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Emmerson Plc initiates arbitration claim against Morocco over potash project
British mining company Emmerson Plc has taken a significant legal step by filing a formal request for arbitration on May 1 before the International Center for Settlement of Investment Disputes (ICSID). The firm alleges that Morocco has unlawfully expropriated its potash project located in Khemisset.
Valued at approximately $2.2 billion, the halted project has become a focal point of contention, with Emmerson accusing Moroccan authorities of breaching a bilateral investment agreement with the United Kingdom. The legal action follows months of escalating tensions between the company and Moroccan institutions, particularly after the Regional Unified Investment Commission (CRUI) raised serious environmental concerns regarding the project.
The CRUI's unfavorable opinion highlighted the project's high water consumption, a critical issue in a nation grappling with increasing pressure on its natural resources. Despite these challenges, Emmerson maintains that the regulatory decision constitutes an unlawful seizure of its investment.
The firm has asserted that it sought domestic remedies to resolve the dispute, but its appeal to the regional governor was dismissed as inadmissible. In preparation for the arbitration process, Emmerson secured $11.2 million in funding earlier this year to cover arbitration-related expenses and a significant portion of its administrative costs. Additionally, a fundraising effort in December yielded £850,000, earmarked for supporting legal proceedings and compensating key witnesses.
Emmerson has enlisted the services of Boies Schiller Flexner (BSF), a law firm renowned for its representation of clients in high-profile international disputes. Although the arbitration tribunal is not yet fully constituted, the proceedings are anticipated to extend over a two-year period. The company has also indicated that it has backing from a group of investors experienced in arbitration, who previously supported GreenX in a related case against Poland. These investors are reportedly confident in the strength of Emmerson's legal position.
As of now, Moroccan authorities have not publicly commented on Emmerson’s allegations or the ICSID filing, leaving the outcome of this dispute uncertain.