exercised their right to file a request for rectification of the award.
In a statement on its website, the ICSID confirmed that it had received and registered Morocco’s request for partial annulment of the award and had subsequently granted the provisional suspension.
The ICSID’s decision to temporarily halt the enforcement of the award provides Morocco with a breathing space to pursue its legal challenges.
Under the ICSID Convention, arbitral awards are generally final and binding. But the Convention also provides for limited post-award remedies, such as requests for interpretation, correction, or annulment.
In its arbitration claim, Corral had argued that Morocco had breached several protections afforded to the company under the bilateral investment treaty.
This breach allegedly included arbitrarily freezing the Samir’s bank accounts, prohibiting oil tankers from docking at the port of Mohammedia, and failing to take necessary measures to ensure the refinery’s competitiveness.
The Moroccan government has consistently denied any wrongdoing, saying that its actions were taken in accordance with Moroccan law and were necessary to protect the interests of the Moroccan people.
Morocco said that it should not be held responsible for SAMIR’s bankruptcy, attributing the refinery’s downfall to the majority shareholder’s failure to inject promised capital to save the company.
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