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Carlyle vs. Morocco: Portfolio investment

Photo by World Bank Photo Collection CC BY NC ND 2.0
  • Amount demanded: US$400 million
  • Outcome: Case settled (investor received US$14 million)
  • Treaty invoked: Morocco - United States FTA
  • Sector: energy
  • Issue: finance

by Public Citizen (edited by

In January 2018, the US private equity corporation, Carlyle Group, filed a notice of intent under the US-Morocco FTA, claiming that the stockpiles of oil it had bought and entrusted to the custody of the Samir Group refinery, through the incorporation of two special purpose vehicles (SPVs) in the Cayman Islands, had disappeared when the company went bankrupt, allegedly due to the refinery’s financial difficulties and tax debt, and that some of the oil had been seized by the Moroccan government during SAMIR’s insolvency proceedings. Carlyle Group is demanding $400 million in compensation for this alleged expropriation and a breach of the US-Morocco FTA’s minimum standard of treatment provision.

In January of 2020, the tribunal bifurcated the majority of the jurisdictional objections raised by Morocco, suspending the proceedings on the merits. The hearing on Jurisdiction is set for January 2021. Morocco’s core jurisdictional objections are that the claimants never had an active investment in the territory of Morocco since the claimant never took ownership over the oil and never contributed any money to the Cayman SPVs, as well as alleged not having control over the Cayman entities.

The case was reportedly settled in February 2022. Morocco agreed to pay about US$14 million to the US firm.

Morocco was also sued on the same matter by the majority shareholder of the Samir refinery, Corral Morocco Holdings AB, a Moroccan subsidiary of the Swedish Corral Petroleum.

Last update: December 2023

 source: Public Citizen