Wednesday, October 21, 2009

Africa ADR

There is a new Arbitration ‘authority’ in Southern Africa this week. It is Africa ADR This new arbitral forum was launched this week. It is a collaborative project between the Arbitration Foundation of Southern Africa (AFSA) with assistance and support from a variety of groups international and domestic.

To begin with the venues for Africa ADR are Mauritius, Mozambique, The Democratic Republic of Congo and three cities in SA. Instrumental in establishing the new arbitral forum were IOD which is the Institute of Directors, South Africa. This organisation is thoroughly English as in English, not British but English. It was started by a King and that makes it really old and important-like cognac. Sorry, is that too impertinent? I have been told that my bad attitude about royalty is because I am American and I am jealous. Seriously??

International commercial arbitration is resorted to when cross-border contracts go pear shaped and there is a clause in them that says, parties cannot sue for damages under this contract, they must go to arbitration. Well-drafted arbitration clauses within contracts can specify the forum or group that will assist in the dispute resolving. Now, with the help of Africa ADR parties can use the clause provided on the website and ensure that their disputes are heard by an African panel of arbitrators. This is invaluable.

If parties have a problem abiding by a contractual obligation, the matter becomes a dispute and goes before an arbitral panel run by Africa ADR. The parties have to pay a forum fee and pay for administration costs. Parties will pay their lawyers and then pay for the cost of renting space at the venue for the arbitration. Parties will pay the arbitrators fees and costs as well. Parties will pay costs al throughout the hearing-then they will get an Award which needs to be enforced by a court.

The Africa ADR announcement encourages potential African states to adopt the New York Convention in order to smooth the way for arbitration in Africa. The New York Convention is a UN sponsored code that can be adopted by governments that orders the judiciary of a nation to enforce awards made in international commercial arbitration. This would ensure that awards are respected and upholds the integrity of the arbitral process. But what if countries do not like the New York convention?

The New York Convention was created in the 1950’s with little or no African influence. It was crafted in 1958 and it for this reason that many African states have not adopted it.

For years, contracts have been drafted by lawyers at white shoe firms whose interests were to ensure that any dispute was resolved in London of New York so that their colleagues could handle that matter. If African businesses begin to put the Africa ADR clause in their contracts then dispute will be handled by this forum, in Africa, before a panel of experts that presumably is African. That would be cool if we could be sure.

Another organisation that supported Africa ADR is 39 Essex Street Chambers-an English Chambers based in London. All helpful no doubt because business is good and they are feeling charitable......right? Unlikely, there is money to be made in this venture. These barristers make money ok, but there is real money in international arbitration. They can represent parties or be an aribtrator, either way there is money to be made. Having an English Chambers involved gives arbitration street cred but it is African… exactly? Surely, there is enough arbitration expertise in Africa to have all African support for this forum-African arbitrator, African counsel.

There needs to be a forum for African commercial dispute resolution, for sure. A place, closer than NYC, Paris or LONDON. This forum or several forum--should be where African business can resolve an international dispute based on an arbitration clause in a contract, on their own terms. This is the true nature or arbitration-to select dispute resolution on agreed upon terms.

I like Africa ADR. It has great potential. It is just that once you get outsiders involved, they are not going to want to give up $ to the newly trained African team. There is no transition step in the arbitration business. It is all about getting your foot in the door and never removing it until you can fit yer whole self in in the room. Once this thing gets up and running and making money, the English barristers will not move on and make way for the African. Some parties to disputes may want that English presence. And this is fine...but this makes Africa ADR the choice for parties who like the 'old world' and its lawyers.

This is the beauty of Arbitration. Parties get to choose how they want their dispute resolved.

This new forum for dispute resolution is a hopeful thing. Many disputes will be facilitated and resolved in this forum to be sure. But it should be a beginning of lots of other forums for dispute resolution throughout Africa with support from various sources or none. This is the true nature of Arbitration- consensual and as the parties choose.

No comments:

Post a Comment