Introduction: Ethiopia has enacted a new Arbitration law on April 2, 2021. Arbitration and Conciliation proceedings until then were mandated by the Civil Code, 1960, Civil Procedural Code, and other laws. There were also differences in the naming of the tools and procedures for resolving disputes.
Arbitration centers were also created as non-profit entities under the Civil Code and a jumble of other legislation. Addis Ababa, Africa's political capital, lacked an international arbitration and conciliation center due to a lack of modern arbitration and conciliation rules. With the help of recent ratification done by Ethiopia at the New York Convention, it led to the enactment of the Ethiopian Arbitration and Conciliation Working Procedure Proclamation.
The Transition from Old to New Framework: Arbitration and Conciliation proceedings were dealt with under Ethiopia's civil code and civil procedure code. The provisions for Arbitration and Conciliation proceedings were scattered all over the local laws. The Labour Proclamation, for example, has procedures for labor dispute mediation and arbitration. The Council of Ministers Regulations No.121/1993 on Transfer of Technology allow for the mediation and arbitration of disputes resulting from a transfer of technology agreement.
In terms of the finality of arbitral decisions, Article 350 of the Civil Procedure Code states that an arbitration award is neither final nor appealable unless the parties agree to waive it. A party aggrieved by the arbitration tribunal's judgment has the right to appeal to the competent court in the absence of an agreement and with complete information. The extent of the competence-competence concept, which permits arbitrators to rule on their jurisdiction, was limited in Ethiopia. While the Civil Code permits arbitrators to rule on their jurisdiction, Article 3330(3) prohibits arbitrators from ruling on the legality of an arbitral proposal. The arbitration clauses did not address issues such as arbitrator nomination, reasons for disqualification of arbitrators, arbitrator replacement, etc. Furthermore, the previous regulations were not adaptable enough to new problems like distant processes or virtual hearings. All these reasons hindered the development of the conflict resolution system in Ethiopia.
The new Arbitration and Conciliation Proclamation has widened the scope for Arbitrators. The Proclamation, which states that arbitral tribunals "have the ability to evaluate the existence or nonexistence of a valid arbitration agreement between the contracting parties, as well as whether or not it has jurisdiction to hear the case." The new proclamation applies to domestic commerce-related arbitrations as well as international arbitrations with a seat in Ethiopia. It does, however, include a few rules that regulate international arbitrations held outside of Ethiopia.
Divorce, adoption, teaching, custodianship, succession, criminal, tax, bankruptcy, dissolution of companies, lease, and other land issues, administrative contracts unless otherwise permitted by law, trade competition and consumer protection issues, and administrative matters bestowed on administrative tribunals are all covered by Article 7. The Proclamation stipulates that arbitration centers may be established by either the government or a private individual. The Federal Attorney General is in charge of issuing and renewing licenses, establishing criteria for their creation, and supervising them. The lack of specialists in the field might make creating a competitive center in Africa complex.
Conciliation Law: The Proclamation deals with the conflict resolution mechanism of ‘Conciliation.’ An agreement to settle conflicts through conciliation may be offered as a preliminary objection under Articles 55, and 68 of the Proclamation, and settlement agreements are final, non-appealable, and enforceable. The court with material jurisdiction at the location of the settlement agreement, as well as the authority to enforce the parties settlement agreement. Objections to such executions can only be made if the settled agreement is null or void. If it needs more clarity, it violates the public policy, and if the parties cannot agree. Grounds such as fundamental error or fraud can also invalidate the settled agreement.
Conclusion: The new Arbitration and Conciliation Proclamation is yet to be put into practice to test its efficacy. But this framework is the first step for more success and expansion in Arbitration and Conciliation.
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