After years of litigation, on 7 February the United Nations Permanent Court of Arbitration ruled in Mozambique’s favour, rejecting all the claims made by the Indian company Patel Engineering Ltd (PEL) against the Mozambican state. The country is thus exempt from paying 100 million dollars.
According to a document released on Tuesday (13) by the Agência de Informação de Moçambique (AIM), the facts of this case date back to 2011, when PEL and the government signed a memorandum of understanding on a potential rail-port project to link the Moatize region in Tete province to a new deep-water port in Macuse, Zambezia.
As a result, PEL took part in a public tender in 2013, but did not win, and the project ended up not materialising, which led the Indian company to initiate arbitration under the 1976 Arbitration Rules of the United Nations Commission on International Trade Law (“UNCITRAL”) against the Republic of Mozambique.
However, the Court concluded that it had no jurisdiction because the company’s actions in the country were limited to pre-investment activity.
“PEL has not made any investments in Mozambique under the bilateral treaty signed between the two parties,” he emphasised.
Founded in 1949, Patel Engineering Ltd. provides services in the infrastructure sectors, building dams, tunnels, micro canals, hydroelectric and irrigation projects, motorways, roads, bridges, railways and refineries.
