African countries are suffering the consequences of breaching international business rules

That an aircraft belonging to the president of the Republic of Congo Denis Sassou Nguesso was auctioned on October 3 this year by France comes as no surprise as a number of African countries continue to breach international business law.

Nguesso, who has been in power for over 38 years, will have to forfeit his plane, after it was seized in June 2020 at a private terminal in Western France, for his government’s failure to pay public contractual work done by construction company Commisimpex between 1983 and 1986.

The International Court of Arbitration in Paris has twice ordered Mr Nguesso’s government to compensate Commisimpex, but it has been unable to do so, with the sum claimed by the company rising from 100 million euros in 1992 to 1.7 billion euros in 2023.

Over the years, the sum claimed by the businessman has soared, from 100 million euros when the dispute began in 1992 to 1.7 billion euros today. The order to auction the aircraft was first issued by the Bordeaux Judicial Court in December 2022 and again by the Court of Appeal in June 2023.

Successfully, Commisimpex also recovered some $30 million from a Congo state company bank account in France after a court ruling.

Other governments notorious for not meeting contractual agreements, could be facing the same predicament.

Djibouti ignores the rule of law

Yet Congo is not the only case where African governments are breaking international law. This September, the US District of Columbia Court denied the request of the Republic of Djibouti, to quash subpoenas sent to the 10 banks as part of post-judgment discovery efforts.

Djibouti had attempted to block the court's judgment without posting bond and all of its appeals were denied. In these bank subpoenas, the plaintiff, DP World, a Dubai-based shipping company, targets all bank assets greater than $25,000 and belonging to the Djiboutian state or entities with links to the Republic of Djibouti or the family of President Ismaël Omar Guelleh. Asset searches include the period from July 1, 2012 to the present. At Barclays Bank, DP World found 338 entities that are linked to the Republic of Djibouti and fall into the following categories.

In January 2020, DP World won a legal hearing against Djibouti over the Doraleh Container Terminal at a tribunal of the London Court of International Arbitration. Djibouti, which the court ruled had acted illegally when it forcibly removed DP World from management of the Doraleh Container Terminal SA in February 2018, was ordered to restore the rights and benefits under the 2006 Concession Agreement to DP World within two months, or pay damages.

But it didn’t, and DP World at the time estimated to have incurred losses amounting to more than $1 billion. The Concession Agreement involved a shareholding structure of the terminal of 67 per cent by the government of Djibouti and 33 per cent by DP World. The company, which says it contributes 12 per cent to Djibouti’s GDP, claimed the government terminated the Concession Agreement and transferred the terminal assets to a state-owned entity, a total disregard and breach of the business contract.

Despite the terminal being the largest employer and biggest source of revenue in the country, the government refuses to follow international rules that govern the establishment and operation of the Doraleh port, and continues to illegally exert full control of all operations.

Other cases

Another high profile case comes from West Africa’s Equatorial Guinea - where the Vice President’s million euros property was seized in February this year over a business deal that went sour in 2013. Vice-president “Teodorin” Nguema Obiang changed goal posts on a public contract he had awarded South African businessman Daniel Janse van Rensburg. Obiang is the son of President Teodoro Nguema Mbasogo.

A high court in South Africa ordered the seizure of Obiang’s two homes and his superyacht docked in Cape Town, to pay for $2.2 million in damages awarded to van Rensburg for being detained and tortured for 491 days in a notorious Equatorial Guinea jail after Obiang failed to honour a business agreement to have van Rensburg set up an airline and pay him. When van Rensburg completed the work, the court heard, Obiang, through his relative politician Gabriel Angabi, demanded his money back because the government did not “want to do this anymore.”

On three other occasions, French authorities and the US state department seized a total of more than $200 million between 2012 and 2018. Djibouti’s President might certainly be on this same trend where his country’s poor citizens are unable to find out where all the public state money has been spent.

African presidents who have ruled for long have been known to not only shortchange foreign companies in business contracts but also amassing huge assets for their families at the expense of poor citizens.

After president Ali Bongo was ousted by the military from Gabon’s leadership in August by the military, it was revealed that his family, which has been in power for 56 years, has accumulated $92 million in real estate assets in the posh addresses of Paris. In fact Djibouti’s president also has a few properties on similar addresses.