American Manufacturing & Trading Inc. v Zaire

Year of the award: 1997
Forum: ICSID
Applicable investment treaty: United States - Zaire BIT (1984)

Arbitrators
Mr Sompong Sucharitkul - President
Mr Heribert Golsong
Mr Keba Mbaye


Executive summary

AMT, a US company, was a majority shareholder of the Zairian company SINZA, engaged in the production and sale of automotive and dry sell batteries and in the importation and resale of consumer goods and foodstuffs.

In 1991, soldiers the Zairian armed forces destroyed, damaged or carried away the property, finished goods, raw materials and other objects of value belonging to SINZA. In 1993, another episode of looting occurred in relation to SINZA's property.

AMT brought a dispute before an ICSID Tribunal claiming violations by Zaire of its obligations under the US-Zaire BIT and requesting compensation in the amount of US$ 14.3 million plus interest and costs. Zaire did not contest the fact of destroying and damaging SINZA's property by its soldiers but opposed the AMT's claim for compensation.

The Tribunal found violations by Zaire of the general BIT "protection and security" standard as well as of the special BIT provision regarding compensation for losses sustained by investments due to armed conflicts, riots or acts of violence. The Tribunal went on to determine the amount of damages representing the "actual market value of the properties destroyed". The Tribunal took into account the independent expert's report on the value of destroyed property, but in exercising its discretion and basing itself on equitable principles, the Tribunal doubled that amount. However, the Tribunal also indicated that the awarded amount was lower than it could have been because the investor ought to have been aware of high political and business risks when investing in a country like Zaire. The final award was US$ 9 million.