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The Middle Eastern and African Arbitration Review 2017

Developments in African Arbitration

Arbitration in Africa has reached a tipping point. While Africa-related disputes have kept lawyers busy for a number of years in traditional arbitration centres, the market is steadily changing. The number of arbitral centres across the African continent is growing rapidly, and African lawyers are developing specialist arbitration skills to service this growth. As the market becomes more mature, notably in jurisdictions such as Kenya, Nigeria, Ghana and South Africa, but also increasingly in francophone Africa, governments, arbitration lawyers and arbitrators are calling for these disputes to be heard in Africa rather than ‘exported’ to international centres.

In May 2016, the International Council for Commercial Arbitration (ICCA) Congress, comprising both lawyers and government officials, was held in Mauritius. This conference, run by one of the prominent thought-leadership organisations in the field, was for the first time dedicated to arbitration in Africa. The ICCA conference achieved its mission of providing a long-overdue platform to explore some of the challenges and showcase the opportunities for arbitration across Africa. Although some commentators might argue that Mauritius is not strictly speaking Africa (notwithstanding its membership of the African Union), the island nation hosts a number of arbitral institutions and is an entry point for foreign investment into Africa, notably from India. Mauritius also played a key role in the development of the United Nations Convention on Transparency in Treaty-based Investor-State Arbitration (2014). 

The growth of arbitration in Africa is by no means restricted to an offshore jurisdiction. Relatively mature arbitral centres already exist in a number of African cities including Kigali, Nairobi and Accra. Governments are getting wise to the fact that arbitration can be a source of economic activity, with conference centres, hotels and local lawyers all set to benefit. For any country, a recognised arbitral centre is also a great show of ‘soft power’, helping to underline broader messages about political and legal stability, and give comfort to foreign investors. However, in order to offer true competition to the established arbitral centres around the world, these centres in Africa will need to demonstrate that they can offer a reliable and efficient alternative for the users of arbitration – including by giving comfort that the local judiciary will actively support, or at least not interfere with, the arbitral process. 

Arbitration institutions operating within the continent are contributing to the development of arbitration in Africa. In June 2016, the second conference in the ‘SOAS Arbitration in Africa​’​ conference series was held in conjunction with the Lagos Court of Arbitration on the theme ‘Rethinking the role of courts and judges in supporting arbitration in Africa’. The Cairo Regional Centre for Arbitration will host the next SOAS conference in April 2017 on the theme of the role of African States and governments in creating a viable legal and regulatory environment for arbitration to grow.1 In December 2016, the Nairobi Centre for International Arbitration held its inaugural conference, with the aim of establishing Kenya as a key centre for arbitration. The increasing regularity of arbitration conferences in Africa illustrates the significant appetite amongst practitioners to develop skills and harness the growth potential of the African market.

The growth of arbitration across Africa is further supported by a wide array of legal reforms gaining momentum across the continent. For example, OHADA’s desire to modernise the Uniform Arbitration Act (UAA), and recent ratifications of the New York Convention all contribute to a more stable and reliable environment in which arbitration can flourish. Most African states have understood that this stability is key to facilitating and encouraging both domestic and foreign investment. When it comes to arbitration of investment disputes, however, not all states are aligned on the benefits of this method of dispute resolution. More on this below.

Against the backdrop of this largely positive outlook for arbitration in Africa, we explore in this article some of the challenges that the continent still faces and consider whether the steps that a number of key jurisdictions are taking will be sufficient to tip the balance in favour of arbitration.

Recent trends

While many African economies were hit by the marked reduction in commodities prices in 2016, commentators noted that ‘[d]espite its slowdown, the African continent remained the second fastest-growing economy in the world’.2 In any event, it is generally agreed that Africa’s economy as a whole is set to rebound in the next couple of years, returning to the higher rates of growth seen in the past decade.

In the next section, we reflect on how the recent economic growth has driven increased commercial and investment treaty arbitration across the continent and seek to identify certain trends which could shape the landscape over the next few years.

Commercial arbitration

The number of arbitration cases involving African parties remains steady. The London Court of International Arbitration (LCIA) Registrar’s Report 2015 noted that over 6 per cent of the cases registered with the institution in 2015 involved African parties. While 125 cases involving African parties were registered with the International Chamber of Commerce (ICC) in 2015, the ICC witnessed a modest decline in the number of parties and nationalities from Sub-Saharan Africa: only 71 new cases involving such parties were registered, compared to the record high of 113 in 2014.4 The ICC noted that, of those 71 cases, close to half were brought by parties from Nigeria and South Africa. State-owned entities and parastatals continue to feature in significant numbers as parties to ICC arbitration, reflecting the central role they continue playing into African economies.

A new and welcome trend in the appointment of arbitrators has been identified by the ICC.5 There has been a significant rise in the number of arbitrators from African countries appointed to sit on international commercial arbitration tribunals. The ‘diversity gap’ in international arbitration has been a recurrent theme in recent years,6 but 2016 might have become a tipping point in this respect. According to ICC figures, 31 African arbitrators were appointed in 2015, 13 of whom were South African nationals and 10 Egyptian nationals.7 This rise in appointments of African arbitrators is a positive trend which will over time start to redress the historic stark underrepresentation of African arbitrators in arbitration. Indeed, African arbitrators could well benefit from a similar evolution to that of their Latin American counterparts, whose increase in appointments was considered to be the ‘most notable change’ in the 2015 arbitrator appointments at the ICC. The ICC observed ‘[w]hile this no doubt reflects the increased involvement of Latin American parties in ICC arbitration […], it also points to greater numbers and wider recognition of practitioners in the region’.8 The time may well now have come for the arbitration community to consider a ‘pledge’ regarding geographic diversity to complement the existing efforts towards equal representation of women in arbitration.9

To date, practitioners’ experience suggests that the majority of commercial arbitration disputes in Africa have arisen in the telecoms, construction, energy and natural resources sectors. The energy and natural resources sectors have long been two of the driving motors of the African economy as resource-rich countries remain attractive targets for foreign investment.10 However, investment paradigms are changing, with The Economist observing that ‘[i]nflows of capital are increasingly focused on less resource-rich countries, as investors target the continent’s booming middle class. The amount of investment into technology, retail and business services increased by 17 percentage points between 2007 and 2013.’

Investment in Africa continues to attract investors not only in new sectors, but also from different jurisdictions. China became the key player for investment into Africa, challenging the investment model offered by investors from jurisdictions with long-standing ties to the continent (notably, the UK, France and Belgium). China’s recent fall in economic growth has not dinted its outbound investments, as evidenced by the promise to invest US$40 billion in Nigerian economy.11 However, although Chinese investment into Africa increased exponentially over a very short period of time, it also gave rise to a number of salutary ‘lessons learned’ as projects turned sour and African governments started to re-evaluate their preferred business partners. Investors from other jurisdictions, India and South Korea, for example, each have their own approach to making investments, not least due to cultural differences. African host countries now have a much greater choice of partners with whom to do business. Although various recent reports indicate that China’s investment will slow down this year, the country has developed a strong foothold in Africa,12 providing the impetus for the creation of an arbitration partnership between China and South Africa (see below). Japan too has pledged to invest US$30 billion in Africa by 2018.13

Investment treaty arbitration

Like commercial arbitration, investment treaty arbitration cases involving African state respondents have also seen a significant increase in recent years. According to the most recent statistics published by the International Centre on the Settlement of Investment Disputes (ICSID) Secretariat, African states are today party to just under 15 per cent of pending arbitrations.14 Most of these disputes relate to the energy and natural resources sectors.15 Only three new cases were registered in ICSID against African sub-Saharan states in 2016 (6 per cent of the new cases registered in 2016), while four arbitrators of African nationalities (and one of dual nationality) were appointed in 2016.

The increasing number of investment disputes involving African states can be attributed to a number of factors. There is an inevitable corollary between increased investment activity anywhere and increased investment-related disputes. The past decade has also seen an increase in the number of bilateral investment treaties (BITs) signed by African states, as well as an increasing number of investment codes that incorporate similar protections. In parallel, investors worldwide are increasingly both aware of the availability of investment arbitration and willing to bring such claims. Finally, a further factor which has contributed to this growth is a renewed effort on the part of a number of African countries to crackdown on corruption. In a number of instances, these efforts have resulted in the cancellation of contracts and projects, with investors seeking remedies pursuant to BITs.16 

Investment arbitration is thus increasingly in the spotlight in Africa. Concerns raised by civil society groups about transparency of investor-state arbitration proceedings coupled with concerns that poor and heavily indebted states are at a significant disadvantage in disputes against well-funded investors have led to questions about the balance of power in these disputes. These concerns are part of a global reassessment of investment arbitration that has given rise to changes in approach in Africa, as some states seek to modify the investment protection mechanisms available. 

For example, in November 2015, South Africa concluded its process for the termination of its BITs with the approval of a new domestic law (not yet in force) that gives preference to mediation and state courts over international arbitration.17 The law limits the South African government’s consent to international arbitration to circumstances where domestic remedies have been exhausted. Even more radically, consent to arbitrate applies only to state-to-state arbitration, not investor-state arbitration.18 This approach, which has been subject to criticism from both opposition parties and the international sphere, has been adopted to redress what South Africa’s Trade Minister termed ‘inconsistent and unpredictable outcomes’.19 

Development of new institutions and growth of existing institutions 

Alongside the growth in the number and importance of both commercial and investment arbitrations involving African parties, the proliferation of arbitral centres across Africa is testament to the increasing importance of arbitration as a means of dispute resolution on the continent. In the next section, we evaluate some of the challenges and opportunities that these institutions face as competition grows in the African continent.

The Maghreb

Northern Africa has had a strong arbitration scene for a number of years, notably in Morocco and Egypt. 

The recent inflow of foreign law firms to Casablanca demonstrates the keen interest in the Moroccan market.20 Morocco benefits from its strategic gateway position between Africa and both Europe and North America, making it a favourable entry point for investment into Africa. Together, these factors create a persuasive narrative for the viability of Morocco to become a hub for African disputes. 

The Casablanca International Mediation and Arbitration Centre (CIMAC), for example, has set out its bold ambition to become the reference point for international dispute resolution, not only in the region but also for the entire African continent. Such ambition was shown with the organisation of an inaugural arbitration conference in 2014, Casablanca Arbitration Days, which attracted a number of high-profile guest speakers from the global arbitration community and was then supported by the LCIA, the ICC, and the International Centre for Dispute Resolution (ICDR). 

Casablanca’s ambition to entrench itself as an arbitration hub is further illustrated by CIMAC’s wish to elect a foreign chair, in order to strengthen the centre’s independence, credibility and its regional and international influence.21 CIMAC is also looking to establish an experienced panel of arbitrators and experts who would be familiar with its rules and in a position to offer the international business community a viable alternative to arbitrating in Paris or London, which typically would be significantly more expensive. 

For Casablanca to succeed as an arbitration centre, however, it will need to address several key issues. In common with a number of African institutions, at the time of writing CIMAC lacked a good website to explain the role and aspirations of the Centre and, crucially, where its rules could be published in various languages. Moreover, to succeed as an arbitration hub, Morocco would need to allow court submissions in arbitration-related matters to be submitted in French. Currently, all court submissions must be in Arabic, limiting the willingness of international companies and many states to use a Moroccan seat for non-Arabic language arbitrations. Second, Morocco will need to ensure that arbitration-related court applications will be directed to a specialised division of the courts such that local judges develop the requisite expertise through training and experience. Third, Morocco will need to amend its current arbitration law – dating back to 2008 – in order to make its provisions more consistent with those now usually found in arbitration-friendly jurisdictions, for example, in respect of the grounds available for challenging an award. 

To the east, the Egyptian capital is home to the oldest African arbitration institution, the Cairo Regional Centre for International Commercial Arbitration (CRCICA). Created in 1979 by the Asian-African Legal Consultative Organisation, CRCICA was ranked as one of the leading arbitration centres across the African continent by the African Development Bank in a survey published in April 2014. CRCICA’s status is supported by its on-going cooperation agreement with ICSID.22

During the first quarter of 2016, CRCICA registered a total of 39 new cases.23 In 2016, its caseload included disputes arising in a variety of sectors, with construction disputes topping the list. Like Morocco, however, Egypt would also benefit from a review of its arbitration law. CRCICA’s efforts towards modernisation of its arbitration rules, in particular with regard to novel mechanisms implemented by other institutions (eg, emergency arbitration or third-party funding), are to be welcomed. CRCICA has already shown its clear intent to enhance transparency, through the publication of awards in an anonymised form and quarterly newsletters providing key statistical information.24 

East Africa

East Africa has a promising story to tell when it comes to the growth of arbitration in Africa. Noteworthy progress in developing arbitration has taken place in Rwanda, Ethiopia, Tanzania and Uganda. 

For example, in Rwanda, Kigali has clearly shown its will to win a slice of the arbitration market, notably with the Kigali International Centre of Arbitration (KIAC).25 Administrating cases under its own Rules and under the UNCITRAL Rules, it provides both a domestic and an international panel of arbitrators. KIAC actively seeks to attract internationally renowned arbitrators, as shown by its decision to revamp both panels in May and June 2016. KIAC now has a panel of 63 international arbitrators and a total of 54 domestic arbitrators.26 As of July 2016, KIAC had registered a total of 40 cases since its creation, registering 12 cases in the past year of 2015–2016.27 While historically the majority of cases before KIAC relate to infrastructure, in 2016 the services sector saw the greatest number of new arbitration claims.28 

Kenya, however, is the shining star of the East Africa market. Since its amendment of the Arbitration Act in 2009,29 and the drafting of the 2010 Constitution (which promotes arbitration and other ADR mechanisms), Kenya has shown a strong appetite to be at the forefront of the development of arbitration in Africa. Steadily building up a strong arbitration practice to match its position as the region’s commercial and investment hub, Kenya has made a number of significant reforms through the concerted efforts of both government and the private sector. These have culminated in the establishment of the Nairobi Centre for International Arbitration (NCIA) in 2013.30 The Centre was officially inaugurated at the first International Arbitration Conference in Central and East Africa held in December 2016. President Kenyatta (in a speech read on his behalf by the Kenyan Cabinet Secretary of the National Treasury) observed that ‘the inauguration of the Nairobi Centre for International Arbitration today will mark another milestone in a journey to transform the way we do business in Kenya. We are committed to transforming the lives of our people and the realisation of the final agenda for Africa’s emancipation and rapid sustainable development’.31

South Africa

The development of arbitration in South Africa has been held back by its outdated arbitration laws, which have been unreformed since 1965. However, 2016 marked the launch of a landmark development in the landscape for international arbitration in South Africa. In April 2016, the Minister of Justice published a draft International Arbitration Bill, since approved by the Cabinet,32 but yet to be passed by Parliament and signed into law by the President.33 The Bill’s ambition, once enacted, is to align the administration of arbitrations in South Africa with international arbitration best practices.34 The law will distinguish between international arbitrations and domestic arbitrations. While the latter will continue to be governed by the Arbitration Act of 1965, the UNCITRAL Model Law will be applicable to international arbitrations.35 The law is considered by many to be a long overdue step towards making South Africa a key centre for international arbitration in Africa.36 However, until the entry into force of the Act, which is expected to be some time in 2017, the current legislative regime will continue to apply and it remains to be seen how the South African courts will interpret and implement the supervisory powers granted to them in the Model Law.

With respect to investment arbitration, the South African Government has taken steps to terminate a number of its BITs, in favour of a general framework for the settlement of investment disputes under the new Protection of Investment Act 2015.37 The Act, which has yet to come into force,38 seeks to shift the resolution of investor-state disputes away from arbitration in favour of mediation and the South African court. An investor may have recourse to arbitration under South African law if there is an arbitration clause in a relevant contract with the South African government.

Subject to the consent of the South African state, the Act also permits state-to-state arbitration between South Africa and a foreign investor’s home state. 

South Africa’s leading arbitral institution, the 20-year old Arbitration Foundation of Southern Africa (AFSA), has achieved a degree of success and has demonstrated a keen desire to develop further. Following an ambitious legal exchange programme with China, in August 2015, AFSA launched a new international arbitration centre dedicated to the resolution of commercial disputes between Chinese and African parties – the China Africa Joint Arbitration Centre (CAJAC). This new centre, established in Johannesburg, is the result of an agreement between AFSA, AADR, the Association of Arbitrators of Southern Africa, and the Shanghai International Trade Arbitration Centre. The CAJAC does not publish details of its caseload; it is therefore difficult to assess its progress but it certainly has the potential to boost South Africa’s presence on the international arbitration scene.

West Africa

Given the significant international investment in West Africa, notably in the oil and gas sector, the region has been relatively slow to adopt the dispute resolution machinery typically sought by foreign investors. 

Nigeria is the only country in the region to have a modern arbitration law, the Arbitration and Conciliation Act (ACA), based on the UNCITRAL Model Law. Further, Nigerian courts have also developed a strong line of arbitration-friendly jurisprudence. Nigeria is home to various arbitral institutions, including the Lagos Regional Centre for International Commercial Arbitration (LCRICA), the Maritime Arbitrators Association of Nigeria, and the Lagos Court of Arbitration (LCA). Established in 1989, the LCA amended its Rules in 2013 to introduce its own form of emergency arbitrator procedure. 

A few hundred kilometres to the west, interest in arbitration has been growing in Ghana, especially in the business community, as the traditional court system can be considered to be slow, often ineffective and expensive. A recent corruption scandal has done little to assuage these views. In September 2015 a journalist released an undercover report into corruption of the judiciary resulting in a series of resignations, dismissals and the investigation of over 30 judges.39

Arbitration is well placed to be the beneficiary of the public’s desire to see efficient and impartial decision-making in the country.

There are two main arbitration bodies in Ghana: the Ghana Arbitration Centre (GAC) and the Ghana Association of Chartered Mediators and Arbitrators (GHACMA). Both deal mainly with domestic arbitrations. The passing of the Alternative Dispute Resolution Act 2010 provides for both arbitration and mediation, and the courts themselves are empowered to encourage the use of ADR. The Act acknowledges the traditional role of arbitration in Africa, with a full chapter dedicated to customary arbitration.40 Attitudes in the country are changing, and the business community is increasingly seeking the inclusion of arbitration and ADR clauses in contracts.

Francophone Africa – OHADA

The Organisation for the Harmonization of Business Law in Africa (OHADA) was set up by treaty in 1993 to harmonise commercial law in the African franc zone. As part of this remit, OHADA established a dual track for arbitration: institutional arbitration administered by the Common Court of Justice and Arbitration (CCJA) and ad hoc arbitration where the CCJA acts as the Supreme Court for the purposes of applications for recognition, enforcement and annulment of awards. 

As it nears its 25th anniversary, the CCJA has made considerable efforts towards modernisation, including the signature of various cooperation agreements, in particular a partnership with the ICC signed in June 2016. Under this partnership, the ICC will deliver training across the region and co-host an annual conference on alternative dispute resolution each year in a different OHADA country.41

The CCJA appears to have embraced a strong commitment to ensuring modern procedures, including meeting the demands for greater transparency.42 The decision in Getma v Republic of Guinea, in which Guinea sought to set aside an OHADA arbitration award made against it, demonstrates the CCJA’s efforts to achieve greater transparency in the arbitral process.43 In this case, Guinea was successful in setting aside the award before the CCJA on grounds that the fees charged by the arbitral tribunal (which were set out in a contract between the parties and the arbitrators entered into at the outset of the arbitration) exceeded those permitted under the mandatory fee scale. The CCJA’s published decision sends parties and arbitrators a clear message that all must adhere to OHADA’s rules to ensure a level playing field for arbitration users. Following the CCJA’s decision to set aside, in June 2016 the New York courts refused to enforce the award in the United States, where the exequatur was sought, ruling that ‘[n]one of Getma’s public policy-oriented contentions compel the Court to go against the grain and ignore the CCJA’s annulment of the arbitration award’. However, meanwhile, the arbitrators went to the French courts seeking payment of their unpaid fees. Notwithstanding the annulment of the award, the French courts upheld the offending fee agreement and ordered Getma to pay the entirety of the arbitrators’ fees, including those owed by the Republic of Guinea.44 

The various Getma decisions have sparked lively debate amongst practitioners, including at the ICCA 2016 Congress where it was suggested that the CCJA should consider reviewing its fees schedule or by amending its rules to permit specifically negotiated fee arrangements.45 However, given that the costs of many European-based arbitration institutions are considered prohibitive for parties in Africa, the CCJA’s decision currently provides some comfort to users of OHADA arbitration that costs remain within their reach. While an amendment to the current fees schedule would be a means to attract internationally renowned arbitrators to consider accepting CCJA arbitration appointments, any change to the current fee scale may make OHADA arbitration more difficult to access, notably where OHADA states themselves might wish to commence proceedings as claimants. This would potentially undermine the very remit of the CCJA to facilitate efficient and affordable dispute resolution in the region. While the CCJA’s decision in Getma attracted criticism from certain commentators who saw the decision as a sign of the CCJA’s bias in favour of member states, this suspicion was shown to be entirely misplaced when, in July 2016, the CCJA upheld a US$28 million award against Niger.46

In 2016, OHADA and the CCJA were subject to further scrutiny, this time in relation to the CCJA’s president, Marcel Serekoisse-Samba who, following an audit, was suspended for mismanagement of the institution’s finances. The president of the CCJA plays a key role in certifying the enforcement of CCJA arbitral awards within the OHADA region, as well as presiding over all applications made to annul any CCJA awards. Abdoulaye Issoufi Touré, formerly vice-president of the CCJA, is now acting president pending the selection of a permanent replacement for the post.47

Against this backdrop, OHADA continues to make significant progress in ensuring that it has modern and robust arbitration procedures. The Uniform Act of Arbitration (UAA) – which sets out the rules for all arbitrations seated in the 17 OHADA countries and guarantees that OHADA-governed arbitral awards will be enforceable in all member states – is currently being revamped. OHADA is acutely aware of the need to modernise the UAA and in 2016 initiated the revision process. The revision of the rules offers OHADA the opportunity to iron out certain drafting ambiguities in the current version. In particular, the interaction between the UAA and other arbitration rules requires clarification. As one commentator notes: ‘if the parties to a contract which is to be performed in the OHADA zone provide for CCJA arbitration and select as seat of the arbitration a place outside the OHADA area, the CCJA Arbitration Rules will be applicable; however, the arbitration will be subject not to the UAA, but to the law of the seat of arbitration.’48 Until this ambiguity is rectified, the risks of satellite litigation remain high, which could prove to be a deterrent to the use of OHADA arbitration.

Attitudes to enforcement

Enforcement of international arbitral awards in Africa is considered by many – not without some reason – to be complicated and difficult.49 However, the reality is in fact more positive and nuanced than is generally thought. The vast majority of African states are party to the New York Convention or to other multilateral treaties that facilitate the enforcement of awards. Attitudes of local courts are, however, key and great strides have been made in a number of jurisdictions to train the judiciary to deal with applications relating to arbitral awards. Further efforts need to be made across the continent to maintain this momentum. According to a recent survey, the enforceability of awards is the number one reason why parties turn to arbitration.50 It is therefore fundamental that awards be enforced easily in Africa, even where the state is the losing party. 

It is incumbent upon all African states to ensure that they have a modern arbitration law which deals effectively with enforcement procedures, supported by a consistent and published body of case law supporting the enforcement process.51 For the OHADA region, the revision of the UAA is expected to update the current provision on enforcement to bring them into line with international best practice. Such measures will play a critical role in encouraging the use of international arbitration in Africa.

Opportunities and challenges 

Arbitration is now firmly entrenched as a viable alternative to the courts in many jurisdictions across Africa. The developments seen in recent years have helped establish more reliable and consistent practices and procedures. There is, however, more work to be done. There are still relatively few international arbitration cases heard on African soil (in 2015, only four ICC arbitration cases were heard in African countries),52 and the number of African arbitrators appointed on international cases remains woefully small. The ‘delocalisation’ of African-related arbitration proceedings, to paraphrase Judge Yusuf’s words during his intervention at the ICCA conference,53 is doubly damaging to Africa, as it prevents arbitration from contributing to the rule of law and impedes the growth of arbitration in African countries. 

In order to cement the progress made to date, three key evolutions are needed. The first is the modernisation of domestic arbitration laws, which is one of the factors influencing the choice of an arbitral seat.54 The second is that local judges and lawyers must acquire deeper knowledge of arbitration. The third is to ensure that states, and government lawyers in particular, are fully aware of the upsides – as well as the downsides – of arbitration as an effective means of dispute resolution.

This capacity building is being carried out across Africa and is led, in large part, by non-profit organisations such as Africa International Legal Awareness and the African Legal Support Facility. Capacity building is also being implemented through international cooperation agreements, such as the one concluded between the Permanent Court of Arbitration and the African Union. These cooperation agreements aim to assist with the development of arbitral infrastructure and engagement of the regional arbitration community by participating in educational outreach and training programmes throughout the continent.

The creation and the modernisation of various arbitration institutions on African soil are obviously two very important steps to enable arbitrations to be heard on the continent. Communication remains a challenge, however, and a quick fix would be to ensure that institutions maintain user-friendly websites where the latest arbitral rules and details of arbitrator panels can be found. 

According to a recent survey, the most commonly cited challenge by parties when conducting arbitration in Africa is the availability and experience of arbitrators.55 According to Judge Yusuf, ‘African states have failed to appoint an African arbitrator or conciliator in 69 out of 85 existing ICSID disputes involving the continent’.56 Training, in part, is the answer, but also the appetite for greater diversity in the pool of arbitrators is not solely an African problem – it is an issue with which the wider arbitration community continues to grapple.

Although to date international corporates may have been reluctant to have their disputes heard in Africa, arbitration in Africa now finds itself at a tipping point. With increased attention on the continent’s arbitral centres, improved legislative frameworks underpinning international commercial and investment arbitration, and better resourcing and training, Africa can secure for itself a place on the global arbitration map.

Notes

  1. For details see www.soas.ac.uk/news/newsitem114170.html
  2. African Economic Outlook 2016, p. 24.
  3. The World Bank has thus projected a rebound in 2017/2018 (www.worldbank.org/en/region/afr/overview ), while the African Economic Outlook 2016 has underscored that Africa’s economic growth ‘is supported by domestic demand, improved supply conditions, prudent macroeconomic management and favourable external financial flows’ (p. 24). 
  4. ICC Statistical Report 2015, ICC Bulletin No. 1, 2016.
  5. According to the LCIA Registrar Report of 2015, arbitrators appointed in new cases have included arbitrators of Nigerian and South African nationalities.
  6. A. Carlevaris, T. Ogunseitan and D. Diawara, ‘Africanisation of International Arbitration’, TDM – Special Issue, October 2016, vol. 13, iss. 4 ; R. D. Soopramanien and S. O. Soopramanien, ‘Spotlight on Africa : Problems of Legitimacy and Inclusivity in International Arbitration’, TDM – Special Issue, October 2016, vol. 13, iss. 4.
  7. The ICC statistics do not identify if these figures include multiple appointments of the same arbitrator.
  8. ICC Statistical Report 2015, ICC Bulletin No. 1, 2016, p. 14.
  9. See www.arbitrationpledge.com/
  10. Investment in Africa’, The Economist, 30 May 2015, available at www.economist.com/news/economic-and-financial-indicators/21652274-investment-africa.
  11. Nan, ‘China plans $40b investment in Nigeria’, The Guardian (Nigeria), 11 January 2017.
  12. ‘Chinese FDI to Africa rose to $3.5 billion in 2013, and nearly all African countries are benefiting from China’s participation today’ (M. Diop, Y. Li, L. Yong, H.E. A. Ahmed Shide, ‘Africa Still Poised to Become the Next Great Investment Destination’, The World Bank, 30 June 2015, available at www.worldbank.org/en/news/opinion/2015/06/30/africa-still-poised-to-become-the-next-great-investment-destination).
  13. AFP, ‘Abe pledges Japan will invest $30 billion in Africa by 2018’, 28 August 2016, Japan Times.
  14. ‘The ICSID Caseload - Statistics (Issue 2017-1)’, available on https://icsid.worldbank.org/en/Pages/resources/ICSID-Caseload-Statistics.aspx.
  15. Eg, Cortec Mining Kenya Limited, Cortec (Pty) Limited and Stirling Capital Limited v Republic of Kenya (ICSID Case No. ARB/15/29); Total E&P Uganda BV v Republic of Uganda (ICSID Case No. ARB/15/11); BSG Resources (Guinea) Limited and BSG Resources (Guinea) SÀRL v Republic of Guinea (ICSID Case No. ARB/15/46); Standard Chartered Bank (Limited) Hong Kong v United Republic of Tanzania (ICSID Case No. ARB/15/41).
  16. See for example the following cases where corruption are alleged in the investment proceedings, Menzies Middle East and Africa SA and Aviation Handling Services International Ltd v Republic of Senegal (ICSID Case No. ARB/15/21) and BSG Resources Limited v Republic of Guinea (ICSID Case No. ARB/14/22). See also ‘Crying foul in Guinea’, The Economist, December 2014, available at www.economist.com/news/business/21635522-africas-largest-iron-ore-mining-project-has-been-bedevilled-dust-ups-and-delays-crying-foul. The authors of this article are counsel in this case, the issue is thus simply mentioned here and will not be addressed in further detail in this article.
  17. Protection of Investment Act 22 of 2015, Republic of South Africa, available at www.gov.za/sites/www.gov.za/files/39514_Act22of2015ProtectionOfInvestmentAct.pdf.
  18. Article 13(5): ‘The government may consent to international arbitration in respect of investments covered by this Act, subject to the exhaustion of domestic remedies. The consideration of a request for international arbitration will be subject to the administrative processes set out in section 6. Such arbitration will be conducted between the Republic and the home state of the applicable investor.’
  19. Minister Rob Davies : Debate on the Protection of Investment Bill, 2015, in Parliament by Minister of Trade and Industry, available at www.gov.za/speeches/minister-rob-davies-debate-protection-investment-bill-2015-17-nov-2015-0000.
  20. Jean-Yves Gilg, ‘Morocco: The new gateway to Africa’, African Law and Business, 7 May 2015. 
  21. Laurent Gouiffès and Thomas Kendra, ‘Launch of the Casablanca International Mediation and Arbitration Centre in Morocco’, available on www.lexology.com/library/detail.aspx?g=a00e1d1f-632d-4e39-a626-71a76baa064f.
  22. ‘ICSID Concludes Cooperation Agreement with the CRCICA’, available at https://icsid.worldbank.org/en/Pages/News.aspx?CID=209.
  23. ‘CRCICA Recent Caseload: Construction Cases rank on top in the second quarter of 2016’, http://crcica.org/Arbitration_Statistics.aspx.
  24. Mohamed Abdel Raouf and Daila Hussein, ‘Chapter 3: The Cairo Regional Arbitration Centre’, in E. Onyema, The Transformation of Arbitration in Africa: The Role of Arbitral Institutions, Kluwer, 2016, para. [C].
  25. www.kiac.org.rw/. KIAC has expressly made a considerable effort to promote its arbitration practice, as is illustrated in its KIAC Annual Report, July 2015/2016, pp. 7-12, available at www.kiac.org.rw/IMG/pdf/annual_rept_2015_-2016_web.pdf
  26. KIAC Annual Report, July 2015/2016, p. 6, available at www.kiac.org.rw/IMG/pdf/annual_rept_2015_-2016_web.pdf
  27. KIAC Annual Report, July 2015/2016, p. 1, available at www.kiac.org.rw/IMG/pdf/annual_rept_2015_-2016_web.pdf
  28. KIAC Annual Report, July 2015/2016, p. 3, available at www.kiac.org.rw/IMG/pdf/annual_rept_2015_-2016_web.pdf.
  29. E. Torgbor, ‘Chapter 3.5: Kenya’, in L. Bosman (ed), Arbitration in Africa: A Practitioner’s Guide, Kluwer Law International, 2013, pp. 219–222. 
  30. ‘About NCIA’, www.ncia.or.ke/about-ncia/.
  31. ‘Nairobi arbitration centre inaugurated as Kenya hosts mediation conference’, www.mygov.go.ke/, 6 December 2016.
  32. Draft International Arbitration Bill Heading Back to Cabinet, sabinetlaw.co.za, 17 October 2016 (www.sabinetlaw.co.za/justice-and-constitution/articles/draft-international-arbitration-bill-heading-back-cabinet).
  33. Keynote Address by the Deputy Minister of Justice and Constitutional Development, the Hon JH Jeffery, MP, at the International Arbitration – the Dawn of a New Era in South Africa Seminar, held at the Johannesburg Stock Exchange Auditorium, Johannesburg, 14 October 2016.
  34. South African Department of Justice and Constitutional Development’Deputy Minister John Jeffery: International Arbitration – the Dawn of a New Era in South Africa Seminar’, www.gov.za/, 14 October 2016.
  35. Article 6(1) of the Draft Bill provides that, with regard to international arbitration, ‘the Model Law applies in the Republic subject to the provisions of this Act’.
  36. D.M. Ziyaeva and M. Jonker, ‘Legal Trends and Developments of International Arbitration in South Africa’, TDM – Special Edition, October 2016, vol. 13, iss. 4.
  37. Protection of Investment Act 22 of 2015, published in the Government Gazette on 15 December 2015.
  38. Keynote Address by the Deputy Minister of Justice and Constitutional Development, the Hon JH Jeffery, MP, at the International Arbitration – the Dawn of a New Era in South Africa Seminar, held at the Johannesburg Stock Exchange Auditorium, Johannesburg, 14 October 2016.
  39. Ruth Greene, ‘Ghana gets tough on judicial corruption’, International Bar Association, available at www.ibanet.org/Article/Detail.aspx?ArticleUid=2c8eb0c5-3ba2-4619-a7ac-b5c2d117633d.
  40. Alternative Dispute Resolution Act of 2010, part three.
  41. Press Release of OHADA, ‘The Permanent Secretary of OHADA, Professor Dorothé SOSSA signs a Partnership Agreement with the President of the International Court of Arbitration of the International Chamber of Commerce of Paris, Mr. Alexis MOURRE’, available at www.ohada.org/attachments/article/1460/OHADA%20%E2%80%93%20ICC%20Cooperation%20.pdf
  42. The Queen Mary International Arbitration Survey of 2015 highlighted that institutions could principally improve international arbitration by (1) communicating information about the average length of time or the institution’s arbitrations, (2) publish awards in a redacted form and / or as summaries, (3) increase transparency about how arbitrator appointments are made by the institutions (Chart 18, p. 23). 
  43. See http://globalarbitrationreview.com/news/article/34474/tribunal-criticises-court-treatment-guinea-award/; http://kluwerarbitrationblog.com/2016/02/10/a-step-back-for-ohada-arbitrations/.
  44. French Court of Cassation Civ. 1e, 1 February 2017, No. F15-25.687.
  45. Allison Ross, ‘ICCA Mauritius lookback: Africans on Africa’, Global Arbitration Review, 18 August 2016.
  46. CCJA, 14 July 2016, Decision No. 141/2016, Etat du Niger c. Société Africard Co. Ltd – available at https://pacer-documents.s3.amazonaws.com/36/176769/04515708263.pdf
  47. Allison Ross, ‘President of OHADA Court suspended’, Global Arbitration Review, 15 July 2016.
  48. Athina Fouchard Papesfstratiou, ‘OHADA arbitration – A Critical Analysis’, TDM – Special Edition, October 2016, vol. 13, iss. 4.
  49. Alexander Brabant and Ophélie Divoy, ‘The Enforcement of International Arbitral Awards in OHADA Member States – The Uniform Act on Arbitration is Not the Smooth Ride it Was Designed to Be’, TDM – Special Edition, October 2016, vol. 13, iss. 4.
  50. Queen Mary 2015 International Arbitration Survey: Improvements and Innovations in International Arbitration, 2015, p. 6.
  51. http://ohada.org/appels-doffres-sp/fr/sp/actualite/3828,avis-manifestation-interet-pour-la-revison-de-lacte-uniforme-sur-larbitrage.html.
  52. ICC Statistical Report 2015, ICC Bulletin No. 1, 2016.
  53. Cited in Sebastian Perry, ‘Time to ‘relocalise’ arbitration in Africa, ICCA told’, Global Arbitration Review, 10 May 2016.
  54. Queen Mary School of International Arbitration, Survey ‘Choices in International Arbitration’, 2010, available at www.arbitration.qmul.ac.uk/docs/123290.pdf
  55. www.simmons-simmons.com/~/media/Files/Corporate/External%20publications%20pdfs/Africa%20Insight.pdf; p. 112.
  56. Lacey Yong and Alison Ross, ‘Africa must have more representation on tribunals, says Somali judge’, GAR, vol. 10, iss. 6, 15 October 2015.