Dutch tribunal to rule on jurisdiction over coastguard deal against Somalia

By T. Roble

GOOBJOOG NEWS|ROTTERDAM: An international arbitrator based in the Netherlands will by Friday rule on whether it has jurisdiction over a case by a Cypriot company against Somalia for defaulting in the 2014 multi-million dollar coastguard deal.

A letter seen by Goobjoog News from Unum Transport Arbitration and Mediation addressed to the legal teams representing Somalia and the plaintiff AMO Shipping Company (AMOSC) indicates that the tribunal will issue its verdict before the end of this week.

“The arbitral tribunal is doing its utmost to complete the award shortly, and to provide it to the parties through the Unum case platform before the end of next week (week 29, ending Friday July 22, 2022),” the head of the tribunal Wouter H.F.M. Cortenraad said.

Somalia engaged Legaltree, a Dutch firm in December 2019 at the cost of €393,000.

AMOSC vs FGS or AMOSC vs FRS?

Somalia entered into a coastguard deal with AMOSC at the cost of €132m in 2013 just a year after current President Hassan Sheikh Mohamud came into office. However, Somalia failed to honour its financial commitments and went ahead to default from day one. In 2018, AMOSC dragged the Federal Government to the tribunal appointed during the signing of the contract for compensation amounting to over €150 million.

Somalia engages Dutch law firm for €393,000 in fight over contractor’s €66m claim

PART II: Tussle between oversight body, Defense HQs and imminent court battle

EXCLUSIVE: Cypriot company to sue Somalia over coastguard deal default, claims €90.6m

However, the FGS distanced itself from the case noting the contract was entered into between AMOSC and the Federal Republic of Somalia (FRS) and thus was not a party to the case. In effect, AMOSC withdrew the case and was compelled by the tribunal to pay Somalia €31,000 in costs. The Cypriot company subsequently filed another case this time against FRS. The tribunal will therefore decide by end of this week if it has jurisdiction over the new case. The case raises questions of law on the distinction between ‘government’ and ‘state’ in international law.

COMPENSATION

AMOSC is banking on this ruling to pursue compensation from Somalia amounting to € 132 million in addition to € 24.6 million in interest accrued on the overdue instalments from July 29, 2013, to March 2018.

AMOSC is seeking the arbiter compels Somalia to pay € 66 million on account of instalments due in the first instance and secondly issue an ‘irrevocable Letter of Credit in the initial amount of €132 million or if a Letter of Credit is issued after payment of the €66 million to AMOSC, issue an irrevocable Letter of Credit as referred to in article 4.3 of the Building Contract in the remaining amount of €66 million’.

According to the contract, the Letter of Credit would be cashed at Credit Suisse Bank of Geneva, Switzerland.