Protection of Foreign Investors
Foreign investors are individuals or companies that invest in a foreign country other than their own. In investment arbitration, foreign investors are often involved in disputes with host states over issues related to their investments, such as breaches of contract, expropriation, discrimination, or other actions that may harm their investments.
Nigeria is a signatory to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (commonly known as the ICSID Convention). This means that foreign investors who have invested in Nigeria may submit disputes arising from their investments to the International Centre for Settlement of Investment Disputes (ICSID) for resolution through arbitration.
Additionally, Nigeria has also entered into several bilateral investment treaties (BITs) with other countries, which contain provisions for the protection of foreign investors. These BITs typically include provisions on the protection and promotion of investments, non-discrimination, fair and equitable treatment, protection against expropriation, and the right to repatriate profits and other investment returns.
Furthermore, Nigeria has enacted the Nigerian Investment Promotion Commission (NIPC) Act, which provides for the promotion, protection, and regulation of investments in Nigeria. The NIPC Act also establishes the Nigerian Investment Promotion Commission, which is responsible for facilitating and promoting investments in Nigeria.
In the event of a dispute between a foreign investor and the Nigerian government, the investor may seek redress through international arbitration under the ICSID Convention or other arbitration mechanisms provided for in the BITs. In such cases, the arbitral tribunal will apply relevant provisions of the BITs, the NIPC Act, and Nigerian law.
Lastly, while Nigeria has taken steps to protect foreign investors through its membership in the ICSID Convention, BITs, and the NIPC Act, there have been concerns about the effectiveness of the legal and regulatory framework for foreign investment protection in Nigeria. Therefore, foreign investors should conduct thorough due diligence before investing in Nigeria and ensure they have appropriate legal counsel to advise on investment protection measures.
In terms of protection for foreign investors in investment arbitration in Nigeria, there are several steps that the government can take to ensure that foreign investors are protected. These include:
- Ratifying international investment agreements: Nigeria can ratify international investment agreements such as the International Centre for Settlement of Investment Disputes (ICSID) Convention and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. This would provide foreign investors with access to international arbitration mechanisms to resolve disputes with the Nigerian government.
- Enacting investment-friendly laws: The Nigerian government can enact investment-friendly laws that provide adequate protection for foreign investors and ensure that their investments are treated fairly.
- Strengthening the judicial system: The Nigerian government can strengthen the judicial system and improve the capacity of judges to adjudicate investment disputes fairly and efficiently.