Investment Dispute Settlement in Lesotho

Overview

Lesotho’s investment-dispute system combines domestic courts (including the Commercial Division), mediation, statutory tribunals (e.g., procurement), and international frameworks (Arbitration Act, New York Convention, ICSID). This mix influences forum selection, timelines, enforceability of awards, and cross-border enforcement strategies.

Institutional and Legal Framework

• High Court (Commercial Division) – specialist commercial court.
• High Court Act, 1978 – establishes High Court jurisdiction.
• High Court Civil Litigation Rules, 2024 – updated civil procedure rules.
• High Court (Mediation) Rules, 2011– court-annexed mediation framework.
• Arbitration Act, 1980 – domestic arbitration framework.
• New York Convention (1958) – Lesotho acceded 1989; enforceability of foreign arbitral awards.
• ICSID Convention – Lesotho member since 1969; ICSID awards enforceable.
• Procurement Tribunal – created under the Public Procurement Act, 2023.
• SADC Protocol on Finance and Investment – regional protections; investor-state dispute settlement (ISDS) removed.
• AfCFTA Investment Protocol – continental framework; state-to-state dispute settlement.

Dispute Resolution Mechanisms

1. Commercial Court: Specialised commercial disputes, proactive case management, appealable to Court of Appeal.
2. Arbitration: Domestic (Arbitration Act, 1980) or international (NYC/ICSID).
3. Mediation: Court-annexed (High Court Mediation Rules, 2011).
4. Procurement Tribunal: Appeals under Public Procurement Act, 2023.
5. Regional/Continental: SADC FIP and AfCFTA emphasise State-to-State mechanisms, not ISDS.

Investor Implications and Strategies

Practical Impacts:

• Commercial Court provides specialised litigation.
• Arbitration clauses critical for cross-border enforcement.
• Mediation can reduce costs and timelines.
• Regional treaties shift ISDS reliance to BITs/contracts.

Actionable Checklist:

• Draft arbitration clauses (seat, rules, governing law).
• Include escalation: negotiation → mediation → arbitration/litigation.
• Align contract management with Commercial Court timelines.
• Confirm applicable BITs and ICSID access.
• Map procurement disputes via Tribunal routes.
• Identify enforcement venues under NYC/ICSID.

Key Takeaways

• Lesotho offers Commercial Court, arbitration, mediation, and tribunals.
• Foreign arbitral awards enforceable under NYC; ICSID awards binding.
• SADC/AfCFTA restrict ISDS; BITs remain essential.
• Procurement disputes handled via Tribunal under 2023 Act.

Dispute Resolution Flowchart