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OHADA MEMBER STATES: A NEW MOVE FORWARD TO PROMOTE ARBITRATION AND MEDIATION

- Benoit Le Bars

On 23 and 24 November 2017, the OHADA Council of Ministers adopted three new texts on arbitration and mediation: a new Uniform Act on Arbitration (the “Uniform Act”), a new Uniform Act on Mediation, and revised rules of arbitration of the Common Court of Justice and Arbitration (the “CCJA Rules”).

The OHADA organisation adopted in 1999 the OHADA Uniform Act on Arbitration to bridge the gap that existed in the legislative framework applicable to arbitration in the seventeen Member States from West and Central Africa,[1] and provide an effective legal framework for arbitration. The Uniform Act is applicable when the seat of arbitration is located in an OHADA Member State.[2] The OHADA treaty also provides for arbitration under the Rules of the CCJA.[3]

However, the Uniform Act of 1999 and the rules of the CCJA exhibited certain deficiencies, whether in their role of harmonization of law and procedure or in the promotion of arbitration. In fact, the CCJA has registered only 96 cases since its creation. The revised CCJA Rules and the Uniform Act attempt to address these deficiencies.

According to the official statement, the purpose of the new text is to “enhance the transparency, speed and efficiency of the arbitral proceedings in the OHADA space”, in order to strengthen “the confidence of local and foreign investors and improve significantly the business climate in Africa”.[4]

The revised CCJA Rules and the revised Uniform Act include innovative provisions that seek to make arbitration in the OHADA space more attractive and for the CCJA to be recognized as an useful centre of arbitration.

The new Uniform Act, the revised CCJA Rules, and the Uniform Act on Mediation were published in the Official Journal on 15 December 2017 and will enter into force on 15 March 2018.

 An expanded scope

The scope of the Uniform Act and the CCJA Rules have been expanded in two ways. On the one hand, States, local governments, public establishments, and any legal entity governed by public law may henceforth be a party to arbitration.[5] On the other hand, the Uniform Act and the CCJA Rules have both sought to expand investment arbitration in the OHADA space; today OHADA Member States are involved in arbitration proceedings with private parties.[6]

Both texts clearly state that arbitration could be initiated on the basis of an arbitration agreement or an investment instrument such as an investment code, or a bilateral or multilateral investment treaty. It remains to be seen how in practice the CCJA arbitration centre will promote investment arbitration in the region and dedicate a specific set of measures to handle investment arbitration procedures which, to date, are mainly handled overseas.

Increasing the powers and autonomy of the arbitral tribunal

Another modification that effectively promotes arbitration in the OHADA space while maintaining the goal of harmonisation consists in granting the arbitral tribunal powers similar to those granted by modern arbitration laws, such as the power to nominate experts,[7] and order provisional and conservatory measures upon a party’s request. Moreover, a request for provisional and conservatory measures may also be brought before a national court in case of emergency.[8] However, preventive seizures and judicial security are excluded from the powers of arbitrators. The granting of such measures, which requires the use of coercive powers, is a prerogative of state courts, owing to public policy considerations, and is therefore not accorded to arbitral tribunals under these rules.[9]

An accelerated proceeding

With the Uniform Act, a 3-month deadline has been imposed on national judges to judge requests for setting aside arbitral awards. The failure of a national judge to meet this deadline allows a party to bring proceedings before the CCJA within 15 days after the deadline.[10]

The CCJA must render its decision on the setting aside of awards within 6 months.[11] The grounds for setting aside awards are now the same in both texts. Indeed, this shortening of deadlines addresses a recurring problem of slow proceedings for the setting aside of awards in the OHADA space. Previously, the failure of an arbitrator to order the provisional execution of an award was used by the parties as an excuse to institute dilatory proceedings to set aside the award. However, the new 6-month deadline seems to be ambitious. It is therefore hoped that both the state courts, as well as the CCJA are able to adhere to this deadline.

However, it is important to note that the deadlines imposed on parties for the commencement of set aside proceedings are different. The Uniform Act imposes a 1-month deadline whereas the CCJA Rules impose a 2-month deadline from the date of notification of the award to the parties.

Moreover, the CCJA Rules and the Uniform Act both allow the parties to waive the right to file an application to set aside the award, to the extent that such a waiver will not be deemed to be contrary to international public policy. Indeed, international public policy is a notion that varies from one country to another and it is one of the most popular grounds used by parties to resist enforcement of arbitral tribunals’ award.

Regarding the request for enforcement, both texts impose a fixed deadline on national courts and the CCJA to order or decline enforcement of the award. The texts specifically provide that a failure to issue an order within 15 days results in a conclusive presumption that exequatur has been granted.[12] Thus, exequatur allows for the enforcement of an award in all Member States.

Importantly, an award rendered under the Uniform Act requires an enforcement order from a competent authority in the Member State where the award is to be enforced. The lack of coherence in enforcement proceedings in the different Member States was historically a significant problem. The rules now provide that when an award is rendered pursuant to the CCJA Rules, exequatur allows for the enforcement of the award in all Member States. This system of exequatur by the CCJA can be seen as a solution to the difficulty of enforcing awards in Member States that are not parties to the New York Convention. At the local level, it will be important to see if national courts effectively permit the prompt enforcement of awards that have been granted exequatur by the CCJA without causing additional trouble for the party trying to enforce the award.

The 15-day deadline to issue and order exequatur harmonises the different arbitration laws of the Member States. The shortening of the deadline aims to facilitate the efficient and rapid enforcement of arbitral awards and will contribute to the success of arbitration as an effective way of resolving international disputes. It is also hoped that a short 15-day deadline will render it difficult for a resisting party to orchestrate insolvency.

Provision of a Med-Arb or Arb-Med-Arb mechanism

As discussed in a previous article, the Med-Arb mechanism provides the flexibility of mediation with the certainty of arbitration by allowing arbitration between disputing parties only if a prior mediation was initiated and then failed.[13] The explicit introduction of such a mechanism can render the resolution of disputes more cost-efficient.[14] Similarly, the Uniform Act and CCJA Rules clearly provide for the possibility for arbitrators to issue consent awards which record the settlement agreed by the parties during the arbitration proceedings, that are enforceable as regular arbitral awards.[15]

Strengthening of arbitral awards

With the revised CCJA Rules, the award must be a reasoned award.[16] The CCJA Rules require arbitrators to provide reasons for the awards. The failure of the tribunal to do so properly is now a ground for setting aside the award.

The CCJA also has the power to scrutinize draft awards. These powers are quite similar to those of the International Chamber of Commerce (“ICC”). The Court can purely suggest formal changes, may draw the tribunal’s attention to a failure to address a claim, or to a failure to include mandatory information in the draft award. However, the court cannot suggest a solution to the dispute. [17]

Introduction of mediation in the OHADA space

The Uniform Act on Mediation is directly applicable in the Member States to all mediation proceedings initiated after its entry in force, regardless of the date when the agreement to mediate was made. Both ad hoc and institutional mediation are covered by the provisions of the Uniform Act, without regard to who decided to proceed with mediation; be it a judge, an arbitral tribunal, a competent public authority, or the parties themselves.[18]

However, Article 1 defines conventional mediation (initiated by the parties themselves) and judicial mediation (ordered by a court judge with prior agreement of the parties), but Article 2 provides that “the uniform act does not apply to the cases in which a judge or an arbitrator, during a litigation or arbitration proceedings attempts to facilitate a friendly settlement directly with the parties.” The two Articles are thus contradictory in our view. Consequently, we expect that a clarification will likely be required by the CCJA regarding the interpretation of these two provisions.

Following this reform, it could be argued that the Uniform Act and the CCJA’s Rules may go a long way in fortifying and encouraging arbitration in the OHADA space, and possibly beyond, thereby fulfilling its intended goal of becoming a “law, which marks a milestone in the process of a truly African arbitration law, without departing from the widely accepted principles in modern practice in arbitration.”[19]

Over the past few years, Africa is increasingly becoming an important place of business, and there is no doubt that these texts will increase the attractiveness of the OHADA space.

At the same time, arbitration procedures and centres can only be efficient when supported by proper facilities and human resources, which are a sine qua non for the success of the OHADA arbitration mechanism.

B. Le Bars

[1] Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Comoros, Côte d’Ivoire, Democratic Republic of Congo, Equatorial Guinea, Gabon, Guinea, Guinea-Bissau, Mali, Niger, Republic of the Congo, Senegal and Togo

[2] Article 1, Uniform Act, 2017

[3] Article 1.1, CCJA Rules, 2017

[4] See, <http://www.ohada.org/index.php/fr/actualite/dernieres-nouvelles/2293-mise-en-ligne-des-nouveaux-textes-ohada-sur-l-arbitrage-et-la-mediation>

[5] Article 2, Uniform Act, 2017

[6] Article 2, Article 3, Uniform Act, 2017; Article 2.1(2), CCJA Rules, 2017

[7] Article 19-2, CCJA Rules, 2017; Article 14 (1), Uniform Act, 2017

[8] Article 10-1, CCJA Rules, 2017; Article 14 (12), Uniform Act, 2017

[9] Article 14 Uniform Act, 2017

[10] Article 27, Uniform Act, 2017

[11] Article 29.4, CCJA Rules, 2017

[12] Article 30.2, CCJA Rules, 2017; 31(5) Uniform Act, 2017

[13] See, <http://internationalarbitrationlaw.com/blog/med-arb-and-arb-med-arb-as-means-for-the-resolution-of-commercial-disputes>

[14] Article 8-1, Uniform Act, 2017

[15] Article 20, CCJA Rules, 2017; Article 19, Uniform Act, 2017

[16] Article 22.1, CCJA Rules, 2017

[17] Article 23, CCJA Rules, 2017

[18] Article 1, Uniform Act on Mediation, 2017

[19] See, Francis Ulrich Ndinga-Yocka, The features of the arbitration proceedings under the OHADA Uniform Act on arbitration law, Global Scholars Journal of Law and Conflict Resolution, 2014, Vol.1, p.1, Available at : <http://www.globalscholarsjournals.org/LCR/pdf/2014/december/Francis%20Ulrich%20.pdf>