Summary:

Canadian oil firm Zenith Energy has filed a request with the Swiss Federal Tribunal to secure the annulment of a recent International Chamber of Commerce (ICC) ruling that sided with the Tunisian government and against Zenith. 

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Zenith raised multiple concerns with the proceedings that led to the ICC ruling and the ruling itself. Most notably, Zenith highlighted that previously undisclosed ties between members of the ICC tribunal and the Tunisian government had been uncovered.  

Zenith also highlighted that the recent ICC ruling marked a major change of course after a previous case had been ruled in favor of Zenith and against the Tunisian government. 

Under Swiss law, the annulment of arbitration rulings is allowable in some cases. 

Outlook: 

Zenith has continued its public efforts to recuperate funds from the Tunisian government, with the recent ruling against Zenith coming as a surprise in the Canadian firm’s arbitration efforts which had been gaining momentum after the prior positive result in the initial ICC ruling. 

The public proceedings continue to paint the Tunisian government and ETAP (the state-owned oil firmed) specifically in a negative light, creating headlines that will continue to draw scrutiny and concern from current and potential foreign investors. 

The proceedings with Zenith seem to confirm that regulatory and operational risks are a major concern in the extractives industry and other industries requiring close partnership with Tunisian government entities. As the story continues to evolve, it will continue to create reputational damage for the investment environment in Tunisia that will take time to repair. 

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