In 1997, Judge Charles Brower published a piece in The American Journal of International Law describing the “three phases” of arbitration in the Middle East.
The first phase, stretching from World War II to the 1970s, saw cases ending badly for the Arab side, usually a state. (Petroleum Development (Trucial Coast) Ltd v Sheikh of Abu Dhabi is a particularly good example of just how badly some of those cases went.) European arbitrators gave short shrift to arguments deriving from shariah law. The second phase was a turning away from arbitration.
But only briefly. The concept of private dispute resolution is in fact a strong part of Arab culture. The Bahraini Minister of Justice, Sheikh Khalid bin Ali Al Khalifa, once said, “Arbitration harmonises with an Arab’s psychological make-up – which is imbued with sentimentalism and which is more at home with a spirit of peace, goodwill and conciliatory brotherhood.”
So after a “winter”, the third phase has seen a flowering of local arbitration providers. Things have reached the point where, as Reza Mohtashami (a GAR editorial board member and Freshfields partner) noted, speaking at a GAR Live conference in Istanbul, “The tiny island of Bahrain is in fact home to three arbitral centres.”
Almost 20 years after Brower’s article ran, this third phase is still in full bloom – 2014 saw a Saudi Arabian resolution to establish a new commercial arbitration centre in Riyadh while authorities in Dubai are to set up a maritime arbitration centre for the UAE. Whether or not we are entering a possible fourth phase – in which local providers expand their caseloads, successfully atomise the market and trump the big international centres as the first choice for investors – is open to debate.
A key recent development that colours this discussion is the rise in investment treaty disputes across the Middle East and North Africa.
Traditionally, the region has generated more commercial disputes than investment treaty cases, perhaps because much investment in the region has been in sectors of the economy where the state has a presence, enabling aggrieved investors to sue under contracts rather than treaties.
The rise in treaty cases doubtlessly owes something to the political sea change of the Arab Spring and the consequent reassessment of contracts that comes with new regimes. But that’s not the whole story: increasing awareness of the treaty process among governments and rises in outgoing investment were both highlighted by speakers at GAR Live Dubai in 2014.
So what are the options for investors, and are they worth using?
Sadly, it’s not quite that simple. The courts across the Middle East are the weak link, rather than the arbitration providers. According to highly respected local arbitration figure Essam Al Tamimi, the problem is “a persistent lack of certainty” from the courts. “You will bring the same case you brought last year – and which got a good result – [then] put it back in the same pipeline and get a bad judgment, different from the previous one.”
He added that, with arbitration recently becoming a compulsory part of the legal syllabus in the Arab League, “90 per cent of judges will be properly trained in it, not just 10 per cent like now.”
States are also finding ways to take their courts out of the equation: by creating special financial zones with their own “common” law borrowed from the wider world (the DIFC in the UAE and the QIFC in Qatar). Some use the concept of “the virtual seat” (you can nominate the law from anywhere in the world to apply). The presence of those zones, with their own courts staffed by judges from elsewhere is expected to improve the standard of courts around the region.
So the region’s future, as a seat, is brighter. But for now, parties with options might decide not to risk the region.
Nassib Ziadé – the Chilean–Lebanese CEO of the Bahrain Chamber for Dispute Resolution (BCDR-AAA) and a former acting secretary general of ICSID – told a recent GAR Live Dubai that Arab investors seeking redress from a state in the region should opt for administered rather than ad hoc arbitration proceedings overseen by a well-known institution that would ensure “a public perception of legitimacy”.
So far, ICSID has been a major beneficiary of the treaty case rise, posting a 4 per cent rise in new matters from the MENA region from 2013–2014; more than twice the volume of traditional treaty hotspot Latin America.
However, the region has also attracted joint ventures between a Middle Eastern state and an international arbitral brand name (such as the AAA-ICDR or the LCIA), more of which may be announced in the future.
Home-grown institutions are also gaining greater market share. The Cairo Regional Centre for International Commercial Arbitration (CRCICA) is named as a possible administrator of investment arbitration proceedings in a number of inter-Arab treaties, and was the inaugural winner of GAR’s up-and-coming regional centre award in 2014.
So in time, the Middle East may be seen as a more dependable place to go for arbitration.
That’s not to say things are quiet. Thanks to the courts’ shortcomings and a downturn in the local economy a few years back, arbitration providers are more than busy. According to Al Tamimi, a “veritable army” of lawyers, arbitrators, experts and support services are at work on disputes in the region. One source recently estimated that there are 750 arbitrations a year in the UAE alone (a combination of domestic and “foreign-related” work).
Institutions in sub-Saharan Africa, while less prominent than their neighbours to the north, have their own momentum. For example, Mozambique didn’t have an independent legal profession until 1990, meaning that its entire judicial system had to be built from scratch following the constitutional reforms of that year. Currently, the country has one lawyer for every 20,000 people. But 2001 saw the arrival of an arbitration institution – the Centro de Arbitragem, Concilição e Mediação – buoyed by Mozambique’s attractiveness as a foreign investment destination (among the top six in the region) as well as a proactive legal fraternity willing to take the market seriously; the centre has around 200 arbitrators on its panel.
Similar ingredients are currently at play in Djibouti, which is home to one of Africa’s largest ports, and where an international team of big name academics and practitioners plans to launch an international arbitration centre in 2018. “Big name” here isn’t just a throwaway term; Columbia Law School professor George Bermann, French professor of international law at Sciences Po Jean Yves Gontier, former White House legal adviser Ian Bassin, former ambassador of Djibouti to France and UNESCO Rachad Farah, IGAD executive secretary Mahboub Maalim, and president of the Djibouti Chamber of Commerce Youssouf Moussa Dawaleh are all working on the development of the International Arbitration and Amicable Dispute Resolution Centre.
Here is our guide to the current choices for regional arbitration in the Middle East and Africa.
- Cairo Regional Centre for International Commercial Arbitration (CRCICA)
- Dubai International Financial Centre – London Court of International Arbitration (DIFC–LCIA)
Worth a closer look
- Abu Dhabi Commercial Conciliation and Arbitration Centre (ADCCAC)
- Bahrain Chamber of Dispute Resolution (BCDR)
- Dubai International Arbitration Centre (DIAC)
- London Court of International Arbitration – Mauritius International Arbitration Centre (LCIA–MIAC)
- Qatar International Centre for Conciliation and Arbitration (QICCA)
- Tunis Centre for Conciliation and Arbitration (CCAT)
- Common Court of Justice and Arbitration (CCJA)
- Kigali International Arbitration Centre (KIAC)
CAIRO REGIONAL CENTRE FOR INTERNATIONAL COMMERCIAL ARBITRATION (CRCICA)
Why is it on the white list?
The CRCICA is the “granddaddy” of arbitration in the region, to quote one source. It’s been operating for 35 years, during which time it has administered more than 1,000 cases, many with an international element. Other local organisations look to it for inspiration.
Who set it up?
The CRCICA was founded by the Asian-African Legal Consultative Organisation (which has since founded four other regional arbitration centres (the Kuala Lumpur Regional Centre for Arbitration (KLRCA); the Lagos Regional Centre (RCICAL); the Tehran Regional Centre (TRAC); and the Nairobi Regional Centre). But out of all of those, Kuala Lumpur and Cairo are the best known.
What are Cairo’s strengths?
It’s been operating for long enough to have encountered most situations at least once. It’s also well managed. Together these factors see it described as “the current class of the field” in the Middle East.
Who got it to this point?
The CRCICA has had a string of highly respected directors. For many years it was led by the charismatic Mohamed Aboul-Enein, a former judge and law professor. His willingness to travel and participate in events around the world made the centre an early regional arbitration celebrity.
Tragically, Aboul-Enein suffered a fatal car accident in 2008, en route to an IFCAI meeting. He was succeeded by Nabil Elraby (an ex-diplomat and international judge) and then Mohamed Abdel Raouf, a protégé of Aboul-Enein. This year Ismail Selim took over as director.
What sorts of cases go to Cairo?
It varies – the size isn’t always earth-shattering, but there have been matters (in oil and gas, and telecoms) worth billions of Egyptian pounds. They’re pretty diverse in terms of origin too.
Where do its cases tend to come from?
It’s a true regional player. In 2016, the top sources of non-Egyptian parties were the UAE, Jordan, Lebanon, Libya, Saudi Arabia, the Cayman Islands, Italy, Germany, and Spain. the US, the British Virgin Islands, Lebanon and Turkey. This represents something of a change from recent years, when European companies were the major users of the centre, and a return to its more traditional, regional user base.
How busy is it?
In 2016, a record number of new cases – 91 in all, were filed. This was a big increase on 54 the year before and beat the previous high of 78 in 2012. Arbitration being arbitration it isn’t clear why there was a surge but it bodes well for the centre. Construction disputes formed the largest sub-category (23 new cases), followed by service contracts (20 cases) and then media and entertainment (10 cases).
And who gets appointed as arbitrator?
Arbitrators also tend to be from around the region. There is some suggestion that this is changing thanks to better rates of pay, but it’s early days. Parties have full autonomy over whom they appoint under the rules: there’s no list system and no need for approval from the centre either.
Who’s suggested it is getting easier to appoint internationals?
Caline Mouawad and Rocio Digon, two French lawyers, performed a critical assessment of CRCICA’s latest rules for the International Journal of Arab Arbitration. The rules changed the available rates of pay. The pair concluded that this development will “certainly persuade more arbitrators to accept appointments, which, in the medium and long term, will help the centre’s image and reputation”.
How ambitious is it?
It wants to be the “foremost administrator of cases relating to the Arab world”. One area it is trying to get into is sports disputes. In 2012, it signed an agreement with the Court of Arbitration for Sport in Lausanne (CAS) to host CAS cases. The centre’s 2014 figures listed one sports case on its books.
It’s also hoping to hear more cases with no connection to Egypt.
The centre noted with pride in its most recent report that CRCICA rules were inserted into to “purely international contracts (not involving any Egyptian party)” concluded by parties from Saudi Arabia, Jordan and Libya. Exactly how it knows this, the report didn’t say.
Does it run any educational programmes?
It’s been partnering with part of the ABA on a series of programmes aimed at newly qualified lawyers since 2009. More recently, it has started a series of four courses, one on each phase of an arbitration, working with the Cairo branch of the CIArb.
What sort of cases are particularly suitable to send there?
If administrative fees are an issue (not that common admittedly) it may be worth consideration. A survey in 2010 (published in GAR) by Louis Flannery and Benjamin Garel of Stephenson Harwood found it to be the most affordable of six arbitral institutions on fees. It did well when the survey was updated a few years later too.
There’s also a small enforcement advantage – at least locally. More significantly perhaps, its rules contain some useful elements that help to counteract local “worst practice”.
What sorts of worst practice?
Article 8/5 anticipates a common problem: the arbitrator who for whatever reason is bent on delaying the process. The Centre can reject a proposed appointee for a “past failure to comply with duties”, among other things – i.e., a bad track record.
The flipside of this is article 12. This allows the Centre to remove an arbitrator who is failing to act, or has become incapacitated. Both rules require at least one oral hearing to be held following any such substitution.
The Centre is also very proud of how carefully the rules translate the UNCITRAL model law into Arabic.
How do we know?
The centre has gone so far as to describe its work as “an original version” of the UNCITRAL package, because it has been so accurately translated.
Is it an IFCAI member?
Does its model clause make any default choices that should be highlighted?
How responsive is it as a case administrator?
It has a dedicated dispute management department. The staff can work in English, Arabic and French.
Has it been affected by the turbulence in Egyptian politics in the past few years?
The centre would say not, and the numbers seem to back this up: CRCICA registered 150 new cases over the Morsi years, many of which were entirely international. Since the new government took over the pace hasn’t slowed, with 54 new cases in 2015 alone.
What’s it working on now?
The centre is getting ready for its 40th birthday in 2019, and preparing a French version of its rules. It is also considering adding provisions on emergency arbitrators and consolidation to its current set. 2015 also saw the centre welcome two renowned members to its board: Nigeria’s Olufunke Adekoya and the Somalian vice president of the International Court of Justice, Abdulqawi Ahmed Yusuf. It also added three new members to its advisory body: Mohamed Gomaa, of counsel at Zaki Hashem & Partners in Cairo; Ismail Selim, head of dispute resolution at Al Tamimi & Company in Cairo; and Samaa Haridi at Hogan Lovells in New York. The trio will serve on the committee from 2016 to 2020.
Dubai International Financial Centre – London Court of International Arbitration (DIFC–LCIA)
When was it founded?
In 2008, but it’s fair to say it didn’t go full steam from the start.
Why was that?
There was a bit of a civil war with another Dubai arbitral institution, which suggested the DIFC–LCIA’s legal infrastructure didn’t work.
What infrastructure is that?
The DIFC–LCIA is part of the Dubai International Financial Centre, which is an autonomous jurisdiction with its own commercial laws.
After some denying of the problem, the DIFC–LCIA was rebuilt and relaunched in 2015 on a firmer statutory footing (it is now independent from the DIFC’s courts) Since then things have run more to plan. In its first full year, DIFC–LCIA ‘version 2.0’ registered 22 new cases in its first year, and a further 28 in the first eight months of 2017; in the years before that the centre had managed just 48 cases in total
How does it work?
Essentially, the LCIA–DIFC sits in an offshore jurisdiction located within Dubai. It is surrounded by common law, overseen by the DIFC court, which is staffed by judges from around the world, including Michael Hwang SC from Singapore and the deputy chief justice Sir John Chadwick from the UK.
If there is this DIFC court open Dubai, why does anyone need arbitration?
Privacy, mainly. the DIFC court sits in public whereas DIFC–LCIA arbitration (and other types of arbitration) can keep things behind closed doors.
What explains the uptick?
As always, it’s hard to pin it down to any one thing. A source within the centre says that a number of disputes relating to oil that were put on hold when the oil price dropped and during the US election have resumed, boosting the numbers.
Is it all running successfully now?
The big difference is it can do the bulk of the administration in Dubai now (previously it was routing the key decisions through London to avoid any problems). It can also finally have its own, locally based registrar. As of 1 May 2017 he is Robert Stephen, formerly a senior associate at Herbert Smith. He took over from Mohamed El Ghatit, who returned to private practice.
In October 2016, the DIFC–LCIA announced revised rules. The new rules provide for emergency arbitration; multiparty disputes; and make it possible to sanction counsel for poor conduct. They echo similar changes made by its parent organisation the LCIA.
What’s the link between the LCIA and the DIFC–LCIA?
They have a common DNA while being distinct; the DIFC–LCIA rules also mirror the LCIA’s, with a similar light touch when administrating, and the same payment of arbitrators by the hour. The LCIA’s illustrious court serves both.
Why not go straight to the parent in London?
Convenience. There’s also – on some occasions – an enforcement advantage. If enforcement is envisaged in greater Dubai (or another emirate), the DIFC–LCIA takes a slight shortcut. At the risk of oversimplifying, it can be enforced as a judgment of the DIFC court (which its Dubai counterparts will recognise directly). It thereby skips the possibility of an “against public policy” challenge, which would be a risk with a standard New York Convention enforcement.
Has that been demonstrated to work?
Are there any other benefits?
If an arbitration is seated in the DIFC, it avoids the need for the arbitrators to be physically present in the Emirate to sign the award. Of course, it doesn’t have to be a DIFC–LCIA arbitration. Anyone who wants can nominate the DIFC as seat (see recent developments at the DIAC below).
Who uses it?
Most cases feature an Emirati and an international (ie, non-UAE) party.
Who can I appoint as arbitrator?
Anyone, subject to an LCIA rule that he or she has certain qualifications. But in keeping with the LCIA’s light-touch philosophy, parties can waive that rule. If it’s making the appointment itself, the DIFC–LCIA has the LCIA’s vast reservoir of experience (and databases) to draw on.
Are there any pitfalls or default selections to watch out for?
Pitfalls, no. The model clause makes a few choices you might want to adjust: one arbitrator, DIFC seat, use of English and so on.
How many cases does it get per year?
In 2015 it received 12, double its 2014 total.
So is the DIFC–LCIA out of the woods?
One would hope so. That said, there continue to be rumblings about the relationship between the DIFC Court and the rest of Dubai, a relationship that anchors the whole project. So, watch this space.
Worth a Closer Look
The Middle East and African region is also home to some other providers that, for matters that fall in their sweet spot, are well worth considering.
ABU DHABI COMMERCIAL CONCILIATION AND ARBITRATION CENTRE (ADCCAC)
Why’s it worth watching?
The ADCCAC is a very significant organisation. In 2014, the most recent year for which it has published statistics, there were 74 new. It’s one of those centres that plays the role that should be played by local courts.
So a lot of small real estate stuff then?
Yes, but it has the occasional large case too – about power projects, infrastructure, joint-venture agreements, etc.
How come the mix?
Well, it has some very loyal followers: the Abu Dhabi government and some of the senior Abu Dhabi-based companies who impose it on their business partners. In the past, it was the centre’s outmoded arbitral procedure, rather than its case numbers, that held it back.
What was wrong with its procedure?
Until 2013, the ADCCAC hadn’t updated its rules since 1993, making arbitration there a bit like stepping back in time.
For example, there was no scale of fees. So every part of the financials for a case, for arbitrator and institution, had to be negotiated from scratch. And all fees were non-refundable, even if the case settled.
It was also fairly unclear how you actually started an arbitration – the sequence of exchanges – or what should happen if one side failed to show up. On top of that, the arbitrators had very little flexibility about approach – a certain number of sessions were always required to be held. Thankfully, all that’s a thing of the past.
The ADCCAC has new rules, and all of those eccentricities have been ironed out. They came into force on 1 September 2013 and have completely replaced the old rules.
How do you completely replace old rules?
Well, the old rules weren’t merely replaced, they were “repealed”. So now, all new arbitrations, no matter when the clause dates from, will occur under the new rules. There can’t be any confusion.
What are the new rules like?
They’re patterned on the UNCITRAL model (and a few other well-known institutions), with a couple of extra (region-specific) features.
What are those features?
One rule says that if you’re aware that one of the centre’s rules is being ignored and you don’t mention it, you can’t raise the matter later. You’ve waived that right.
Why is that useful?
It stops sides storing up procedural “errors” to use as the basis of a challenge later (which is something of a local sport). The rules also fill in some other gaps: such as adding a confidentiality provision and immunity for arbitrators and the institution. Even so, things aren’t perfect.
What’s less than good?
Chiefly, the range of arbitrators available. Parties have the freedom to appoint whoever they wish, but the ADCCAC must appoint from its own list – and, while it’s nearly 500 names long, it’s not well stocked with experienced international types. That isn’t a surprise when you look at the requirements for inclusion.
What are the requirements?
First, it costs around US$400 a year to be on the list, plus 15 per cent of any fees you earn. More importantly, you have to supply an authenticated “no criminal convictions” certificate from your place of origin or residence. The hassle alone is enough to deter most.
Are there any other pitfalls?
It’s not quite a pitfall, but be aware the final award will be delivered in Arabic – even if the language of the arbitration was English. The centre’s administration also leaves something to be desired. But, overall, this centre now seems headed in the right direction.
Is it popular with users?
It doesn’t get great reviews from international users. The revised rules remain problematic, and the case-handling can be hit and miss. On the other hand, it retains the loyalty of the government and state-owned entities, and therefore there are times when it’s difficult to avoid. It’s thought the centre would like to do more to modernise, but problems at the level of ownership get in the way. It’s owned by the state through the Chamber of Commerce, any major reform would threaten certain vested interests.
What happens to it if the Abu Dhabi Global Markets initiative adds a DIFC–LCIA type arbitral institution?
That is now on the horizon. In July 2017, the ICC announced it is to open an office in the ADGM, which will administer cases locally. The office is expected to open in early 2018.
BAHRAIN CHAMBER OF DISPUTE RESOLUTION
What is it?
A partnership between the Bahrain Ministry of Justice and the American Arbitration Association, launched in 2010. It operates in an “arbitration free-zone”.
Parties can nominate the law of any country to govern their arbitration, thereby creating a virtual seat. It means awards can’t be challenged before the local courts.
Who runs the show?
Nassib Ziadé took over as CEO in 2013 after a stint with DIAC in Dubai. He’s a former executive secretary of the World Bank Administrative Tribunal, who commands respect.
Why is it only “one to watch”?
It hasn’t gone on the main list because, quite simply, it’s early days and all a bit unproven. On the plus side, the centre is guaranteed work: it has automatic jurisdiction over any local disputes that exceed US$1.3 million in value, if they feature either a licensed financial institution or an international party.
How active is it?
It isn’t in the habit of releasing case numbers, but it is active in other areas. It produces a its own arbitration review, organises various conferences around the world and has just released new rules.
What are they like?
Adopted in Autumn 2017, they’re an update of the original rules from 2010, to bring them into line with changes at other organisations such as the LCIA and ICC since then. The revision was conducted by CEO Nassib Ziadé with Adrian Winstanley (formerly the director general of the LCIA) and Antonio Parra, former deputy secretary general of ICSID. So the revising committee was top-notch.
DUBAI INTERNATIONAL ARBITRATION CENTRE (DIAC)
Why’s it in the worth a closer look section?
The centre’s had some difficulties of late but it is still a well-known organisation, overseen by a board that’s stocked with big international arbitration names. During good times it receives hundreds of new cases a year.
Where do those cases come from?
There’s little public confidence in the UAE’s courts, and DIAC pretty much fills in the gap. That means it gets quite a variety of work: everything from local, low-value, real estate disputes, including landlord–tenant matters, to international stuff. But the bulk of its work is domestic.
Sometimes it’s almost too busy. In 2009–2010, shortly after the financial crisis hit, DIAC had 478 new claims, which was almost too many for it at the time. It responded well: by heading out into the international transfer market, to steal a footballing analogy, and getting a big-name manager in.
Who was that?
Nassib Ziadé, formerly of ICSID at the World Bank. Unfortunately, he’s since gone (to the Bahrain Chamber of Dispute Resolution) and the DIAC is again starting to attract complaints.
What sorts of complaints?
Arbitrators not being paid on time, or not being paid the right amount; problems with the rules (there are gaps in them, and the English and Arab versions not matching up); key decisions – mainly the constitution of tribunals – taking a long time. Systems needing an upgrade. They all tend to share a common theme. They’re the sorts of things that need high-level attention – and at the moment there’s nobody in overall charge.
Why is the DIAC taking so long to appoint a new head?
That’s the million-dollar question. It’s thought to have come close twice (most recently attempting to promote an internal candidate, a counsel, who sources say has been de facto running the place), but each time something went wrong. The suggestion is, it’s down to money. The centre is owned by the Dubai Chamber of Commerce, and anecdotally it has been less than helpful. The problem is that the longer things go on, the more the scale of the challenge increases and the more likely key people are to leave (such as the counsel who failed to get the top job, and then went).
Any other pitfalls to be aware of?
A lot of concerned attention recently at a recent amendment to the UAE penal code that allows arbitrators to be imprisoned for showing bias. Never mind the possibility of conviction, simply the prospect of an arbitrator having his or her passport confiscated during the investigation is already leading some to refuse appointments.
Dubai has some curious rules requiring arbitrators to be physically present to sign the award (and initial it on every page). Locals think this is partly to boost the revenue of Emirates Airways. Arbitrators used to have to hold hearings in the emirate too. That’s no longer the case, but the issue can still blow up at the enforcement stage, if the judge is a bit out of touch. Another potential pitfall at enforcement is the prospect of jurisdictional conflicts between Dubai itself and the DIFC – for instance, where an enforcement application in one jurisdiction butts up against a set-aside in the other. There’s now a joint committee set up to resolve these disputes, but it’s tilted towards Dubai and decisions so far have gone accordingly.
Are there any positive signs?
The DIAC has opened a branch in the DIFC-free zone for those who want to avoid some of the problems with the UAE as a seat. It’s also worth noting that despite the overall angst towards the institution, people have nothing but good things to say about the DIAC counsel level and other staff. In other positive news, it is about to update its rules.
How do you know?
In August 2016, it circulated a draft set of new rules for public comment. The proposed changes remove some of the problems identified over the years (the differences between the Arabic and English versions; an inability for tribunals to award legal costs, etc), as well as adding some of the newer bells and whistles, emergency arbitrator procedure, expedited procedure – and so on. But there are concerns they don’t go far enough. In particular, the August 2016 draft didn’t seem to include the power to consolidate proceedings, or solve the vexed issue of whether arbitrators still have to sign every page of the award and be physically present in Dubai when doing so.
How busy is it?
From 1 June to 2016 to 31 May 2017, the DIAC registered 181 international cases, and constituted 119 tribunals (many were sole arbitrators). In 2016, the centre registered 207 new cases, with a combined value of US$735 million.
What is it?
It’s a joint venture between the London Court of International Arbitration (LCIA), the government of Mauritius and the Mauritius International Arbitration Centre.
It was named GAR’s regional arbitration centre of the year in 2015.
What’s advantageous about Mauritius?
Africa has few decent arbitration regimes. Mauritius wants to fill that gap.
It’s got a lot going for it. It’s bilingual (French and English), has good courts and is home to a burgeoning offshore financial business. Many investments from Asia into Africa are routed through it.
It’s also written itself one of the most state of the art arbitration laws yet seen in the region.
What’s so state of the art about the law?
The drafters really went to town – doing a number of things that hadn’t been seen before. For example, the law expressly considers treaty arbitration and makes sure it’s on a sound footing. It also, in a common law system, embraced the negative effect of competence-competence (no court shall touch an arbitration matter until an arbitrator has ruled). And it made the Permanent of Court of Arbitration (PCA) in The Hague a backstop for the system.
How does it do that?
The law makes the PCA the default appointing authority – a very international move – rather than local courts. The PCA now has a permanent representative there.
And how are things going?
Promotional efforts are in full swing for both Mauritius as a seat and for the LCIA–MIAC. After hosting two huge international conferences in the past four years, the island hosted ICCA in 2016. It has also given its courts some additional powers.
What can the courts do now that they couldn’t?
They can give arbitration cases more timetabling priority, useful for interim measures requests and the like. And they can make more parts of cases private. Perhaps most importantly, there’s now a special panel of six judges in place, which will handle everything to do with arbitration.
Is the LCIA–MIAC busy?
It’s so far completed one ad hoc arbitration and one mediation – all of them international and worth more than US$1 million. In one it provided administration of the whole case, in the other two it provided certain specific services requested by the parties to arbitrations that were otherwise ad hoc, or administered by another body. It has a further two arbitrations pending. Both under its own rules.
So it’s still early days, but the signs are positive.
How is the LCIA–MIAC related to the LCIA?
They share the LCIA court and rules, but are intended to be separate entities. Adrian Winstanley, the ex-director general of the LCIA said this is symbolised by the fact the LCIA–MIAC logo has been adjusted to include indigenous Mauritian birds.
The LCIA–MIAC has its own registrar, Ndanga Kamau, and an excellent website (www.lcia-miac.org) with frequently asked questions. The LCIA–MIAC is busy amending its rules at the moment to reflect the changes in new LCIA rules now in force (as of October 2014).
QATAR INTERNATIONAL CENTRE FOR CONCILIATION AND ARBITRATION (QICCA)
Why haven’t I heard of it?
It’s still early days. Although it’s been around since 2006, QICCA hasn’t done much to promote itself internationally. That started to change in 2010 when Minas Khatchadourian joined, as deputy secretary general. Since then he’s done more to spread the word abroad.
Why is GAR putting it as worth a closer look?
Even before Khatchadourian’s arrival, QICCA was a popular choice for Qatari government entities in international contracts. It is the only institution in the Gulf states that uses UNCITRAL Rules, and is capable of delivering a high-level service. A source who’s had several first-hand experiences with the Centre describes its work as “very impressive”.
Is it busy?
About 40 to 50 new cases per year – and increasing.
Is it doing anything to grow its appeal beyond Qatar?
Khatchadourian was an Egyptian professor and a respected regional arbitrator when he took the job, and he’s done a number of things to grow the centre’s international profile since taking the job. He’s updated the rules, been a frequent visitor to international events on behalf of the centre, and taken steps to make QICCA more palatable to outsiders, such as expanding QICCA’s roster of arbitrators to bring in more international figures.
Is there a but?
There is. While QICCA isn’t short of local buy-in, foreigners remain wary of Qatar as a seat. There have been a number of arbitration-unfriendly decisions, which, even if corrected on appeal indicate that a case there might go less than smoothly. In one recent example, an arbitration award was set aside for failing to reference that it was “made in the name of Emir Sheik Tamim bin Hamad Al Thani (the ruler)” a requirement for court decisions, but not for arbitration awards. The centre has made efforts to improve the arbitral literacy of the judiciary, but there are still hiccups like this. A new Qatari arbitration law, introduced in 2017, is expected to help a certain amount. It is regarded as a big improvement on the its predecessor. But it still leaves too much room, some think, for courts to interfere.
Does the diplomatic row between Qatar and its neighbours affect QICCA? Nine states have now severed diplomatic ties.
Inevitably yes, because it’s so much harder to get arbitrators to go there. Flights from Doha to Dubai that used to take 40 minutes now go via Oman or Kuwait and can require six hours. That’s if airline schedules line up (which they don’t, because this round trip was never envisaged). A roundtrip from Dubai now requires most of a weekend just for the travel part. Cases are moving to convenient places (in one instance it was decided that Brussels would be more convenient for all concerned). With little domestic work to keep the centre busy, there’s a danger that if current obstacles persist QICCA’s skills will wither on the vine. On the other hand, the same problems may well generate sizeable work.
Is it non-profit?
Yes. It sits within the Qatar Chamber of Commerce and Industry.
Can I appoint whoever I want as arbitrator?
Parties have a free hand. In reality, given the nature of the contracts that select it, the arbitrator will probably need a good knowledge of GCC laws, but the rules don’t curb party autonomy in any way. For those needing help the centre maintains a list of 150 individuals but it is “indicative only”.
And will international arbitrators like the rate of pay?
Fees are similar to other regional centres. That means, for a substantial case, it shouldn’t be too hard to obtain an international name. Smaller matters might be problematic. But some think locals should handle such cases anyway, as it builds the local arbitrator pool.
How big is the secretariat?
Three case managers and a full-time secretary. They can work in English and Arabic, while the director is fluent in French.
Aside from problems with the local courts, are there any downsides?
Similar to Dubai, Qatar has rules that require the arbitrators to be physically present for all hearings and similar acts of authority and to initial every page of the award in the kingdom.
THE TUNIS CENTRE FOR CONCILIATION AND ARBITRATION (CCAT)
When was it founded?
1996, as a non-profit organisation.
Why haven’t I heard of it?
The centre is active, but “woefully underfunded” according to one knowledgeable source. The most recent available statistics place the number of total cases received at 17 – the first in 2001. It now registers one to two new cases per year, mostly from Tunisians.
Why don’t international firms use it?
Mostly because of the funding issues. The centre can’t really afford to pay arbitrators the going rate. Therefore it focuses more on being an outlet for domestic work.
Are there any limits on who can be appointed as arbitrators?
Aside from the practicalities of payment, no. The “scientific council”, its version of an internal expert oversight body, will assist if the parties fail to appoint.
Might it get bigger?
It would like to. The centre runs training programmes and conferences, and a few years back put on an international event with IFCA and the ICC. It plans to modernise its rules soon (the current rules are UNCITRAL-based) and it hopes that more public corporations will start to insert its clause when writing contracts.
Common Court of Justice and Arbitration (CCJA) (Abidjan, Côte d’Ivoire (established by OHADA)
Why’s it worth a closer look?
The CCJA is one of the main institutions in Africa and the institution for OHADA law disputes. The CCJA itself is the supervisory court for OHADA, so as well as confirming and appointing arbitrators and administering OHADA rules arbitrations, it also acts as the supervisory court for arbitrations conducted under its banner.
What’s it like?
It’s not the ICC but it’s not a start-up either.
The arbitration centre uses the same physical space as the OHADA court when it’s sitting. So panels have to schedule themselves around its schedule. Arbitrations often take place elsewhere than Abidjan for that reason. It’s also a very francophone organisation – not always comfortable working in English, and the staff aren’t always as responsive as they could be. They need a few more. But the big issue is probably arbitrators’ fees.
What’s the problem with arbitrator fees?
The CCJA’s arbitrator rates are phenomenally low for the type of work they receive. The fee scale hasn’t changed in 16 years. It was this mismatch that recently led to the Getma affair, where the CCJA set aside an award after the tribunal refused to accept the fees it set for the case: €60,000, which the tribunal dismissed as “charity”. That led the tribunal to negotiate a side-deal with the parties in defiance of a court order, which created the setting for the later problems in the case.
Is OHADA aware of the problem?
It is, and the Getma decision has given its attempts to move into the modern world more impetus. As part of efforts to improve it commissioned an audit by PwC, which led to two disciplinary proceedings against senior members. Marcel Serekoisse-Samba, president of the court, was suspended pending further investigation.
What did he do?
Serekoisse-Samba admitted mismanaging funds and failing to keep account of money paid to the court in its function as administrator of arbitrations. He did not admit dishonesty. His suspension was described as temporary and he is allowed to continue sitting as a judge in the court.
When would it be particularly suitable?
The CCJA is a creature of the OHADA system – a set of business laws adopted by 17 west and central African countries with the aim of harmonising commercial law across the continent. So it would be a natural choice for an OHADA law dispute. A number of OHADA states now write CCJA clauses into their commercial contracts. So there are times that it will be imposed.
How busy is it?
Some of those are the size that would be found at the LCIA and ICC.
As the recent disciplinary proceedings show, the OHADA member states have ways to influence the composition of the court (much as the EU member states do over the bench for European courts). So there may be times you want a body that’s more independent.
Kigali International Arbitration Centre (KIAC)
Why’s it worth a closer look?
Rwanda is seeking to establish itself as business capital of East Africa. Kigali is the local arbitration institution. People who’ve used it say it works well, and is a decent option for the right case.
Is it busy?
It had handled around 30 cases as of July 2016 – one-third of them international. New figures are expected soon. It appears to be receiving around 10 new matters a year. Most of the cases have come from construction or infrastructure projects, though services-related cases are now making an appearance.
Who goes there?
The most common type of international case includes a Rwandan state entity, as the government writes KIAC into contracts. But it is also getting work from around the east Africa region – Uganda, Kenya, Burundi, Tanzania. If you have a case with an African party that is nervous of going to a European institution, Kigali is somewhere that will do the job.
Is it independent of the government?
It’s a private institution and the government has also lost cases there.
So far the government has complied voluntarily with all awards against it. It will be interesting to see what happens if someone has to enforce such an award in the local courts. But that’s not really a problem with the centre itself.