The Kingdom of Lesotho is a Contracting State to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention). Lesotho signed the Convention in 1968 and ratified it in 1969. The Arbitration (International Investment Disputes) Act 23 of 1974 gives domestic effect to Lesotho’s obligations under the Convention.

Lesotho has designated the Permanent Secretary for Foreign Affairs as the competent authority for purposes of recognition and enforcement under Article 54(2). It has not made territorial exclusions, notifications limiting classes of disputes under Article 25(4), or designations of constituent subdivisions or agencies.

ICSID awards are binding and not subject to appeal or review before Lesotho courts. Any challenge must proceed exclusively under the annulment mechanism in Article 52 of the Convention.

No additional declarations or territorial extensions were made.

Lesotho is also a Contracting State to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Non-ICSID investment treaty awards are therefore subject to recognition and enforcement under the New York Convention framework. Article V grounds apply and are likely to be interpreted restrictively. Public policy operates as a narrow exception and does not permit merits review.

Lesotho does not have a publicly adopted national Model Bilateral Investment Treaty.

Its treaty policy is reflected in the bilateral and regional agreements currently in force. Lesotho’s older BITs follow traditional first-generation drafting, typically providing broad definitions of investment and investor, unqualified fair and equitable treatment standards, protection against expropriation, free transfer of funds, and investor–State arbitration mechanisms.

More recent regional and continental instruments, particularly within SADC and the evolving AfCFTA framework, reflect a more calibrated approach, emphasising regulatory space and, in certain contexts, state-to-state mechanisms rather than investor-initiated arbitration.

Lesotho has bilateral investment treaties in force with Switzerland, Germany and the United Kingdom.

In addition, Lesotho is party to regional and multilateral instruments containing investment-related provisions, including the SADC Protocol on Finance and Investment, the African Continental Free Trade Area, the SACU–EFTA Free Trade Agreement, the SACU–UK Economic Partnership Agreement, the SACU–US Trade and Investment Framework Agreement, and the Cotonou Agreement.

Lesotho has not publicly indicated any intention to terminate its BITs or withdraw from ICSID.

a. Has your state exercised termination rights or indicated any intention to do so? If so, on what basis (e.g. impact of the Achmea decisions, political opposition to the Energy Charter Treaty, or other changes in policy)?

There is no publicly available indication that the Kingdom of Lesotho has exercised termination rights in respect of its bilateral investment treaties currently in force, including those concluded with Germany, the United Kingdom and Switzerland. Nor has there been any formal announcement of an intention to terminate or renegotiate these agreements.

Lesotho is not a Member State of the European Union and has not been directly affected by the Achmea jurisprudence. There is no evidence of an Achmea-style policy shift, withdrawal from ICSID, or broader retreat from ISDS. Lesotho has likewise not adopted a position analogous to recent political opposition to the Energy Charter Treaty seen in certain jurisdictions.

Overall, Lesotho’s treaty policy reflects continuity rather than retrenchment.

b. Do any of the treaties reflect (i) changes in environmental and energy policies, (ii) the advent of emergent technology, (iii) the regulation of investment procured by corruption, and (iv) transparency of investor state proceedings (whether due to the operation of the Mauritius Convention or otherwise).

• Environmental and energy policy: The existing BITs do not contain detailed sustainable development provisions, climate-related language, or express regulatory carve-outs of the type now common in newer agreements. Regional and continental frameworks, including developments within SADC and AfCFTA policy discussions, indicate a broader shift toward balancing investor protection with regulatory space, but these developments are not yet reflected in Lesotho’s older BITs.
• Emergent technology: There are no treaty provisions specifically addressing digital assets, data governance, fintech, or technology-driven investment models. Such investments would fall within general treaty protections, subject to domestic sectoral regulation.
• Corruption and legality: Older BITs typically rely on general “in accordance with host state law” clauses rather than detailed anti-corruption provisions or denial-of-benefits clauses. More recent regional policy templates signal increased attention to investor obligations, but this has not yet translated into revised bilateral treaty language.
• Transparency in ISDS: Lesotho is not a party to the Mauritius Convention on Transparency. Transparency in investor–State proceedings therefore depends on the applicable arbitration rules or specific treaty text rather than on automatic application of the UNCITRAL Transparency Rules.

c. Does your jurisdiction publish any official guidelines, notes verbales or diplomatic notes concerning the interpretation of treaty provisions and other issues arising under the treaties?

There is no publicly available evidence that the Government of Lesotho routinely publishes formal interpretative notes, notes verbales, or diplomatic communications concerning the interpretation of its bilateral or regional investment treaties. Public treaty repositories and official summaries do not indicate the existence of standing interpretative guidelines.

In practice, treaty interpretation would therefore be governed by the text of the relevant instrument and general principles of treaty interpretation under international law, rather than by published governmental interpretative statements.

Lesotho does not have a single consolidated “Foreign Investment Act.” Instead, foreign direct investment is facilitated and regulated through a broader legislative and institutional framework. The principal instruments include the Business Licensing and Registration Act 2019, the Lesotho National Development Corporation Act and its institutional framework, the Companies Act 2011, relevant provisions of the Constitution of Lesotho (particularly those protecting property rights), and various sector-specific statutes such as those governing mining, telecommunications, financial services, energy and environmental regulation. Tax and customs legislation also play an important role, particularly in relation to incentives and repatriation.

a. Please list out any formal criteria imposed by such legislation / instrument (if any) concerning the admission and divestment of foreign investment;

Admission and divestment criteria

Admission of foreign investment is primarily governed by the Business Licensing and Registration Act 2019 and related legislation. Investors are required to establish and register a legal entity in accordance with the Companies Act 2011 or the applicable business registration framework. Certain activities require the prior issuance of a business licence before operations may commence. In addition, specific small-scale and retail sectors are reserved for Basotho citizens, and foreign participation in those sectors is restricted unless prescribed structural or financial thresholds are met.

While Lesotho does not impose a general foreign equity cap across all sectors, certain regulated industries may require approvals, impose participation requirements, or mandate compliance with localisation conditions. Investors must also comply with tax, labour, environmental, immigration and sector-specific regulatory frameworks as a condition of lawful operation. The Lesotho National Development Corporation plays an important facilitative role in promoting investment, allocating industrial sites and assisting investors in accessing incentives.

There is no general statutory prohibition on divestment by foreign investors. However, corporate procedures under the Companies Act 2011 apply to share transfers, restructuring and liquidation. In regulated sectors, prior notification or regulatory approval may be required before a change in ownership or control. Tax compliance and applicable financial regulatory requirements may also affect the timing and mechanics of repatriation of capital or returns.

b. Please list out what substantive right(s) and protection(s) foreign investors enjoy under such legislation / instrument;

Substantive rights and protections

Foreign investors benefit from a combination of constitutional, statutory and institutional protections. Once registered and licensed, foreign-owned entities are generally accorded treatment comparable to that afforded to domestic companies, subject to sectoral reservations. Property rights are constitutionally protected, including protection against arbitrary deprivation, subject to lawful expropriation accompanied by compensation.

Investors are entitled to repatriate profits, dividends and other returns, subject to compliance with tax and financial regulatory requirements. Through the LNDC framework, qualifying investors may access incentives, facilitation services and industrial infrastructure. The Companies Act 2011 provides corporate governance certainty, including limited liability and defined shareholder protections. Sector-specific legislation may also provide additional regulatory safeguards and procedural clarity.

c. Please list out what recourse (if any) a foreign investor has against the home state in respect of its rights under such legislation / instrument; and

Foreign investors may challenge administrative decisions, including licensing refusals, suspensions or cancellations, before the High Court of Lesotho. Such challenges may be brought under general administrative-law principles recognised under Lesotho’s common law and the Constitution of Lesotho, which guarantees the right to lawful, procedurally fair administrative action and protection of property rights.

Sectional regulatory decisions made under the Business Licensing and Registration Act 2019, the LNDC framework, or sector-specific legislation (such as mining or telecommunications statutes) are subject to judicial review. The High Court has supervisory jurisdiction to set aside unlawful, unreasonable or procedurally unfair administrative action.

The Constitution of Lesotho further provides protection against arbitrary deprivation of property and guarantees access to the courts for enforcement of fundamental rights. Investors may therefore institute constitutional proceedings where State conduct is alleged to infringe constitutionally protected property rights or other fundamental rights.

Where an investment agreement has been concluded with the Government of Lesotho or a state-owned entity, recourse to arbitration will depend on the dispute resolution clause contained in that agreement. Contractual arbitration is commonly available in large infrastructure or resource projects.

In addition, where applicable, foreign investors may rely on dispute settlement provisions contained in a relevant bilateral investment treaty or invoke arbitration under the ICSID Convention, subject to the existence of valid consent to arbitration.

It should be noted that Lesotho’s domestic investment legislation, including the Business Licensing and Registration Act 2019 and the LNDC Act, does not itself confer a freestanding statutory right to international arbitration against the State. International arbitration arises from treaty commitments or contractual consent rather than directly from domestic investment statutes.

d. Does this legislation regulate the use of third-party funding and other non-conventional means of financing.

Lesotho’s investment legislation does not specifically regulate third-party funding in the context of investment disputes or foreign investment structures. There is no dedicated statutory regime governing third-party litigation or arbitration funding, nor is there any express prohibition on alternative or non-conventional financing arrangements, provided they comply with general principles of contract law, financial regulation and anti-money laundering requirements.

Accordingly, the permissibility and treatment of third-party funding would be assessed under general legal principles and, where relevant, the applicable arbitral rules, rather than under any investment-specific legislative framework.

The Kingdom of Lesotho has appeared as a respondent in international arbitration proceedings, including investment-related disputes.

The most prominent publicly reported investment treaty matter is Swissbourgh Diamond Mines (Pty) Ltd and Others v Kingdom of Lesotho (PCA Case No. 2018-46), administered by the Permanent Court of Arbitration under the UNCITRAL Arbitration Rules. In that case, Lesotho participated fully in the proceedings, appointed counsel, and filed detailed submissions on both jurisdiction and the merits. A notable feature of the State’s approach was its firm reliance on jurisdictional objections at a preliminary stage. Lesotho challenged, inter alia, whether the claimants qualified as protected “investors” under the relevant SADC Protocol framework, whether valid consent to arbitration existed, and how the SADC Protocol on Finance and Investment should properly be interpreted. In 2019, the tribunal declined jurisdiction, concluding that it lacked jurisdiction over the dispute. No damages award was therefore rendered against Lesotho.

In addition to treaty-based arbitration, Lesotho has been involved in significant international commercial arbitration, most notably in Frazer Solar GmbH v The Kingdom of Lesotho. That dispute arose from a renewable energy supply agreement concluded in 2018 and culminated in an arbitral award issued against the Kingdom of Lesotho. The matter has since generated extensive multi-jurisdictional litigation, including enforcement proceedings in foreign courts and parallel domestic proceedings in Lesotho challenging the validity of the underlying agreement and the associated arbitration clause. Although the dispute was contractual rather than treaty-based, it is significant in demonstrating the State’s active engagement with complex cross-border arbitral and enforcement processes, as well as its willingness to pursue judicial remedies where issues of authority, legality, and public law arise.

More broadly, Lesotho has not been a frequent respondent in investment treaty arbitration. There is no discernible pattern of non-participation or repudiation of arbitral proceedings, nor any public indication of systemic resistance to the ISDS framework, such as withdrawal from ICSID or termination of investment treaties following arbitral exposure.

In the past year, there have been no major publicly reported investment treaty arbitration awards or significant treaty-related decisions involving the Kingdom of Lesotho as either a respondent or an interested party.

While the domestic courts of Lesotho continue to adjudicate commercial and civil matters, there have been no new publicly reported investor–State awards or international treaty interpretation decisions concerning Lesotho during this period.

Lesotho has not, to date, served as the seat of a non-ICSID investment treaty arbitration. Instead, the principal non-ICSID matters involving Lesotho have been seated in foreign jurisdictions. In Kingdom of Lesotho v Swissbourgh Diamond Mines (Pty) Ltd and Others (UNCITRAL, PCA-administered), the tribunal selected Singapore as the seat of arbitration, and any set-aside proceedings were accordingly brought before the Singapore High Court, which exercised supervisory jurisdiction as the court of the seat. Similarly, in Van Zyl / Burmilla Trust and Others v The Kingdom of Lesotho (UNCITRAL, PCA-administered), the seat of arbitration was Mauritius.

The practical consequence is that, in non-ICSID treaty arbitrations involving Lesotho, the supervisory and supportive role of national courts, particularly in relation to challenges, annulment-type proceedings, or procedural assistance, has been exercised by the courts of the seat, such as Singapore or Mauritius, rather than by the courts of Lesotho.

The Kingdom of Lesotho does not have investment-specific legislation dealing expressly with interim measures in treaty arbitration. In practice, however, the High Court may grant interim or conservatory relief under its general procedural powers and arbitration law principles.

The most common form of relief is an interdict. The High Court may grant interim interdicts pending final determination, final interdicts, and mandatory interdicts compelling a party to act. Such relief may be sought, for example, to preserve the status quo pending arbitration, prevent the dissipation of assets, restrain allegedly unlawful administrative action, or prevent the termination of contractual rights while arbitral proceedings are underway. The test applied is the traditional common-law test: the applicant must establish a prima facie right, a well-grounded apprehension of irreparable harm, that the balance of convenience favours the granting of relief, and that there is no satisfactory alternative remedy.

In appropriate circumstances, the courts may also grant attachment or preservation orders, including attachment to found or confirm jurisdiction and attachment aimed at preserving assets pending determination of rights. Such measures may be relevant where an investor seeks to prevent the dissipation of assets before or during arbitration. The High Court may additionally grant declaratory relief clarifying the parties’ legal positions pending arbitral proceedings, provided the usual jurisdictional requirements are met.

Where constitutional rights are implicated, including property rights, litigants may approach the High Court for urgent constitutional relief. These proceedings may run in parallel with arbitration if constitutional dimensions arise.

Although Lesotho is a party to the ICSID Convention and the New York Convention, interim measures in aid of arbitration are not governed by a specialised investment regime. Courts may recognise and enforce arbitral awards, stay domestic proceedings where a valid arbitration agreement exists, and provide supportive procedural assistance where appropriate. There is no publicly documented instance of Lesotho courts granting interim measures expressly in aid of a non-ICSID investment treaty arbitration, but in principle the High Court retains inherent jurisdiction to grant urgent relief where the established requirements are satisfied.

As regards court practice, the High Court does entertain urgent applications, particularly where immediate harm is alleged, State action is challenged, or property rights are at risk. Applications are typically brought by way of motion proceedings supported by affidavit evidence. Where a valid arbitration agreement exists, the courts generally respect party autonomy and may stay proceedings or decline to determine issues that properly fall within the arbitral tribunal’s jurisdiction. That said, the courts retain the power to grant interim protective relief unless clearly excluded by agreement.

Where the State is the respondent, the same substantive test for interim relief applies. Administrative-law considerations and separation-of-powers principles may influence the scope of relief, but there is no discernible pattern of systemic reluctance to grant interim measures against the State. Ultimately, relief turns on whether the applicant satisfies the established legal requirements.

It should be noted that Lesotho has not developed a substantial body of reported jurisprudence specifically addressing interim measures in support of investment treaty arbitration. As a result, general civil procedure and constitutional principles continue to govern.

The Kingdom of Lesotho does not have legislation specifically tailored to the appointment of arbitrators in investment treaty disputes. Default mechanisms therefore arise from general arbitration law and the applicable arbitration rules, such as the ICSID or UNCITRAL Rules.

In ICSID arbitrations, the appointment process is governed exclusively by the ICSID Convention and the ICSID Arbitration Rules. If a party fails to appoint an arbitrator within the prescribed timeframe, the Chair of the ICSID Administrative Council makes the appointment. Domestic courts, including those of Lesotho, have no role in constituting the tribunal. Accordingly, no Lesotho court practice arises in this context.

In non-ICSID proceedings, such as those conducted under the UNCITRAL Arbitration Rules, the rules provide that where a party fails to appoint an arbitrator, the designated appointing authority will do so. In a number of treaty cases involving Lesotho, the Permanent Court of Arbitration has acted as registry and/or appointing authority. If a non-ICSID arbitration were seated in Lesotho and the arbitration agreement were silent, or if the appointing authority mechanism failed, the High Court of Lesotho could, in principle, act as a default appointing authority under its general arbitration jurisdiction. However, there is no reported investment treaty arbitration seated in Lesotho in which the High Court has exercised such powers.

Under Lesotho’s broader arbitration framework, where parties fail to appoint an arbitrator in accordance with their agreement, the court may appoint one upon application. The court’s role in such circumstances is supervisory and facilitative rather than substantive. It does not engage with the merits of the dispute when making an appointment, reflecting orthodox common-law arbitration practice.

In practice, investment treaty arbitrations involving Lesotho have generally been seated outside the country, including in jurisdictions such as Singapore and Mauritius. As a result, Lesotho’s courts have not developed a body of jurisprudence addressing default appointments in the treaty arbitration context.

If an investment treaty arbitration were seated in Lesotho and a default appointment issue arose, it is likely that the High Court would respect party autonomy, apply the agreed appointment mechanism or the applicable rules, and intervene only to the extent necessary to ensure the proper constitution of the tribunal. The court would be expected to avoid engaging with jurisdictional or substantive treaty issues at that stage, adopting a facilitative approach consistent with international arbitration standards.

To date, there has been no publicly reported non-ICSID investment treaty arbitration seated in the Kingdom of Lesotho. Consequently, Lesotho’s courts have not developed investment-specific jurisprudence concerning set-aside applications in this context.

(i) Grounds for Annulment or Setting Aside

In the absence of the self-contained annulment regime applicable to ICSID awards, a non-ICSID award seated in Lesotho would be subject to challenge before the High Court under general arbitration law and common-law principles, broadly aligned with the standards reflected in the New York Convention.

The principal grounds would likely include lack of jurisdiction, such as the absence of a valid arbitration agreement, invalid consent to arbitration, or the tribunal exceeding its mandate. A party may also rely on serious procedural irregularity, including denial of a fair opportunity to present its case, bias or a reasonable apprehension of bias, or material departure from the agreed procedure. Challenges may further arise where the tribunal exceeded its powers by deciding matters not submitted to it or failing to determine issues properly referred. Public policy remains a recognised ground, though narrowly construed, and would typically be invoked in cases involving fraud, corruption, or manifest illegality affecting the award. In addition, an award may be vulnerable where the tribunal was improperly constituted or the agreed appointment mechanism was not followed.

Although these grounds broadly mirror those found in Article V of the New York Convention, it is important to distinguish between refusal of enforcement and setting aside at the seat. In a Lesotho-seated arbitration, the High Court would act as the supervisory court under domestic arbitration principles.

(ii) Court Practice in Applying These Grounds

There is no reported case in which Lesotho’s courts have considered a set-aside application arising from a non-ICSID investment treaty arbitration seated in Lesotho. In practice, investment treaty arbitrations involving Lesotho have been seated abroad, with supervisory jurisdiction exercised by foreign courts such as those in Singapore or Mauritius.

More generally, Lesotho’s courts adopt a supervisory rather than appellate role in arbitration matters. They do not revisit the merits of the dispute and limit intervention to recognised jurisdictional or procedural defects. Public policy is likely to be interpreted restrictively and in line with international practice.

If confronted with a set-aside application concerning a non-ICSID investment award seated in Lesotho, the High Court would be expected to apply established arbitration standards, respect party autonomy, and avoid engaging in substantive treaty interpretation beyond what is necessary to determine jurisdictional or excess-of-powers issues. There is no indication of a judicial tendency toward expansive intervention or hostility to arbitration.

The Kingdom of Lesotho is a Contracting State to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) and has enacted domestic legislation to give effect to its obligations under that Convention.

(i) Grounds on which ICSID awards can be challenged

Under Article 53 of the ICSID Convention, an ICSID award is binding on the parties and is not subject to appeal or any other remedy except those expressly provided for in the Convention. As a result, Lesotho courts have no jurisdiction to annul, set aside, review, or vary an ICSID award. Domestic courts may not revisit questions of jurisdiction, merits, procedure, or quantum.

The only available challenge mechanism is the annulment procedure under Article 52 of the ICSID Convention. Annulment may be sought on limited grounds, namely that the tribunal was not properly constituted, that it manifestly exceeded its powers, that there was corruption on the part of a tribunal member, that there was a serious departure from a fundamental rule of procedure, or that the award failed to state the reasons on which it is based. Any such application is determined by an ad hoc annulment committee constituted within the ICSID framework, not by domestic courts.

(ii) Recognition and enforcement

Article 54 of the ICSID Convention obliges each Contracting State to recognise an ICSID award as binding and to enforce the pecuniary obligations imposed by the award as if it were a final judgment of its own courts. Lesotho has designated a competent authority for purposes of recognition and enforcement in accordance with Article 54(2).

In enforcement proceedings, domestic courts may address only formal and procedural matters, such as verification of authenticity and compliance with procedural requirements for registration and execution. They may not examine the substantive validity of the award. Issues relating to execution are governed by domestic procedural law, subject to the preservation of sovereign immunity under Article 55 of the Convention.

Court practice in Lesotho

There is no publicly reported decision of the Lesotho High Court setting aside or substantively reviewing an ICSID award, which is consistent with the Convention’s exclusion of domestic review.

If recognition or enforcement of an ICSID award were sought in Lesotho, the High Court would be expected to treat the award as final and binding, decline to entertain jurisdictional or public policy objections, and permit enforcement in accordance with the rules applicable to final judgments. Any challenge to the validity of the award would have to be pursued exclusively through the ICSID annulment mechanism rather than before Lesotho’s courts.

The Kingdom of Lesotho does not have a standalone State Immunity Act. Questions of sovereign immunity are governed by common-law principles influenced by English law, constitutional considerations, and Lesotho’s international obligations, including those arising under the ICSID Convention and the New York Convention. Lesotho adheres to the restrictive doctrine of sovereign immunity, distinguishing between sovereign acts (jure imperii) and commercial acts (jure gestionis).

Immunity from suit, or jurisdictional immunity, is generally limited where the State has consented to arbitration. In the case of ICSID awards, Article 54 of the ICSID Convention obliges Lesotho to recognise such awards as binding and to enforce pecuniary obligations as if they were final judgments of its own courts. Consent to arbitration through treaty or contract is ordinarily regarded as a waiver of jurisdictional immunity in proceedings for recognition and enforcement. As such, immunity from suit would not typically prevent recognition of an ICSID award.

For non-ICSID awards, recognition and enforcement are governed by the New York Convention and domestic arbitration law. Similarly, consent to arbitration is generally treated as a waiver of immunity from jurisdiction in recognition proceedings, making it unlikely that immunity from suit would succeed at that stage.

Immunity from execution is treated more strictly. Even where an award has been recognised and the State has consented to arbitration, execution against State property is not automatic. Article 55 of the ICSID Convention expressly preserves immunity from execution under domestic law. While recognition is mandatory, execution remains subject to domestic sovereign immunity principles.

Under the restrictive approach applied in Lesotho, property used for sovereign or public purposes, such as diplomatic premises, public infrastructure, military assets or central bank reserves, would generally be immune from attachment. Assets used for commercial purposes may, in principle, be susceptible to execution if clearly identifiable as commercial in nature. Importantly, a waiver of immunity from suit does not automatically amount to a waiver of immunity from execution. Courts would likely require an express and unequivocal waiver and clear evidence that the assets targeted are commercial rather than sovereign in character.

There is no significant reported jurisprudence in Lesotho concerning enforcement of investment treaty awards against the State. However, the courts would likely distinguish carefully between recognition and execution, comply with Lesotho’s treaty obligations at the recognition stage, and apply close scrutiny to any attempt to execute against public assets. In practical terms, immunity from suit is unlikely to bar recognition where the State has consented to arbitration, but immunity from execution remains a substantial and potentially limiting consideration.

The Kingdom of Lesotho is a Contracting State to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States and has enacted domestic legislation to give effect to it. The ICSID regime is self-contained and significantly restricts the grounds upon which recognition and enforcement of awards may be resisted before domestic courts.

(i) Grounds on which recognition and enforcement may be resisted

Under Article 54 of the ICSID Convention, each Contracting State is required to recognise an ICSID award as binding and to enforce its pecuniary obligations as if it were a final judgment of its own courts. Unlike the regime under the New York Convention, there are no equivalent refusal grounds at the recognition stage.

Accordingly, Lesotho courts do not have jurisdiction to refuse recognition or enforcement on the basis of public policy, excess of jurisdiction, procedural irregularity, or invalidity of the arbitration agreement. Such matters fall exclusively within the annulment mechanism provided under Article 52 of the ICSID Convention and are determined by an ICSID ad hoc annulment committee.

In practical terms, resistance to recognition in Lesotho would be confined to formal or procedural matters, such as proof that the award does not qualify as an ICSID award within the meaning of the Convention, defects relating to authentication or certification, or evidence that the award has been annulled or stayed pursuant to ICSID annulment proceedings. Issues concerning execution, including sovereign immunity from execution preserved under Article 55, may also arise, but these relate to enforcement measures rather than recognition itself.

(ii) Court practice and examples

There is no reported decision in which a Lesotho court has refused recognition or enforcement of an ICSID award. This is consistent with the Convention’s mandatory recognition framework and the exclusion of domestic review.

Consistent with international practice, domestic courts are not permitted to review ICSID awards on the merits or to invoke public policy as a ground for refusal. Their role is limited to verifying formal compliance and authenticity. Any substantive challenge must be pursued exclusively through the Article 52 annulment procedure within the ICSID system. Lesotho courts have no authority to revisit jurisdictional determinations, treaty interpretation, quantum, or procedural findings made by the tribunal.

In the Kingdom of Lesotho, recognition and enforcement of non-ICSID investment treaty awards are governed by domestic arbitration law and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, to which Lesotho is a Contracting State.

Unlike ICSID awards, non-ICSID awards, including those rendered under the UNCITRAL Rules or other ad hoc treaty frameworks, are subject to the ordinary recognition and enforcement regime under the New York Convention.

(i) Grounds on which recognition and enforcement may be resisted

Under Article V of the New York Convention, as applied in Lesotho, recognition and enforcement may be refused on limited and exhaustively enumerated grounds. These include incapacity of a party or invalidity of the arbitration agreement under the applicable law; lack of proper notice or denial of an opportunity to present one’s case; the award dealing with matters beyond the scope of the submission to arbitration; irregularity in the composition of the tribunal or arbitral procedure; the award not yet being binding or having been set aside or suspended at the seat of arbitration; non-arbitrability of the subject matter under Lesotho law; and recognition or enforcement being contrary to Lesotho’s public policy.

Where Lesotho is the seat of arbitration, a party may also apply to the High Court to set aside the award on broadly corresponding grounds, such as lack of jurisdiction, serious procedural irregularity, excess of powers, or public policy.

(ii) Court practice in applying these grounds

There is no substantial reported jurisprudence in Lesotho specifically concerning enforcement of non-ICSID investment treaty awards. However, general arbitration practice suggests that the High Court would adopt a pro-enforcement approach consistent with the New York Convention. The Article V grounds would likely be treated as exhaustive and narrowly construed, and the court would refrain from reviewing the merits of the award.

Public policy would be applied as a narrow exception, confined to fundamental principles of justice and legality, such as fraud, corruption, serious procedural unfairness, or enforcement of an award requiring manifest illegality. Where an award has been set aside at the seat of arbitration, the High Court would likely regard this as a strong basis for refusal under Article V(1)(e), in line with international practice.

Sovereign immunity considerations may also arise at the execution stage, particularly where enforcement is sought against State assets. Even where recognition is granted, execution against sovereign or public-purpose property would remain subject to the restrictive immunity principles applicable under Lesotho law.

In the Kingdom of Lesotho, enforcement of arbitral awards against the State, or against state-owned or state-linked entities, is governed by common-law principles of restrictive sovereign immunity, constitutional considerations, and general execution rules. There is no standalone State Immunity Act codifying these principles.

A central distinction is drawn between enforcement against the State itself and enforcement against separate legal entities owned or controlled by the State.

With respect to enforcement against the State, even where an award has been recognised, whether under the ICSID Convention or the New York Convention framework, execution against State property is not automatic. Lesotho applies the restrictive doctrine of sovereign immunity. Assets used for sovereign or public purposes, such as public infrastructure, government bank accounts allocated to public expenditure, diplomatic property, military assets, and central bank reserves, would generally be immune from attachment. By contrast, assets used for commercial purposes may, in principle, be susceptible to execution, provided they are clearly identifiable as commercial in nature and not dedicated to public functions. Courts would require cogent evidence of commercial use, and a waiver of immunity from suit would not automatically amount to a waiver of immunity from execution. An express and unequivocal waiver would likely be required.

In relation to state-owned enterprises incorporated under the Companies Act 2011, these entities are ordinarily treated as separate legal persons. Their assets are not automatically regarded as assets of the State. An award rendered against the State cannot ordinarily be enforced against an SOE unless there are sufficient grounds to pierce the corporate veil or to establish that the entity operates as the alter ego or instrumentality of the State. Applying orthodox company-law principles, Lesotho courts would generally respect separate legal personality unless there is evidence of fraud, abuse of corporate form, or a lack of genuine operational independence.

Where an entity is merely state-linked, but not wholly owned by the State, enforcement will depend on whether that entity itself is the award debtor. If the entity is the debtor and operates commercially, its assets would ordinarily be subject to standard execution procedures. If, however, the State is the award debtor, the assets of a separate entity would not be reachable absent veil-piercing or alter ego findings.

In the ICSID context, Article 55 of the ICSID Convention preserves immunity from execution under domestic law. Recognition of an ICSID award is mandatory, but execution remains subject to Lesotho’s sovereign immunity principles.

In practical terms, enforcement against core sovereign assets is highly unlikely. Attachment of clearly commercial State assets may be possible in principle but would be subject to careful judicial scrutiny. Enforcement against SOE assets will depend on corporate separateness and the identity of the award debtor. There is no significant reported jurisprudence in Lesotho concerning the attachment of SOE assets in the investment treaty context, but existing common-law doctrine suggests that courts would adopt a cautious approach, respecting corporate separateness and applying restrictive immunity principles.

Overall, Lesotho permits enforcement against State-owned or State-linked assets only within narrow limits. Sovereign and public-purpose assets are likely to remain immune, while commercial assets may be attachable only upon clear proof of commercial use and, where necessary, an express waiver.

Lesotho’s current approach to arbitration and investor–State dispute settlement reflects continuity rather than reform or retrenchment.

First, Lesotho remains a Contracting State to both the ICSID Convention and the New York Convention, and its domestic legislation, including the Arbitration (International Investment Disputes) Act, continues to recognise and support international arbitration as a legitimate dispute resolution mechanism. There is no indication of legislative or policy divergence from this arbitration-supportive framework.

Second, Lesotho’s exposure to ISDS has been relatively limited. The most notable treaty-based case, Swissbourgh Diamond Mines v Kingdom of Lesotho, was dismissed on jurisdictional grounds. Lesotho has therefore not faced a significant pattern of adverse treaty awards or substantial damages exposure that might otherwise generate political pressure to curtail ISDS mechanisms.

Third, there has been no public move to terminate or renegotiate existing bilateral investment treaties, withdraw from ICSID, or otherwise reverse policy in respect of ISDS. Lesotho’s investment treaties remain in force, and there is no announced reform agenda comparable to developments seen in certain EU Member States post-Achmea or in jurisdictions reconsidering their participation in instruments such as the Energy Charter Treaty.

Fourth, domestic arbitration reform in Lesotho has focused on modernising procedure, strengthening enforceability of awards, and aligning with international standards. These reforms are arbitration-supportive in general terms but do not represent a targeted shift in ISDS policy.

Fifth, Lesotho’s participation in regional and continental frameworks, including the Southern African Development Community and the African Continental Free Trade Area, may influence future treaty practice. In particular, the development of an AfCFTA Investment Protocol could shape the future balance between investor protection and regulatory space at the continental level.

Sixth, global debates concerning environmental regulation, public health measures, transparency in investor–State proceedings, and the recalibration of substantive treaty protections have not yet been systematically reflected in Lesotho’s older bilateral treaties. However, these broader international trends may inform future negotiations or treaty updates.

Finally, there is no reported indication that Lesotho’s judiciary is hostile to arbitration. Courts recognise arbitration agreements and awards in accordance with international obligations and apply conventional approaches to jurisdiction and enforcement.

Overall, Lesotho’s arbitration and ISDS landscape remains stable and treaty-compliant. There are no recent disruptive shifts or policy reversals. Any future developments are more likely to arise from regional or continental investment policy evolution than from domestic resistance to arbitration or ISDS.

Lesotho has not been directly affected by the Achmea decision, which concerns intra-EU bilateral investment treaties, and there is no public indication that Lesotho has adopted an Achmea-style policy of terminating treaties or refusing investor–State dispute settlement on that basis.

One notable development in Lesotho-related treaty arbitration has been the role of foreign seat courts in supervising proceedings. In Swissbourgh Diamond Mines / Van Zyl v Kingdom of Lesotho, administered under the UNCITRAL Rules with PCA support, significant judicial scrutiny occurred at the seat in Singapore during set-aside proceedings. Those judgments are frequently cited for their close examination of whether the tribunal remained within the scope of consent under the applicable instrument. Importantly, this supervisory role was exercised by the courts of the seat rather than by Lesotho’s courts.

There have also been related PCA-administered proceedings in the mining sector, including Van Zyl / Burmilla Trust v Kingdom of Lesotho, which has been recorded in public ISDS databases. These matters underscore that Lesotho’s exposure to ISDS has arisen primarily in the context of regional investment frameworks rather than a broad network of BIT disputes.

In terms of transparency, Lesotho is not a party to the Mauritius Convention on Transparency. As a result, transparency in treaty-based arbitrations involving Lesotho depends on the applicable arbitration rules and the specific treaty provisions rather than on the automatic application of the UNCITRAL Transparency Rules through that Convention.

From a broader policy perspective, Lesotho’s investment arbitration landscape is influenced by regional and continental developments, particularly within SADC and the evolving AfCFTA framework. There is a discernible regional trend toward more regulated or calibrated approaches to ISDS, and future AfCFTA investment rulemaking may influence Lesotho’s treaty practice once fully implemented.

Finally, there is no specific statutory framework in Lesotho regulating third-party funding in ISDS. Issues relating to third-party funding would typically be addressed, if at all, through the applicable arbitral rules, tribunal directions, disclosure requirements, and general legal principles, rather than through dedicated domestic legislation.