A. LEGISLATION AND RULES
A.1 Legislation
A.1.1 No legislative amendments to the OHADA Treaty, the UAA and the CCJA Regulation
International arbitration continues to be governed by the Treaty on Harmonization of Business Law in Africa (“OHADA Treaty“), the Uniform Act on Arbitration Law (UAA) and the Arbitration Regulation of the Common Court of Justice and Arbitration (“CCJA Regulation“).
A.1.2 The African Union Assembly of Heads of State, including all OHADA state parties, adopted the Protocol on investment to the AfCFTA
On 19 February 2023, [1] the African Union Assembly Heads of States, 47 of which ratified the Agreement Establishing the African Continental Free Trade Area[2] (AfCFTA) adopted the Protocol on Investment (“Protocol” or POI).[3] The Protocol is part of the AfCFTA, which seeks to harmonize trade across the whole African continent by eliminating trade barriers and promoting intra-Africa trade and investment. The initial AfCFTA Establishment Agreement that set out the framework for the functioning of the free trade area was signed by 54 out of 55 African states and launched on 7 July 2019.
Subsequently, the state members of the AfCFTA (“AfCFTA Member States“) negotiated several protocols in two separate phases. The first phase focused on trade in goods and services and has been successfully completed. The second phase (“Phase II“) is ongoing and encompasses the POI, the protocol on intellectual property and the protocol on competition.
It is in the course of Phase II that the POI was adopted. The Protocol will govern investments in the free trade area and define the rights and obligations of investors and AfCFTA Member States.
First, the Protocol only applies to African investors — natural persons or legal persons — who invest in the 54 AfCFTA Member States. It anticipates issues of investors’ dual nationality by applying the “effective nationality” criteria (Article 1 of the POI).
Second, to qualify for an investment, the Protocol requires that such investment contribute to the economic development of the host state (Article 1 and Article 5 of the POI).
Third, the Protocol provides investors protection, such as national treatment (Article 12 of the POI) and most-favored nation treatment (Article 14 of the POI), physical protection and security (Article 18 of the POI), and protection against expropriation (Article 19 of the POI). However, the Protocol does not grant any fair and equitable treatment standard. Rather, the AfCFTA Member States agreed to ensure administrative and judicial treatment (Article 17 of the POI). Under that treatment, “investors and investments of another State Party are not subject to treatment which constitutes a fundamental denial of justice in criminal, civil and administrative adjudicative proceedings, an evident denial of due process in administrative and judicial proceedings, or manifest arbitrariness.”[4] However, the Protocol specifies that it does not amount to the fair and equitable treatment standard. Instead, the provided administrative and judicial treatment includes solely the minimum standard of treatment under customary international law and shall not be subject to any interpretation. Therefore, departing from the traditional formula of the fair and equitable treatment standard, the AfCFTA Member States seek to prevent tribunals or courts from favoring investors by extending the scope of the standard of treatment required from the host state.
Lastly, the Protocol requires investors to comply with a number of obligations to benefit the protection of the POI, such as: (1) compliance with national and international law (Article 32 of the POI); (2) compliance with business ethics, human and labor standards (Article 33 of the POI echoing Article 15 of the Morocco-Nigeria BIT requiring investors to comply with international and domestic labor and human rights protection); (3) protection of the environment (Article 34 of the POI); (4) respect for the rights of Indigenous people and communities (Article 35 of the POI); (5) refraining from interfering with the host state’s internal affairs and intergovernmental relations (Article 36 of the POI); (6) refraining from unlawful and corrupt practices (Article 37 of the POI — recalling Article 17 of the Morocco-Nigerian BIT); (7) commitment to achieving the highest possible level of contribution to the host state’s sustainable development (Article 38 of the POI — recalling Article 22 of the Pan-African Investment Code).
However, while the African Heads of State agreed on the final draft of the POI, the annex dealing with the investor-state dispute mechanism is still under negotiation. The initial draft protocol — known as “zero draft” — included in its annex a traditional investor-state dispute system. First, the investor and host state shall seek to resolve their dispute amicably.[5] Then, if such amicable resolution could not be achieved between the parties, the investors were entitled to submit their claims to arbitration under the ICSID Rules, UNCITRAL Rules or any arbitration rules adopted by African institutions or dispute resolution centers, or under any other arbitration institution.[6]
A.2 Institutions, rules and infrastructure
Arbitration proceedings continue to be governed by the CCJA Regulation, the Arbitration Rule of the Court of Arbitration of Côte d’Ivoire or the Arbitration Rule of the Centre d’arbitrage du Groupement Interpratronal du Cameroun. Those institutions have not amended their respective arbitration rules in the past year.
B. CASES
B.1 No effect of liquidation on arbitration agreement
In Société Canalbox Benin v. Benin and Caisse Autonome d’Amortissement,[7] the Common Court of Justice and Arbitration (CCJA or “Court“) stated that in the event of liquidation of a party to a contract containing an arbitration clause, a disputed debt arising from that contract and owed to the counterparty falls within the jurisdiction of an arbitral tribunal.
The parties entered into a repayment agreement under which Canalbox Benin undertook to repay a certain amount of money to its counterparty. In this agreement, they agreed to submit to arbitration any dispute arising out of or in connection with it.
Subsequent to the decision of liquidation of Canalbox Benin, the Republic of Benin and the Caisse Autonome d’Amortissement objected to the liquidation before the Cotonou Commercial Court on the grounds that the former owed the latter a debt of several hundred thousand euros under the repayment agreement. Canalbox Benin challenged the jurisdiction of the commercial court, asserting that as the disputed debt arose from the repayment agreement, it fell within the competence of an arbitral tribunal.
Confirming Canalbox Benin’s position, the CCJA held that given that the debt at issue had arisen from a contract containing an arbitration clause, the commercial court did not have jurisdiction over the dispute.
First, the Court found that the dispute in question related more to contractual matters than to bankruptcy, and therefore, rejected the application of the Uniform Act relating to the law of commercial companies, which provides jurisdiction to domestic courts over bankruptcy matters, in favor of the UAA.
Second, relying on Article 13 paragraph 1 of the UAA[8] and Article 23 of the OHADA Treaty,[9] the CCJA found that when the parties to a contract agree to submit to arbitration any disputes related to that contract, the domestic court shall decline jurisdiction.[10] Considering the contractual nature of the disputed debt, the arbitral tribunal had jurisdiction to rule over such dispute or, at least, had exclusive competence to rule on its own jurisdiction.
B.2 No conflict of interest on the part of an arbitrator appointed by one of the parties’ shareholders in previous arbitration proceedings
In EMM v. Société Kamoto Copper Company,[11] the award debtor challenged the impartiality of the arbitral tribunal on the ground that one arbitrator was appointed as emergency arbitrator in a previous dispute involving the shareholder of one of the parties to the current arbitration proceedings.
First, the Court emphasized that while the challenging arbitrator disclosed the potential conflict of interest in the early stage of the arbitration proceedings, the award debtor applied for the disqualification of this arbitrator for the first time in the course of the set-aside proceedings. The judges found that such a challenge at this stage of the proceedings was behind time. Also, the CCJA pointed out that the award debtor had signed the minutes recording the object of the arbitration and setting out the conduct of the arbitration proceedings. Therefore, it “was ill-advised to mention the irregularity of the composition of the arbitral tribunal.”[12]
Second, the CCJA ruled that the fact that an arbitrator had been appointed as an emergency arbitrator in a previous arbitration involving the shareholder of one of the parties of the current proceedings did not amount to a breach of their duty of impartiality and independence.
B.3 Arbitrators’ power to order provisional execution
In Société ITF Trading Company v. SOCIA,[13] the CCJA held that an arbitral tribunal is empowered to order provisional execution of an award where the law applicable to the dispute allows it to do so.
The applicant to set-aside proceedings challenged an arbitral award on the ground that the arbitral tribunal infringed the law applicable to the merits of the dispute by ordering the provisional enforcement of the arbitral award. The arbitral tribunal ordered such enforcement pursuant to Article 3 of Law 97/108 of 7 August 1997, laying down certain conditions relating to the enforcement of court decisions in Cameroon.[14] While the judges initially refused to consider such ground, they thereafter made comments on the application of the law in question, highlighting that when the law vested a court or a tribunal to order provisional execution of a decision, an arbitral tribunal shall be vested with such power.
While the clarification of the term “tribunal” in Article 3 of Law 97/108[15] is welcome, one might wonder whether this clarification falls within the scope of the grounds for setting aside or refusing to set aside an arbitral award. By reexamining whether the conditions for the application of Article 3 were met — in particular, whether the debt was of a contractual nature and whether the debt was due — the CCJA went far beyond the grounds for annulment or refusal of annulment of an award set out in Article 29.2 of the CCJA Regulation. According to this provision, the CCJA can only rule on the validity of an arbitration agreement, the composition of the arbitral tribunal, the mission of the arbitrators, the adversarial principle, the lack of a statement of reasons for the arbitral award and compliance with international public policy.[16] It is not empowered to review the proper application of the substantive law.
In EMM v. Société Kamoto Copper Company,[17] the CCJA held that it was not for it to rule on the provisional enforcement of the award’s grounds relating to procedural costs, since the arbitrator had complied with his terms of reference and the adversarial principle had been respected.
Refusing to comment on the merits of the award, the judges recalled that the arbitral tribunal had considered that the provisional enforcement of part of the award did not exceed the limits of the arbitrator’s terms of reference approved by the parties. According to the arbitral tribunal — and restated by the CCJA — the requests for provisional enforcement were directly linked to the parties’ dispute and did not modify or add any considerations set out in the terms of reference.[18]
The Court added that as the applicant had raised no objection to the provisional enforcement of the award when it was issued, the arbitral tribunal had not breached the principle of adversarial proceedings. As a result, the arbitral tribunal was entitled to grant such provisional enforcement.
B.4 Start of the statute of limitations to challenge arbitral award before the CCJA in case of the deficiency of domestic courts to rule
In GETRAN v. Ibou Fall,[19] the Court ruled that under Article 27 of the UAA, in the event of domestic courts failing to rule on an application for setting aside an award, the matter should be referred to the CCJA within 15 days of the termination of the three-month period following the filing of such application with the domestic court.
On 14 July 2021, an award debtor applied to the Dakar Court of Appeal to set aside an arbitral award.
On 21 February 2022, the Dakar Court of Appeal was unable to comply with the three-month statute of limitations stated under Article 27 of the UAA and, therefore, withdrew from the case. On 3 March 2022 — less than 15 days after the Court of Appeal’s decision — the award debtor brought its case to the CCJA to set aside the arbitral award.
The CCJA ruled that the application was inadmissible on the grounds that the award debtor had lodged its application beyond the statute of limitations. Under Article 27 of the UAA, when the competent domestic court has not given a ruling within the three-month period following the filing of an application to set aside the arbitral award, that court shall be relieved of jurisdiction, and the applicant may bring its application before the CCJA within the following 15 days. As a result, the 15-day statute of limitations began to run from the termination of the three-month statute of limitations, i.e., 15 October 2021, and not from the date on which the Court of Appeal handed down its ruling.
[1] Investment Treaty News, H. El-Kady, M.M. Mbengue, S.H. Nikiéma and D. Uribe, “The Protocol on Investment to the Agreement Establishing the African Continental Free Trade Area: What’s in it and what’s next for the Continent?,” 1 July 2023.
[2] See AfCFTA website, au-afcfta.org.
[3] Please note that the text of the final version of the POI is not available to the public; we refer under this section to the last version of the draft of the POI adopted by the African Union Assembly Heads of State.
[4] Article 17 of the POI.
[5] Article 3 of the zero draftof the POI.
[6] Article 6 of the zero draftof the POI.
[7] CCJA, Société Canalbox Benin v. Bénin and Caisse Autonome d’Amortissement, No. 152/2023, 29 June 2023.
[8] Article 13 paragraph 1 of the UAA states: “When a dispute subject to arbitration proceedings under an arbitration agreement is brought before a State court, the latter must, if requested by one of the parties decline jurisdiction.”
[9] Article 23 of the OHADA Treaty states: “Any court of a State Party to which a dispute that the parties had agreed to submit to arbitration has been referred will decline jurisdiction if one of the parties so requests, and must, if necessary, refer to the arbitration procedure under this Treaty.”
[10] CCJA, Société Canalbox Benin v. Bénin and Caisse Autonome d’Amortissement, No. 152/2023, 29 June 2023, p.4.
[11] CCJA, EMM v. Société Kamoto Copper Company, No. 104/2022, 23 June 2022.
[12] CCJA, EMM v. Société Kamoto Copper Company, No. 104/2022, 23 June 2022, p.6-7.
[13] CCJA, Société ITF Trading Company v. SOCIA, No. 035/2023, 9 March 2023.
[14] Article 3 of the Cameroonian Law 97/108 of 7 August 1997 states that “the court may, in the event of a contradictory or deemed contradictory decision, order provisional execution, notwithstanding appeal, in the following cases: a) in the case of […] contractual debt due for payment […].”
[15] Article 3 of the Cameroonian Law 97/108 of 7 August 1997 states that “the court may, in the event of a contradictory or deemed contradictory decision, order provisional execution, notwithstanding appeal, in the following cases: a) in the case of […] contractual debt due for payment […].”
[16] Article 29.2 of the CCJA Regulation states: “The motion for annulment is admissible only: a) if the arbitral tribunal has ruled without an arbitration agreement, or on a null or expired agreement, b) if the arbitral tribunal has been improperly composed, or the sole arbitrator was improperly appointed, c) if the arbitral tribunal has ruled without complying with the mission entrusted to it, d) if the adversarial principle has been breached, e) if the arbitral award is contrary to international public policy, f) if the award is devoid of any reason.”
[17] CCJA, EMM v. Société Kamoto Copper Company, No. 104/2022, 23 June 2022.
[18] CCJA, EMM v. Société Kamoto Copper Company, No. 104/2022, 23 June 2022, p. 8-9.
[19] CCJA, GETRAN v. Ibou Fall, No. 049/2023, 23 March 2023.
