Paper presented at the AfAA 3rd Annual International Arbitration Conference, 3rd - 5th November 2022.  

Conflicts and ineffective means of resolving them lead to wasted resources, social instability, reduced investment, underdevelopment, and in extreme cases, loss of life. Over the years, it has become evident that effective negotiation, joint problem-solving, intervention by neutrals, alternative dispute resolution (ADR) mechanisms and dispute management skills help parties with differing interests, values and cultures, assuage brewing tensions and foster a wide range of social, legal, commercial and political goals.

This paper presents a comparative analysis of major forms of dispute resolution mechanisms and highlights key thematic areas impacting ADR. It answers the question of where we are, with the status of ADR in Africa, why ADR mechanisms proffer effective resolutions to disputes and what needs to be done to propel the use of ADR.

Finally, the author will argue that the call to action for the African continent is to develop a pan-African ADR framework which accommodates the nuances of the diverse sub-regions in Africa but creates harmonized ADR standards which will ultimately foster ADR in Africa. Important recommendations such as enabling Africa as an attractive seat for ADR mechanisms, re-positioning ADR institutions, capacity building and the continued collaboration between the bench, bar, ADR practitioners and users, amongst others will be canvassed as viable options for advancing ADR. 

Status Of ADR In Africa

The resolution of disputes outside of courts is not new; societies world-over have long used quasi-judicial and indigenous methods to resolve conflicts. These have since evolved to more formalized ADR mechanisms, to wit, arbitration, adjudication, conciliation, mediation, negotiation, early neutral evaluation, expert determination, amongst others. These ADR mechanisms are useful for conflict avoidance, conflict management and conflict resolution, they encourage party autonomy and increase access to justice when harnessed appropriately.

Within the African continent and amongst ADR practitioners, arbitration is the preferred ADR mechanism but there has been a rise in the use of mediation and dispute boards. Importantly, there are nearly 100 arbitration/ADR institutions in Africa. Historically, Africa-related international commercial disputes are arbitrated in London for English-speaking African parties or Paris for French-speaking African parties.  

According to the 2020 SOAS University of London Survey in Africa[1], the top five arbitral centers in Africa are African Foundation of Southern Africa (AFSA), Cairo Regional Centre for International Commercial Arbitration (CRCICA) Kigali International Arbitration Centre (KIAC), Lagos Court of Arbitration (LCA) and Nairobi Centre for International Arbitration (NCIA). However, these institutions do not take up top positions on a global stage[2]. This disadvantaged perception is also seen in the position of African countries as favored seats for arbitration globally. The top five preferred seats globally are London, Singapore, Hong Kong, Paris and Geneva[3] while the top five seats in Africa to wit, South Africa, Nigeria, Egypt, Rwanda, Cote d’Ivoire[4] are not well-positioned/favored by global ADR users.

The ADR laws in Africa are also quite fragmented. International conventions such as the New York Convention 1986 which has been signed by 42 out of the 54 African countries[5], still remains the convention on private disputes/arbitration with the greatest number of African signatories. Its counterpart for mediation and settled agreement, the Singapore Convention on Mediation 2019, has only been signed by 10 African countries. The UNCITRAL Model Law on Arbitration has been signed by 11 African countries while the UNCITRAL Model Law on International Commercial Mediation and International Settlement Agreements Resulting from Mediation 2018 (UNICTRAL Model Law on Mediation) has been signed by 16 African countries. Albeit this, ADR mechanisms are practiced throughout the continent in one form or the other, with different levels of regulation and development.

Interestingly, different sub-regions have treaties with dispute resolution mechanisms which are unfortunately only applicable to a certain bloc of countries. The Treaty on the Harmonization of Business Law in Africa[6] which established Organization for the Harmonization of Business Law in Africa (OHADA), the Uniform Acts on Arbitration and Mediation and Common Court of Justice and Arbitration Centre (CCJA) is applicable to only 17 West and Central African States.

There are 836 Bilateral Investment treaties from Africa with provisions on dispute settlement.[7] The Investment Agreement for Common Market for Eastern and Southern Africa (COMESA), Southern African Development Community (SADC) Organisation of Islamic Cooperation (OIC), East African Community (EAC) and Tripartite Free Trade Agreement (TFTA) contain dispute settlement mechanisms, but they are only applicable to Contracting States and not widespread throughout Africa.  Taking a leaf from the extensive acceptance of the African Continental Free Trade Agreement (AfCFTA) and its Dispute Protocol, signed by 54 African countries, for the settlement of disputes between Contracting States, there is a need to develop a pan-African ADR framework for the settlement of private disputes between legal persons.

Africa is certainly a well-diverse continent with different legal systems ranging from common law to civil law, African customary law and Islamic law. Unfortunately, the status in this rich continent has been legal balkanization, judicial insecurity and political instability. It is author’s view that the goals of African countries should be to harmonize economic laws and legal practices, improve judicial systems, restore investor confidence, facilitate cross-border trade and investment, guarantee security and encourage a vibrant private sector so as to achieve economic growth, development and globalization.

The Significance Of ADR Mechanisms

In achieving these important economic goals and wide-spread development in Africa, diverse forms of dispute resolution should be harnessed and promoted. It is believed that the dispute and/or parties involved should inform the ADR mechanism utilized. It is therefore important to expound the diverse ADR mechanisms and highlight their nuances and uses.

Arbitration provides increased access to justice through a cost and time effective mechanism which is confidential and enforceable. Party autonomy seats at the bedrock of this mechanism as the consent of parties to the process is sacrosanct to its commencement. Importantly, it is a formalized process that culminates in an award on merits which can be enforced in multiple applicable jurisdictions using the benefits of the New York Convention on reciprocity of enforcement of awards. The grounds for challenging and refusing enforcement of the arbitral awards are also limited and arbitration is typically encouraged by local courts.

Conciliation facilitates communication and settlement which essentially leads to a non-binding conciliation agreement by neutrals. It is a favored mechanism in the AfCFTA Dispute Protocol and is to be used by the Dispute Settlement Body, Panels and Appellate Body. It is keenly related to mediation[8]  but it is usually a more formal process where the conciliator can make a decision or proffer a solution outside of the settlement of parties.

Mediation also involves a settlement process which facilitates resolution of disputes through a mediator. However, a settlement agreement is achieved only with the consent and cooperation of the parties. Thankfully, with the introduction of Singapore Convention, settlement agreements are now enforceable in Contracting States.

Negotiation is usually the first ADR mechanism deplored when a dispute arises, as parties attempt by themselves to seek out the best solution for the dispute. It does not require a written consent of parties and it is an informal and flexible process which does not involve third party neutrals or administrative charges. It can be used in diverse types of disputes and by multiple parties.

Early Neutral Evaluation (ENE) is a non-binding assessment of the merits of a case by a neutral and this assessment is typically without prejudice and can be used as a basis for settlement negotiations leading to a Calderbank offer.[9] The neutral is usually appointed to answer legal, evidential, factual or technical questions. It is an important mechanism when the parties have reached an impasse on an issue, there is a great disparity between the position of parties, or they require confidentiality in achieving a common ground. It has been encouraged by the English courts[10], expressly provided in the English Civil Procedure Rules (CPR)[11] and offered in the Chancery Division, Commercial Court and the Technology and Construction Court[12]. The Stockholm Chamber of Commerce (SCC) Rules for Express Dispute Assessment also provide for the appointment of a neutral assessor to evaluate one or several issues.

These ADR mechanisms, amongst many others like adjudication and expert determination have over the years evolved and become very instrumental to the resolution of many disputes.

Key Recommendations

In recognizing the advantages of diverse ADR mechanisms, it becomes important to foster their reach in Africa by ensuring that African cities become attractive/favoured seats and the use of African ADR institutions is promoted. The key recommendations for promoting Africa as an attractive seat are as follows:

·Promote legal and political stability, judiciary support and enforcement of ADR outcomes as well as neutrality and impartiality of local legal systems.

·Develop harmonized laws and regulations which take cognizance of, and allow for, important concepts such as third-party funding, emergency or expedited ADR proceedings, interim measures, multi-party proceedings, express service or evaluation, remote hearings, electronic signatures, amongst others.

·Promote the use of ADR mechanisms for diverse types of disputes such as disputes with ESG elements, human rights disputes, family and estate disputes, smart contracts and technology disputes, crypto disputes and non-commercial disputes, amongst others.

·Encourage the use of, and provide rules for, other ADR mechanisms such as early neutral evaluation, adjudication and expert determination so it becomes mainstream.

·Establish sectoral workshops and legislations for specific industry disputes like technology, travel, communication, amongst others.

It is important to acknowledge that there are many ADR institutions in Africa. However, expanding the reach of these institutions so as to draw from a larger pool of potential users should be encouraged. Key recommendations to achieve this, include:

·Continued collaboration and resource sharing between ADR institutions.

·Proliferation of arbitration and mediation centers attached to courts.

·Establish walk-in ADR houses with increased accessibility to ADR users.

·Actively promote civic engagement, stakeholder sensitization and awareness campaigns on the existence, availability and advantages of the diverse ADR mechanisms. This can be done through signposting, behavioral nudges, public consultation and trust building using social media, print, broadcasting media and public assemblies. Focused education of the legal and business community on ADR.

·Support capacity building by ADR entities through grants to these institutions.

·Encourage third party funding, alternative financing options or access to funds so as to increase access to ADR mechanisms for users. These funding options for ADR mechanisms should be encouraged by legislative action and policies.

·Create outcome-related fees and costs structures for ADR mechanisms[13].

·Facilitate capacity building for ADR practitioners, judges and court personnel through funding for trainings, facilities and technology development.

·Widespread education on ADR mechanisms. Given that Africa has a significant youth population, the introduction of ADR mechanisms, their uses and advantages at an early stage of the educational system should be promoted.

·Drawing from the lessons of the COVID-19 period, the continued use of technology as an enabler for error-free, expeditious and effective ADR processes should be harnessed.

Ultimately, the coordination of the ADR rules and practices in Africa through a pan-African framework for the different ADR mechanisms will be a step in the right direction.

Call To Action

ADR is the means of settling a compliant out of court with the assistance of an impartial dispute resolution process. ADR can effectively bridge the gap between formal legal systems and traditional modes of African justice.

It is therefore recommended that a pan-African Treaty/Directive on ADR and Online Dispute Resolution (ODR) is developed and widely accepted in Africa for increased effectiveness. This treaty should be a horizontal legislative framework for ADR and ODR in Africa. It should provide for uniform adoption and minimum standards as seen in the European Union (EU) Directive 2013/11/EU on ADR[14] and EU Regulation No 524/2013 on ODR for Consumer Disputes[15] for EU countries as well as the ASEAN ADR Guidelines for Consumer Protection 2021[16] for ASEAN countries and OHADAC on Arbitration, Mediation and Conciliation for Caribbean countries[17].

The proposed Treaty should assess different approaches to ADR, the implementation in each member state and steps to establish and apply ADR mechanisms effectively. It should take into consideration international and African best practices in ADR. In order to achieve desired results, this Treaty should be available for contracting states to consult and review their existing ADR legislation to ensure it adequately implements agreed principles. The principles for the ADR framework should include National Policies, Access to Justice (website, online and offline, domestic and cross-border), Expertise, Independence and Impartiality, Transparency, Effectiveness, Fairness and Due Process, Legality, Efficiency, Party Autonomy and Enforcement. Guidance on the appropriate types of disputes, costs, language, ADR clause, forum selection, bias and neutrality should also be provided. This will present useful guidance for a harmonized legislative framework throughout Africa. These principles should also be binding quality requirements for ADR entities, the ADR procedures operated by them and – to a lesser degree – the substantive standards from which the outcome of the ADR procedure is derived.

Participation from different stakeholders, from ADR entities/institutions, national authorities, consumer centers, academia, representatives of Member States, amongst other key stakeholders, in consultations for the establishment of this ADR framework/Treaty will be important. A successful ADR framework should be fair, accessible, easy, affordable include a human element and be faster and much cheaper than courts to resolve disputes.

Importantly, robust and uniformed national ADR policies/legislations should be enacted. Then progress and implementation must be measured and monitored. Reform should be a continuum so as to align with best practices and the needs of stakeholders. An Africa-wide ADR Assembly should be established to promote ADR and ODR, this Assembly will monitor the progress of the Treaty and implement changes that incorporate African peculiarities based on diversity of culture and legal systems. There should also be a list of certified ADR institutions, akin to the over 430 ADR entities in the EU and EEA, on an ADR platform which is accessible to all. Any effective ADR system must have a flexible design structure that is rooted in satisfying the interests of the parties in dispute and professionally administers fair justice in a dynamic yet culturally appropriate manner.

The provision and access to grants for ADR institutions would also aid capacity building in the form of facilities, technology and well-trained personnel. Stakeholder tax incentives as introduced in Macau[18], amongst other stakeholder incentives will also encourage the use of ADR. The introduction of the use of ADR for class actions as recently discussed in South Korea[19] could also be a welcomed innovation for ADR. Essentially, it would be important to reduce ADR costs, streamline ADR processes, reduce the barrier to entry for practitioners and users, promote reciprocal enforcement of ADR outcomes (be it settlement agreements or arbitral awards), encourage third party funding or financing options and ultimately build an appetite for ADR.

Finally, to facilitate judiciary collaboration, special courts for ADR – related matters (challenges, enforcement, interim measures, neutral appointment) should be established and equipped with judges and court personnel that are knowledgeable in ADR. There should be continuous training of the judiciary in ADR practice and procedure so they can provide the needed support for the process and enforce ADR outcomes effectively. Essentially, ADR should be seen as complementary to the judicial process and not a threat. These imperatives are geared towards achieving the same goal of promoting increased access to justice and effective dispute resolution mechanisms which will prepare the right foundation for increased investment, trade and development.

Conclusion

It is important to create an appetite for ADR so as to develop a sustainable market for ADR within Africa for intra-Africa disputes and ultimately for international disputes. Viable routes to achieving this would signal the development of a pan-African ADR framework with a unified and harmonized approach to ADR as well as uniform adoption of minimum standards across Africa. This would create an integrated legal space conducive for a viable economic industry. The promotion of African cities as an attractive seat for ADR mechanisms and re-positioning of ADR institutions in Africa coupled with capacity building, judiciary collaboration, stakeholder sensitization and civic engagement would be pivotal to the advancement of ADR, especially on the African continent.

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*Oluwaseun Oloruntimehin is a dual-licensed lawyer in New York, USA and Nigeria, an arbitrator, negotiator, chartered secretary and governance professional qualified in the United Kingdom and Nigeria. She is a dispute resolution specialist with a bias for international commercial arbitration and a successful track record of strategically advising and representing clients across a wide range of industries, in high value and complex domestic and international disputes. She primarily sits as an arbitrator in adhoc and institutional arbitrations and is a member of the Panel of Neutrals for arbitral institutions including the LCA and CIArb-LCA MSME Scheme. She is a fellow of the CIArb and editor-in-chief for the LCA. She has written several papers and is a favored speaker at international conferences. As an approved faculty member and tutor of the CIArb, Oluwaseun also enjoys teaching international arbitration. As an advocate for justice, Oluwaseun is passionate about law, ADR, education and social change.

[1]https://eprints.soas.ac.uk/33162/1/2020%20Arbitration%20in%20Africa%20Survey%20Report%2030.06.2020.pdf (last accessed on 28 November 2022).

[2] The 2021 International Arbitration Survey by Queen Mary University indicates that the five most preferred arbitral institutions for African parties are the International Chamber of Commerce (ICC) - (79%), London Court of International Arbitration (LCIA) – (57%), Singapore International Arbitration Center (SIAC) – (39%), International Centre for Settlement of Investment Disputes (ICSID) – (21%) and Hong Kong International Arbitration Center (HKIAC)- (14%).https://arbitration.qmul.ac.uk/media/arbitration/docs/LON0320037-QMUL-International-Arbitration-Survey-2021_19_WEB.pdf (last accessed on 28 November 2022).

According to SIAC Report 2021, 2.7% of SIAC cases had African parties. The 2021 LCIA Report indicates that 6.6% of reported cases had African parties. According to ICC Report 2020, 7% of ICC cases had African parties. The ICSID Report 2021 evidences that 15% of the cases had Sub-Saharan Africa parties and 9% had North Africa and Middle East parties.

[3] According to the 2021 International Arbitration Survey by Queen Mary University, London is tied in first place with Singapore with 54% of practitioners indicating London and Singapore as their favored seat of arbitration. London is more favored for African practitioners as 69% rank London as their number one preferred seat. Hong Kong is the third preferred seat for arbitration, as 50% of practitioners indicated it as a preferred seat. While Paris is the fourth favored seat globally, it ranks very high amongst African practitioners with 67% indicating Paris as a favored seat. This is particularly true for practitioners/users in French-speaking African countries. Geneva is also a top ranked city for arbitration as 12% of practitioners and users indicate it as their preferred seat.

https://arbitration.qmul.ac.uk/media/arbitration/docs/LON0320037-QMUL-International-Arbitration-Survey-2021_19_WEB.pdf (last accessed on 28 November 2022).

[4] According to the 2020 SOAS Survey in Africa, the top five African countries that are used as a seat for arbitration are South Africa, Nigeria, Egypt, Rwanda and Cote d’Ivoire.

[5]https://iclg.com/alb/17761-african-arbitration-centres-on-the-rise (last accessed on 28 November 2022).

[6] This Treaty which was signed on October 17, 1993 in Port-Loius established the OHADA.

[7]https://www.whitecase.com/insight-our-thinking/arbitration-africa (last accessed on 28 November 2022).

[8] The Nigerian Arbitration and Conciliation (ACA) Bill refers to mediation as opposed to conciliation which is used in the extant ACA Act. The UNCITRAL Model Law on International Commercial Conciliation 2002 has also been replaced with the UNCITRAL Model Law on Mediation 2018.

[9] A Calderbank offer is a settlement offer made on a “without prejudice save as to costs” basis.

[10] ENE was strongly endorsed by the United Kingdom Court of Appeal in Lomax v Lomax [2019] EWHC 1467 where the court held that pursuant to the CPR, the court had the power to schedule an ENE hearing to help parties settle the case so courts can hear an early neutral evaluation. This upturned the earlier position in Halsey v Milton Keynes [2004] EWCA Civ 576 where the court held that ADR was not a compulsion and unwilling parties cannot be compelled to mediate.

[11] By Rule 3.1 (2) (m) of CPR in an appropriate case, the court may provide for an Early Neutral Evaluation hearing for the purposes of assisting parties to settle the case.

[12]https://www.ashurst.com/en/news-and-insights/legal-updates/quickguide---early-neutral-evaluation/ (last accessed on 28 November 2022).

[13] Hong Kong has enacted a new set of Arbitration (Outcome Related Fee Structures for Arbitration) Rules which is to come into operation on 16 December 2022. These Rules allow for the use of various outcome-related fee structures (ORFS) in arbitration proceedings.  These include Conditional Fee Agreement, Damages Based Agreement and Hybrid Damages Based Agreement.https://www.lexology.com/library/detail.aspx?g=791c4da5-1645-4c6a-ae94-6df4e8a08825 (last accessed on 28 November 2022). 

[14]https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2013:165:0063:0079:EN:PDF (last accessed on 28 November 2022).

[15]https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2013:165:0001:0012:EN:PDF (last accessed on 28 November 2022).

[16]http://aadcp2.org/the-asean-alternative-dispute-resolution-adr-guidelines-for-consumer-protection/ (last accessed on 28 November 2022).

[17] Other relevant regulations include the United Kingdom’s ADR for Consumer Disputes (Competent Authorities and Information) Regulations 2021 which is a new residual ADR Scheme for consumer disputes that appoints a principal authority to certify and monitor relevant ADR providers. The UNCTAD Manual on Consumer Protection, Customer Dispute Resolution and Redress and ECD Recommendation Consumer Dispute Resolution and Redress are also useful regulations.

[18] In 2021, Macau enacted a provision for tax reduction (50% tax reduction in stamp duty) for documents with an arbitration clause.

[19] The South Korean bill (the proposed Class Action Act) permits class action lawsuits in any area of law so there are now open discussions for permitting class action arbitrations in South Korea.