Arbitration: It's Time for Africa!

'Arbitration: It's Time for Africa! A View from the Arbitral Institutions'

11 May 2016
Arbitration: It's Time for Africa!
Mr. Neil Kaplan, CBE QC, international arbitrator, Arbitration Chambers, Hong Kong, delivering the closing remarks at the MARC Conference held on 11 May 2016 in Port Louis.

Conference organized by the MCCI Arbitration and Mediation Center (MARC) held in Port Louis, Mauritius on 11 May 2016.

Representatives of major arbitral institutions from around the world gathered on 11 May 2016, to discuss on the development and promotion of arbitration in Africa on the occasion of a Conference organised by the MCCI Arbitration and Mediation Center (MARC).

The Conference consisted mainly of two panel discussions themed around the questions of how arbitral institutions can better secure enforcement of arbitral awards, and how they can assist in promoting African ADR practitioners. It was held in the wake of the ICCA 2016 Congress, organised for the first time for and in the African continent, more specifically in Mauritius, from 8 to 11 May 2016.

The President of the MCCI, Mr. Azim Currimjee, in the opening speech, highlighted the efforts made by the MCCI during the past years towards developing best practices in the field of business, whether through provision of information, promotion of training services and of ADR methods for settling dispute, through its ADR center, the MARC. He highlighted that the MCCI has always played – since its creation in 1850 – this role with the sole aim of facilitating business and investment, and creating a secure environment in which traders can operate, in line with international standards and the users’ expectations.

The event was sponsored by the Chambers of A.R.M.A. Peeroo SC GOSK and 5 St James Court, was attended by over 100 participants from Mauritius and abroad, mainly lawyers, judges, arbitrators and other ADR specialists.

A summary of main discussions held during the two Panels, moderated by Mr. Barlen Pillay of the MARC Permanent Secretariat and Dr. Jalal El Ahdab, of GMPV, Paris, is provided below.

First Panel
Enforcement of Arbitral Awards in African Countries - Does it make a difference when the award is issued by a Centre?

Structure and Services of the Arbitration Center

In response to the main thematic question of the first panel, Mrs. Lim Seok Hui, Chief Executive Officer of the Singapore International Arbitration Centre (SIAC) laid emphasis on the structure adopted at the SIAC as instrumental in building trust and ensuring greater enforcement of awards, namely that of having a Court of Arbitration made up of reputable arbitration experts working closely with the Secretariat and legal team of the Arbitration Center.

Mrs. Seok Hui talked about the scrutiny of award service provided by arbitration centers, which helps mitigate risks of challenge of awards.

SIAC’s CEO also outlined the support provided by arbitration centers in terms of monitoring of time limits and costs so as to make sure that there are no unjustifiable delays in the arbitration proceedings.

Collaboration with the Judiciary

Mr. Fidèle Masengo, Executive Director (Ag.) of the Kigali International Arbitration Centre (KIAC), on his part, focused on the necessity of a pro-arbitration judicial system and of close collaboration between the judiciary and the arbitration center, whether through support such as participation in events and trainings of the Center or through support such as appointment by the judiciary of an arbitrator from the Panel of the Center in case the decision is in their hands.

This close collaboration is essential, he mentioned, as it guarantees more pro-arbitration practices, especially with regards to recognition and enforcement of awards delivered under the aegis of the arbitration center.

On a question of the moderator, Mr. Wakefield, member of the Management Committee, Arbitration Foundation of Southern Africa (AFSA), commented that the nationality of the arbitrator should not have any bearing on whether an award is enforceable or not, except perhaps to the extent that one might argue that a local arbitrator will have more knowledge of the domestic laws applicable when the question of enforcement is raised.

He pointed out however that the expertise of arbitrators more versed in the practice of international arbitration would be needed as South Africa is still in the process of updating and modernizing its laws on international arbitration.

Building an arbitration culture and fostering trust and acceptability of arbitration centers.

Mr. Richard Naimark, Senior Vice-President of the American Arbitration Association/International Centre for Dispute Resolution (AAA/ICDR) laid emphasis on the need to build a credible arbitration culture and to build trust and acceptability of the stakeholders in arbitration centers.

- Regarding the use of award scrutiny as a means to ensure enforceability, he pointed out that a balance must be made between on the one hand party autonomy and on the other having an arbitration center being seen to influence the ultimate decision of the arbitrator through a scrutiny of the award. The fine line to be drawn is between the substantive part of the award which is the strict territory of the arbitrator and certain more procedural aspects (arithmetic, appropriate language, completeness, whether or not the arbitrator has addressed all the issues put before him), a close monitoring of which could ensure greater enforceability of the award.

Mediation? Building a strong arbitration culture as foundation

Answering a question from the audience on the importance of mediation, Mr. Naimark said: 'The two processes [arbitration and mediation] are very compatible. In my institution, whenever a case is filed for arbitration, we encourage the parties in the period, where we are setting up the arbitration, to try mediation. Even for the international cases only about 10% agreed to try mediation. [...] people are not familiar with the process, they are hesitant to use it. So, I would say yes it is important to invest in mediation but I would, if it was my choice, I would first build a very strong foundation, a viable, predictable arbitration culture and then branch off there and try to expand into mediation as people develop trust with the centre, with the local dispute resolution culture'.

Second Panel
Promoting African Arbitrators and Practitioners: What can institutions do?

Responding to a question of the moderator, Dr. Ahdab, as to whether there was an urgency to have African arbitrators in African arbitration centers hence posing the question of illegitimacy of such a system excluding African arbitrators, Ms. Meg Kinnear, Secretary General of the International Center for the Settlement of Investment Disputes (ICSID) said such urgency was indeed felt: 'I think it is a very legitimate point and an important one in regards to legitimacy that there are not a sufficient number of Africans who are doing these cases. There are a number of other areas where there are similar-type legitimacy challenges, for example, gender is one way where relatively a few females… There are a number of other regions who are underrepresented and there are many who would say that people under fifty perhaps are underrepresented and it is time for a new generation. So, I think the key point here is that arbitration tribunals need to be more representative of the population they are serving so that they have legitimacy.'

Answering a question of the moderator as to whether he considered that this legitimacy crisis was indeed a fact and a reality from the perspective of the ICC, Sami Houerbi, ICC Director for the Middle East & Africa Region, commented that: 'what Africa is today experiencing is the same as what the other part of the world did experience in the past. When arbitration started to grow in Latin America we had at the beginning the same issues. We had huge growth of the parties coming from [the] other side of the world with much less participation of Latin American arbitrators. Things changed with the passing of time (...) We have now huge increase of parties coming from Africa, involved in ICC arbitrations.'

Commenting on the issue of legitimacy, Hicham Zegrary, Secretary-General of the Casablanca International Mediation and Arbitration Center (CIMAC), said that "the spirit and the philosophy of the Casablanca International Mediation and Arbitration Centre, is to give a place to African arbitrators for sure (...) I think that we have the responsibility to promote more and more arbitration now by this community in Africa."

Narcisse Aka, Secretary-General of the Cour Commune de Justice et d'Arbitrage de l'OHADA (CCJA) in reply to a question of the moderator regarding statistics stated that the CCJA has 50% of cases coming from African parties, and 50% of cases coming from other countries of the world, generally Europe. Mr. Aka also explained that the CCJA acts as a Supreme Court for the seventeen countries of OHADA, West Africa, Central Africa and Comoros as well as an arbitration centre.

ICC’s Sami Houerbi commented that85% of arbitrators are directly appointed by their parties and that the role of the institution is quite limited to specific situations when it comes to appointment. Mr. Houerbi also mentioned that in 2015 thirty-two African arbitrators were appointed.

Meg Kinnear added that the ICSID had similar statistics, whereby 85% of arbitrators are named by the parties and the institution does not have any opportunity to even propose an African candidate. Ms. Kinnear mentioned that at the ICSID they have a review remedy whereby the ICSID gets to select the arbitrators from a list compiled by states and every state has the opportunity to put four people on that list. They can be from anywhere, they do not have to be a national. ICSID’s Secretary General highlighted though that, in many respects, this is an opportunity for African countries to put forward names of African candidates. 'There are a number of African states whose lists have expired and no one is giving us new names', she pointed out.

Replying to a question of Dr Ahdab regarding whether the Hong Kong International Arbitration Center (HKIAC) has an affirmative role in making sure that the arbitrators reflect diversity [in terms of nationality] or whether it was a secondary consideration, Maria-Krystyna, Managing Counsel of the HKIAC replied : '(...)we try to take a very close look at the case itself first of all the parties involved and the questions involved. There are some, very important issues to consider in our region, linguistic issues which may arise namely because obviously being so close to China we have a lot of cases which might involve, for instance, the need for a Chinese speaking arbitrator but who is not a Chinese national. So we do try to, from that point of view, first cater to the actual case before we worry about diversity. I would say that we are thinking very, very much about diversity and from this perspective I think as one of the two women on the panel, one of the things that we look at very much is to try to put female arbitrators forward, under fifties (...) We also feel very strongly that it is important to promote a new generation of arbitrators wherever they come from in the world.'

Final remarks and conclusions of panelists centered around the need for training and education of African arbitrators and lawyers, greater participation in arbitration events and conferences as well as greater promotion of African arbitration venues and institutions.

Mr. Neil Kaplan, CBE QC, was invited to deliver the closing remarks through which he stated: ' I am absolutely confident that in due course there will be many more arbitrations in Africa involving African parties and African arbitrators. The ICCA congress in Africa was not an end in itself. It should be seen as the beginning of what might be a long but I am sure a successful process in achieving what everyone believes will be the correct solution and the ultimate result of a lot of arbitrations in Africa.' Mr. Kaplan also highlighted the important role of arbitral institutions in framing and leading the process of furthering the development of arbitration in Africa and concluded: ' There is a lot of work to be done. There is a lot of training to be done. I think that the future is bright.'

Mr. Kaplan also commented that 'fair competition between arbitration centers is perfectly acceptable and I think an arbitration centre has to promote itself for its own benefits, for its own assets and for what it can do to the parties but at the end of the day in all the cases there is a question of consumer choice and that is what we are all here for. We are all giving the consumers a choice of running to get there with disputes resolved expeditiously and fairly, and somebody said, and I have to agree with them, that the more trade there is in the world, the more disputes there will be (...)there is probably enough business for everybody and we have to spread it around.'

The MARC Conference was followed by a networking cocktail.

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