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AFRICARD CO LTD

AGAINST

STATE OF NIGER

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INTERIM PROCEDURAL AWARD

Rendered by the Arbitration Court formed of:

Boubacar DICKO (Sole Arbitrator), President

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TABLE OF CONTENT OF THE INTERIM PROCEDURAL AWARD

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The Arbitration Court, seated in the CCJA Arbitration Center in Abidjan, rue Doctor Jamot, has rendered this day the following award between:

Africard CO LTD, with head office located in Geneva Place, Road Town, TORTOLA, BRITISH VIRGIN ISLAND, CLAIMANT

Represented by:

Mr. Dany CHACCOUR, Chief Executive Officer, residing at the same abovementioned address as Africard CO LTD;

Mr. Sleiman OBEID, Associate of the Chief Executive Officer, residing at TORTOLA, BRITISH VIRGIN ISLAND, GENEVA PLACE, ROAD TOWN;

Having as Counsels:

Maître Souleymane YANKORI, Lawyer, SCPA YANKORI and ASSOCIATES, with law firm located at 754, Rue du Plateau, Niamey (Niger);

Maître Amer OBEID, Lawyer, with law firm located in SODECO Building, Rue Petrotrad, Achrafieh District, Beirut (Lebanon);

Maître Rachad MEDAWAR, Lawyer, with law firm located in SODECO Building, Rue Petrotrad, Achrafieh District, Beirut (Lebanon);

And

The State of Niger, represented by Mr. IBRO ZABAYE, Head of the Civil Litigation Department of the State, General Secretariat of the Government, Presidency of the Republic, PO BOX: 550, Niamey (Niger), assisted by Maître IBRAHIM YAGI, Attorney-at-Law, SCP JUSTICIA, Dar es Salam, 52, Rue de la Radio, PO BOX: 13851, Niamey (Niger), RESPONDENT and COUNTER-CLAIMANT.

I. Facts - Obligations of the Parties – Proceedings:

A. Facts:

1. In order to provide its citizens with biometric and electronic passports, the State of Niger, with the aim of selecting the company which will be responsible for the large-scale manufacturing and production of administrative documents, initiated in December 2011, under the auspices of the Ministry of Interior, Public Safety, Decentralization and Religious Affairs a restricted direct procurement process with competitive tendering of three (3) companies specialized in this field.

2. As a result of this procedure which was approved, authorized and launched by the General Directorate for Public Procurement, as the technical department of the Ministry of Economy

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and Finance (See exhibits No. 10 and11 of the Request for Arbitration: letters from the General Manager of the General Directorate for Public Procurement on 14 and 27 January 2011 to the General Manager of Resources and to the Ministry of Interior, Public Safety, Decentralization and Religious Affairs), the contract was awarded to Africard CO LTD, a company with headquarters in the British Virgin Islands, GENEVA Place, Road Town, Tortola, by virtue of notification letter No. 00000200/MIS D/AR/DGR/DAF/DMP dated January 28, 2011 and sent by the Minister of Interior, Public Safety, Decentralization and Religious Affairs to the General Manager of Africard CO LTD (See exhibit No. 12 of the Request for Arbitration) in exchange for an amount of thirty four billion eight hundred million (34,800,000,000) CFA F.

3. The contract notification letter was followed by an agreement on October 13, 2011 entitled "Agreement for the Production of Biometric and Electronic Passports in the Republic of Niger", concluded and signed by the representatives of both parties.

4. The examination of this agreement made up of thirty three articles shows that it includes common provisions for the contracting parties and other specific provisions relative to the respective or mutual obligations imposed on them.

B. Obligations of the Parties

1. Common Provisions of the Agreement

a) Purpose

5. The purpose of the agreement is defined in Article one thereof, which states that “the purpose of this agreement is the production of a minimum of one million (1,000,000) biometric and electronic passports including a minimum of eight hundred sixty thousand (860,000) regular passports, of one hundred thousand (100,000) regular passports for students and minors and of forty thousand (40,000) diplomatic and service passports".

b) Term

6. The term of the agreement is defined in Article 2 thereof which states that “the term of this agreement shall be five (5) years, renewable once with an extension of two (2) additional years at the end of the second five (5)-year period".

c) Form

7. Article 4 states in this regard that "this agreement is a BOT [Build, Operate and Transfer] agreement with a unit price and revenue sharing between the Contractual Partner (Africard CO LTD) and the State of Niger, according to the chart below (...)”.

d) Actual Implementation of the Agreement Purpose

8. Article 21 states in this regard that “the on-site preparation and delivery of the first passport is set within a maximum period of one hundred fifty (150) days after the signature of specimens".

e) Tax and Customs System

9. Article 5 identifies in particular the exemptions from which Africard CO LTD shall benefit upon the introduction of its production materials and means in the Nigerien territory and for

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its different importations related to the implementation of the aforementioned purpose of agreement.

2. Respective Obligations of the Parties

2.1 Obligations of Africard Co LTD, Claimant

10. According to Article 6 of the Agreement, Africard CO LTD shall mainly undertake to:

• Produce at least one million (1,000,000) biometric passports during the contract term (...);
• Provide, install, operate and maintain the materials and equipment required for the on-site agreement implementation;
• Take charge of and make a qualified team responsible for the management and supervision of the agreement available to the State of Niger;
• Ensure the BOT financing of all the operating expenses incumbent upon it, in addition to the expenses related to the data entry and collection operations in the chancelleries of Niger;
• Ensure the initial and continuous training of the State of Niger's staff during the term of the agreement;
• Restore the production system and transfer the same to the State of Niger at the end of the contract term with a minimum operation warranty of six (6) months; Article 10 concerning the terms of this transfer states that “the Contractual Partner will transfer to the State of Niger the infrastructure, know-how and technical information and commits itself vis-à-vis the State of Niger to provide maintenance, technical assistance, upgrade and training to facilitate the management by the State of Niger of the transferred infrastructure (...)".

11. Africard CO LTD also provides guarantees regarding compliance with the standards defined in the technical file of materials, supplies and equipment used, transported, installed or to be delivered within the framework of the implementation of the agreement and for the intellectual, physical, technological and legal reliability thereof (See Articles 17, 18, 19 and 20 concerning respectively the patents, packaging, insurance and technology of the aforementioned materials and equipment).

2.2 Obligations of the State of Niger, Respondent

12. According to Articles 7, 8 and 9 of the agreement, these obligations are divided into logistic, financial and social measures.

Logistic Measures (Article 27 of the Agreement)

13. In this case, they are the measures directed to the material and administrative facilitation of the agreement implementation, such as those

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aiming at "giving the Contractual Partner access to the facilities designed for the preparation and issuance of biometric and electronic passports and to any other information required to facilitate the implementation of the agreement within the defined term...”, at “providing the Contractual Partner with data collection centers, a collection and production functional site and qualified staff to ensure the proper implementation of the agreement" and finally at "ensuring the safety of the premises including the collection and production site, the safety of collected funds and of the Contractual Partner's staff during the execution of their mission within the framework of this agreement”.

Financial Measures (Articles 7b and 8 of the Agreement)

14. This section concerns all the financial rights and advantages granted to the Contractual Partner by the State of Niger including in particular the exemption from customs duties and taxes, in addition to the authorization for the repatriation of funds recovered by the Contractual Partner and importation by the latter of the capital required for the implementation of the agreement.

Social Measures (Article 9 of the Agreement)

15. These measures comprise the appointment and remuneration by the State of Niger of the staff required for the implementation of the agreement and which shall be therefore trained by the Contractual Partner on the production software techniques and granted the incentive awards paid by the Contractual Partner, the amounts thereof to be defined by mutual agreement.

3. Mutual Obligations of the Parties

16. They relate to the events, circumstances and actions that may affect the implementation by the parties of the provisions of the agreement: this is the case of specific provisions related to the force majeure, the so-called stability clause and termination clauses which show that the parties have a priori agreed to give priority to the implementation of the said agreement in mutual complete loyalty and trust; in fact, the proof is Article 14 which states that no party shall be entitled to ask to terminate the agreement in case of force majeure, while the existence and invocation of this force majeure shall constitute a legal reason for the failure of the debtor to perform his obligations (See in this regard Article 1148 of the Nigerien Civil Code which states that “no compensation or interest shall be granted in the event that the debtor, as a result of a force majeure or unforeseeable incident, should fail to give or do what he was obliged to, or did what was prohibited"); another proof is Article 26 of the agreement forming the so-called stability clause according to which “the State of Niger shall ensure that the implementation of this agreement is not affected by any disruption arising from any possible amendments made to laws and regulations in the legal,

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administrative, fiscal or customs fields; the final proof is the common designation in Article 24 of the events in which the agreement may be terminated due to the acts of the parties: therefore, it only appears in this regard that on one hand : “In the event that the State of Niger should terminate the agreement without any fault or negligence by the Contractual Partner, the State of Niger shall undertake to pay the Contractual Partner the amounts equal to the revenue shortfalls resulting from this termination. In this event, the State of Niger shall keep all the materials" and on the other hand that "in the event that the Contractual Partner should wish to terminate the agreement without any fault or negligence by the State of Niger, the investments carried out shall remain the property of the State of Niger notwithstanding compensation for the damage caused".

17. It should be added that parties agreed (Article 29) to form two months after the entry into force of this agreement a joint monitoring and assessment committee responsible for ensuring the performance of the agreement; this committee shall therefore in this context prepare, to the attention of both parties, a summary report each six (6) months in addition to an annual detailed report and may propose that the State of Niger terminate the agreement if substantial faults or negligence are noticed in its assessments.

5. Agreement Implementation

18. Despite the mutual conclusion and signature of the aforementioned agreement between Africard CO LTD and the State of Niger, no biometric or electronic passport was produced by the Contractual Party, in accordance with the abovementioned purpose, provisions and conditions of the said agreement.

19. This situation is attributable to the volte-face of the State of Niger toward the Contractual Partner: in fact, by virtue of the letter of March 24, 2012, the Minister of Interior, Public Safety, Decentralization and Religious Affairs informed the General Manager of Africard CO LTD that "the agreement for the production of biometric and electronic passports signed on October 13, 2011 unfortunately falls within the domain of Public Private Partnership covered by Order No. 2011-07 of September 16, 2011, defining the general regulations of the Public Private Partnership contracts and their implementation and by its implementation decree No. 2011-559 on November 09, 2011” and that “therefore, the said agreement is null and void”. (See exhibit No. 25 of the Request for Arbitration).

20. Added to the legal excuse mentioned in the said ministerial letter, are some questions about the "appropriateness” of the procurement process related to the biometric passports with Africard CO LTD; thus, in an analytical paper of September 06, 2012 reserved for the Prime Minister, Head of the Government (See exhibit No. 33 of the Request for Arbitration), the Government Secretary General mentioned that "...considering

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the context, it is allowed to question the appropriateness of the launching of the call for tenders relative to the biometric passports, specifically in this period of time, which means December 2010 (...). In fact, it should be noted that the International Civil Aviation Organization orders the introduction of biometric passports only on a voluntary basis and starting from 2015. There was obviously no urgent need to initiate the process of biometric passports introduction. Moreover, it would be rational in this period of time to strengthen the production of the machine-readable passports which are in conformity with the ICAO standards (...)".

21. Africard CO LTD will intercede with the competent Nigerien Authorities in order to completely change their decision of termination or to reconsider this decision in such a way as to amiably renegotiate the basis of the proposals and suggestions which may lead to a satisfactory financial agreement for both concerned parties, and mainly for the Claimant which claims having incurred, before this termination decision, substantial installation and materials costs (See in this regard, exhibit No. 34 of the Request for Arbitration: letter dated September 27, 2012 from the Claimant's Counsel to the Government's Secretary General; See as well the various letters and emails exchanged during 2012 between the General Manager of Africard CO LTD and many Nigerien officers, emails forming the second part of the Claimant's pleadings in response).

22. Thus, in one of his emails dated September 19, 2012 (See pleadings in response “page 5 of 6"), the General Manager of Africard CO LTD informed the Permanent Secretary of the Public Private Partnership Support Unit, one of its main interlocutors, that "... following the hearing HE Prime Minister granted me Friday, September 14, 2012 in Paris, I take the liberty to make contact with you in order to find a solution to this issue and to the dispute. The hearing with the PM was very constructive and we decided to close this matter as soon as possible. Africard still wishes to be granted the contract again through an amendment addendum which will bring the said agreement into compliance with the PPP [Public Private Partnership] law (...). If this may seem difficult, HE the PM... expressed his willingness to launch a transparent international tendering process... but to do so, he expressed his willingness to resolve the dispute before launching such a tender. In this regard, he asked me to present some suggestions (...). In an act of good faith, and sincerely wishing to end this dispute which is causing us a financial drain and a huge loss on the level of our group image, we are ready to sign an amicable termination protocol stipulating for a fixed compensation to be discussed (...).

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Another suggestion, but one which is more difficult to apply, is to compensate Africard CO LTD through the payment of 10,000 CFA F for each passport sold by the new Contractual Partner (...)".

23. This amicable approach made towards the Nigerien authorities proved to be unsuccessful and in vain. Thus, Africard CO LTD had recourse to the judicial means in order to challenge the decision issued on March 24, 2012 by the Minister of Interior, Public Safety, Decentralization and Religious Affairs, to terminate the agreement for the production of biometric and electronic passports in the Republic of Niger.

24. In this regard a “Request for the Annulment of a Ministerial Decision" from Africard CO LTD, was submitted to the State Court of Niger, by the Counsel, Maître Souleymane YANKORI, Attorney-at-Law in Niamey, on April 30, 2012; this request was received and registered by the chief clerk of the court on March 02, 2012.

25. By virtue of Decision No. 13-04 on January 23, 2013, the State Court complied with the aforementioned request and annulled the challenged ministerial decision. The Government Secretary General was notified of this decision by email on January 29, 2013 sent by the chief clerk of the State Court.

26. In several emails, the aforementioned Counsel of Africard CO LTD, forwarded a copy of this same Decision to the highest Nigerien authorities (See exhibits No. 36 and 37 of the Request for Arbitration: Letters of January 30 and February 08, 2013 to the Minister of Interior, with copy to the Presidency of the Republic, Prime Minister and Government Secretary General and to the Public Private Partnership Support Unit).

27. In the abovementioned letters, the aforementioned Counsel of Africard CO LTD stressed the “enforceable” nature of the abovementioned decision which, according to him “shall take effect for all” and “the main effect of which... is to return to the statuquo ante: which means the way things were before the termination decision. In other words, with the annulment of this decision, the Agreement of October 13, 2011 regains full effect".

28. Despite the accomplishment of all diligences and petitions resulting from the issuance of Decision No. 13-04 of January 23, 2013 of the State Court of Niger, it turned out that the said decision did not play the dissuasive and conservatory role that Africard CO LTD wished for vis-à-vis the Nigerien competent authorities.

29. In this regard, in its letter dated March 28, 2013 to the Government Secretary General (See exhibit No. 39 of the Request for Arbitration), Africard CO LTD, through its aforementioned Counsel, regrets that “unfortunately, the State of Niger did not to date show any intention

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to comply with the Court's decision, or at least, to compensate the Contractual Partner despite [its] numerous requests" and revealed that “even worse”, it just noticed the introduction of a new so-called electronic passport called produced by the current contractor Contec Global, whose contract expired two years ago".

30. It is also surprising that "Contec Global, with no official contract award or tendering process, gained the right to perform a public service provision yet, a contract is duly awarded to another company after a transparent procedure in conformity with the provisions of the public procurement code in force in Niger", Africard CO LD considered that “this public service provision could not be performed except by virtue of an unlawful agreement, by means of an abuse of the procedure” forming “a violation of the law, more specifically a violation of the public procurement code” and “a serious and deliberate breach of the Agreement of October 13, 2011 resulting in the termination attributable to the State”. (See exhibit No. 39 of the Request for Arbitration”, letter from Maître Souleymane Yankori, Counsel of Africard CO LTD, dated March 28, 3013 and sent to the Government Secretary General).

31. Therefore, Africard CO LTD concluded in the aforementioned letter that “based on the latest developments in this case”, it informs the State of Niger of “its final and decisive decision to have recourse to the CCJA for an Arbitration Process".

32. Considering that the wrongful acts of the State of Niger toward it, such as its refusal to perform the aforementioned State Court decision and the assignment to another contractor of the contract which was already duly and legally awarded to it, have caused it substantial damages, for which it claims compensation, Africard CO LTD submitted to the CCJA a "Request for Arbitration" dated April 08,2013, which was registered by the Secretary General of the CCJA Arbitration Center under No. 003/2013/ARB on April 15, 2013.

C. Proceedings

33. The proceedings were as follows:

1. After the submission of the Request for Arbitration by the Legal Counsel of Africard CO LTD, Maître Souleymane YANKORI, Attorney-at-Law in Niamey, a notification was served by the CCJA Arbitration Center Secretary General to the State of Niger.
2. By virtue of Decision No. 0083/2013/CCJA/ADM/ARB, dated August 1, 2013, the CCЈА nominated Mr. BOUBACAR DICKO, Magistrate, Former Judge at the

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CCJA/OHADA and currently a legal counsel at the Supreme Court of Mali in Bamako, as sole arbitrator and Chairman of the Arbitration Court.
No party has objected to this nomination.

3) On September 26, 2013, the meeting provided for in Article 15 of the CCJA Arbitration Rules was held and the minutes of the meeting were drawn up: it shows in particular that:

• The parties accept that they are bound by an arbitration agreement under Article 25 of the Agreement for the Production of Biometric and Electronic Passports in the State of Niger, mutually signed by them on October 13, 2011;
• The Claimant, Africard Co LTD, seeks an order to oblige the State of Niger to pay it primarily the amount of 19,747,000,000 (nineteen billion seven hundred forty seven million) and 5,000,000,000 (five billion) CFA francs, or a total of 24,747,000,000 CFA francs, as compensation for the loss of income and for moral and commercial damages it has suffered as a result of the termination by the State of Niger of the aforementioned framework convention; it further requests the provisional execution of the award to be rendered;
• The Respondent, the State of Niger, represented by Mr. IBRO ZABAYE, Head of the Civil Litigation Department of the State, declares agreeing to sign the minutes but reserves the right to make all objections and challenges including those related to the jurisdiction of the Arbitration Court. He also pointed out the following issues:
  1. The inappropriateness of the project with respect to the requirements of the international standards in this field;
  2. Violation of the Order of September 16, 2011 establishing the public-private partnership, in that the agreement was concluded hastily on the same day that the order was adopted;
  3. The exorbitant claims of Africard Co LTD indicating that the project does not take into account the interests of the State of Niger;
  4. The requested provisional enforcement, which is not necessary in the case of a State;
• The parties recognize that:

- The Arbitration Court is located in the premises of the CCJA in Abidjan and may, in accordance with Article 13, clause 3 of the CCJA Rules of Procedure, decide to hold hearings in any other place after consulting the parties;

- The language of this arbitration is French;

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- The law applicable to the merits of the dispute is the Nigerien law;

- The arbitration is governed firstly by the CCJA Rules of Arbitration and where they are silent, by the OHADA Uniform Act concerning the arbitration law of March 11, 1999;

• The parties declare that they do not intend to grant the Arbitration Court the powers of amicable compositor;
• In agreement with the parties, the Arbitration Court has, pursuant to Article 15-1-d of the CCJA Arbitration Rules, fixed the forecasted timetable as follows:
  • October 28, 2013 at the latest: submission to the CCJA Arbitration Center Secretariat General of the reply of the State of Niger, with a copy to Maître SOULEYMANE YANKORI;
  • November 26, 2013 at the latest: submission of the pleadings in response of Maître SOULEYMANE YANKORI on behalf of the claimant;
  • December 26, 2013 at the latest: rejoinder of the State of Niger, if applicable;
  • January 16, 2014 at the latest: hearings and deliberations;
  • April 16, 2014 at the latest: drafting, signature and handover of the award to the CCJA Arbitration Center Secretariat General;

4) According to the abovementioned forecasted timetable, the parties exchanged and submitted to the Arbitration Court the following documents:

• The reply of the State of Niger to the Request for Arbitration in the defense pleadings, undated but received by the CCJA Arbitration Center Secretariat General on October 29, 2013;
• The pleadings in response of Africard CO LTD, undated, but subject of the letter of transmittal to the Chairman of the Arbitration Court and the Respondent on November 21, 2013 from its Counsel Maître Souleymane YANKORI, Attorney-at-Law in Niamey.

5) On January 16, 2014 a hearing of the oral arguments was held in the premises of the CCJA. This hearing was registered, and its transcript, performed by the Court Secretary General, was sent to the parties which have made no comment thereon.

6) At the end of this hearing, the Claimant submitted to the Arbitration Court and to the Respondent an undated summary document entitled

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"Pleading of January 16, 2014”, the examination of which reveals that it is a compilation of all its pleas and arguments made in its Request for Arbitration and its response and pleadings.

7) The Chairman of the Arbitration Court notified the parties of the closure of the hearings this January 16, 2014.

II. Parties' Claims

A. Lack of Jurisdiction Raised by the State of Niger

34. In both its defenses and pleadings, the State of Niger, through the Head of the Civil Litigation Department of the State and its Counsel, considered that the analysis of the last two clauses of Article 25 of the said agreement gives it grounds to claim the lack of jurisdiction of the Arbitration Court on the grounds that the said article stipulates on one hand that "Failing an amicable settlement, any dispute shall be submitted by one of the parties for arbitration by OHADA Common Court of Justice and Arbitration (CCJA)" and on the other hand that “In the event that the dispute should be of technical nature, and failing to reach an amicable settlement, the parties shall, before any arbitration proceedings, have recourse to the expertise of the International Chamber of Commerce (ICC) International Center for Technical Expertise in Paris in accordance with the enforced technical expertise regulations thereof".

35. Africard CO LTD, bound to strictly comply with the aforementioned provisions, was required, according to the State of Niger, to seek first an amicable settlement with it "before any arbitration procedure", and which "it has not deigned to do", breaching therefore in its “hastiness” the first prerequisite defined by Article 25 to have recourse to the Arbitration Court" (See pleadings in defense, pages 3 and 4).

36. The Respondent gives many interpretations to the concept of amicable settlement; therefore, according to it "the amicable settlement would mean a will to settle the issue of the compensation of Africard, while for the latter amicable settlement would simply mean to award or grant it the project; it must necessarily have this concession for an amicable settlement to be reached” (See page 64 of the Transcript, No. 428, declaration of the Head of the Civil Litigation Department of the State).

37. The Respondent states as well that the provisions governing public procurements in Niger stipulates for the establishment of a committee for the settlement of disputes at the level of the Regulatory Agency for Public Procurement, and that it is this committee which shall receive, even in case of termination, the complaint of a party to proceed to an amicable settlement; it considers that the Claimant was

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required to make recourse to this committee in this regard, which it did not do (See pages 87 and 88 of the Transcript, No. 533 and 536, pleadings of Maître Ibrahim YAGI, Lawyer of the State of Niger).

38. The Respondent concludes on this level mentioning that "... the difficulty that brought the State of Niger to terminate the Agreement with Africard results from the effort to comply with the new judicial provision freely adopted by Niger in accordance with its budgetary consolidation policy. A real will to reach an amicable settlement would simply make Africard request the conclusion of a new agreement in conformity with this new order; which was not the case at all (...)" (See page 4 of the pleadings in defense).

39. Moreover, still according to the Respondent, the second prerequisite defined by Article 25 of the agreement is to have recourse to the ICC International Chamber of Commerce (ICC) International Center for Technical Expertise in Paris when the dispute if of a technical nature.

40. For the State of Niger, “this dispute is of a technical nature, since it no more seeks any implementation of the contract, but the evaluation of the material damage that was allegedly caused to one of the parties; Africard... has no expertise... in this field... it is therefore necessary to have recourse to such an expert assessment on which the Arbitration Court could be based; otherwise, any assessment is subjective" (See page 4 of the pleadings in defense).

41. The Head of the Civil Litigation Department repeated this argument during the debates of the hearing of January 16, 2014 (See page 66, No. 431 of the Transcript) mentioning that: “we said that this dispute is of a technical nature with regard to the assessment of the exact damage that was caused or has been allegedly caused to Africard. The latter, as a party, shall not be entitled to perform this expert assessment in order to assess the damage allegedly caused to it (...)”.

42. Thus, based on all these observations, the “State of Niger raises, in limine litis, the issue of the lack of jurisdiction of the Arbitration Court since that the prerequisites to have recourse to such court are not met" by Africard CO LTD (See page 5 of the pleadings in defense).

Concerning the lack of jurisdiction of this Arbitration Court reported above and raised in limine litis by the State of Niger

1. Concerning the first section of the lack of jurisdiction based on the violation by the claimant of Article 25, Clause 2 of the agreement for the production of biometric and electronic passports in the Republic of Niger

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43. The above observations show that the State of Niger considers that the amicable settlement clause inserted in Article 25, clause 2 of the aforementioned agreement stipulates a prerequisite for the arbitration, failing which the arbitration cannot take place. Therefore, the State of Niger blames Africard CO LTD for violating the said article since “it does not deign to seek an amicable settlement of the dispute..." (See page 3 of the pleadings in defense), before initiating the arbitration procedure by performing the due process with the competent national administrative bodies formed for this purpose “by virtue of the provisions governing public procurements in Niger” (See page 87 of the Transcript, N. 533, Pleading of Maître Ibrahim YAGI, Lawyer of the State of Niger).

44. Africard CO LTD considers in turn that the amicable settlement clause in Article 25, clause 2, of the aforementioned agreement cannot be construed or considered as a prerequisite for the introduction of an arbitration process; this term, as mentioned in the said article, does not, according to it, form an incentive for the parties to get closer to better agree before initiating the litigation: therefore, in this case, there is simply an exhortation resulting from the use of the terms "first" and "to the greatest extent possible” in the said article, which do not indicate and shall not therefore be construed as a prerequisite for the arbitration (See page 36 of the Transcript, No. 224, Pleadings of Maître Souleymane YAKORI, Lawyer of Africard CO LTD).

45. Considering these opposing positions of the parties with regard to Article 25, clause 2 of the aforementioned agreement, the Arbitration Court should decide as to its nature and scope.

46. In this regard, it should be noted that the jurisprudence (See Lawsuit No. 00112004/ARB/CCJA dated 10/06/2004: Huileries du Benin (SHB) Company versus the Société Nationale de Promotion Agricole (SONAPRA) [National Company for Agricultural Promotion], Interim Procedural Award on March 10, 2006 and Partial Award on September 26, 2006) and the doctrine (See both rulings: French Commercial Cassation, November 28, 1995 and Joint Chamber, February 14, 2003, mentioned and reviewed in the aforementioned awards) approve the binding or only motivational nature of the amicable settlement clause based upon the content and the scope intended by the contracting parties in the occurrence and settlement of their dispute. It is clear that some of the amicable settlement clauses are more binding, more imperative and more strict than others, depending on whether they expressly refer to the intervention of a third party such as a mediator, conciliator or expert to seek and reach an amicable settlement, or not.

47. In this case, Article 25, Clause 2 of the aforementioned agreement makes no reference to any third party to initiate an amicable settlement of the dispute – whether a natural person or, a fortiori, a state agency or legal entity, such as

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the Disputes Settlement Committee established with the Regulatory Agency for Public Procurement (ARMP), supposed to be, according to the Respondent, the only recourse in this matter.

48. On this specific point, it should be noted that this assertion by the Respondent is not valid because, a simple interpretation of Articles 177 to 120 of the Nigerien Public Procurement Code, concerning recourse before the Disputes Settlement Committee regarding the Attribution of Public Procurement Contracts and the appeals related to their implementation, shows that the referral to the said Committee is optional and mainly that this referral must be carried out either by the applicant excluded by the award of the public procurement contract (article 177 of the Public Procurement Code: “in the absence of a favorable decision within five (5) working days as of the submission of the prior recourse, the applicant shall have a period of three (3) working days to submit its recourse before the Disputes Settlement Committee regarding the Awarding of Public Procurement Contracts, established with the Regulatory Agency for Public Procurement”), or by the contractor which could have disputes with the Contracting Officer [which means the representative duly authorized by the contracting authority to represent it in the conclusion and implementation of the contract] during the implementation thereof (Article 120, Clause 1 of the Public Procurement Code: "the contractor shall be entitled to amicable recourse to the contracting officer in order to reach a settlement for the disputes or litigations they may experience during the contract implementation”).

49. It is noted that the present litigation did not result from either the award of the public procurement contract, but rather from its termination, or from the implementation of such a contract, since the latter did not reach implementation mainly because of the termination by the State of Niger of this agreement.

50. Knowing that the reliance by the Respondent upon the aforementioned provisions proves to be ineffective in this case, it is therefore obvious that the challenged amicable settlement clause is devoid of any binding nature, which is clear from its hypothetic writing calling to the good will and good faith of the disputing parties more than forcing them drastically to seek a formal amicable settlement likely, in such case, to be concluded by a transaction. Failing to reach such a formal settlement, it should be recalled that in its numerous letters mentioned above and sent to different Nigerien officials, Africard CO LTD submitted many requests for amicable settlement of this dispute, which remained unsuccessful; it is probably due to this deadlock that it used the arbitration clause stipulated in Article 25, clause 3 of the aforementioned agreement by submitting the dispute to Arbitration.

51. The Arbitration Court notes in this regard that, notwithstanding the submission of the Request for Arbitration to it, the Respondent, if really willing to, could still initiate the negotiations as required and desired

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by its adversary, as long as the Arbitration Award is not rendered and the court did not settle any dispute; but this was not the case at all.

52. It is appropriate to mention here that during almost all the thirteen months between March 24, 2012 - date of the termination of the agreement by the Ministry of Interior, and April 15, 2013, date of the submission of the Request for Arbitration, it is rather the Claimant which has vainly sought an amicable settlement of the dispute with the State of Niger, as proven by the different appeals and letters already mentioned above and which remained unsuccessful; thus, in an ultimate and unsuccessful effort to reach amicable negotiations before making recourse to the State Court, then to the Arbitration Court, the Counsel of Africard CO LTD, Maître Souleymane YANKORI, Attorney-at-Law, in his letter dated September 27, 2012 to the Government Secretary General (See exhibit No. 34 of the Request for Arbitration) stated mainly that “...we reiterate our offer to renegotiate an amendment addendum as recommended by the Competent Authority in its report dated June 25, 2012. However, in the event that the situation should become irreversible, we suggest you to sign an amicable termination protocol between both parties with compensation. I would like to inform you that in this context, the Chairman of the Board of Directors of Africard travelled specifically for this purpose. For this reason, kindly inform us of your position within five (5) days as of receipt of this letter. If no answer is received, we shall consider your option final, which will make us have recourse of the CCJA (...)”.

53. Therefore, Africard CO LTD, relying on Article 25, Clause 3 of the aforementioned agreement, is fully entitled to make recourse to arbitration provided for by this article, by referring to this Arbitration Court.

54. Therefore, it follows from all the foregoing considerations that the lack of jurisdiction of the Arbitration Court raised by the Respondent and based on the abstention of the Claimant to seek an amicable settlement before any arbitration procedure is invalid and should be rejected.

2. Concerning the second section of the lack of jurisdiction based on the technical nature of the dispute and the subsequent recourse to the expertise of the International Chamber of Commerce (ICC) International Center for Technical Expertise in Paris

55. If it is undisputed that Article 25, clause 4 of the aforementioned agreement refers to the expertise of the International Chamber of Commerce (ICC) International Center for Technical Expertise (CIET) in Paris “in the event that the dispute should be of a technical nature, and failing to reach an amicable settlement", it is appropriate in this case for the sake of clarification, to analyze and interpret in particular the concept of “dispute of a technical nature" referred to in the said article and which is likely to be submitted to the “expertise of the CIET",

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for the "amicable settlement” previously explained and commented.

56. Concerning this concept of “dispute of a technical nature”, it is noted from the declarations of the Respondent (See No. 39 above) that the latter links the said concept to the assessment of the damage incurred by its adversary, whereby the expert assessment and evaluation of this damage, according to it, fall within the exclusive competence of the CIET.

57. On the contrary, for the Claimant, “in case of biometric passports, a dispute of a technical nature which would require a technical expert assessment [of the CIET]would be for example related to the quality of the electronic microchip in a passport, the quality of the collected digital fingerprints, the quality of the materials, the face value and its conformity with the provision of the ICAO [International Civil Aviation Organization]” (See pages 38 and 39 of the Transcript no. 245, declaration of the General Manager of Africard CO LTD).

58. The Arbitration Court considers that the damage to which the Respondent is referring results from a harm which is defined as an act indicating any violation of the integrity of a thing, a person or an activity or a situation and which should be repaired and compensated in accordance with civil liability rules. According to a known jurisprudential formula, the basis of this civil liability is to “restore as accurately as possible the balance destroyed by the damage and restore the victim, at the expenses of the party responsible for the damage, to the situation in which it would have been if the damage did not occur” (Civil Cassation 2^nd, October 28, 1954, Bull, CIV II No. 328, in the Civil Law Treaty: Provisions of the Liability by Geneviève Viney and Patrice Jourdain, L.G.D.J Library, No. 1309 and 1320).

59. In order to be rectifiable, the elements of a loss alleged by the parties in support of their claim should be drawn up on concrete data verifiable by the Judge - judiciary or arbitrational personally and alone, even if within this framework, this judge shall be entitled to have recourse to the expertise of a technician who will be responsible for clarifying the etiology, nature and scope of the damage, being understood that the observations and conclusions of this expert do not bind the judge. Article 19.3 of the CCJA Arbitration Rules concerning the "investigation of the cause” by the Arbitrator, is a good illustration of these words: it provides that "the Arbitrator shall be entitled to nominate one or several experts, define their mission, receive their reports and listen to their observations in the presence of the parties or their counsels".

60. It thus appears that the compensable damage, as legally defined above and claimed by the Respondent, cannot be confused as the Respondent is trying to do in vain - with the dispute of a technical nature mentioned in Article 25, clause 4 of the agreement and which shall fall within the expertise of the CIET.

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61. Thus, it should be noted that the occurrence of this type of dispute is improbable in this case to the extent that, following the unexpected termination of the aforementioned agreement by the State of Niger, Africard CO LTD was unable to install the production materials on site or, a fortiori, to start the manufacturing of biometric and electronic passports concerned with this agreement.

62. As a result of the foregoing, the second section of the lack of jurisdiction claimed by the Respondent and based on Article 25, clause 4, of the aforementioned agreement is also invalid and should be rejected.

63. After the rejection of both means presented and analyzed above, this Court is competent to settle the dispute.

B. Claims on the Substance

1. Africard CO LTD's Claims

64. After the termination of the Agreement of October 13, 2011, Africard CO LTD made requests concerning the compensation for the various losses it incurred according to it as a result of "the unilateral, untimely and abusive decision” of termination taken against it by the State of Niger (See pleadings in response, page 21. II). On pages 21 to 36 of its pleadings in response, it stated the heads of damages to be repaired or compensated, mentioning their judicial grounds before defining their value.

a) Heads of Damages to be Compensated

65. In this case it involves the material damages which are divided into the incurred losses and the loss of income for Africard CO LTD and the moral damage.

1) The Incurred Losses

66. The Claimant mentions in this section (See pleadings in response, page 33.II.3.2.a) that in order to satisfy the requirements of the tender for the contract award, it was required beforehand to establish a local structure, more specifically “to form a local Nigerien company to ensure the provision of biometric passports to the Nigerien people for 12 years, with the obligation to produce a minimum of 1,000,000 passports, form a local team and perform during the agreement term the transfer of technologies to the State of Niger” and “with the aim of meeting these requirements, Africard incorporated the company Africard Niger SA, recruited staff, invested significant financial means and performed various material and immaterial preparatory services in this project”. The so invested financial means, the reality of which the State

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of Niger cannot deny, required, according to the Claimant, many transfers of funds that were operated during the period from October 15, 2010 – tender date – to March 24, 2012 – date of the agreement termination: the cumulative amount of these transfers is 545,998,799 (five hundred forty five million nine hundred ninety eight thousand and seven hundred ninety nine) CFA F, for which the claimant seeks reimbursement from the State of Niger.

2) Loss of income

67. According to the Claimant, the loss of income results from the report of the financial expert appointed by it to proceed to the assessment thereof; this report dated March 22, 2013 and written by Mr. Maroun N. BARAKAT, is attached to the Request for Arbitration. According to the Claimant, it concludes that “the minimum loss of income calculated based on the production of a minimum of 1,000,000 passports throughout the term of the 12-year agreement amounts to 19,747,000,000 (nineteen billion seven hundred forty seven million) CFA francs" for which it also claims reimbursement from the State of Niger.

3) Moral Damage

68. Moreover, the Claimant considers that the loss of the contract for the production of biometric passports, which are the subject of the terminated agreement, without any explanation by the State of Niger, caused it moral damage which comprises mainly of:

- A damage to its image and reputation both on the African market where it operates through its subsidiaries and sister companies and with foreign investors who, believing in this agreement, have invested million of US dollars in the capital of Africard CO LTD. Upon the announcement of the termination of this agreement, one of these investors lodged a claim before the arbitration court against it for the recovery of its investment; the dispute was amicably settled and the shareholders of Africard CO LTD paid by bank draft the amount of 2,886,000 USD to this investor and other investors are following the same path.

- The loss of opportunities due to the dispute, forming therefore, according to the claimant, an obstacle to participating in new potential tenders launched by the State of Niger and concerning other contracts for secure biometric printing such as identity cards, driving licenses, national census and ballot papers, etc.

69. The Claimant declares therefore having suffered “certain moral damage that caused it subsequent material troubles".

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70. For the moral damages compensation, the Claimant considers that it should not be less than 5,000,000,000 (five billion) CFA francs, for which is seeks payment from the State of Niger.

b) Legal Grounds of the Right to Compensation of Damages Claimed by the Claimant

71. Whereas the aforementioned agreement was definitively sealed and signed and whereas its implementation had started according to the Claimant with the manufacturing and submission of the new passport samples to the competent Nigerien authorities for approval, and with ordering the production materials, the Claimant regrets that facing this commitment, “the State of Niger did not show any enthusiasm and started to slip away from the contract until it terminated it with no valid reason, upon a simple decision rendered by the Minister of Interior and masked by a motivation that fails on both de jure and de facto bases" (See the document entitled "Pleadings of January 16, 2014", Chapter C, the Dispute/Litigation); thus, the Claimant considers, referring to abundant jurisprudence in this regard, that the civil and administrative liability of the State of Niger is based on the following substantial faults and breaches:

- The wrongful and de facto termination of the agreement by the State of Niger without any contractual mistake by the Claimant, and the discretional awarding of the contact, without any tendering process, to another competing company, in clear violation of the legal provisions in force, in particular the provisions of the Public Procurement Code.

- The non-implementation by the State of Niger of Decision No. 13-04 of January 23, 2013 of the State Court which annulled the decision of the termination of the agreement made by the Minister of Interior; thus, the State of Niger was required to abide by this decision by restoring the said agreement, or by offering the Claimant compensation for the damages caused to it; two alternatives, in this case, strongly avoided by the State of Niger to its detriment, which calls on its liability and confirms the Claimant right for compensation.

2. Claims of the State of Niger

72. In response to the objections and claims brought up by the Claimant against the State of Niger, the latter commented first on the inappropriate, fraudulent and exorbitant nature of the aforementioned agreement, which caused its disavowal and resulted in the defaulted execution thereof, before stating its claims.

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1) Inappropriateness of the Agreement

73. The International Civil Aviation Organization (ICAO) having recommended to all its members, including Niger, to adopt biometric and electronic passports before the deadline prescribed for January 2015, according to the Respondent, there was no urgent need as of December 2010 to initiate the process resulting in the contract award to Africard CO LTD; in this case, the implementation of this process could not be done without the complicity between Africard CO LTD and some officials of the Administration, within the context of a military transition situation.

74. Therefore, it is clear for the State of Niger that the aforementioned agreement is inappropriate, costly and contrary to its interests: the State of Niger claims to define these defects (see pleadings in defense, pages 5 and 6).

2) Violation of Law

75. The Respondent considers that the aforementioned agreement was concluded and signed in violation of the provisions of the new order No. 2011-17 of September 16, 2011, defining the general system of the Public Private Partnership (PPP) contracts in the Republic of Niger which was designated to govern the public procurement contracts and replace Order No. 2002-007 of September 18, 2002 concerning the Public Procurement Code in Niger, amended by Order No. 2008-06 of February 21, 2008 and Decree No. 2011-686/PRN/PM of December 29, 2011 concerning the Public Procurement Code and the Public Services Delegations.

76. In fact, still according to the Respondent, Africard CO LTD does not deny the creation process of the new PPP order, but pretends to ignore it with the complicity of some of the Administration officials with the sole aim of exempting the said agreement from the implementation of the new order and benefiting therefore from a more flexible legal regime by virtue of the old legal provisions governing public procurement.

77. For this reason, the Respondent confirms that “Africard never wished for an amicable settlement of the issue by signing another agreement with the State of Niger which would be governed by the new order concerning the public private partnership” (See the pleadings in defense, page 7).

78. Therefore, the Respondent asks the Arbitration Court “to declare null and void the agreement upon which the Africard relies..." by virtue of the general principle of law according to which "fraud produces its own inefficiency” (See the pleadings in defense, page 7).

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3) Exorbitant Nature of Africard CO LTD's Claims

79. The Respondent considers that the amounts claimed by its adversary for the compensation of loss of income are exorbitant, even though it is assumed in this matter that the compensation to which the contractual partner of the Administration is entitled in the event of a unilateral termination of a contract shall cover the total damage suffered, but shall in no event result in the unjust enrichment of the company; in other words, the latter shall not be entitled to claim compensation higher than the amount it would have gained if the contract had continued; however, in this case, the Respondent mentions that it is obvious that for an agreement with a total value of thirty four billion CFA francs over a term of 12 years, which did not reach implementation, Africard CO LTD claims a loss of income of nineteen billion seven hundred forty seven million CFA francs.

80. For the Respondent, such a loss of income is a “real rip off” and “fictitious” (See the pleadings in defense, page 8): it therefore asks the Arbitration Court to decide on the “the lack of seriousness" of this claim.

81. With regard to the moral damage compensation amounting to five billion CFA francs claimed by Africard CO LTD as a result of the abstention from implementing the judgment rendered by the State Court, the Respondent considers this damage “hypothetical”, resulting from a wrong interpretation of the said decision which, according to it, “punishes the termination process but does not aim in any circumstances whatsoever to acknowledge the validity of an agreement or even to impose a partner on the State of Niger” (See the pleadings in defense, page 9).

4) Counterclaim of the State of Niger

82. The State of Niger considers, on one hand, that it has been subject to abusive proceedings based on an agreement itself obtained after a fraudulent process, which makes it null and void; and on the other hand, that it has unjustly been subject to fees following proceedings of which the prerequisites were not met” (See the pleadings in defense, page 9).

83. Based on all the above comments and observations, the State of Niger submitted a counterclaim asking the Arbitration Court to order Africard CO LTD to pay it the amount of 100 9one hundred0 million CFA francs, as compensation for all the damages suffered (See the pleadings in defense, page 9).

5) Alternative Claim of the State of Niger

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84. The State of Niger considers that if the Arbitration Court decides to accept and respond to the claims of Africard CO LTD, this Court will have to “assess the true value of the damages allegedly caused to it as a result of the termination, taking in account the procedural fees imposed by Africard upon the State of Niger; knowing that the agreement did not reach implementation, Africard CO LTD did not incur any fees” (See the pleadings in defense, pages 9 and 10).

85. Asked by the Arbitration Court during the pleadings hearing of January 16, 2014 to explain more about this alternative claim, the Head of the Civil Litigation Department of the State declared on the merit (page 82 of the Transcript, No. 510) that: “the assessment of the fair value [of the damages caused to Africard CO LTD] was made in view of... the exorbitant claims and means of evidence of Africard which are not reliable (...) thus, the Court shall only rely, in assessing the damages caused to Africard, on clear instruments or proofs (...) for this reason, I insist on the need for a real expert assessment to identify the damage that may have been caused to Africard (...)".

III. Concerning the Grounds of the Right to Compensation of Damages Claimed by Africard CO LTD

86. The Arbitration Court rules in this case that, given the strong objections mentioned in the main claim of Africard CO LTD, it is appropriate to discuss the admissibility of this claim in form and substance, before discussing the amounts and then to decide on the other claims of the parties, being in this case the counterclaim of the Respondent and the other claims of the Claimant concerning the settlement of the court expenses and fees.

87. The Arbitration Court considers that the admissibility of the main claim depends on the sound assessment of the legal basis of the right to compensation for the damages expressed by Africard CO LTD and the liability of the State of Niger in causing these damages.

88. In this regard, it should be recalled that Article 1134 of the Nigerien Civil Code stipulated that "the legally concluded agreements serve as a law binding the parties which concluded it. They can only be revoked by mutual consent of these parties or for the legally defined causes. They should be implemented in good faith”, this article shows that the contracts provisions are binding for the parties, and especially, that they cannot be amended or revoked unless by mutual consent of these parties. The voluntary agreement which is at the root of the contract and the equality between the parties prevent either party from amending or terminating an agreement under implementation.

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89. The State of Niger does not deny having unilaterally terminated the aforementioned agreement: it presented here many supporting causes including the inappropriateness of the agreement (See No. 73 to 74 above), its double fraudulent nature (See No. 75 to 78 above), its discretionary power of termination as sovereign State (See the pleadings in defense, page 9), and the fact that the agreement did not even reach implementation according to it (See the pleadings in defense, page 8).

90. It is appropriate to examine the abovementioned supporting causes based on the provisions of the abovementioned agreement and the Nigerien legal system for the termination of public procurement contracts.

91. Therefore:

- Concerning the alleged inappropriateness of the agreement, the same reasons that have been presented by the State of Niger to exclude Africard CO LTD, namely, compliance with the International Civil Aviation Organization's recommendations concerning the adoption of biometric passports for all the member states (See No. 73 above), are paradoxically the same as those which led to the nomination of the competitor Contec Global for the manufacturing and production of the same contested biometric and electronic passports;

- Concerning the fraudulent nature of the agreement in terms of both the suspicious morality of "some Administration officials” in its establishment and the breach by the said agreement of Order No. 2011-17 dated September 16, 2011 concerning the general system of the Public Private Partnership (PPP) contracts in the Republic of Niger, it should be noted for the first point that the ethics, or rather the lack of ethics of certain officials of the Nigerien Public Administration cannot be enforceable on a private commercial company which participated among others in an international tender process and against which no evidence on any breach was provided; for the second point, Decision No. 13-04 of January 23, 2013 of the State Court gave the suitable legal reply, reminding that it is assumed that “regulatory instruments of general scope shall not produce any effect until being duly published, most of the time in the official gazette”: in accordance with this principle, based on Article 1 (See citation, the pleadings in response, page 17) and 2 (See citation, the pleadings in response, page 17) of Order No. 60-10 of January 15, 1960 defining the conditions of publication of legislative, governmental and administrative instruments in the Republic of Niger and on Article 106 (See citation, the pleadings in response, page 17) of the Constitution of Niger, Order No. 2011-17 dated September 16, 2011 concerning the general system of the Public Private Partnership (PPP) contracts in the Republic of Niger, published in the official gazette on December 05, 2011, only entered into force as of this date and therefore, was not applicable at the time of the signature of the said agreement on October 13, 2011"; this

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argument of the highest administrative court in Niger will be reinforced according to the Arbitration Court by the exorbitant nature under the administrative law - of the stability clause stipulated for in Article 26 of the agreement that “The State of Niger shall ensure that the implementation of this agreement is not affected by any disruption arising from any possible amendments made to laws and regulations in the legal, administrative, fiscal or customs fields";

- Concerning the discretionary power of termination vested in the State of Niger as sovereign State, it is certainly recognized by the case law and doctrine that the contracting Administration shall have the power to terminate some defined contracts, provided that this power is exercised with caution and "for the public interest" and is accompanied by compensation for the contractual partner (See: the Major Resolutions of the Jurisprudence – Administrative Law – Jean-François LACHAUME – Thémis Library – PUF – 2^nd Edition – pages 333 to 338 – Note under Decision of May 02, 1958 of the Council of State, Distillerie de Magnac – Laval); in this case, the State of Niger does not provide any grounds related to the public interest, of which it would solely be the judge, but refers instead in its decision to terminate the mentioned agreement to the issuance of the new order which is not applicable to the agreement as mentioned above;

- Finally, concerning the fact that the aforementioned agreement did not reach implementation according to the State of Niger, this claim is contradicted by objective elements mentioned in the file of the proceedings and proving that the said agreement has reached implementation, we mention including among others: the establishment of a Nigerien subsidiary of Africard CO LTD, fund flows between the subsidiary and the mother company, the attested launching of the materials orders (see exhibit No. 20 of the Request for Arbitration, letter from the General Director of Resources of the Ministry of Interior to the General Director of Africard CO LTD), the manufacturing of passports specimens and their delivery to the competent Nigerien authorities for approval; to close this topic, it should be noted that the Ministry of Interior in its letter dated December 30, 2011 sent to the Prime Minister (see exhibit No. 21 of the Request for Arbitration), notes that since the notification of “the duly drafted, concluded and signed agreement" sent to Africard CO LTD, the latter “has since then strived to meet its contractual commitments".

92. It is thus clear, according to the Arbitration Court, that if the abovementioned reasons for the agreement termination by the State of Niger are irrelevant, they intrinsically breach the provisions of the said agreement which defined its own termination mechanism: in fact, Clause 1 of Article 24 provides that “In the event that one of the parties should fail to comply with one of the substantial obligations arising from this agreement, the other

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party shall be entitled to terminate the agreement at the defaulting party's risks after sending the first party a written notice to this respect. The agreement may be then terminated thirty (30) days after the date on which the offending party receives the said notice, and unless the offending party has rectified the breach of which it is accused”; Clauses 2 and 3 of the same respectively provided for "the event of termination by the State of Niger without fault or negligence by the contractual partner” and the event where the latter wishes to terminate the agreement without fault or breach by the State of Niger.

93. The Arbitration Court considers that based on the combined and restrictive reading of the abovementioned three clauses, it appears that the only breach –certainly to be defined – likely to lead to the termination of the agreement should only result from the breach by one of the parties of a substantial obligation of this agreement.

94. The Arbitration Courts notes that in absence of such fault or breach in this specific case and whereas it is assumed that the agreements should be implemented in good faith and in compliance with the mutual commitments between the parties with regard to the same investment project, the discretionary termination of the agreement by the State of Niger forms a contractual mistake giving entitlement to compensation.

95. The Arbitration Court also notes, while strictly abstaining from assessing the reasons that have determined the decision of the State party, whether they are political, economic, financial or related to the public interest, that the State of Niger has terminated the mentioned agreement without accusing the contractor of any negligence or mistake.

96. By this failure, the State of Niger breached the national and communal provisions governing public procurement contracts, and mainly in this case Article 88 of Directive No. 4/2005/CM/UEMOA concerning the Procedures of the Award, Execution and Regulation of Public Procurements and Public Service Delegations in the West African Economic and Monetary Union which entered into force between the member States on January 1, 2006

97. The Arbitration Court mentions as well that Article 144 of Decree No. 2011-686/PRN/PM of December 29, 2011 concerning the Code of Public Procurement and Public Service Delegations in the State of Niger, is the same repetition of Article 88 of the abovementioned Directive, stipulating that “public procurement contracts may be terminated under the conditions stipulated in the specifications, in the following events: a) at the initiative of the contracting officer due to a negligence by the contractor or the liquidation of its company;
(...)
With the exception of the termination events stipulated in clause (a) of this article, the contractor shall be entitled to termination compensation calculated on a flat rate based on the remaining services to be executed. This percentage is defined in the General Administrative Provisions for each market segment".

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98. Accordingly, the Arbitration Court declares admissible in form and substance the Claimant's claims for compensation; as for the substance, the Arbitration Court reminds that for damage to be compensated, it should meet the following conditions:

- It should be direct, in that there must be a causal link between the claimed damages and the cause thereof;

- It should be certain: damage is certain when it is not obviously hypothetical or potential and where there is no doubt about it existence or future occurrence.

- The damaged interest should be legitimate: the Arbitration Court refers here to the first point of the abovementioned agreement preamble.

99. The Arbitration Court considers that these compensation claims of the Claimant strictly comply with the abovementioned criteria and have a legal basis since the faults and breaches attributable to the Respondent have resulted in the cancellation of an investment project, the implementation of which had started, causing it material and moral damages including financial losses, damage to its image, reputation and credibility (See No. 65 to 70 above).

100. The Arbitration Court mentions, however, that with regard to the Claimant's claims, the State of Niger declared that “it never denied that upon termination of a contract, we should compensate. However, claims and allegations should be reasonable and acceptable [which means] based on proven expenses (...)” (See No. 502 and 505 of the Transcript, page 81: Declaration of the Head of the Civil Litigation Department of the State).

101. Concerning the amounts of the claimed material damage, including the loss of income and the incurred losses, the Respondent considers that these amounts reflect "a will to cheat or enrich itself unduly at the expenses of the State of Niger”; it claims therefore “to ignore" these claims by Africard CO LTD which are, according to it, “exaggerated and unfounded" (See No. 562 of the Transcript, page 91, Pleadings of Maître Ibrahim YAGI, Counsel of the State of Niger).

102. The Respondent stigmatizes in particular the report of evaluation of the loss of income submitted by the financial expert Maroun N. BARAKAT upon the request of Africard CO LTD, setting the amount of the head of damage at 19,747,000,000 CFA francs: it rejects this report based on the grounds that “an expert nominated unilaterally by Africard in another country with which we have no judicial convention... cannot bind us... it is too easy to nominate an expert, who could be imaginary, and who prepares a report which is supposed to bind another party... for us, this

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report is null and void...” (See No. 473, 475 and 477 of the Transcript, page 75, declaration of the Head of Litigation of the Government).

103. The Arbitration Court considers in this case that, even though the Respondent claims to "declare this Request by Africard unfounded and to reject all the heads of claims" (See document of the pleadings in defense, page 10), at the same time, it does not seem to reject in its declarations the hypothesis or principal of compensation of the Claimant, but specifies "fair, reasonable and acceptable amounts” and “on clear bases, with supporting proofs" and to the extent that, based on the remarks by Professor Stephane BRACOLI, which he validates, this compensation to which the Contractual Partner of the Administration is entitled in the event of a unilateral termination of a contract shall cover the total damage suffered, but shall in no event result in the unjust enrichment of the company (See No. 498, 500 and 502 of the Transcript, pages 80 and 81, declarations of the Head of Litigation of the State).

104. According to the Respondent, for the approval of this compensation, “there is a need for a real expert assessment to identify the damage that may have been caused to Africard" (See No. 510 of the Transcript, page 82, declarations of the Head of Litigation of the State).

105. On the contrary for the Claimant, the request of its adversary for an expert to determine only the amount of its loss of income is unnecessary and dilatory: it considers that the expert report it has already ordered for this purpose, included in the file and shared with the State of Niger which did not make any comment thereon, is enough given “the intrinsic elements of the file, the agreement and mathematical demonstrations made by the General Manager of Africard CO LTD” (See No. 657 and 661 of the Transcript, page 109, Pleading of Maître Souleymane YANKORI, Counsel of Africard CO LTD).

106. In fact, based on calculations he considered “simple” and “elementary”, the General Manager of Africard CO LTD approved and explained the conclusions of the evaluation report of Expert Maroun N.BARAKAT, mentioning that the loss of income claimed by its company is formed by the share of the latter in the production of a minimum of 860,000 passports over a contractual term of 12 years with a unit selling price equal to 54,000 CFA francs per passport; an amount on which the State of Niger is expected to gain 8,000 CFA F/unit and Africard CO LTD 46,000 CFA F/unit: through the calculation of all these elements, the General Manager of Africard CO LTD notices that the loss of income of the latter is equal to 19,747,000,000 CFA francs, while the State of Niger should at the same time receive 14,000,000,000 CFA francs in addition to other movable and immovable properties, free of charge; all without

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spending a penny (See No. 679 to 693 of the Transcript, pages 113 to 115, declaration of the General Manager of Africard CO LTD).

107. The Arbitration Court notes that the parties are opposed both with regard to the method of calculation and to the determination of the amount of the loss of income compensation claimed by the Claimant: the Arbitration Court considers it necessary and useful to settle the dispute over the evaluation of this head of financial damage, to which shall be added to be complete, the head of the incurred losses which also includes monetarily assessable accounting and financial elements, and orders an expert assessment to make investigations and audits allowing the said Court to assess and calculate in particular the value of the heads of damages related to the loss of income and losses incurred by Africard CO LTD.

For the above reasons, [the Arbitration Court]

- Rejects the lack of jurisdiction mentioned in limine litis by the State of Niger;

- Declares therefore that the Arbitration Court is competent to settle this dispute which follows the arbitral proceedings of Africard CO LTD, the Claimant;

- Declares that this Arbitration proceedings are admissible in form;

- States that the claims for damages compensation made by the Claimant are admissible in form;

As to the substance

- Declares that the unilateral termination by the State of Niger of the Agreement of October 13, 2011 for the production of biometric and electronic passports in the Republic of Niger is abusive and wrongful;

- States therefore that the State of Niger shall pay Africard CO LTD compensation for the damage caused by all the expenses incurred to meet the requirements of this project throughout the period from the launching of the tender to the termination of the said agreement;

- State that the State of Niger shall pay Africard CO LTD compensation for the damage caused by the loss of income which represents the profits this company would have gained if the agreement was completed;

- States that the State of Niger shall pay Africard CO LTD compensation for the moral damage caused to this company, through the damage caused to its image and reputation, in addition to the loss of opportunities as a result of this dispute.

Interim Procedural Award

- Orders an expert report to be prepared by a sole expert responsible for carrying out investigations and audits allowing the said Court

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to assess and calculate in particular the value of the heads of damages related to the loss of income and losses incurred;

- Appoints for this purpose the accounting firm Deloitte & Touch, located in Abidjan, Commune of Plateau, ALPHA 2000 Building, to carry out this mission;

- Declares that the expert appointed by the said firm should perform his mission in compliance with the Audi Alteram Partem principle between parties and shall therefore submit his report forty five (45) days after the matter was referred to him;

- States that the fees and expenses of the expert will be paid by Africard CO LTD and will be added to the total expenditure;

- States that upon submission of the expert report, the proceedings will continue in conformity with the provisions of Article 15-5 of the CCJA Arbitration Rules.

Signed in Abidjan, on June 09, 2014

Signature

Boubacar DICKO

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