Arbitration and mediation are effective ways to resolve internationals business deals in the OHADA region. This article provides an overview of the OHADA framework, including the benefits of using arbitration and considerations for enforcing awards.
1. What is OHADA?
- OHADA is the Organization for the Harmonization of Business Law in Africa.
- It is an intergovernmental organization for legal and economic integration between 17 African member states mostly of Francophone Africa.
- OHADA sets standards for economic and business integration within member states in the region through the harmonization of a common business law.
- The OHADA business laws on arbitration and mediation set the foundation and the procedures for resolving commercial disputes in business transactions within the region.
2. Arbitration in the OHADA region.
Arbitration in the OHADA region is an effective option for resolving international business deals.
i) Confidentiality and neutrality.
- Parties or businesses that engage in international contracts of significant value within the region generally want to resolve disputes efficiently, rapidly and confidentially.
- This consideration is key especially when the parties are from different countries - they prefer a neutral body rather than using national courts to resolve their disputes.
- This is a key concern for foreign investors who may have trust issues with national judicial systems.
ii) International deals involving states or state entities within the region.
- Where a dispute involves state entities, national special courts have jurisdiction.
- However, arbitration offers a neutral forum, including concerning the parties’ capacity to enter into an arbitration agreement or proceeding.
- Arbitration clauses are thus popular in contracts especially in international deals involving states parties within the region.
3. Advantages of Arbitration in the OHADA Region.
- Arbitration as an alternative to conventional litigation is primarily for commercial disputes in the OHADA region.
- Its advantage over litigation is that it is a private mechanism for settlement of disputes which depends on the parties’ agreement.
- Arbitration in the OHADA region is viewed as cost efficient and free from unnecessary publicity.
- Arbitration provides the expertise of the arbitral judges (arbitrators) in a specific field. It also gives the parties a certain control over the procedure, which is not necessarily the case with litigation before national courts.
4. Key aspects of arbitration within the OHADA framework.
- The Uniform Act on Arbitration (2017) creates a harmonized legal framework for arbitration across the 17 member states.
- Recognition and Enforcement of Awards: Arbitral awards are binding and enforceable in all OHADA member states (subject to limited exceptions).
- The Common Court of Justice and Arbitration (CCJA) provides a central body for resolving challenges to Arbitral awards.
- The OHADA framework allows enforcement of foreign arbitral awards originating from the ICC and other arbitration centers.
5. The Common Court of Justice and Arbitration.
- The CCJA is a supranational institution and the highest court of the organization promoting arbitration within the OHADA region.
- It has a dual role both in litigation and arbitration.
- With litigation, it entertains and hears all appeals of commercial disputes originating from national courts.
- Regarding arbitration, it acts as a central body resolving challenges to arbitral awards.
- It is headquartered in Abidjan, Cote d’Ivoire, West Africa.
6. Key Considerations for Enforcing Arbitration Awards in the OHADA Region.
i) Process for enforcing arbitration awards in the OHADA region.
- Parties request an "exequatur" order from a competent court in the state where enforcement is sought.
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There are very limited grounds for refusing enforcement – for example, one ground for refusal is where award is contrary to public policy.
ii) Key issues to consider for effective enforcement.
- Choosing the right seat for arbitration - legal systems must be considered.
- The OHADA member states have a common legal system, with the exception of Cameroon, which has a bi-jurally legal system based on both civil and common law.
- Regardless, the harmonization of the OHADA Business Law has made it possible to choose a seat in any of the member states, where the conflict originates and both parties reside.
- Arbitral institutions are also considered, particularly when the parties designate the seat of their dispute to a specific institution to form the tribunal and hear the dispute on the merit.
iii) Drafting a well-crafted arbitration clause
- When drafting an arbitration clause in regional commercial contracts, it is critical to clearly specify OHADA and CCJA jurisdiction in case any dispute arises.
- This clarifies and strengthens the parties' intention about the issue of jurisdiction in the event of any dispute
7. Conclusion
- Arbitration is the most effective dispute resolution mechanism in the OHADA region for international deals.
- Foreign direct investors coming into the region should consider arbitration as a dispute resolution mechanism.
- Arbitration offers several advantages and benefits from for the enforcement of foreign arbitral awards within any member state of the OHADA region.
Author: Neneng Yannick of Neneng Law Office (a Primerus member firm)
