Cameroon Faces Over 652 Billion FCFA in Arbitration Liabilities
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TL;DR
- Cameroon faces arbitration liabilities and claims exceeding 652 billion FCFA (~$1.08 billion USD).
- An ICC tribunal awarded Sundance Resources 355 billion FCFA over the Mbalam-Nabeba mining project.
- Piccini and Magil Construction are pursuing additional claims related to the Olembé sports complex.
- Tollcam is seeking indemnification after public-private contract termination, with a settlement plan underway.
Overview
The government of Cameroon is contending with arbitration awards and outstanding claims from international companies, with the total liabilities exceeding 652 billion FCFA. The disputes involve significant infrastructure, mining, and public-private partnership projects, with findings and proceedings before international arbitral institutions.
What Happened
Sundance Resources, an Australian mining company, announced it won an ICC arbitration award in Paris against the State of Cameroon. The tribunal ordered Cameroon to pay approximately 355 billion FCFA (over $600 million USD) for withdrawing Sundance's mining rights in the Mbalam-Nabeba iron ore project and granting permits to another operator.
The tribunal also found that Cameroon breached an emergency ICC order from March 2022, which prohibited the granting of the mining permit to a third party. Sundance had originally claimed $5.5 billion USD, but the tribunal's award is for a lower amount.
Claims also arise from infrastructure disputes surrounding the Olembé sports complex. Italian company Piccini has initiated ICSID arbitration seeking 250 billion FCFA (about 381 million euros), alleging wrongful contract termination. Canadian firm Magil Construction is pursuing a 17 billion FCFA claim at the ICC, stating it did not receive promised financing. Both disputes are ongoing.
Tollcam, a French consortium, claims 30 billion FCFA related to a terminated PPP contract for automated toll stations. Arbitration proceedings at the ICC in Paris are ongoing, but an amicable settlement is reportedly in progress, with budgeted payments outlined by the Cameroonian government.
Context
According to Cameroon's 2024 national accounts certification report, these disputes are part of a wider set of litigations facing the state, mostly involving foreign companies and large-scale infrastructure contracts. The reported liabilities are among the largest, but additional disputes of lesser value could put further pressure on Cameroon's public finances.
The reported sums represent either awards already rendered or claims currently before the arbitral tribunals at ICC or ICSID. Actual payouts may depend on enforcement and any further legal proceedings.
Why It Matters
- The reported arbitration sums represent an immediate and significant financial risk to Cameroon's public accounts.
- Outcomes from these leading cases may influence future conduct and negotiations for international investors and infrastructure contractors working in Cameroon.
- The prominence of ICC and ICSID proceedings highlights the role of international arbitration in resolving major project contract disputes in Cameroon.