Maputo, Aug. 14, 2026 - Portuguese energy company, Galp, bases its international arbitration case against Mozambique – concerning the sale of its gas stake – on the bilateral investment treaties signed with Portugal and the Netherlands, which provide for mechanisms to resolve disputes between investors and states.
The dispute, registered on 26 June with the International Centre for Settlement of Investment Disputes (ICSID), an institution of the World Bank Group, pits Galp Energia SGPS (Portugal), Galp Energia Portugal Holdings B.V. and Galp East Africa B. V. (both headquartered in the Netherlands) against the Republic of Mozambique, in case ARB/26/31, according to the latest case update consulted on Friday by Lusa.
At issue is the sale of Galp's 10% stake in Area 4 of the Rovuma Basin to the Abu Dhabi National Oil Company (ADNOC), which yielded at least €760 million, on which the Mozambican Tax Authority is claiming payment of $175.9 million (€151.5 million) in taxes, a claim which the company disputes. The case has progressed to tax enforcement proceedings, with Galp taking the matter to international arbitration.
The ICSID classifies the case as a dispute relating to a natural gas concession in the oil, gas and mining sector.
According to information available from the arbitration centre, the companies within the Galp group are invoking the Agreement on the Reciprocal Promotion and Protection of Investments between Mozambique and Portugal, signed in September 1995, and the bilateral investment agreement between Mozambique and the Netherlands, concluded in December 2001.
The Portuguese oil company is represented in the proceedings by the law firm PLMJ Advogados, based in Lisbon, and by the lawyer Saadeh Rahman, based in London, whilst the Mozambican State is represented by the Attorney General's Office, according to the ICSID.
The two agreements invoked by Galp form the legal basis for the arbitration and, in accordance with the texts of the treaties, the signatory states have undertaken to mutually promote and protect investments made by nationals and companies of each country within the territory of the other.
The agreement signed with Portugal provides for the creation of favourable conditions for investment and the strengthening of economic cooperation between the two countries, based on the principle that the reciprocal protection of investments helps to stimulate private initiative and economic development.
The treaty concluded with the Netherlands, meanwhile, aims to ensure a stable framework for international investment, promoting the flow of capital and technology between the parties. The preamble to the agreement also emphasises that the «fair and equitable» treatment of investments is desirable.
Both instruments include, amongst the protected investments, shareholdings, economic rights and concessions relating to the exploitation of natural resources. The agreement with the Netherlands expressly mentions rights to prospect for, exploit and utilise natural resources, whilst the treaty with Portugal includes concessions for the prospecting, exploration and exploitation of such resources within the definition of protected investment.
This framework coincides with the characterisation given by the ICSID to the case, which identifies it as a dispute relating to a natural gas concession.
Last month, the Mozambican Government reiterated that Galp must pay the taxes claimed by the State.
«What the Government is saying is that it has to be paid. That is all. It is the Mozambicans' right. It is a national resource and it has to be paid,» stated the spokesperson for the Cabinet, Inocêncio Impissa.
Impissa admitted, however, that arbitration could serve as a mechanism to bridge the gap between the parties' positions, arguing that, where there are differing interpretations, it is up to the arbitrator to analyse the arguments and evidence put forward by each party.
Meanwhile, Galp's co-CEO, João Diogo Silva, stated in October 2025 that the company saw no legal basis for the tax claim submitted by the Mozambican authorities, whilst expressing a willingness to reach a negotiated settlement of the dispute.
PVJ/AYLS // AYLS
Lusa
