Construction projects and arbitrations in Africa: are lenders’ expectations realistic?

Trinity International is a partner of “Paris Arbitration Week”, which brings together arbitration professionals from around the world. For this year’s edition held on 23-27 March 2026, Trinity hosted a discussion with Narayan Iyer (Senior Counsel at British International Investment plc), Claudia Nardinocchi (International General Counsel at Eiffage Génie Civil) and Dr Sally El Sawah (Founder of El Sawah Law in Cairo and Head of Arbitration and Litigation of Junction Paris), who shared their unique perspectives with Trinity partners Marianna Sédéfian (head of Project Finance in Paris), Natasha Peter and Florian Quintard (both Arbitration partners). The panel discussed whether lenders’ expectations are realistic when it comes to construction projects and arbitrations in Africa, with a particular focus on dispute resolution and contract management.

Marianna kicked things off with a primer on project finance for the benefit of the arbitration lawyers in the audience. The discussion then turned to the issues that can arise on a project when its participants include a conservative DFI lender and a commercial contractor operating on tight margins.

There are tensions that can result from the basic DNA of these participants. As Narayan explained, BII is a custodian of taxpayer money. Its brief is to invest that money carefully in order to help solve global development challenges. It does not compete with private sector lenders, it is inherently risk-averse, and its financial goal is to get its money back (albeit with a sprinkling of interest). The contractor, however, is at the other end of the commercial spectrum. Their brief is straightforward: win mandates and then make a profit on them by protecting thin margins.

The panel explored three examples of how this tension plays out in practice.

First, the panel considered the basic elements of the dispute resolution clause. Lenders like BII are not subject to the market pressures that push entities like Eiffage to find innovative commercial compromises. There is no benefit to a DFI in being a first adopter of relatively untested institutions or seats in Africa. Instead, DFIs are typically content to be a ‘last adopter’, likely only to agree to so-called ‘non-standard’ seats or institutions when they have in fact become standard. But this level of circumspection may present challenges for contractors seeking to maintain a competitive edge: being able to compromise with subcontractors, for example, on applicable law, the seat or the institution, are helpful bargaining chips in a commercial negotiation. Where these elements are predetermined by the lender’s requirements, the contractor may have more limited scope to accommodate counterparties, which could place them at a relative disadvantage.

Second, the tension is present in the way that the participants conceive of what makes a project “bankable”. For the DFI lender, bankability typically involves the implementation of robust controls designed to safeguard their investment. For the contractor, however, feasibility entails protecting their margins, often by making quick commercial decisions to keep things moving. In practice, commercial arrangements—such as settlements with subcontractors or local government entities—may not always align neatly with lender-imposed controls. Claudia described how this “consent culture” can be a source of frustration for contractors.

Third and finally, the tension is also apparent in other requirements that lenders have for dispute resolution mechanisms, in particular the ability to consolidate arbitrations commenced under separate project documents. A single consolidated arbitration may make sense for the owner – who may, for example, end up with a defective project, but not know (i) whether it was the fault of the contractor or the sub-contractor; or (ii) which of the two has liquidity. In this situation, being able to start a single consolidated arbitration on the basis of the same fact pattern would make sense. A lender may also benefit from a consolidated, multi-party or multi-contract arbitration, although in truth, as Narayan explained, this often operates more as a question of ‘insurance’ than a primary objective. The last thing a DFI wants to do is find itself embroiled in an arbitration, but if it does, it wants all options open to it.

From the arbitration practitioner’s perspective, Natasha and Florian added a note of pragmatism about what these consolidation and joinder provisions do (and do not) achieve once a dispute is on foot. Even where the drafting aims for “one arbitration to rule them all”, consolidation remains dependent on the applicable rules and on institutional or tribunal discretion. A single consolidated arbitration can also become procedurally unwieldy: it may have to absorb technical issues, financing questions, legal points under various governing laws and shareholder or regulatory disputes – all on different timetables and between different parties. A clause designed to create efficiency and predictability can, in practice, produce complexity, delay and tactical asymmetry – and may not always deliver the streamlined process that parties assume they are buying at the drafting stage.

Sally then pulled the lens back further, to enforcement. Even with a well-drafted arbitration clause and a strong award, parties can find themselves facing sovereign immunity arguments, difficulty identifying attachable assets, political headwinds, or parallel local proceedings that slow down or complicate recovery. Her message was practical: enforcement risk is not something to be “patched” at the end of a dispute, but something that should inform the project’s dispute provisions from the outset, including thinking carefully about waiver language, the choice of counterparty, and where the award is most likely to need to be recognised and executed.

So where did that leave matters? Are lenders’ expectations realistic? As ever, it depends on perspective. From the standpoint of a DFI lender seeking to deploy capital prudently, the above expectations can be seen as appropriately cautious: it is the other project participants, surely, that are unrealistic if they expect anything else. And as the discussion also highlighted, drafting choices that a party (be they a lender, contractor, or anyone else) may have considered to be desirable at the outset of the project – on seats and institutions, consolidation mechanics, and even enforcement protections – can look very different when the project comes under stress and disputes become real rather than theoretical.

A final takeaway from the discussion was that there is rarely a single “correct” dispute provision for Africa-connected construction projects. The appropriate balance will depend on the project, the counterparties and the risk profile. Some deals will justify the comfort of a familiar seat and institution. Others will justify more flexibility to reflect local realities, manage costs and preserve commercial relationships. At Trinity, we help clients strike that balance on a case-by-case basis, designing solutions that remain bankable for lenders, workable for contractors, and defensible in arbitration and enforcement when it matters most.