4 2 Mizan,297-333 - Ethiopian Legal Brief
www.chilot.meTHE ROLE OF ETHIOPIAN COURTSIN COMMERCIAL ARBITRATIONHailegabriel G. Feyissa AbstractThe role of arbitration in settling disputes which involves national andtransnational commercial transactions is steadily growing in this era ofglobalisation. International and national rules governing various aspects ofcommercial arbitration have contributed to the effectiveness of arbitration as analternative to litigation. The involvement of national courts is crucial to theoverall efficacy of arbitration, both domestic and international. Instancescalling for court intervention may appear at all stages of the arbitralproceedings. There is, however, a need to maintain a balance between the levelof court involvement and the smooth functioning of arbitration – which is acontractual alternative to judicial dispute settlement. This article deals with thelegal and practical role of Ethiopian courts during the three stages of arbitralproceeding, i.e., at the beginning of arbitration, during the arbitral proceedings,and after the end of the arbitration. And finally, I argue in favour of judicialrestraint particularly during the first two stages of arbitral proceedings.Key words:Commercial Arbitration, Ethiopian courts, arbitral proceedings, judicialrestraintIntroductionArbitration is seen here as a non-judicial dispute settlement mechanism wherebyparties to a dispute resort to a third party (or parties) whose determination overthe dispute is as binding as comparable court decisions. Depending on variousfactors, one can distinguish different types of arbitration.1 For instance, adistinction can be made between international and domestic arbitration.2 Within LL.B, LL.M, Lecturer in Law, Bahir Dar University School of Law. The author is grateful to Jennifer Ward and the anonymous reviewers for theircomments which enriched the initial version of the work.1See, e.g., Kröll, S. (2006) Arbitration, in Smits J. (ed.), Elgar Encyclopaedia ofComparative Law. Cheltenham, Edward Elgar Publishing Limited, p. 78 [hereinafterKröll].2See n. 29 infra and the accompanying text.
www.chilot.me298MIZAN LAW REVIEWVol. 4 No.2, Autumn 2010the domain of international arbitration, one may further distinguish betweeninvestment arbitration, commercial arbitration and arbitration between states.3For the purpose of this article, commercial arbitration stands for arbitrationof commercial disputes between private parties to either domestic orinternational transactions. I intend to use international commercial arbitrationto refer to arbitration between Ethiopians, on the one hand, and private partiesfrom foreign nations, on the other.4This article mainly focuses on commercial arbitration – both domestic andinternational. Particularly, it deals with the role played by Ethiopian courts incommercial arbitration. It argues that Ethiopian courts should maintain afriendly attitude towards commercial arbitration.The first section of the article highlights the different approaches regardingthe role of courts in arbitration and examines the reasons why Ethiopian courtsshould retain a minimalist approach regarding commercial arbitration. Thesecond and third sections deal with the historical and present state of theEthiopian legal regime on arbitration. And, the fourth section takes us throughthe crux of the research, i.e. the practical role Ethiopian courts have thus farplayed in commercial arbitration and its impact on the efficacy of the latter.1. The Interaction of Courts and Arbitral Tribunals: TheCompeting ApproachesArbitration as a dispute settlement device has a history dating as far back asancient civilisations in Egypt and Greece.5 Literature indicates that arbitrationpredates litigation.6 The gradual prominence of governmental dispute settlementbodies led to a period of judicial hostility towards arbitration. In what are now“arbitration friendly” jurisdictions like the USA, Great Britain and France, therewas a long-standing jurisprudence against arbitration.7 The main reason for the3Kröll, supra n. 1, p. 78.But see n. 29 infra.5Barrett, J. (2004) A History of Alternative Dispute Resolution. San Francisco, JosseyBass, pp. 1 et seq.; Zekos, G. (2008) International Commercial and MarineArbitration. London, Routledge- Cavendish, pp. 9 et seq. [hereinafter Zekos].6Zekos, ibid, p. 9.7Martinez-Fraga, P. (2009) The American Influence on International CommercialArbitration. Cambridge, Cambridge University Press, pp. 6-14[hereinafter MartinezFraga]; Navarro, P. Challenges of awards vis-á-vis the finality of internationalarbitration, pp. 11. Available from: www.consulegis.com [last accessed 31 Oct.,2010][hereinafter Navarro]; see also n. 45 infra.4
www.chilot.me4(2) Mizan Law Rev.THE ROLE OF ETHIOPIAN COURTS IN COMMERCIAL ARBITRATION299hostility between courts and arbitration was, inter alia, the belief that arbitrationgoes against public policy.8Amidst this judicial attitude, however, the use and advantage of arbitrationgained gradual ascendancy. Crucially, judicial prejudice against commercialarbitration has gradually faded away as the business sector “needed greaterspeed and flexibility for the settlement of their disputes than that provided bycourts.”9 Moreover, neutral venues in the form of international arbitral tribunalshave been in demand as international trade grew dramatically after World WarII.10 This in turn led to gradual judicial accommodation of arbitration.The traditional scepticism of arbitration now appears to have given way toremarkable judicial restraint. Yet, states have always kept arbitration under acertain level of court control. The desirability of a level of judicial assistance toand control over arbitration is now well understood.11 Nonetheless, acomparative analysis of national rules on commercial arbitration would revealthat the level of interaction between courts and arbitral tribunals varies fromjurisdiction to jurisdiction.12The most prevailing international trend confines judicial intervention to aminimum.13 This minimalist approach is represented by the United NationsCommission of International Trade Law Model Law on InternationalCommercial Arbitration (UNCITRAL Model Law) and other comparablenational arbitration laws. Aspects of this approach include the enforcement ofarbitration agreements, the recognition of the principles of severability andcompetence-competence (Kompetenze-Kompetenze), the upholding of thefinality of arbitral awards subject to certain fairness standards, the relativeautonomy of arbitration from judicial intervention during the arbitralproceeding, and the enforcement of arbitral awards. Whereas, the maximalistapproach is characterised by, for instance, the subjection of arbitral awards to8In the common law jurisdictions, for example, arbitration was perceived to be againstpublic policy for it “ousted otherwise competent courts of their jurisdiction”; seeMartinez-Fraga, p. 7.9Zekos, supra n. 5, pp. 16-20.10Craig, W. (1995) “Some Trends and Developments in the Laws and Practice ofInternational Commercial Arbitration,” Texas International Law Journal, (30), p. 2[hereinafter Craig].11See generally discussions under section 4 infra.12See generally Zekos, supra n. 5 for an excellent comparative analysis of the role ofEnglish, US, Greek and Belgian courts in commercial arbitration.13See, e.g., Gu, W. (2009-2010) “Judicial Review Over Arbitration in China: Assessingthe Extent of the Latest Pro-Arbitration Move by the Supreme People’s Court in thePeople’s Republic of China”, Wisconsin International Law Journal, (27), pp. 225-231;Kröll, supra n. 1, p.78.
www.chilot.me300MIZAN LAW REVIEWVol. 4 No.2, Autumn 2010broader judicial review and the wider court intervention during the proceedingsof the arbitration.The challenge of maintaining a fair balance between “excessive judicialinterference and necessary intervention” looks like an ever-ending endeavour asthe minimalist-maximalist debate still continues with regard to judicial reviewof certain awards involving the application of such areas of law as antitrust.14In this article, it is argued that Ethiopian courts must avoid excessive judicialinterference with regard to commercial arbitration for the following reasons.First, arbitration is a method of dispute settlement which is based on the consentof parties to avoid litigation. Courts must not frustrate the parties’ freedom ofcontract by interfering in the arbitration process and thus making the latterredundant. Second, arbitration – unhampered by excessive court interference –is a desirable input for Ethiopia’s attempt to actively participate in internationaltrade and attract foreign investment.15 Third, courts themselves may benefitfrom abstaining from unnecessary intervention in commercial arbitration.162. The Commercial Arbitration Regime of Ethiopia: HistoricalOverviewThe Ethiopian legal framework for modern arbitration was laid down by thecodifications of the 1950s and 60s. Before that, arbitration was only knownwithin the context of traditional dispute resolution processes. For the major partof Ethiopian legal history, non-judicial dispute settlement methods played asignificant role in resolving disputes in a traditional Ethiopian society.Shimguilina is one of the many traditional Ethiopian dispute settlement deviceswhich could be approximated to what is now known as arbitration.1714Navarro, pp. 11 et seq.; see also Blanke, G. (2007) “The ‘Minimalist’ and‘Maximalist’ Approach to Reviewing Competition Law Awards: A Never EndingSaga”, Stockholm International Arbitration Review, (2), pp. 51-78.15Asouzu A. lists numerous reasons why commercial arbitration is “an option ofnecessity and convenience for Africa in general; see Asouzu, A. (2001) InternationalCommercial Arbitration and African States: Practice Participation and InstitutionalDevelopment. (Cambridge: Cambridge University Press), pp. 27-50 [hereinafterAsouzu].16Arbitrators should be seen as partners of judges in the administration of justice. Theyhave a role to play in making the judiciary efficient by enabling the latter to avoid theunnecessary diversion of the limited judicial resources and time away from mattersthat require particular judicial attention.17Tilahun Teshome (2007), “The Legal Regime Governing Arbitration in Ethiopia.”Ethiopian Bar Review, 1(2), pp. 117-118 [hereinafter Tilahun]; Brietzke, P. (1974)
www.chilot.me4(2) Mizan Law Rev.THE ROLE OF ETHIOPIAN COURTS IN COMMERCIAL ARBITRATION301Nonetheless, shimguilina seems a much wider concept than the modern notionof “arbitration”. The former combines aspects of different ADR mechanismsincluding mediation, conciliation, compromise and, of course, arbitration.18Shimguilina, along with other forms of traditional dispute settlementprocesses, was well-liked by people living in rural Ethiopia – where access tostate law enforcement organs used to be very limited.19 Apparently, it has alsosurvived the transplantation of Western dispute settlement processes. Studiesshow that many people, including urban merchants, had widely usedshimguilina “to save time and expense and to preserve business relations,” evenwell after the transplantation of Western-style dispute settlement systems.20 Thistraditional alternative dispute settlement device is still popular among the 21stcentury Ethiopian businesses, which often rely on it to settle disputes.21 Hence,arbitration has not been unknown to the traditional Ethiopian society.The modern concept of commercial arbitration had, however, been alien toEthiopia until at least mid-20th century, when Ethiopia developed most of itscurrent codes on private law. Some provisions were made for arbitration in the1960 Civil Code and the 1965 Civil Procedure Code (CPC). Articles 3325 to3346 of the 1960 Civil Code govern the enforcement of agreements to arbitrate“Private Law in Ethiopia,” Journal of African Law, 18(2), p. 158 [hereinafterBrietzke].18Tilahun, ibid, pp. 117-118; Fekadu Petros (2009), “Underlying Distinctions betweenADR, Shimglina and Arbitration” Mizan Law Review, 3(1), p.124 [hereinafterFekadu].19For a fair discussion on the prominence of non-judicial dispute settlementmechanisms among the traditional Ethiopian societies and the uneasy attempt of theState to impose modern legal institutions, see, e.g., Singer, N. (1970-1971) “ATraditional Legal Institution in a Modern Legal Setting: the Atbia Dagnia ofEthiopia”, UCLA Law Review, 18, pp. 308 et seq.; Alula, Pankhurst & GetachewAssefa (2008) Grass-roots Justice in Ethiopia: the Contribution of Customary DisputeResolution. Addis Ababa, CFEE [hereinafter Alula & Getachew].20Brietzke, supra n. 17, p.158.21See, e.g., a report by USAID (2007) Ethiopia Commercial Law & InstitutionalReform and Trade Diagnostic, p.60 [hereinafter USAID Report]; Mintwab Zelelew &Mellese Madda (2008) Alternative Dispute Resolution in Addis Ababa: the Case ofMarkato, in ibid, Alula & Getachew, p. 250.
www.chilot.me302MIZAN LAW REVIEWVol. 4 No.2, Autumn 2010in the form of either arbitral clauses or submissions.22 CPC, for its part, providesrules on some procedural aspects of arbitration.23Ethiopia is a signatory to the Convention on the Settlement of InvestmentDisputes between States and Nationals of Other States (ICSID Convention).24Unlike many of its sub-Saharan counterparts, however, Ethiopia has not yetratified the 1965 Convention to which it was one of the first signatories.Moreover, Ethiopia is yet to join the 1958 New York Convention on theRecognition and Enforcement of Foreign Arbitral Awards.25 As a result, the twocodes, both of which predate the modern international arbitration legislationrepresented by UNCITRAL Model Law, are for now26 the major sources ofarbitration law in Ethiopia.Ethiopia’s arbitration law seems “to be basically designed for domesticarbitration.”27 The pertinent provisions of the Civil Code and CPC do notdistinguish, except in the context of execution of foreign arbitral awards,28between domestic and international arbitration. It may thus appear that theCodes’ provisions on arbitration do not apply to “international”29 arbitration.22Appointment and replacement, disqualification, removal, competence and function ofarbitrators along with effects of non-performance of arbitration agreement aregenerally governed by the 1960 Civil Code of Ethiopia [hereinafter Civil Code].23In particular, procedure before arbitration tribunal, making of an award, appeal from,setting aside and execution of an award are governed by rules of the 1965 CivilProcedure Code of Ethiopia [hereinafter CPC].24See the list of member states on the website of ICSID at www.worldbank.org/icsid .25Optimism on the eventual membership of Ethiopia to both the ICSID and New YorkConventions surfaces as Ethiopia is now a member of regional trade zones whichdirectly or indirectly encourage the adherence to such international conventions; see,in particular, Asouzu, p. 337.26To the best of my knowledge, a new law on arbitration is set to be promulgated in thenear future.27Bezzawork Shimelash (1994) “The Formation, Content and Effect of an ArbitralSubmission under Ethiopian Law” Journal of Ethiopian Law, 17, p. 90 [hereinafterBezzawork].28Note, however, that foreign arbitral award is not synonymous to internationalarbitral award. International arbitral awards may of course be domestic for thepurpose of enforcement if the arbitral tribunal rendering the award has sat in the veryjurisdiction where enforcement is sought.29It is now uncommon for states to have two separate regimes of domestic arbitrationand international arbitration. Initially, there was no distinction between internationaland domestic arbitration. According to one theory, the distinction has become relevantonly after “the courts of various countries became involved in the conduct ofarbitration and enforcement of arbitral awards”. The jurisprudence in manyjurisdictions indicates that the nationality of the parties, the international nature of the
www.chilot.me4(2) Mizan Law Rev.THE ROLE OF ETHIOPIAN COURTS IN COMMERCIAL ARBITRATION303Such an argument would, however, be weighed down by the practicalapplicability of the Codes’ provisions vis-à-vis international arbitrations sited inEthiopia.30Incidentally, the term commercial which appears important in contemporaryunderstanding of international commercial arbitration is irrelevant in so far asEthiopian law on arbitration is concerned. For one thing, there is no lawreserving arbitration to only commercial disputes as was the case in sometraditional civil law countries. For another, Ethiopia is not a signatory tointernational treaties31 on recognition and enforcement of arbitral awards thatallow commercial reservations – which would have necessitated a definition ofcommercial for that purpose.A wider utilization of modern arbitration in Ethiopia has been delayed due tohistorical reasons. The reception of western style arbitration was not asrevolutionary as the introduction of the law itself.32 First, one of the mainreasons in the West for resorting to arbitration – the search for a disputesettlement mechanism other than the widely used courts – was initially missingin Ethiopia.33 Secondly, the poor utility of modern arbitration which ensued fortransaction and the place of arbitration are factors considered in deciding whetherarbitration is international or not. Thus, international arbitration entails arbitrationbetween (1) parties from different nations, (2) parties to an international transaction,or (3) parties to an arbitration agreement according to which a foreign place ofarbitration is designated; see, e.g., Tweeddale, A. & Tweeddale, K. (2005)Arbitration of Commercial Disputes: International and English Law and Practice.Oxford, OUP, at § 2.27-2.28 [hereinafter Tweeddale & Tweeddale]; Chiasson, E.(1999) A Comparison of International Arbitration Rules: the Practical Perspective. In:Campbell, D. & Birkeland, B. eds. Lawyering in International Market. New York,Transnational Publishers Inc., pp. 339-341.30See further discussions in section 4 infra.31Such as the 1958 New York Convention on the Recognition and Enforcement ofForeign Arbitral Awards.32See generally Beckstrom, J. (1973) “Transplantation of Legal Systems: an EarlyReport on the Reception of Western Laws in Ethiopia”, American Journal ofComparative Law (21), p. 567 [hereinafter Beckstrom]; and Sedler, R. (1967-68) “TheDevelopment of Legal Systems: the Ethiopian Experience”, Iowa Law Review 53[hereinafter Sedler].33In an article published few years after the 1960s codification, Robert Allen Sedlerimplicitly noted that Ethiopia was not as ready as its Western counterparts forarbitration or similar dispute resolution processes introduced by the law. He posits:“[unlike in Ethiopia], it is interesting to note that in countries with highly developedlegal systems the trend is toward removing disputes from the courts and submittingthem to arbitration and/ or giving jurisdiction to administrative tribunals”; see Sedler,p. 608.
www.chilot.me304MIZAN LAW REVIEWVol. 4 No.2, Autumn 2010some decades may also be attributed to “gross unfamiliarity”34 with modernarbitration.35Fortunately, recent developments show that Ethiopia has gradually developedan interest for alternative dispute settlement mechanisms including arbitration.36Arbitration, along with other ADR37 mechanisms, is now a popular disputesettlement process among businesses – international or domestic. Inter alia,economic and time factors justify the growing popularity of ADR andarbitration. Litigating commercial disputes in courts is less favoured by partiesbecause its financial burdens coupled with possible administrative barriers andcorruption can “lead to distrust of courts”.38 In particular, judicial settlement ofinternational commercial disputes is usually unattractive to at least one of theparties who might find submitting disputes to national courts unpleasant.3934Bezzawork states “.despite the fact that, we
Overview The Ethiopian legal framework for modern arbitration was laid down by the codifications of the 1950s and 60s. Before that, arbitration was only known within the context of traditional dispute resolution processes. For the major part of Ethiopian legal history, non-judicial dispute settlement methods played a
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Albert Woodfox were properly convicted for the 1972 murder of prison guard Brent Miller. Supporters of Wallace and Woodfox, who make up two-thirds of a group known to supporters as the "Angola Three," say that the convictions were at least partly because of the men's involvement with the Black Panther Party. "Under this new governor's office, this new day, we are making sure we right the .
