ESQ Legal Practice Magazine JUNE 2014 EDITION | Page 79

ARBITRATING
IN AFRICA
Sub-Saharan Africa is currently among the fastest growing economic regions in the world and provides a rate of return on foreign
investment higher than in any other developing region, according
to a recent report by McKinsey & Company.

T

his increased
economic momentum continues to
create significant
business opportunities for both
domestic and
foreign investors in a wide
range of industries in Africa,
including
telecommunications, energy,
infrastructure, financial
institutions and mining.
Against the backdrop of this
myriad of investment
opportunities, potential
investors must also weigh up
the potential risks and
challenges. As indicated by
the World Bank's Investing
Across Borders 2010 report,
one of the important factors
driving investment decisions
by multinational corporations
is the strength of legal
frameworks for alternative
dispute resolution and the
extent to which the judiciary
supports and facilitates
arbitration. In response,
governments seeking foreign
direct investment are encour-

the
enf
orce
ment
of
foreig
n court
judgme
nts,
which
makes the
ease of
enforcement
of arbitration
awards one of
the key reasons
international
arbitration is the
dispute resolution
method of choice for
many foreign investors.
More than half of the
states in Africa are party to
THE NEW YORK
the New York Convention,
CONVENTION
including Nigeria, Ghana,
ARBITRATING IN AFRICA: The New York Convention
Cote d'Ivoire, Kenya, Tanzania
ENFORCEMENT REGIMES provides an extensive
and South Africa.
enforcement regime for
FOR ARBITRAL AWARDS
An arbitral award will be
foreign arbitration awards,
Africa is an incredibly diverse
made under the New York
subject only to a limited
continent. The legal systems in
Convention if it is made in the
number of expressly stipueach country, a product of
territory of a state which is a
lated exceptions.
inherited colonial legal
party to the New York
There is no real equivalent for
systems and more recent
Convention. Membership of
the New York Convention is
therefore of significant
An arbitral award will be made under the New York Convention if it is made in
importance for investors who
the territory of a state which is a party to the New York Convention. Membership may need to conduct arbitraof the New York Convention is therefore of significant importance for investors tion and/or enforce an arbitral
who may need to conduct arbitration and/or enforce an arbitral award in African award in African countries
countries where, for instance, enforcement is sought against a party that does where, for instance, enforcement is sought against a party
not hold assets outside Africa or the investor's African counterparty insists
that does not hold assets
upon an African seat of arbitration.
outside Africa or the investor's

79 I EsQ legal practice

aged to accept the process of
international arbitration as an
effective means of dispute
resolution in order to make
their investment climates
more attractive and competitive.
One of the key components of
a strong arbitration regime is
the ease of enforcement of
foreign arbitral awards. In this
Article, we briefly examine the
enforcement regimes for
arbitral awards across Africa,
which broadly fall into three
distinct categories.
Finally we review the steps
taken by certain African
governments over the past 12
months to further facilitate
arbitration in Africa though
the opening and use of
dedicated arbitration centres.

Simon Nesbitt &
Rashidat Abdulai
Hogan Lovells Int’l LLP

political developments, vary
widely. However, despite
these differences, the enforcement regimes for arbitral
awards for the majority of
countries across Sub-Saharan
Africa fall broadly within
three categories:
1. States that are party to the
New York Convention on the
Recognition and Enforcement
of Foreign Arbitral Awards
1958 (the New York
Convention).
2. States that are party to the
OHADA regime.
3. States that are neither party
to the New York Convention
nor the OHADA
regime.

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