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Arbitration in Africa: Swithin J. Munyantwali, Uganda, part 2 of 2

Swithin J. Munyantwali, Counsel at Appleton Luff continues our series, Arbitration in Africa.

In Part 1, Mr Munyantwali discussed his personal and professional background, including his current role. He also considered arbitral institutions and centres in Uganda. In Part 2, he examines arbitral procedure, court support for arbitration, and recognition and enforcement of awards in Uganda. He also examines investment treaty arbitration and challenges to arbitrators. Finally, he offers advice for those who wish to start a career in arbitration in Uganda/Africa and discusses the difficulties for new arbitration practitioners or arbitrators.

Arbitral procedure

The typical length of an arbitration under the Centre for Arbitration and Dispute Resolution (CADER) rules is about three and a half months. Tribunals have powers to make certain orders, for example, interim remedies. The rules are adequate, since they are based on international best practice. A remaining need is to ensure that ADR (and I include in that arbitration) training is mandatory in African law schools, but more importantly, delivered by experienced practitioners, with the necessary tools, scholarly research to ensure a capable ADR professional be developed. This way, advocates versed with modern ADR practice will increase their knowledge, becoming experienced arbitrators over time.

Court support for arbitration

Local courts usually take a pro-arbitration approach and do not intervene unnecessarily. Challenges to the awards in the courts are generally unsuccessful.

Recognition and enforcement of awards

Local courts usually enforce domestic awards. Uganda is a party to the New York Convention and local courts also enforce foreign awards.

Investment treaty arbitration

Generally, with the increasing discovery of natural resources in the African region, international arbitrations are on the rise, especially in the energy sector. A disturbing trend is the negative impression investment arbitration has taken in some regional capitals following losses by government in large matters and the perception that there is lack of a level playing field in contract negotiation. In 2017, Tanzania enacted the Natural Wealth and Resources (Permanent Sovereignty) Act and Natural Wealth and Resources Contracts (Review and Renegotiation of Unconscionable Terms) Act, which have changed the dispute resolution landscape. The legislation has resulted in the renegotiation of mining contracts to remove “controversial” arbitration provisions (other related measures “impose restrictions on foreign banks, insurance companies and law firms or financing in the mining sector”). In some countries, there is a resistance to including arbitral provisions that provide for arbitration under the well-known arbitral systems (International Centre for Settlement of Investment Disputes (ICSID), International Chamber of Commerce (ICC), London Court of International Arbitration (LCIA), United Nations Commission on International Trade Law (UNCITRAL)) with the insistence that investors be subject to local or regional mechanisms.

What comprises “unconscionable”, for the purposes of the Natural Wealth and Resources Contracts (Review and Renegotiation of Unconscionable Terms) Act 2017, as one commentator observed, is unclear, but investors also have to contend with the grey area before the contract is renegotiated. They may have no choice but to enter investor-state disputes, in the knowledge that they might be prohibited under the renegotiated contract, with no clear guidance on how to treat a case that has already begun. While there is a genuine concern about the level of profits reaped from African investment, this has to be balanced against investor interests.

This trend is inconsistent with the need to attract foreign investment to the region, where a primary and genuine concern is the lack of well-established, efficient and transparent adjudication mechanisms. The poor reputation of inadequately functioning courts, accompanied by rampant corruption in legal systems (and generally), will stem the flow of international investors weary of being subject to local processes; the local (or regional) arbitral institutions are still in their infancy, and will not attract the international investor yet.

In any event, many countries in Africa are party to the New York Convention, have signed bilateral investment treaties (BITs) and are therefore are under a legal obligation to respect these international arrangements and the dispute mechanisms provided thereunder. The better strategy should be to develop the competence and reputation of local/regional centres, which over time will (like the Cairo Regional Arbitration Centre) attract international parties subjecting to their jurisdiction; only then will the share of disputes heard in the region, under the auspices of local experts, increase.

Challenges to arbitration practitioners and arbitrators in Uganda

A few thoughts come to mind:

  • As previously mentioned, there needs to be a genuine effort to build ADR knowledge in the African region; more informed lawyers and judges will raise the quality of adjudication. For example, there is a misconception amongst the bar in some countries that ADR is too quick and therefore cuts into the income generating ability of the lawyer.
  • Even in jurisdictions where the New York Convention has been signed and ratified, the ability for judicial enforcement of an award is only as good as the judicial system prevailing; often, the time to enforce is as slow as the normal local adjudication process, which takes away from the advantage of a supposedly efficient and effective ADR process.
  • Court reform is therefore an essential corollary to an effective ADR system, with judicial confidence playing an important role in promoting its establishment in the region.
  • At the end of the day, the proof is in the implementation, and not in the name: if ADR cannot be managed and implemented effectively, the region will not attract its fair share of investment disputes.

Advice to those who wish to start a career in arbitration in Uganda/Africa

I would advise the following:

  • Ensure that one gets an excellent educational background in arbitration; choose institutions where the faculty have demonstrated competence in the area, and are respected by their peers globally.
  • Read and publish on the subject to gain more knowledge and peer acknowledgment of your expertise.
  • Attend international conferences to appreciate the practical realities and network with a global community of practitioners.

From my experience, getting noticed came from my broad work in promoting rule of law reform on the continent, my writings, lectures and speeches in the region and globally. Of course, it helped that I had studied international commercial arbitration from one of the best in the field, and also actively became involved in building the skills of African jurists in the subject.

Difficulties for new arbitration practitioners or arbitrators in Uganda/Africa

While arbitration practice is growing rapidly in the African region, barriers still exist, some ‘”home-grown”.

Below are a few considerations to keep in mind:

  • African parties enter into contracts which provide for arbitration under some of the well-known arbitral institutions, such as ICSID and the ICC. When the dispute arises, the parties will generally select more well-known arbitrators, who tend to originate in the Northern hemisphere; this, by definition, keeps out the regional practitioner.
  • African governments rarely fill their own quotas on the panels (such as ICSID) leaving the decision to appoint to the normal process defaulting to the same players.
  • When appointment is decided by multilateral institutions, they tend to default to those with experience, which leaves out African experts.
  • There are thousands of lawyers who want to become arbitrators, but only very few make it.
  • The arbitration club is a small close-knit group, who tend to recommend each other, usually older, and who are very similar in terms of education and outlook; this, by definition, will squeeze out those who don’t hold similar qualities.
  • The lack of experience will feed into the narrative of “lack of experience”, with the vicious cycle leading to little or no work.
Appleton Luff Swithin Munyantwali

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