AVZ Faces Uphill Battle for Potential DRC Arbitration Award

The DRC's track record with arbitration awards raises serious doubts about the likelihood of swift compensation. Recent high-profile cases demonstrating the DRC's resistance to paying awards exceeding hundreds of millions of dollars serve as stark reminders. Notable cases where awards have been issued against the DRC:

1. Dig Oil Ltd v. Democratic Republic of CongoAward: An ICSID (International Centre for Settlement of Investment Disputes) Tribunal awarded Dig Oil approximately US$617 million in 2018.

2. Groupement d'Entreprises du Bâtiment et des Travaux Publics & Others (Commisimpex) v. Democratic Republic of CongoAward: An ICC (International Chamber of Commerce) Tribunal award of over US$16 million in favor of Commisimpex.

3. FG Hemisphere Associates LLC v. Democratic Republic of CongoAward: An ICC Tribunal awarded over US$100 million plus interest to FG Hemisphere.

All of the above awards remain unpaid. While international treaties theoretically provide enforcement mechanisms, seizing Congolese assets is extremely difficult.

Regarding the amount of damages likely to be awarded in the event AVZ were successful:

Importantly, the amount of damages awarded in arbitration is often significantly less than the initial claim. Tribunals tend to anchor their assessments on sunk costs – the investments already made into the project – rather than broader calculations of potential future profits.

https://www.credibilityinternational.com/study/credibility-study-of-damages-second-ed/

Even if AVZ Minerals wins, it'd be the first step in a potentially prolonged legal battle. The prospect of confidential settlements for significantly reduced amounts, or the possibility of abandoning collection efforts altogether, highlight the stark realities facing AVZ.