Arbitration in OHADA
by Lucien Mutulwa
The Organisation for the Harmonization of Business Law in Africa (OHADA) is an international organization that was created by the treaty signed at Port-Louis, capital of Mauritius, on 17 October 1993 (the OHADA Treaty) and modified at Quebec in Canada on 17 October 2008. Apart from aiming to ensure juridical and judiciary security to its members, the purpose of the OHADA Treaty is also to promote the development of the contracting states by elaborating a business law model that is simple, modern and adapted in order to stimulate and secure investment in the OHADA territory, both at legal and judiciary level[1]. OHADA is made up of the following 17 contracting states: Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Comoros, Congo, the Democratic Republic of Congo, Ivory Coast, Gabon, Guinea Conakry, Guinea Bissau, Equatorial Guinea, Mali, Niger, Senegal and Togo.
The Uniform Act on Arbitration and the Common Court of Justice and Arbitration
The OHADA needed an effective institution to solve the different matters that may occur between several parties from the same OHADA Member State, parties from different OHADA Member States, or a party from an OHADA Member State and another from a foreign State. That’s why in 1999 two harmonized laws with regards to arbitration were adopted: The Uniform Act on Arbitration (UAA), and the Rules of Arbitration of the Common Court of Justice and Arbitration (CCJA). In 2016, OHADA initiated a reform of its arbitration laws. As of 15 March 2018, revised versions of the UAA and the CCJA Arbitration Rules came in force. The new rules imposed strict and short time-limits for decisions to be rendered by the local judges in arbitration matters. Practice will show the efficiency of these legislative measures[2].
Considering the economic instability that many Member States have experienced, it is legitimate to wonder how successful this institution has been so far. In fact, there are still several remaining challenges for the development of arbitration in the OHADA zone. Increasing the recourse to arbitration, improving public awareness of the benefits of arbitration, training local practitioners, including judges, and granting additional resources to the CCJA are the seminal challenges. However, the Court has been arbitrating a considerable number of cases[3].
Many of its decisions are to be found on this link:
http://www.ohada.com/jurisprudence/categorie/9/cour-commune-de-justice-et-d-arbitrage-ccja.html.
One of the most controversial is the decision in the case of Getma International (a French Company) v. Guinea.
Getma International v. Guinea.
In 2011, Getma International began arbitration proceedings against the Guinean State for wrongful termination of a port and railway concession contract. The proceedings were held under the arbitral rules of the CCJA. Three arbitrators: Professor Ibrahim Fadlallah, Eric Teynier Esq and Juan Antonio Cremades Esq were the ones in charge of the arbitration. The arbitrator’s total fees were set at €450,000 after negotiating directly with the parties over their fees whereas the CCJA, though a court order from 2011 limits their fees to 40 million CFA francs (approximately €60,000)[4].
In April 2014, the Tribunal ruled in favour of Getma, ordering Guinea to pay over €38 million in damages plus interest. Getma commenced proceedings to enforce the award in the US courts. However, that decision was annulled on 19 November 2015 on the grounds that the arbitrators had breached their mandate by negotiating directly with the parties over their fees, in breach of the 2011 court order which limited their fees to 40 million CFA francs[5].
This CCJA annulment decision was a controversial one, with potentially serious implications for the future of OHADA arbitrations. Because of this precedent, future parties to CCJA arbitrations would likely avoid increasing arbitrator fees without the CCJA consent. If this were the case, then the tribunal fees could remain unchanged, as they are fixed by the CCJA. As a result, it is questionable whether the CCJA will be able to attract high quality international arbitrators to hear its cases going forward[6].
In response to this highly-publicized case, the CCJA Arbitration Rules now expressly provided that: “any decision on the fees made without the approval of the Court is null and void, but may not be used as a ground for annulment of the award.” The new text therefore provided enough safeguards against any conduct similar to the one in the Getma case. This wording also aims at preventing unscrupulous arbitrators from making direct financial arrangements with the parties[7].
Prospect Future
The future of this court looks bright though as its gaining with experience and notoriety. The continent remains the preferred destination for investments, despite the risks future investors may encounter. As far as African States are concerned, they are very supportive of arbitration, while at the same time contemplating other forms of disputes resolution.
[1] Abdou Diallo. Réflexion sur l’arbitrage dans l’espace OHADA. Droit. Université de Perpignan, 2016
[2] OHADA, by Orrick RAMBAUD MARTEL | Back to gap contents gap 1st edition © DELOS DISPUTE RESOLUTION 2018-2020, p 3-4.
[3] OHADA, by Orrick RAMBAUD MARTEL | Back to gap contents gap 1st edition © DELOS DISPUTE RESOLUTION 2018-2020, p 3-4.
[4] Getma v Republic of Guinea—implications for African arbitration Kwadwo Sarkodie, Joseph Otoo, p 10
[5] A Step Back for OHADA Arbitrations? Maguelonne de Brugiere (Herbert Smith Freehills)/February 10, 2016.
[6] Getma v Republic of Guinea—implications for African arbitration Kwadwo Sarkodie, Joseph Otoo, p30
[7] Idem