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There is the need to work to make Africa a highly respected home for arbitration in cases emanating from Africa, the Attorney-General and Minister of Justice, Mr Godfred Yeboah Dame, has suggested.
He was speaking as the guest speaker at the African Regional forum held as part of the International Bar Association’s annual conference in Mexico City, Mexico on Thursday, September 19, 2024.
“I suggest that African nations must take steps to ensure that most international arbitrations involving them take place in their respective countries and are regulated by the laws of their own countries.”
The Attorney-General and Minister of Justice observed that international arbitration has become the principal means for resolving disputes between governments and private persons.
Rather unfortunately, he noted that such disputes often end up being contested at huge cost outside Africa, with London, Paris and New York being the most popular seats for arbitration.
He said even when African disputes involve two African parties, the cases tend to be subject to either the rules of the International Chamber of Commerce (ICC) or London Court of International Arbitration (LCIA) rules, and arbitration takes place with the seats being London, Paris, New York or Singapore.
Mr Dame noted that this development limits the opportunities for African arbitrators and stunts the development of the continent’s prowess in arbitration whilst also coming at enormous expense to the continent.
Making reference to a recent arbitration award of over $11 billion against the government of Nigeria in international arbitration in a claim by a small offshore gas company, Process & Industrial Development Limited (P&ID), which was eventually set aside by the High Court of London in October, 2023, Mr Dame stated that Africa suffers a lot of prejudice in the international arbitration arena.
“Whilst international arbitration is touted to assure neutrality, privacy and efficiency in the adjudication of disputes, it cannot be disputed that African countries have been at the receiving end of some obnoxious and perverse awards.
He said “We cannot discount the prejudice Africa often suffers in international arbitration fora. We must all work towards the establishment of a justice system that guarantees all elements of the rule of law necessarily produce a business operating environment characterised by transparency, certainty and fairness.”
“I should not be misconstrued as saying that Africa should shy away from international arbitration. Far from that. What I advocate for is a sober reflection on the regime for handling international arbitration on the African continent and a reform of same. The vulnerability of arbitration to abuse and fraud exposes the need for more robust safeguards in commercial disputes involving state parties, where the hard-earned purse of the nation is at stake. I deem it incompatible with the sovereignty of African nations for most of our international arbitration matters to be heard in foreign jurisdictions and with foreign countries being the seat of arbitration. It is a truism that an arbitration is international not because of the forum or place of hearing, but largely because of the parties involved and the underlying transaction.”
The Attorney-General and Minister of Justice told the guests that Ghana was taking steps to ensure the passage of a law, an amendment to her State (Property and Contracts) Act, 1960, to mandate all contracts involving the State and its agencies as parties, to not only stipulate Ghana law as the governing law but also to have Ghana as the seat of arbitration and with the ADR Centre in Accra being the venue for the arbitration.
With this amendment, Mr Dame said the practice whereby the state and Ghanaian lawyers travel to various jurisdictions – Paris, New York, London, Singapore, for the conduct of arbitration involving the government of Ghana and where arbitral awards are enforced all over the world at enormous cost to the state, and in jurisdictions with legal systems alien to Ghana’s, will cease and will be consigned to history.
On global regulatory barriers, the Attorney-General and Minister of Justice urged global leaders, particularly regulators of the legal profession around the world, to take a second look at rules regulating the practice of law across borders in view of the circumstances the world finds itself in.
BY MALIK SULLEMANA
