Trends in dispute resolution in Africa

Legal systems in Africa1. Civil law

• Equatorial Guinea, Benin, Chad, Niger, Mozambique, Angola, Guinea Bissau, DRC

2. Common law• Kenya, Uganda, Tanzania

3. Roman Dutch law• South Africa, Zambia, Botswana, Zimbabwe

4. Sharia/Islamic law• Egypt and parts of Nigeria

Court systems in Africa

1. Issues• Corruption• Delays

2. Alternative ways of resolving disputes – arbitration and others

Alternative dispute resolution (ADR)

1. Arbitration - domestic and international• Only ADR process that is binding, unless parties reach settlement using

another ADR process

2. Mediation• Non-binding, impartial third party to assist parties to articulate own interests

3. Conciliation• Similar to mediation: conciliator heads the negotiations, proposes settlement

terms and directs parties towards an agreement

Why arbitrate?1. Neutrality, impartiality and independence

• Can avoid disadvantages associated with African court sytems

2. Flexibility• Constitution of the arbitration tribunal, language, venue, and procedural rules

3. Confidentiality• Not public like many court proceedings

4. Final and binding award• Not subject to appeal

5. Delays• Generally quicker than court proceedings, particularly post-award

6. Ease of enforcement of award • New York Convention

Enforcement in Africa (1) New York Convention• Award enforcement proceedings involve the consideration of local legislation (Arbitration Acts).• A party seeking to enforce an award in a NY Convention country needs to make an application

to the national court for recognition and enforcement. • Grounds for refusal to enforce a foreign award (Article V):

• A party was under some incapacity or the agreement was invalid;• A party was not given proper notice of appointment of arbitrator or of proceedings;• Award deals with a difference or contains a decision on matters not contemplated/falling

within terms of submission to arbitration, or contains decisions on matters beyond the scope of submission to arbitration;

• Composition of arbitral tribunal or procedure not in accordance with agreement of parties, or, if no agreement, not in accordance of law of country where arbitration took place;

• Award is not yet binding or has been set aside or suspended by a competent authority;• Difference was not capable of settlement by arbitration; or • Public policy considerations.

Enforcement in Africa (2) New York Convention African countries• Over 30 countries are member states, including South Africa, Egypt, Nigeria,

Algeria, Morocco, Mauritius, Tunisia, Kenya, Uganda, Tanzania• Case study – Kenya

• Implemented NY Convention into its national law.• Arbitration Act 1995 – section 36 (2) – award to be recognised as binding and enforced in

accordance with the provisions of the NY Convention, or any other applicable conventions.• Section 36 (3) – requirements for making an application for enforcement of award.• Section 37 – grounds for refusal (similar to those in the NY Convention) :• Party to arbitration agreement was under some incapacity;• Arbitration agreement is invalid; or• Party was not given proper notice of appointment of arbitrator or of proceedings;

Enforcement in Africa (3) • Case study – Kenya (cont’d)

• Arbitral award deals with dispute or contains decision on matters not within contemplation of/falling within terms of arbitration;• Composition of arbitral tribunal or procedure not in accordance with agreement of

parties or with the law of the state where arbitration tool place;• Arbitral award not yet become binding or has been set aside;• Arbitral award was induced or affected by fraud, bribery, corruption or undue

influence;• If the subject matter of the dispute is not capable of settlement by arbitration

under Kenyan Law; and • Recognition or enforcement of award would be contrary to the public policy of

Kenya.

Enforcement in Africa (4)

Non - New York Convention African countries• Including Angola, Chad, Ethiopia, Libya, Namibia.• Consult national legislation of the country where you want to enforce the award

and local lawyers.

Other regional conventions – Riyadh Convention• Member states include some African countries – e.g. Algeria, Djibouti, Sudan,

Somalia, Libya.

Challenges to enforcement – three examples1. Public policy

• Domestic public policy varies between states

2. State immunity• Jurisdictional immunity, or immunity from suit – if the state, or state entity has

agreed to submit a dispute to arbitration, this should not be a problem• BUT immunity from recognition/enforcement and execution of an award can be a

difficult issue - where the award debtor is a state or state entity, state immunity might block enforcement

• Establish what doctrine of state immunity is applied in the country of enforcement• Example - Kenya

• Government Proceedings Act

3. Misconduct

Future of arbitration in Africa

1. New African arbitration centres2. Growth of FDI and regional trade will result in increased demand

for arbitration services, particularly in energy and natural resources

3. Established institutions still popular – LCIA, ICC, ICSID

Questions?