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Morocco appoints arbitrator in $2.2 billion Emmerson mining dispute
Morocco has officially appointed Professor Zachary Douglas KC as its arbitrator in the $2.2 billion dispute with British mining company Emmerson Plc. The arbitration, overseen by the International Center for Settlement of Investment Disputes (ICSID), marks a critical step in a case that highlights the complex balance between foreign investment protections and environmental regulations in Morocco’s resource development projects.
The appointment was recorded by ICSID on August 15 under case number ARB/25/22. Douglas, who holds both Australian and Swiss nationality, is a seasoned expert in international public law, with significant experience as an arbitrator, lawyer, and expert witness in disputes before global tribunals.
Emmerson previously nominated Bulgarian arbitrator Stanimir A. Alexandrov on August 5. Alexandrov, a veteran in international arbitration and current president of the International Council for Commercial Arbitration (ICCA), has a career spanning over three decades, including a role as Bulgaria’s Deputy Foreign Minister.
Dispute origins and arbitration process
The dispute stems from Emmerson’s claim that Morocco violated the bilateral investment treaty signed between Morocco and the United Kingdom in 1990, enacted in 2002. The company is seeking $2.2 billion in compensation after its flagship Khemisset potash project was halted due to environmental concerns.
Located 90 kilometers from Rabat, the Khemisset project was expected to position Morocco as a global leader in potash production. With estimated resources of 311 million tons at an average grade of 10.2% potassium oxide, the mine was projected to produce over 700,000 tons annually for 19 years.
However, the project was suspended following an unfavorable environmental and social impact assessment issued by the Regional Unified Investment Commission (CRUI) on October 28, 2024. The commission flagged the project’s water consumption as unsustainable, citing incompatibility with local resources.
Represented by law firm Boies Schiller Flexner, Emmerson claims this decision constitutes unjustified expropriation under the bilateral treaty, which permits arbitration for investment disputes. Morocco has countered by appointing attorney Hicham Naciri to represent its position.
The arbitration tribunal now awaits the appointment of a president, who will oversee the proceedings and play a pivotal role in shaping the case’s outcome.
Strategic appointments and broader implications
Observers in international arbitration circles suggest that Morocco's selection of Douglas may be strategic. Known for his pro-state rulings, Douglas has frequently dissented in cases where tribunals ruled in favor of investors. His involvement underscores Morocco’s intent to defend its environmental and regulatory decisions rigorously.
The case also underscores broader challenges tied to balancing foreign investment with environmental sustainability. It has drawn attention to the complexities of resource development in Morocco, where economic opportunities must align with environmental and social constraints.
As the tribunal’s president is yet to be appointed, this arbitration is poised to set a significant precedent for Morocco’s approach to foreign investment in resource development.