The legal battle between ABCI Investments and the Tunisian State continues to stagnate following the controversial decision issued by the International Centre for Settlement of Investment Disputes (ICSID) on December 22, 2023.
The case, the oldest ever handled by ICSID (Case No. ARB/04/12), stems from the 1989 expropriation of ABCI’s majority stake in the Franco-Tunisian Bank (BFT).
After more than two decades of complex proceedings, ABCI Investments was awarded a mere $354,000 in compensation, including interest, far below the $12 billion initially claimed. This amount, falling significantly short of the majority shareholder's expectations, is based on the valuation of BFT in 1989, the year of the expropriation.
The dispute traces back to 1982, when ABCI acquired 50% of BFT’s shares from the Central Bank of Tunisia.
However, between 1984 and 1989, transactional agreements were allegedly concluded under duress, according to ABCI’s claims, leading to a web of judicial disputes.
After British courts declared themselves incompetent to adjudicate these agreements, ABCI turned to ICSID in 2003 to initiate an international arbitration process, which only truly began in 2007.
The final ruling, delivered by the arbitral tribunal in December 2023, dismissed the bulk of ABCI’s claims.
The arbitrators unanimously found that the causal link between the alleged violations—particularly those relating to fair and equitable treatment (FET) and denial of justice—and the claimed damages was insufficiently established. Consequently, the tribunal upheld only the expropriation of BFT in 1989 as grounds for financial compensation.
Yet, ABCI is not ready to give up. The company is now challenging the conditions under which the arbitrators were appointed, alleging irregularities that may have compromised the fairness of the proceedings. This new legal angle could further prolong this already protracted conflict, exacerbating tensions between the investor and the Tunisian State.
The "ABCI v. Tunisia" case highlights recurring challenges in international arbitrations involving sovereign states. The slow pace of proceedings, the exorbitant costs of litigation, and disputes over the interpretation of international legal principles—such as fair treatment and investment protection—often complicate dispute resolution.
In this specific case, the tribunal’s approach, focused on a strict assessment of economic harm, raises questions about ICSID’s ability to deliver outcomes perceived as fair by all parties. For the Tunisian State, this decision could be seen as a partial victory, mitigating the financial impact of this dispute on its public finances. However, ABCI’s renewed legal actions signal new judicial battles ahead, potentially further eroding international investors’ confidence in Tunisia.
Beyond the financial stakes, this case holds significant political implications. For the Tunisian State, it is a matter of defending its sovereignty against a foreign investor while safeguarding its economic appeal. Tunisia, seeking foreign capital to revive its fragile economy, could suffer from the negative perception generated by this dispute.
For ABCI, this legal battle represents a fight for the protection of its rights as an investor. The company seeks compensation for an expropriation it deems illegitimate while denouncing what it perceives as procedural flaws in the international arbitration process.
