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SAMIR oil refinery: Morocco rejects $2.7 billion compensation claim from Saudi firm

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Morocco World News | 8 July 2024

SAMIR oil refinery: Morocco rejects $2.7 billion compensation claim from Saudi firm

by Jihane Rahhou

Rabat - Morocco has formally rejected a $2.7 billion compensation claim from Saudi businessman Mohammed Al Amoudi, following the closure of an arbitration procedure at the International Centre for Settlement of Investment Disputes (ICSID).

The dispute centers on the liquidation of Samir, Morocco’s sole oil refinery, which financially collapsed in 2015 under a crushing debt.

Initiated by Al Amoudi’s Corral Morocco Holding, a subsidiary of his Swedish group, the arbitration sought $2.7 billion in damages, citing violations of protections granted under the 1990 bilateral investment treaty between Sweden and Morocco.

However, Morocco dismissed these claims, accusing Al Amoudi of engaging in blackmail and illegal maneuvers to obstruct the liquidation process of Samir.

The ICSID, an arm of the World Bank, concluded the arbitration in accordance with its regulations, potentially setting the stage for further legal battles.

The Moroccan state maintains that Al Amoudi and the former management of Samir were responsible for the refinery’s financial downfall.

Samir’s financial woes date back nearly a decade, with the refinery accruing around 40 billion dirhams ($4 billion) in debt. Of this, 40% is owed to the state through the Customs Administration, while the remainder is divided among Moroccan and international banks.

Banque Populaire alone holds 2 billion dirhams ($200 million) of this debt. The Casablanca commercial court had previously implicated Al Amoudi and Samir’s former management in the financial collapse and extended the refinery’s judicial liquidation.

The refinery ceased operations in 2016 and has since been under judicial oversight, with activities continuing under the supervision of a trustee and a supervisory judge.

The closure of the ICSID arbitration does not mark the end of legal challenges for Morocco, as the rejection of Al Amoudi’s claims may lead to a full-fledged trial.

 source: Morocco World News