The multijurisdictional nature the Lobito Corridor project – which comprises a 1300-km railway linking Angola’s Port of Lobito to the mineral-rich regions of the Democratic Republic of Congo (DRC) and Zambia – necessitates that investors proactively establish contracts that contain robust dispute resolution clauses, according to a press release written by senior representatives from law firm Webber Wentzel.

Given the scale of economic activity, development and investment in the corridor, investors must be aware of the potential for various disputes, ranging from contractual disputes to disputes related to environmental impacts, human rights violations, corruption, community conflict and compliance.

Therefore, investors should structure and adopt mechanisms that are expeditious, cost-effective and aligned with best practices to safeguard their investments, which should include appropriate protections between and among contracting parties as well as suitable mechanisms for investment protection against host States, say Webber Wentzel senior associates Brittany Leroni and Prianka Soni, partners Priyesh Daya and Nick Alp, as well as candidate attorney Rufus Ranhlakgwe.

The firm notes that Zambia, the DRC and Angola are all signatories to key international legal instruments, including the African Continental Free Trade Area Agreement, the Lobito Corridor Transit Transport Facilitation Agency and the New York Convention.

“These instruments provide investors with a strong legal framework for resolving disputes through international arbitration, which enables a neutral legal forum, impartial arbitrators, and a structured dispute resolution process, ensuring a fair hearing and fostering a stable investment environment.”

Further, leading international arbitral institutions – such as the International Chamber of Commerce, the International Centre for Settlement of Investment Disputes, and the Arbitration Foundation of Southern Africa – can also provide neutral arbitration forums and regulate procedural aspects of arbitration in line with best practices for resolving complex cross-border commercial disputes between businesses, investors, and States.

The Lobito Corridor is deemed a “transformative economic route” that will accelerate regional trade and drive growth in key sectors such as agriculture, construction, energy and mining.

It also promises significant benefits, including the improvement of rail, road and water infrastructure for the purpose of enhancing continental and international trade.

Key objectives of the project include facilitating the transport of critical raw materials, strategic minerals and electric vehicle components. It will also reduce transport time and costs.

Further, the project will lower the carbon footprint of agricultural and metal exports.

With strong commitments from global stakeholders, including the US and the EU, the Lobito Corridor is already attracting substantial investment.

Notably, a €50-billion partnership between the European Commission and the African Development Bank Group aims to channel funding into strategic infrastructure corridors such as the Lobito Corridor.

Additionally, investments from the Africa Finance Corporation and the Development Bank of Southern Africa are further accelerating its development.

Consequently, with increasing investment in the Lobito Corridor, international arbitration is a critical tool for protecting investor rights and ensuring efficient dispute resolution, says Webber Wentzel, adding that the firm is available to advise on the appropriate arbitration forum, rules and dispute resolution clauses.