De Beers and Endiama Battle It Out

In mid-September, Angolan miner, Endiama, issued a statement reporting that De Beers had lost out to Endiama in arbitrational proceedings at the International Arbitrational Tribunal.

The company also noted in their statement, that the Tribunal court condemned De Beers’ actions. In June 2002 De Beers initiated an arbitration process against Angola and Angola’s diamond company Endiama, after Ascorp received exclusive exporting rights from the country in 2001.

De Beers wanted the court to prevent Angola from implementing two diamond related laws - decrees 7-A and 7-B of 2000, which require the delimitation of mining concession areas and sets the diamond exporting system and receive $31 million in compensation for damages.

Endiama had noted that the court demanded to conclude the arbitrational procedures, in effect ending the process. Endiama also alleged that the court decreed that De Beers must pay 60 percent of the court costs.

De Beers, though, took a somewhat different view of the matter. Responding to Endiama’s statement, De Beers refuted many of their allegations, stressing that the tribunal did not order it’s claim “to be set aside” or rule that “accepting Debap’s claim could represent a serious disregard of Angolan sovereign rights”.

Following is De Beers’ statement:

De Beers Responds To Recent Claims Made By Endiama

On 21 June 2001, De Beers Angola Prospecting Limited (“Debap”) initiated an international arbitration against Endiama and the Angolan State to defend its rights contained within three agreements for diamond exploration in Angola entered into in 1996. In the face of unresolved procedural complications, the Tribunal as expected ordered the arbitration proceedings to be terminated on 25 September. 

The Tribunal made no ruling whatsoever on the merits of Debap’s claim. This decision was of a procedural nature only and has no bearing on the claim itself. The arbitration, based in Sao Paulo, Brazil, was beset by a number of complications from the outset. In particular, the Tribunal was confronted with the onerous logistical task of trying to resolve a complex international dispute within a four-month deadline. 

This timetable was interrupted and further complicated by a moratorium agreed between both Endiama and Debap which temporarily suspended all legal proceedings between the parties for a considerable period. It should also be noted that Endiama and the Angolan State had not filed their defences against Debap’s claim when the termination order was made.  In effect, the arbitration failed to get off the ground as a result of procedural complications and the insurmountable and unrealistic four month time constraint.

Contrary to statements made by Endiama in the Angolan press, the Tribunal did not order Debap’s claim “to be set aside” and nor did it rule that “accepting Debap’s claim could represent a serious disregard of Angolan sovereign rights”. On the contrary, while terminating the proceedings on procedural grounds, the Tribunal assiduously avoided making any ruling on the claim itself. Debap considers its underlying rights to be unaffected by this decision and reserves its rights in this matter.”