SENEGAL Trends and Developments Contributed by: Aboubacar Fall, AF Legal Law Firm
There has accordingly been a gradual increase in disputes involving foreign investors and Senegalese public entities, often brought before institutions such as ICSID or the ICC International Court of Arbitration. This trend confirms the growing role of arbitration as a tool for regulating international economic relations. A major development occurred with the recent reform of the Investment Code introduced by Law No 2025- 16 of 27 September 2025 which redefines the regime applicable to the resolution of disputes between the state and investors. It introduces a new architecture for dispute handling, marked by a more graduated and structured approach. The former 2004 Investment Regime : direct access to arbitration Article 12 of the former 2004 Investment Code provid - ed that “all disputes arising from the interpretation or application of this Code that have not been amicably resolved shall be settled by the competent Senega - lese courts in accordance with the laws and regu - lations of the Republic. Disputes between a foreign natural or legal person and the Republic of Senegal relating to the application of this Code shall be settled in accordance with conciliation and arbitration proce - dures arising either from mutual agreement between the two parties, or from investment protection agree - ments and treaties concluded between the Republic of Senegal and the state of which the investor is a national.” Thus, this Article provided that disputes not resolved amicably were to be submitted to the competent Senegalese courts. However, for disputes involving foreign investors, the text expressly opened the way to conciliation and arbitration, either by agreement between the parties or under investment protection treaties concluded by Senegal. Within this framework, arbitration appeared as a clear - ly identified and relatively accessible mechanism for foreign investors. The 2025 Code Regime : a structured and graduated approach The new Article 51 of the 2025 Code introduces a dif - ferent approach. It provides that “any dispute between
the state and an investor relating to their investment and arising from the interpretation or application of this Code shall first be submitted to an amicable set - tlement process, such as negotiation, good offices, mediation or conciliation. In the absence of a set - tlement through the mechanisms referred to in the preceding paragraph, the parties may submit their disputes to the competent Senegalese courts, in accordance with the laws and regulations in force. The parties may have recourse to international arbi - tration, in accordance with the applicable treaties and agreements.” It provides that any dispute between the state and an investor must be, first, submitted to an amicable settlement process, including negotiation, good offices, mediation or conciliation. Failing an amicable settlement, the parties may bring the matter before the competent Senegalese courts. Recourse to international arbitration remains available, but only in accordance with applicable treaties and agreements. This development reflects several major changes: • a strengthened institutionalisation of amicable dis - pute resolution methods; • a reorganisation of the hierarchy of dispute resolu - tion mechanisms; and • a stronger integration of arbitration within an international treaty framework rather than within domestic law. This reform can be interpreted in two ways. On the one hand, it may be seen as imposing stricter con - straints on arbitration, insofar as the Code no longer explicitly enshrines a general right to arbitration on the basis of a simple agreement between the parties. On the other hand, it may be viewed as a modernisation of the framework, aligned with international standards in investment law under which arbitration essentially rests on consent expressed through treaties, con - tracts or specific agreements. Emerging challenges and prospects for reform Firstly, Senegalese law does not yet provide for a mechanism for collective arbitration, which limits the handling of disputes involving multiple investors or parties within a single dispute. Secondly, third-party funding of disputes remains unregulated, raising sig - nificant issues of transparency, conflicts of interest
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