In 1997, Judge Charles Brower published a piece describing the “three phases” of arbitration in the Middle East, in The American Journal of International Law.
Phase one – World War II to the 1970s – were cases that ended poorly for the Arab side, usually a state. (Petroleum Development (Trucial Coast) Ltd v Sheikh of Abu Dhabi is one example of just how badly some ended.) In those cases, European arbitrators gave short shrift to arguments deriving from shariah law.
Phase two – little wonder, perhaps – consisted of a turning away from arbitration.
But not for long. Private dispute resolution is a facet of Arab culture. As Bahraini Minister of Justice, Sheikh Khalid bin Ali Al Khalifa, once explained, “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 following the “winter”, phase three has witnessed a flowering of local arbitration providers, so much so that – as Reza Mohtashami QC (a GAR editorial board member and Three Crowns partner) observed at a GAR Live – “the tiny island of Bahrain is [now] home to three arbitral centres.”
The third phase shows no sign of abating – since 2014, Saudi Arabia has launched a centre; additional specialist providers have been launched in Dubai and the UAE has finally upgraded its law (becoming a Model Law jurisdiction).
So does that mean the Middle East is now an arbitral paradise?
Sadly, “no”. There have been setbacks – a law that (for a while) stripped arbitrators of their immunity in the UAE and threatened to impound their passports. More gravely, courts in the region remain a weak link.
According to Essam Al Tamimi, one of the UAE’s most revered arbitration specialists, “a persistent lack of certainty” characterises the problem when it comes to arbitration and local 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 explained at a GAR Live event.
Things may soon be on the up. Arbitration, Al Tamimi noted, has recently been added to the core legal syllabus for the Arab League, so “90 per cent of judges will be properly trained in it, not just 10 per cent like now.”
States are also creating special financial zones using English common law (the DIFC in the UAE and the QIFC in Qatar), to remove the problem from the equation (it has been semi-successful: clever lawyers for a while found loopholes that took cases back to the wider court system, though these have now been closed down).
More significantly, these common law courts, staffed by senior judges from around the world, are setting a standard local courts will have to match; the analogy being used is when the first house in an unloved street is renovated – soon others follow suit.
So, while regional arbitration in Middle East can still be a bumpy ride, it is very much worth considering.
As for Africa – it may be premature to say the same is true. But things are more positive than they’ve ever been. In the past 18 months, two Africa-centric arbitration associations have arrived on the scene – giving a focal point for specialists around the region (see Clubs & Associations directory). Those are likely to raise arbitration literacy and put the need for arbitration-friendly courts on the agenda. Africa also now has one highly professional centre we do suggest you consider.
- 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)
- Mauritius International Arbitration Centre (MIAC) – was 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 40 years, during which time it has administered more than 1,000 cases, many with an international element. Other regional providers frequently look to the Cairo Centre for inspiration.
How did it start?
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 (now renamed the Asian International Arbitration Centre); the Lagos Regional Centre (RCICAL); the Tehran Regional Centre (TRAC); and the Nairobi Regional Centre). So far, the KLRCA (as was) and Cairo have the most traction.
What are Cairo’s strengths?
Experience; it’s been operating long enough to have encountered most situations at least once. And professionalism. It’s been well managed. Together these factors see it described as “the current class of the field” in the Middle East.
Who deserves the credit?
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 International Federation of Commercial Arbitration Institutions (IFCAI) meeting. He was succeeded by Nabil Elaraby (an ex-diplomat and international judge) and then Mohamed Abdel Raouf, a protégé of Aboul-Enein. In 2017, Ismail Selim took over as director and appointed Dalia Hussein as his deputy that same year. They’ve carried the torch admirably since.
What sorts of cases go to Cairo?
It varies – the size isn’t always earth-shattering, but there have been matters worth billions of Egyptian pounds (in oil and gas, and telecoms). The cases are fairly diverse in terms of origin too.
Where do its cases tend to come from?
It’s a genuinely international institution. The most recent statistics – from 2018 – show US parties topped the list of foreign users (with nine cases), with Saudi Arabia, Lebanon and Russian parties not far behind. Parties from Italy, Belgium, China, Germany, Kuwait, Netherlands, Sudan and the UK also had CRCICA disputes in 2018.
How busy is it?
It received 77 new cases in 2018 (up from 65 in 2017). Its best ever total for new matters is 91 new matters in 2016. It’s been generating these sorts of numbers since 2012.
Who gets appointed as arbitrator?
Arbitrators hitherto have tended to be from around the region. There is some suggestion that this could change, since changes were made to the rates of pay – which had made work there unattractive to internationals – 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, who performed a critical assessment of the CRCICA’s latest rules for the International Journal of Arab Arbitration. The most recent 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?
Very! It wants to be the “foremost administrator of cases relating to the Arab world”, and more recently it has set its sights on becoming the centre for Africa, including sub-Saharan Africa.
Does it have a chance of attracting African work?
By all accounts, yes. Africans are reportedly very happy to visit Cairo and it has lots of relevant direct flights. It’s also a lot more affordable for them than obvious other locations.
To that end in April 2017 it held an “African arbitration week”, partnering with the ICCA.
Is that the extent of its international ambitions?
No, it is hoping to attract cases in the future where both sides are not from Egypt. The centre noted with pride in its most recent report that CRCICA rules were inserted into “purely international contracts (not involving any Egyptian party)” concluded by parties from Saudi Arabia, Jordan and Libya.
Does it run any educational programmes?
Yes. 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. In 2018, it ran a day on international arbitration advocacy, using the GAR Guide to Advocacy as its framework.
What sorts of cases are particularly suitable to send there?
If administrative fees are an issue (not that common admittedly), Cairo is a great option. A survey in 2018 (published in GAR) by Louis Flannery of Stephenson Harwood found it to be the most consistently affordable of 17 arbitral institutions on fees for small and mid-sized disputes.
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 (ie, a bad track record).
The flip side 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.
What’s it working on now?
The centre is getting ready for its 40th birthday in 2019 and has released a French version of its rules (as part of its plan to attract work from Africa).
It is also considering adding provisions on emergency arbitrators and consolidation to its current set. The centre also welcomed several renowned members to its board this year, including Emmanuel Gaillard of Shearman & Sterling, Ulf Franke of the SCC Arbitration Institute in Stockholm and Nassib Ziadé of the Bahrain Chamber of Dispute Resolution.
It also added new members to its advisory body in 2016: Mohamed Gomaa, of counsel at Zaki Hashem & Partners in Cairo, and Samaa Haridi at Hogan Lovells in New York. The duo will serve on the committee until 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 any problems, the DIFC–LCIA was rebuilt and relaunched in 2015 on a firmer statutory footing (making it independent from the DIFC’s courts). Since then things have run very much to plan. In its first full year, the “new” DIFC–LCIA registered 22 new cases. In 2017, the centre experienced an impressive uptick in the number of requests for arbitration, registering 58 new cases and administering a total of 80. In previous years, the centre had managed just 48 cases in total. Word on the ground is that the DIFC–LCIA is very much flavour of the month, and several Dubai government bodies have transferred their allegiance to it, away from other providers.
How does it work?
The DIFC–LCIA 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.
Wait... if this DIFC court is 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?
A 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, Robert Stephen, formerly a senior associate at Herbert Smith, took over from Mohamed El Ghatit, who returned to private practice. Stephen’s arrival appears to have been the moment things began to take off. Practitioners in the region credit him with building a “real team”. As a result, many parties agreed to send their ad hoc cases to the institution, because they trusted the new organisation.
What are the rules like?
In October 2016, the DIFC–LCIA announced revised rules. The new rules provide for emergency arbitration and 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 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?
More and more! As revealed in Institutional News (on page 11) 2018 was DIFC -LCIA’s best year for new cases – with 68 registered vs 58 for 2017. This is a four-fold increase just three years before (there were just 17 new cases in 2015). The value of claims is also starting to look impressive – 2 billion AED (US$600 million) for 2018.
This trend looks set to continue – for a bit, at least. At the same time as it reported its 2018 figures, the DIFC-LCIA revealed it had already received 4.4 billion dirhams (US$1.2 billion) worth of new claims in 2019. So, that’s almost twice 2018’s figure – with two months still to go
So is the DIFC–LCIA out of the woods?
The case figures would suggest so. One might go as far as to suggest it’s becoming the institution of choice in Dubai – at least while rivals remain in the doldrums. There remain a few rumblings about the relationship between the DIFC Court and the rest of Dubai, but at least from the DIFC–LCIA’s perspective things are looking pretty good.
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?
Though less prominent than some in the region, the ADCCAC is still a very significant body. In 2014, the most recent year for which it has published statistics, it handled 74 new cases. In many ways, it plays a role that in other countries is played by local courts.
So a lot of small real estate stuff then?
Yes, but also the occasional larger case about power projects, infrastructure, joint-venture agreements, etc.
Who uses it?
It has some very loyal followers: the Abu Dhabi government and certain venerable Abu Dhabi-based companies, which impose it where they can. For some, that was a shock, as for many years the country used a distinctly outmoded arbitral procedure.
Why was it outmoded?
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.
Beyond that, it was unclear how you actually started an arbitration (the exact sequence of exchanges) or what happened if one side failed to show up. In other areas, though, the rules were too strict. Arbitrators found they had little room for flexibility when it came to other parts of the process – there always had to be a certain number of sessions before the case could conclude. Thankfully, all that’s a thing of the past.
Does it have new rules?
Newish. As of 1 September 2013 the ADCCAC adopted a more modern set that irons out many of these kinks. They “completely replaced” the old rules.
What does that mean?
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, the 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 still have a few quirks, 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 above (ownership) get in the way. It’s owned by the state through the Chamber of Commerce, so 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?
We will find out, as it’s getting closer by the day. In July 2017, the ICC announced it is to open an office in the ADGM, which will administer cases locally. The office opened at the end of 2018.
Bahrain Chamber of Dispute Resolution
What is it?
A partnership between the Bahrain Ministry of Justice and the American Arbitration Association, which 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 its own arbitration review, organises various conferences around the world and released new rules.
What are they like?
Adopted in autumn 2017, they’re an update of the original rules from 2010, bringing 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 the 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 remains a well-known organisation, overseen by a board of big international arbitration names. There have been years when it has received hundreds of new cases.
Where do those cases come from?
The locale. There’s little public confidence in the UAE’s courts, so for some years DIAC pretty much filled the gap. That meant it got 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.
In 2009–2010, shortly after the financial crisis hit, DIAC had 478 new claims, which was almost too many 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 the ICSID at the World Bank. Unfortunately, he has now moved on (to the Bahrain Chamber of Dispute Resolution) and he hasn’t yet been replaced. In the intervening period, DIAC has begun to attract a few complaints.
What sorts of complaints?
They come mainly from arbitrators who say they haven’t been paid on time, or haven’t been paid the right amount; and from users who find key decisions – usually to do with the constitution of the tribunal – are taking too long. There have also been complaints about the rules, which are acknowledged to contain some gaps, and problems to do with translation between English and Arabic.
Why is DIAC taking so long to appoint a new head?
That’s the million-dollar question. It’s thought to have identified two candidates and come close twice (most recently attempting to promote an internal candidate, a counsel, who sources say has been de facto running the place). But on each occasion nothing was finalised. A sticking point may be the money on offer. Anecdotally, the centre’s owner, the Dubai Chamber of Commerce, has been less than helpful on that score. Unfortunately, the longer the situation endures, the more key people will leave, and the tougher it all becomes to rebuild.
Any pitfalls to be aware of?
The “old” rules contain a few niggles, as mentioned. Beyond that, Dubai has some curious rules as a seat, including requiring arbitrators to be physically present to sign the award (and initial it on every page). Locals joke this is to boost the revenue of Emirates airline.
Once upon a time arbitrators used to have to hold hearings in Dubai too. That’s no longer the case, but these sorts of points can still become a complication at the enforcement stage, if the judge receiving the matter is 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 not clear how well it is working.
Are there any positive signs?
The UAE government saw the error of its ways when it came to criminal penalties against arbitrators recently. It is also on the verge of issuing its new arbitration law based on the UNCITRAL Model Law.
The Dubai government has also confirmed that foreign practitioners may act in arbitral proceedings seated in the emirate, resolving confusion over a recent resolution that threatened to exclude foreign lawyers from arbitral proceedings in the whole of the UAE.
Meanwhile, the DIAC now has a branch within the DIFC (the free zone) allowing it to offer the benefits of the offshore 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.
Doesn’t DIAC have new rules?
Yes, finally. Tarek Riad, DIAC’s chairman, announced a new set of rules in late 2017, during Dubai Arbitration Week, that resolve many of the problems identified with the old rules. Those rules have duly been adopted – in 2019. So Riad was a tad premature with his announcement but they are here now.
What do the new rules change?
They largely remove all 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.
How busy is it?
In 2017, DIAC registered 181 international cases (201 cases in all), and constituted 119 tribunals (many were sole arbitrators).
In 2018 it registered 161 cases in total.
The trend, however, has been downwards in recent years. In the aftermath of the financial crisis of 2008 it was registering 300-plus cases. The decline is thought to reflect greater competition, along with some discontent with aspects of the DIAC’s process and rules. In theory, those have now been solved.
Are there any other changes to note?
As of late 2019, DIAC has a new board of trustees. Gone are names such as Filip de Ly and Bernard Hanotiau and other international names and in their place come a series of local practitioners, mostly of Arab extraction, none particularly known for arbitration. Graham Lovett, of Gibson Dunn & Crutcher, is one of the names that may be recognised outside the UAE.
A source says this change of direction was unavoidable. A “surprise provision” in the UAE’s new federal arbitration law decrees that no member the DIAC’s board of trustees can be appointed as a DIAC arbitrator. This prompted most of the previous board to resign, and made it hard to find interested specialist replacements.
The DIFC-LCIA is unaffected by the provision as its cases are usually governed by the DIFC’s arbitration law, or else take place overseas.
Mauritius International Arbitration Centre (MIAC)
What is it?
A brand new, independent international arbitration centre based in Mauritius, backed by the government.
Wasn’t the government behind LCIA-MIAC too?
It was – and MIAC is the successor organisation.
In July 2018 LCIA–MIAC closed its doors after the LCIA and the government of Mauritius decided to part ways. The Mauritian government has since thrown its support behind MIAC.
The two sides have not revealed the reasons for the split. However, it appears to have happened around the time of a political shift. The LCIA–MIAC was spearheaded by former Mauritian prime minister Navinchandra Ramgoolam, who lost power in 2014 to Anerood Jugnauth.
So what are MIAC’s plans?
MIAC has a brand-new advisory board led by prominent French practitioner Emmanuel Gaillard, to help its secretariat and ensure that the centre’s practices reflect international standards. The daily operations of the secretariat will be led by co-registrars, which have yet to be appointed.
Does MIAC have its own rules?
Yes. They are based on UNCITRAL rules.
It will also model its provisions for arbitral appointments and challenges on the country’s state-of-the-art arbitration law.
Will it be busy?
Yes, for the foreseeable future. In addition to launching its own rules, MIAC administers arbitrations arising out of agreements that refer to the LCIA–MIAC as of the end of August 2018.
While it is impossible to predict the centre’s future caseload based on the now-defunct LCIA–MIA (which did not release statistics), the LCIA–MIAC did administer one ad hoc arbitration worth more than US$1 million during its lifetime and had least two further arbitrations – suggesting there is a demand for arbitration in Mauritius.
Besides MIAC, what’s advantageous about Mauritius?
Africa has few decent arbitration regimes. Mauritius aims to fill that gap and has many natural assets. 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.
Its arbitration law also has several features that have not 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. (MIAC says its new rules will continue to refer questions to the secretary-general of the PCA.) The PCA also now has a permanent representative there.
Is there anything else to note?
Yes. Mauritius’s courts have been given some helpful arbitration-specific powers. For example, they can give arbitration priority when scheduling (useful for interim measures requests) and they have new powers to make parts of cases private. Perhaps most importantly, there is now a special panel of six judges in place, which will handle everything to do with arbitration.
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. In 2016, the centre said it had settled commercial disputes worth more than US$412 million, requiring it to train extra arbitrators.
Is it doing anything to grow its appeal beyond Qatar?
Khatchadourian was a 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 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? Eight 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 round trip 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 good knowledge of Gulf Cooperation Council 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.
Are any changes in the offing ahead of the World Cup?
Whether it will be in place in time in time to help with preparations for the World Cup in 2022 is unclear, but in 2019 QICCA announced it plans to update its rules – and will include an emergency arbitrator facility, modelled on the ICC’s. The announcement was made in April 2019. QICCA adopted its current rules in 2012.
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). Alarmingly, as this book went to press its website was down. In the past it has registered 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 the IFCA and 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, Ivory Coast (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 arbitrators’ 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 continues to sit 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. It would, therefore, 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.
So what’s new?
In 2018, the CCJA also unveiled an updated version of its arbitration rules. For the first time, foreign investors are expressly permitted to bring a claim under bilateral investment treaties and other investment instruments. Arbitrators also have greater powers – they can consolidate or suspend proceedings – and parties must abide by new rules for ethical behaviour.
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 hub for East Africa. Kigali is its capital’s arbitration institution. People who have used it say it works well, and is a decent option for the right case. And they say visiting Kigali these days is “like visiting Brussels”, only half jokingly.
Is it busy?
It’s getting there. The centre registered 26 new cases in 2017 – a 117% increase over the previous period (which saw only 12 cases filed), and its third successive year of growth. It has now handled 115 cases since inception. Among the new cases was the largest dispute to date – worth – US$14million.
A third of the new matters had one international party.
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 East Africa (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.