International Commercial Arbitration at Ethiopia
Here’s an overview of International Commercial Arbitration in Ethiopia:
International Commercial Arbitration in Ethiopia
1. Legal Framework:
Ethiopia is not yet a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. This limits automatic enforcement of foreign arbitral awards in Ethiopia.
Arbitration in Ethiopia is primarily governed by the Ethiopian Arbitration and Conciliation Proclamation No. 1234/2021, which modernized arbitration law in Ethiopia.
The law incorporates many principles from the UNCITRAL Model Law, aiming to provide a modern legal framework for both domestic and international arbitration.
2. Arbitration Institutions:
Ethiopia does not have a prominent arbitration institution for international commercial disputes like ICC or LCIA.
Arbitration is often conducted ad hoc or under rules of international institutions such as ICC, UNCITRAL, or others chosen by the parties.
The Ethiopian Ministry of Trade and other governmental bodies may sometimes be involved in arbitration related to foreign investments.
3. Arbitration Procedure:
Arbitration agreements must be in writing.
Parties have freedom to select arbitrators.
Arbitration proceedings are confidential and flexible.
Ethiopian courts support arbitration but have the power to intervene in limited circumstances (e.g., appointment of arbitrators, enforcement).
4. Enforcement of Arbitral Awards:
Since Ethiopia is not a New York Convention member, foreign arbitral awards are not automatically enforceable.
Enforcement depends on the recognition of awards by Ethiopian courts through domestic procedures, which can be unpredictable and lengthy.
Domestic arbitral awards are recognized under Ethiopian law and enforceable through the courts.
5. Practical Considerations:
Due to the absence of New York Convention membership, international parties often prefer arbitration seated in a neutral country with strong arbitration enforcement.
Contracts with Ethiopian parties should clearly specify arbitration rules, seat, and enforcement mechanisms.
Ethiopia is working towards improving its arbitration framework, and recent legislative changes show positive movement.
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