Zenith Energy Africa Ltd., Zenith Overseas Assets Ltd. and Compagnie du Désert Ltd. v. Republic of Tunisia

Case summary

At a glance

Parties: Zenith Energy Africa Ltd., Zenith Overseas Assets Ltd. and Compagnie du Désert Ltd. (United Kingdom), subsidiaries of Zenith Energy Ltd., v. the Republic of Tunisia
Case no.: ICSID Case No. ARB/23/18
Forum and rules: ICSID Convention arbitration; ICSID Arbitration Rules in force from 1 July 2022; place of proceeding Paris; language French
Treaty: United Kingdom–Tunisia BIT of 14 March 1989
Tribunal: Loretta Malintoppi (President), Henri C. Álvarez KC, Nassib G. Ziadé
Sector: Oil and gas; hydrocarbon concessions
Outcome: Pending. The published documents are procedural orders. They include the rejection of Tunisia's request for bifurcation (23 December 2024) and the rejection of two requests by the Claimants for provisional measures (July and August 2025). No award is among them.
Amount: Claimed: a principal amount of US$503 million, according to Zenith's stock exchange announcement of December 2024. The Claimants paid USD 250,000 in advances, of which USD 100,000 covered Tunisia's unpaid share.

The dispute

Three UK companies of the Zenith group claim under the UK–Tunisia BIT for their interests, held through EPZ, CNAOG and EPT, in the Ezzaouia, Sidi El Kilani, El Bibane and Robbana oil concessions in Tunisia. The published orders do not set out the Claimants' merits case in detail. Zenith's stock exchange filing refers to Tunisia's failure to comply with the BIT and to the arbitrary conduct of the Tunisian authorities. Tunisia raises five jurisdictional objections. It argues that the Claimants elected mediation and breached the cooling-off period under Article 8 of the BIT. It also alleges abuse of rights through nationality and forum shopping, given the parallel ICC arbitrations. Tunisia further argues that the investments were never 'admitted' under Article 1 and Tunisian law, because concession assignments were refused and required financial guarantees were not provided, and that the investments are tainted by fraud and unclean hands. It adds that any contribution came from the Canadian parent company rather than the Claimants.

Key holdings

At the prima facie stage, none of Tunisia's jurisdictional objections is frivolous, although some appear less serious than others. The Tribunal does not prejudge its final decision on them. PO3 ¶ 90
The objections are strongly intertwined with the merits, because the facts relevant to jurisdiction are likely the same as those relevant to the merits. This is especially so for the objections on the legality of the investment and alleged fraud. A single proceeding is the most sensible and balanced course. PO3 ¶¶ 92–94
The Tribunal was not persuaded that bifurcation would reduce costs. It rejected Tunisia's request for bifurcation in its entirety, reserved costs, and ordered the Parties to agree a procedural timetable by 20 January 2025. PO3 ¶¶ 95–97
The Tribunal ruled on both sides' document requests using the 2020 IBA Rules as guidance and ordered production by 30 July 2025. By the same date the Claimants must produce all documents they had agreed to produce, or give a detailed justification for not doing so. The Tribunal recalled that it may draw adverse inferences from unjustified non-production. PO4 ¶¶ 22–24
The Tribunal cannot order Tunisia to pay its share of the advance on costs as a provisional measure. Article 16 of the ICSID Administrative and Financial Regulations governs default, and that procedure is a matter for the Secretary-General. Non-payment does not prejudice the arbitral process because the other party can pay instead. Tunisia nonetheless owes half of the costs, and the Tribunal may take unpaid advances into account in the final allocation of costs. PO5 ¶¶ 21–25
The ICC-2 award (CNAOG v. Tunisia) was admitted to the record as exhibit RL-319, together with RL-320, under Rule 36(3). Tunisia did not breach ¶ 17.3 of PO1 but should have sought leave first. No legal basis for the award's confidentiality was shown. Admission does not prejudge the award's relevance. PO6 ¶¶ 29–32
The Claimants' request to suspend criminal proceedings in Tunisia was rejected. Suspension would be a highly intrusive measure that requires truly exceptional circumstances. Necessity was not shown, because the Claimants had met no concrete obstacle to participating in the arbitration or to accessing documents. Urgency was weakened by a delay of about six months after the first summonses. The Parties were ordered to cooperate in good faith and to respect the principle of non-aggravation of the dispute. PO7 ¶¶ 48–58