Creation of three new bodies boosts arbitration growth in Africa
Africa’s economic growth is picking up pace and is expected to reach 6.3 per cent in East Africa and 3.4 per cent in Sub-Saharan Africa by the end of this year. Foreign direct investment into Africa is also expected to increase from $41.8billion to $50billion, due in part to the signing of the historic African Continental Free Trade Area (AfCFTA) agreement in March.
As international investment and trade in Africa increases, so does the number and frequency of commercial disputes, with arbitration increasingly becoming a preferred means of resolution. The rise in arbitration in Africa can be seen by looking at the ICC’s recent caseload figures; in 2017, the institution saw the largest number of cases (87) and parties (153) from Sub-Saharan Africa in its history.
Against this background, we will look at three brand new organisations that aim to facilitate the further expansion of arbitration in Africa: the African Arbitration Association; the ICC’s African Commission; and AfricArb, a Paris-based association of lawyers.
1. The African Arbitration Association
One of the most significant developments of the summer was the launch of the African Arbitration Association (AfAA), held at the headquarters of the African Development Bank (AfDB) in Côte d’Ivoire in June. The AfAA aims to “promote, encourage, facilitate and advance” the use of international arbitration within Africa. Although numerous initiatives have been developed to meet these aims in the past, AfAA has been launched to ensure pan-African coordination and cooperation. The association has brought together an impressive number of African arbitral institutions, 71 in total, and will be headquartered in Rwanda at the Kigali International Arbitration Centre (KIAC).
The AfAA is a long-awaited response to calls for the establishment of a single organisation to promote the existing capacity for arbitration in Africa. Commenting on the launch of the AfAA, Fidèle Masengo, secretary general of the KIAC, highlighted that arbitration clauses in many international contracts, particularly those financed by the African Development Bank or the World Bank, often provide for an arbitral seat in Paris, London or another Western location. As a response to this, the AfAA intends to encourage the regionalisation of arbitration, by promoting the appointment of African practitioners, arbitrators and institutions.
The creation of the AfAA may be seen as an important step in what many have termed as the “Africanisation” of arbitration. The organisation has been described as the “coming of age of the arbitration profession in Africa” by Judge Abdulqawi Ahmed Yusuf, President of the ICJ, a Somalian and prominent African arbitrator. The AfAA and its awareness-raising activities also have the potential to tackle the perception that arbitration on the continent is extensively under-developed.
A report by SOAS this year identified that one of the reasons for an underrepresentation of Africa in international arbitrations is a poor perception of practitioners. SOAS’ research showed, however, that a vast majority of respondent practitioners had specialist training (including by the CIArb) and just under half had sat as an arbitrator in at least one domestic arbitration case.
The AfAA also intends to assist African governments in strengthening the existing legislative and judicial frameworks to further facilitate arbitration. This will build on a number of recent institutional and legal developments. In 2017, for example, South Africa modernised its legal framework via the adoption of the UNCITRAL model law in the new International Arbitration Act No.15. Earlier this year, the Organisation for Harmonisation of Corporate Law in Africa (OHADA), revised its Arbitration Act and arbitral rules of the Joint Court of Justice and Arbitration (one of many arbitral institutions on the continent), which included measures to support investment treaty arbitration.
The AfAA aims to address some of the biggest challenges in African arbitration and the international community is eager to see exactly how it will do this. In any event, the creation of the AfAA is a significant development in itself; it evidences the African arbitration community’s focus on raising awareness of its expertise and establishing its place in the international arbitration space.
2. The ICC’s African Commission
In July, the ICC announced that it would establish an African Commission to coordinate its activities and continued growth on the continent. The Commission will be led by Ndanga Kamau (who was recently appointed Vice-President of the ICC Court) as president and Sami Houerbi (Director of ICC Dispute Resolution Services for Eastern Mediterranean, Middle-East and Africa) as secretary. The Commisson’s board will be compromised of members from 15 African jurisdictions.
Alexis Mourre, President of the ICC, explained that the “relevance of Africa for the Court’s future cannot be overstated” and that it is the region where “the development of robust and high-quality dispute resolution services is most relevant.” In addition to a rise in both cases and parties from Sub-Saharan Africa in 2017, the ICC also saw an increase in the number of arbitrators from North and Sub-Saharan Africa. The Commission intends to further this trend through capacity-building, awareness-raising and other outreach activities.
The Commission will also work closely with the ICC Belt and Road Commission, which was launched in March to promote and develop the ICC’s offering for disputes arising out of China’s global infrastructure project. This is in anticipation of large-scale Chinese investment in Africa in the coming years, as the number of African partners under China’s Belt and Road Initiative (BRI) continues to grow; in July, for example, Senegal became the first West African nation to enter into a cooperation agreement with China under the BRI. The size and complexities of the BRI’s projects create the potential for a large number of high-value arbitrations on the continent.
It’s not just arbitral institutions that are focusing on Africa. Lawyers have also recognised that Africa is a distinct market, requiring specific expertise and a tailored approach. AfricArb, a non-profit organisation launched in July, is an example of the continuing international enthusiasm for the development of African arbitration. AfricArb was founded by a group of international practitioners, including Thomas Kendra, partner in the Hogan Lovells international arbitration team in Paris. The organisation aims to promote the use of arbitration through the involvement of actors both inside and outside of Africa. It will provide training and organise other events to encourage the sharing of ideas, knowledge and views.
During the launch event of AfricArb, Emilia Onyema, author of the SOAS report, pointed to its results as evidence of the extensive expertise of international arbitration in Africa. Onyema, who is a member of the AfAA’s board of directors, explained that a concerted effort must be made to increase the representation of African practitioners in international arbitration. While questions on how this will be achieved remain, the creation of organisations such as the AfAA and the ICC’s Africa Commission, which can draw on their institutional experience, is a significant step in the right direction.
These recent developments demonstrate the determination, of both African and international institutions and practitioners, to further strengthen African arbitration. These, and similar organisations, will be vital in ensuring that arbitration is used as a dispute resolution mechanism across the whole of Africa, in a way that promotes and strengthens the continent’s ever growing capacity and expertise.
Thomas is a partner in Hogan Lovells law firm’s international arbitration group, Paris.