Arbitration Liberia

Liberia Supreme Court Reviews SRIMEX-LPRC Arbitration Clause Dispute

By ADR Journal Editorial Desk Published 1 source Arbitration Contractual Disputes Energy Sector Liberia State Owned Enterprises Liberia

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TL;DR

  • The Supreme Court of Liberia is hearing SRIMEX's request to compel LPRC to arbitrate a storage contract dispute.
  • SRIMEX argues a government pricing directive breached the contract and wants the case arbitrated.
  • LPRC challenges the contract's legality and the enforceability of the arbitration clause.
  • The case may clarify if courts or arbitrators decide contract validity when state entities are involved.

Overview

The Supreme Court of Liberia is considering if the dispute between SRIMEX Oil & Gas Company and the Liberia Petroleum Refining Company (LPRC) should be referred to arbitration as stipulated in their petroleum storage contract. The case raises questions about the enforceability of arbitration clauses in contracts involving state entities and the impact of subsequent government directives on such agreements.

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What Happened

SRIMEX Oil & Gas Company and LPRC entered into a petroleum storage agreement on September 3, 2025.

Soon after, a presidential directive revised Liberia's national petroleum pricing, prompting SRIMEX to claim this undermined the contract's commercial terms and amounted to a breach.

On September 29, 2025, SRIMEX filed with the Commercial Court seeking to compel LPRC to arbitration and to restrain LPRC from applying the new pricing pending arbitration.

The Commercial Court issued a temporary restraining order but did not rule on compelling arbitration, so SRIMEX requested the Supreme Court's intervention.

LPRC challenged the contract's legality, arguing it was not made following required legal and procurement procedures, and thus the arbitration clause should not be enforced until the contract's validity is confirmed.

The Supreme Court now must decide whether to enforce the arbitration clause before determining contract validity, or if the underlying contract's legality should be settled by the court first.

Context

Contracts between private companies and state-owned entities in Liberia may include arbitration clauses to resolve disputes.

Governmental actions, such as changes to strategic commodity pricing, can affect contractual rights and obligations.

International arbitration principles, such as the doctrine of separability, are relevant when determining whether an arbitration clause should be enforced even if the underlying contract is challenged.

Why It Matters

  • The Supreme Court's ruling could impact how arbitration clauses are enforced in contracts involving Liberian state-owned enterprises.
  • A decision in favor of arbitration may support greater contractual certainty for investors and private companies dealing with the government.
  • Alternatively, requiring prior judicial review of contract validity could influence how public contract disputes are structured and resolved in Liberia.

Sources

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