Recent Developments: Mozambique—What Legal Options are Available to Investors in Oil, Gas and Mineral Resources?

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Recent developments in Mozambique, including the announcement on October 21, 2013, by opposition party RENAMO (Mozambican National Resistance) that it would no longer abide by the 1992 peace pact that ended years of civil war with the ruling party FRELIMO (Mozambique Liberation Front), are causing concern about potential armed conflicts and ensuing disruption in Mozambique. Although widespread conflict appears unlikely at this stage, the latest events increase the risk of targeted attacks or other forms of selective interference with strategic assets by the political opposition and associated guerrillas. Investors in oil, gas and mineral resources in Mozambique would be well advised to ensure that their investments benefit from investment treaty protection before the political tensions may escalate.

Mozambique has entered into a number of bilateral investment treaties (BITs) and the treaties that are in force may be relied upon by investors to protect their existing and future investments, including by permitting them to bring claims against Mozambique should conflicts and disruption materialize and losses occur. Bilateral investment treaties entitle investors from one State party to submit claims against the other State party to international arbitration. Even if no treaty exists between an investor’s home state and Mozambique, the investor may be able to bring claims under a treaty between Mozambique and a third country if its investment is held through a subsidiary incorporated in that country.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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