Favorable verdict for Morocco against Scholz Holding

The verdict of the case between Morocco and the German company Scholz Holding has been delivered. Indeed, a decision of the International Center for the Settlement of Investment Disputes (ICSID) was rendered at the end of July.

The sentence is, ironically, favorable to the Kingdom. This is the first time that Morocco has settled its disputes other than with a refusal of an amicable settlement and that for a decade and a half, it had not been victorious in any case before this institution.

This case, whose sum at stake is around 18 million euros, started when the German company Scholz Holding GmbH filed a request for arbitration against Morocco before the ICSID. The request was registered on January 3, 2019 with this organization attached to the World Bank in Washington.

The claimant relies on the bilateral investment treaty concluded between Morocco and Germany in 2001. The dispute concerns a “metallurgical industry project”, one can read on the ICSID website, without further details. Sholz disputes a “ safeguard measure applied by Morocco on the import of ferrous waste and the export of concrete wire”corresponding to the activity of the applicant’s Moroccan subsidiary.

All’s well that ends well then, one could say, except that two other files are currently targeting the Kingdom and are waiting for it in front of Cirdi. The first, and not the least, opposes Morocco to Corral Morocco Holding, a Swedish company that owns Samir and whose owner is the Saudi Arabian Mohammed Hussein Al Amoudi, and the second to a request from the Carlyle group, an American investment fund. Heavy in perspective.

Also this verdict could serve Morocco enormously which often, forced into ICSID arbitration, relied on transactions and settled its affairs amicably. This time, the three counsel appointed for the occasion, Me Laila Slassi, a Moroccan jurist from the firm Afrique Advisors (Casablanca, Morocco) and also practicing as a lawyer at the Paris Bar, as well as Me Dany Khayat and Me José Caicedo, from the firm Mayer Brown (Paris) refused any deal in this case, which opposed Morocco to Scholz Holding.

The Claimant was therefore ordered to reimburse a substantial part of the costs of the arbitration to the Respondent, that is to say to Morocco. Initially, Scholz claimed compensation to the tune of 60 million euros, before curbing his ardor and attempting an amicable transaction, at 18 million, rejected moreover by the Kingdom.

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