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Expropriation and Its Numerous Shades of Gray

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With the passage of the Electricity (Common Carrier) (Declaration) Regulations, 2020, Statutory Instrument No. 57 of 2020 by the Minister of Energy, declaring the transmission and distribution lines operated by the Copperbelt Energy Corporation (CEC) commons carriers, many questions from investors and bystanders alike have been asked whether this is some of expropriation by the state.

For certain, the Minister of Energy has powers under section 15 of the Electricity Act No. 11 of 2019 to declare any distribution or transmission line a common carrier. So this article does not delve into the legalities of the declaration, but rather sheds light on what expropriation is and its numerous types.

Definition of expropriation

According to UNCTAD, expropriation generally refers to property-specific or enterprise-specific taking where the property rights remain with the State or are transferred by the State to other economic operators.

Synonyms of Expropriation

Other synonyms of expropriation are taking, nationalization, deprivation and dispossession. However, nationalization usually refers to massive or large-scale takings of private property in all economic sectors or on an industry – or sector-specific basis.

So what are the types of expropriation?

Direct Expropriation

Direct expropriation means a mandatory legal transfer of the title to the property or

Its outright physical seizure and normally, the expropriation benefits the State itself or a State-mandated third party.

Indirect Expropriation

Indirect expropriation involves a total or near-total deprivation of an investment but without a formal transfer of title or outright seizure and its judicial and arbitral recognition internationally includes the Chorzów Factory case.

Creeping Expropriation

Creeping expropriation may be defined as the incremental encroachment on one or more of the ownership rights of a foreign investor that eventually destroys (or nearly destroys) the value of his or her investment or deprives him or her of control over the investment.

From the above, what is clear is that a determination of whether there is expropriation or not in any single instance is not an easy one. All factors are required to be considered.

End

Client Legal Alert – Equitas Legal Practitioners@2020

*This scholarly article is a general guide and does not contain definitive legal advice. Readers considering taking action on any of the issues discussed should speak to their legal advisors before taking any such action. Equitas disclaims any liability whatsoever arising from acting on this article.

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Mr. Lungisani Zulu

partner

Mr. Lungisani Zulu (Partner – Banking, Tax and Finance) is a highly experienced legal practitioner with expertise in banking, financial services regulation, tax, and corporatebfinance. He holds a Master of Laws (LLM) in International Commercial Law from Cornell University School of Law, New York and a Bachelor of Laws (LLB) from the University of Zambia (UNZA)

He is an Advocate of the High Court of Judicature for Zambia with rights of audience before the Court of Appeal, Constitutional Court, and Supreme Court of Zambia, and is also a Commissioner for Oaths and Notary Public.

Mr. Zulu has over 15 years of standing on the Roll of Legal Practitioners in Zambia and possesses extensive experience in financial services regulation, legislative drafting, and corporate and commercial law. Having previously served as Associate for Tembo Ngulube and Associates and as Senior Counsel for the Bank of Zambia, his core competencies include banking and finance transactions, regulatory compliance, policy formulation, legal drafting, contract negotiation, and dispute resolution.

He has significant expertise in advising on financial laws, regulatory frameworks, and capital markets, as well as in providing legal support in litigation and arbitration matters. His practice also encompasses corporate governance, board advisory, and complex commercial transactions.

Mr. Zulu server as President of the Law Association of Zambia (LAZ) and also serves as President of savannah Law Network and a member of the Chartered Institute of Arbitrators (UK) and the Institute of Directors of Zambia and sits on the boards of both public and private companies.

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Ms. Chiluba Mumba

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The Firm’s Managing Partner, Ms. Chiluba Mumba, is a highly accomplished legal practitioner with primary expertise in Energy, Mining, Infrastructure, and Corporate Advisory. She holds a Master of Laws (LLM) in Corporate and Commercial Law from the University of London and a Bachelor of Laws (LLB) from the University of Zambia (UNZA). She is an Advocate of the High Court of Judicature for Zambia with rights of audience before all Superior Courts.

Ms. Mumba has over 15 years of standing on the Roll of Legal Practitioners in Zambia and has extensive experience in corporate and commercial law. Her core competencies include corporate advisory, regulatory compliance, project structuring, contract negotiation, and risk management, particularly within the energy, mining, and infrastructure sectors.

Previously she served as Associate for various firms and as Director Legal for the Energy Regulation Board. Her work experience spans across the energy sector in particular, electricity, petroleum, and renewable energy, with a strong focus on regulatory frameworks, licensing processes, project development, and investment structuring. She also has experience in commercial and civil dispute resolution, as well as governance and board advisory matters within highly regulated industries.

Ms. Mumba is equally a member of the Law Association of Zambia (LAZ) and the Institute of Directors of Zambia. She also serves as the Southern Africa Regional Coordinator for the Africa Minigrid Developers Association (AMDA) and is an Associate Member of the Chartered Institute of Arbitrators.