International businesses operating in West- and Central Africa should consider arbitrating any disputes under OHADA Rules (an acronym for the French phrase for “Organisation for the Harmonisation of Corporate Law in Africa”) that offer effective enforcement mechanisms rarely seen elsewhere, say Grierson and Boua Doux of Africa-focused international firm Asafo & Co.
“National arbitration laws and rules around the world are now very similar to each other,” said Grierson, a partner in Asafo & Co’s Paris office and an expert in international arbitration. “What matters, frankly much more than the national laws or arbitral institution rules, is the way they’re applied and enforced by national courts and arbitral institutions.”
While most multinationals operating in Africa default to resolving disputes under the rules of overseas arbitral organisations like the ICC or LCIA, says Grierson, the enforcement mechanisms of the Common Court of Justice and Arbitration (CCJA) Rules in the OHADA region provide an attractive alternative.
The CCJA, based in Abidjan, is designed to ensure consistent legal interpretations across the 17 West- and Central African nations that signed the OHADA Treaty to harmonise business laws and promote investment and economic growth in the region.
Boua Doux, a partner based in Côte d’Ivoire who specialised in energy, infrastructure and natural resources, believes that OHADA has been successful overall since its launch in 1993.
“Harmonising business law in 17 countries in Africa brought confidence to investors on the legal certainty they can have for their transactions,” he said. “Definitely OHADA stimulated investment in a number of countries. It really helps investors choose where to invest, because they have a clear view on the sets of laws governing their transactions, which are common to neighbouring countries.
It’s also a healthy environment for lenders, Boua Doux commented, with laws relating to registering security interests and filing security documents being harmonised among all member countries.
Grierson believes it is the harmonisation of arbitration rules and enforcement under the CCJA that should draw greater notice and use from international businesses. Not only are there no traps foreign investors could fall into, in terms of any undesirable differences from ICC or LCIA regimes, but there is also a major positive difference when it comes to award enforcement.
“Once you get your award from the CCJA then you can enforce it in any of the 17 states of OHADA as though it were a national judgment of the member state in question,” Grierson explained. He noted that this is a remarkable and very rare benefit, with only an ICSID award from the World Bank providing something comparable when it comes to enforcement.
“That is something that really should be quite attractive to users of international arbitration who think they may end up wanting to enforce somewhere within the OHADA region. It is something to weigh up against the perceived risks of CCJA arbitration which are, in my view, diminishing as the CCJA gains greater experience and with the reform of its rules in 2017.”
With plenty of opportunities in various sectors and recent reforms further strengthening the OHADA regime – including extending it to investment arbitration, accelerated time limits, and a new Uniform Mediation Act – both Boua Doux and Grierson can see a future where international businesses increasingly embrace the region for resolving disputes arising out of their investments there.
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