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Mozambique: ETG threatens international arbitration as ‘pigeon pea saga’ drags on

Club of Mozambique | 23 May 2024

Mozambique: ETG threatens international arbitration as ‘pigeon pea saga’ drags on

African commodities house ETG has warned Mozambique that it will seek international arbitration in a dispute over the seizure of up to US$60 million’s worth of goods.

Export Trading Group ETG accuses the Mozambican state of violating national legislation and international treaties governing the use of arbitration in the event of a conflict.

This is the latest development in the dispute over the export of pigeon peas that began in mid-2022. According to the Financial Times, a British newspaper, “Lawyers for Mauritius-headquartered ETG wrote to President Filipe Nyusi’s government last week warning that ETG ‘will have no choice but to commence international arbitration if Mozambique does not offer talks to resolve the dispute’”.

“We have tried to resolve the matter using every legal avenue available to us in Mozambique, but we have been met with obstructions from the authorities and the judiciary at every turn,” ETG said, adding that it was still open to an amicable solution.

At stake is a battle wherein the ETG group and other companies were accused of having falsified food certificates proving non genetically modified status for a shipment of pigeon peas, whose destination was India, one of the largest markets for this staple food in the world.
ETG responded by calling the report slanderous, but has since seen the seizure of merchandise valued at US$60 million, a seizure it considers illegal and violating its property rights.

Royal Group seized goods including a large consignment of pigeon peas, widely used in meals across India and a key area of trade between India and Africa.

“ETG is alleging that by allowing the seizure, Mozambique has breached both a domestic law on investment that sets out property and export rights, and a bilateral investment treaty with Mauritius. Both have provisions for appointing arbitrators in the event of a dispute,” the Financial Times wrote.

The dispute between the international group ETG and the Mozambican Royal Group is in the courts. ETG says that it has already received a favourable opinion from a deputy attorney general of the Republic, but this opinion was not taken into account, which is why it has now decided to write to the government.

 source: Club of Mozambique