THE AUTHOR: Rukayat Ibrahim, Mentee at the Young ICCA mentorship program
The World Arbitration Update (WAU) addresses key and novel topics of investment and international commercial arbitration, as well as public international law. WAU has an objective to connect the different regions with the global community, creating a unique space for practitioners, private parties, arbitrators, academics and students to discuss and network. WAU nourishes the conversation by following a distinct format, in a decentralized forum in which each day the focus is on a specific region, starting with the Americas (Monday), Africa and MENA (covered in this post), Asia Oceania (Wednesday), Europe (Thursday), and lastly Friday was dedicated to diverse topics.
The panel began with Efemena Iluezi-Ogbaudu (trainee at Linklaters, London) giving an overview and explaining how there is a thriving market for arbitration in the continent of Africa. His explanation was based off present and future undertakings regarding the existence of the current market for arbitration in Africa and the existence of the African Continental Free Trade Agreement (AfCFTA) on the one hand, and the changes in the domestic framework of international arbitration on the other hand.
Regarding the present and future nature of the arbitration market in Africa, Efemena noted that the United Nations Conference on Trade and Development (UNCTAD) report revealed that in the post covid era, sub-Saharan Africa witnessed a 150% growth rate in investment activities. The presence of this inflow, as highlighted comes with the existence of arbitration disputes. Additionally, the AfCFTA investment Protocol is expected to be highly influential regarding the expansion of the market for arbitration in Africa.
Asides from the foregoing, it was revealed that the domestic framework for States in Africa shows that sub-Saharan Africa is a prime destination for arbitration. This is because countries are taking steps to make their jurisdictions arbitration-friendly. The Sierra Leone Arbitration Act of 2022 was cited as a recent example. Before then, a new arbitration bill passed the second stage in the Nigerian Senate and is currently awaiting presidential assent.
Modernization of laws in the regional blocs in southern Africa and the OHADA region were also cited. In addition to the legislative efforts, judicial decisions have also revealed how courts have been supportive of arbitration in the continent. For instance, in Ghana, the Court of Appeal as well as the Supreme Court enforced an arbitration agreement that was incorporated by reference. Additionally, the increase of ad hoc arbitrations and arbitral institutions shows that the promise of sub-Saharan Africa for driving arbitration is growing exponentially.
Following the introduction, the panel discussions were divided into the following sub-topics:
The Legal Environment for International Arbitration and its Capacity to Support the Arbitral Process in Sub-Saharan Africa
Ana Carolina Dall’Agnol explained that the caseload of arbitrations in Africa will rise, and this will eventually lead to the Africanization of international arbitration. The developments taking place in Africa include the modernization of arbitration laws such as the adoption of the UNCITRAL Model Law, Angola’s recent ratification of the convention on the settlement of disputes between States and nationals of other contracting States (ICSID convention), an increase in the number of arbitral institutions, the rise of African focused initiatives such as events and publications. Despite this, caseloads from Africa have however been small and steady.
With a focus on the role of national courts in Africa, Ana Carolina Dall’Agnol explained that factors such as time and cost, the court’s expertise, and pro-arbitration approach as well as publicly available decisions could help shed light into the legal environment in sub-Saharan Africa.
Regarding time and cost, she highlighted that delay and duration occasion litigation costs in Africa which may clog the wheels of the judiciary. This then affects the choice of African seated arbitration thereby making access to justice expensive.
For court’s expertise and pro-arbitration approach, she noted that increasing a court’s familiarity with international arbitration will help create a stable and predictable terrain for arbitration. To this end, it is crucial for judges to have qualifications in certain areas, such as commerce and arbitration, to foster their support for international arbitration.
As for publicly available decisions, she noted that there are several difficulties attached to accessing arbitration cases decided by African courts. Nevertheless, certain jurisdictions like South Africa and Kenya have developed websites to bring decisions to public domain. As was later explained, access to courts’ decisions will help the continent’s contribution towards jurisprudence relating to international arbitration which in itself could form an extension of the Africanization of international law.
Following Ana Carolina Dall’Agnol’s presentation, Abayomi Okubote (Managing Partner at Pensbury Attorneys & Solicitors and the Executive Director of Africa Arbitration Academy), added that the Nigerian arbitration bill contains innovative solutions that address the inadequacies of the current arbitration act in Nigeria. The bill focuses on issues such as third-party funding, emergency awards, and award review tribunals. Accordingly, it is expected that the passage of the bill will position Nigeria as a leading seat in Africa.
Like Nigeria, the new arbitration law in Sierra Leone contains innovative provisions because it remedied inconsistencies in the previous act. Some of these include the mandatory disclosure of third-party funding, the establishment of the Sierra Leone International Arbitration Center which facilitates the conduct of international arbitration in accordance with the law, courts’ ability to issue interim orders to preserve parties’ rights in arbitration, provisions relating to emergency proceedings as well as the power to grant interim measure and confidentiality.
The Role of Ad Hoc Arbitration and the Growth of Arbitral Institutions in these Markets
Njeri Kariuki highlighted the dominant role that the Chartered Institute of Arbitrators has played in developing ad hoc arbitration and also, serving as an appointing authority in countries in Africa. She noted that its popularity is attached to the reputation of its training modules, certifications, and its worldwide presence.
Accordingly, the existence of ad hoc arbitration at the domestic level has been a stepping stone for African practitioners to delve into the world of international arbitration. Overall, this state of fact has occasioned and positioned African countries as an arbitration-friendly jurisdiction.
Proceeding thereon, Victoria Kigen spoke to the unique developments taking place in arbitral institutions in sub-Saharan Africa. She highlighted the unique role of the Arbitration Foundation of Southern Africa (AFSA) as a leading arbitral institution created 24 years ago. The AFSA has a legal exchange with China and in August 2015, launched a new international arbitration center that targets the resolution of international arbitration disputes between Chinese and African parties.
In West Africa, there are several arbitral institutions in Nigeria such as the Lagos Court of Arbitration, the Lagos Chamber of Commerce International Arbitral Centre, Lagos Regional Center for International Commercial Arbitration, and the Maritime Arbitrators Association of Nigeria.
Ghana, another country in West Africa also has two main arbitral institutions: the Ghana Arbitration Center and the Ghana Association of Chartered Mediators and Arbitrators.
In East Africa, there is the Kigali International Arbitration Center which administers disputes both at the domestic and international level. Likewise, trends are taking place in Kenya with the amendment of the country’s arbitration act in 2009 and the promulgation of the Constitution of Kenya in 2010 which encourages the use of arbitration and other ADR processes. Also, the Nairobi Center for International Arbitration was formed in 2013.
The SOAS report also shows that there are 91 arbitral institutions in Africa with the majority being in sub-Saharan Africa.
Going by this, it was noted that ad hoc arbitration will continue to flourish in Africa. Additionally, certain generic and specific features that users will expect were noted. The generic features included the location of the institution, the existence of special hearing rooms and breakout facilities, administrative staff, and suitable arbitration rules amongst a host of others. As for the specific features, importance was given to the presence of multilingual staff, knowledge of African sociocultural context, adequate power supply, stable internet, functioning and attractive website, independence from organization and government control, the location of an arbitral institution in a jurisdiction where there is security of life and property, and arbitral rules should be in different languages while being explanatory at the same time.
Recent Developments Concerning the African Continental Free Trade Area and International Dispute Resolution
Abayomi Okubote referred to the investment protocol of the African Continental Free Trade Agreement (AfCFTA) which is currently underway by noting that it will have unique features that would help State parties determine an enforcement framework.
Additionally, the AfCFTA, as explained, serves as a useful tool to build the convergence between different regional economic communities in Africa. Furthermore, it will help build resilience for sustainable investment related to climate change and justice.
Update on the Africa Arbitration Academy’s Model BIT Project
Abayomi Okubote explained that the African Arbitration Academy’s Model BIT furthers the end of contributing to the investment policy framework of African states. The objective of the model BIT is to promote, encourage and increase investment, and enhance sustainable development in Africa.
Each article of the model BIT comes with explanatory notes to guide negotiators when drafting investment treaties and agreements.
The model BIT has three broad components which are:
- the Africanization of investment regime;
- innovation and reforms; and
The Africanization component incorporates African principles to ensure that investors consider the broader socioeconomic context of the African terrain when making an investment.
It also protects the traditional knowledge of indigenous African communities and encourages the sharing of profit arising from the use of such knowledge. The model BIT also gives indigenous individuals the right to file amicus curiae briefs in relation to disputes that may impact traditional knowledge and cultural expressions.
The model BIT also places an emphasis on sustainable investment in Africa.
As for innovation and reform, the model BIT contains provisions that place emphasis on dispute prevention, seek to balance the rights and obligations of States and investors, contains useful provisions of third-party funding, protection of States action during a pandemic, prevention of corruption and money laundering as well as prevention of terrorist funding in relation to investment in Africa.
The mandatory nature of provisions in the model BIT was also highlighted.
ABOUT THE AUTHOR
Rukayat Ibrahim is a Nigerian lawyer with an interest arbitration and commercial law. She recently concluded her LL.M at the Schulich School of Law, Dalhousie University. She is currently a mentee to Yves Fortier in the 8th cycle of the Young ICCA mentorship program. Rukayat can be reached at Rukayat.Ibrahim@dal.ca