OK, straight to the elephant in the room:
For some time I have been concerned about the likelihood that the DRC will invoke a
sovereign immunity defense at ICSID in order to frustrate the process and ultimately not pony-up a single dollar regardless of the amount awarded to AVZ.
So I asked my AI assistant to clarify whether mining rights and tenements are either
commercial or
sovereign in nature.
Summary: International arbitrators generally view mining rights and tenements as protected
private commercial interests under international law, rather than
sovereign rights, particularly when assessing sovereign immunity claims related to arbitration awards.
This response considered the following:
1. Commercial Nature of Mining Agreements
Arbitrators typically classify mining rights as
acta jure gestionis (commercial acts) rather than
acta jure imperii (sovereign acts). This distinction is critical because restrictive immunity doctrines (applied by most arbitration-friendly jurisdictions) exclude commercial activities from immunity protections. Even if the DRC asserts absolute immunity domestically (as seen in the
FG Hemisphere case), international tribunals focus on the commercial character of the underlying contracts and arbitration agreements.
2. Waiver Through Arbitration Clauses
By agreeing to ICC or ICSID arbitration, states are generally deemed to have waived immunity from the arbitration process itself. However, immunity from enforcement remains a separate issue. Tribunals emphasize that arbitration agreements constitute an implicit waiver of jurisdictional immunity, as seen in the
AVZ-Cominière ICC case where the DRC entity was held liable for breaching emergency measures. ICSID awards benefit from additional protections under the ICSID Convention (Article 54), requiring member states to enforce awards as binding domestic court judgments.
3. Enforcement Challenges
While tribunals reject immunity defenses during merits proceedings, enforcement against state assets often hinges on locating non-immune commercial assets. Mining tenements and related revenue streams might be targeted if they are not used for sovereign purposes. Recent cases like
AVZ v. DRC demonstrate that tribunals will uphold penalties for non-compliance with arbitral orders, irrespective of domestic immunity doctrines.
4. Recent Trends in Mining Disputes
The
AVZ ICSID case (2023) highlights the growing use of investment treaties to counter expropriation. Australia-DRC bilateral investment protections (if applicable) or multilateral treaties could provide AVZ with additional grounds to override immunity claims.
Tribunals increasingly treat mining licenses as protected investments under instruments like the ICSID Convention, requiring states to compensate for unlawful revocation
5. Key Precedents
- FG Hemisphere v. DRC: Confirmed absolute immunity applies in Hong Kong courts but reinforced that immunity does not affect arbitral jurisdiction
- AVZ ICC Award (2025): Ordered Cominière (DRC state entity) to pay €39.1 million, rejecting attempts to circumvent arbitration through sovereign immunity defenses.
Cheers
F
plenty of time ahead to lie down and sleep.
