Morocco Wins World Bank Arbitration Against German Steel Giant Scholz

A victory for Morocco. Since 2019, a dispute has opposed Morocco to the German steel group Scholz, a dispute born in the aftermath of the decision of the former Minister of Industry and Trade Moulay Hafid Elalamy regarding the ban on exports of ferrous scrap and the restriction of imports of reinforcing bars. This decision had been taken in 2013. At the time, the group that had invested in 2008 in Scholz Metall Marokko, a ferrous waste recycling plant located in Skhirat, felt targeted by this safeguard measure. This measure had led to the cessation of the company’s activities. The latter did not hesitate to accuse the ministry of having violated, without prior consultation, a bilateral treaty signed in 2001 between Morocco and Germany for the protection of investments, the article 2 of which stipulates that "neither of the Contracting States shall impede, by arbitrary and discriminatory measures, the administration, maintenance, use, enjoyment or disposal of the investments of investors of the other Contracting State".

The department of Moulay Hafid Elalamy had tried an amicable settlement with Scholz Metall Marokko before August 15, 2018 but was met with the refusal of the German group. The latter claimed $60 million as financial compensation for the losses it would have suffered. A sum it is revising downwards: $20 million. Morocco does not give in. The case will be brought before the International Center for Settlement of Investment Disputes (ICSID). The World Bank’s arbitration body examines the file and rules in favor of Morocco. "We are very happy to have fought the battle to the end and to have surrounded ourselves to win the case before the ICSID," says Ryad Mezzour, Minister of Industry and Trade, to Le Desk. He is pleased to have offered "this first victory to the Moroccan state" in the dispute opposing the kingdom to the German Scholz before the ICSID. One of the five cases opposing the two parties has thus found its outcome.