The Attractiveness of the New OHADA Arbitration Act

A year ago, OHADA1 adopted a new Uniform Arbitration Act, repealing the previous Uniform Act dated 11 March 1997. This reform is part of an effort to promote and consolidate, further illustrated by a new Uniform Act on Mediation being adopted and the Common Court of Justice and Arbitration’s (CCJA’s) Rules of Arbitration being revised.

The reform aims to make the OHADA space more attractive for dispute resolution. This paper addresses the main features of the reform, complemented where necessary by the new CCJA arbitration rules and the Uniform Act on Mediation.

It is followed by a table showing the main developments of the common legislation on arbitration. Security, flexibility and efficiency seem to be the motto of this new Act. This motto applies to the various phases of the process of accessing arbitration at the start of a trial and throughout the arbitration.

Access to OHADA Arbitration: Openness and Security

Expanding OHADA arbitration to investment arbitration

In addition to the traditional openness of OHADA law to any arbitration having its seat in one of the OHADA States and to legal persons under public law, the reforms extend the scope of the OHADA arbitration law to include investment arbitration. Investment arbitration is usually defined as an arbitration forum that hosts disputes between a State or one of its entities, and a foreign private entity carrying out an investment transaction in that State.

Although the creation of the International Investment Dispute Settlement Center (ICSID) is part of this approach, other forums have gradually opened up to this issue too. It is in this light that the new Act includes bilateral investment treaties (BITs) and investment codes as new bases for arbitration. This step, provided for in the new Act is reiterated by the new CCJA Arbitration Rules, which expressly authorise the Court to administer arbitration proceedings based on BITs or national investment laws.

It should be noted that, in practice, the Court of Arbitration of the CCJA has accepted several investor-state disputes on the basis of an arbitration agreement, particularly in the absence of specific, relevant common provisions. Therefore, the new Act only crystallises and completes the evolution of the Court’s internal practices and that of other forums such as ICSID, which have now freed arbitration agreements from being the sole pathway to arbitration. Arbitration under the new Act and the CCJA forum offers a big comparative advantage in that it is close to the host countries geographically and from the point of view of the OHADA legal system with which they are familiar.

Therefore, the OHADA law of arbitration (through both its normative part, the Uniform Arbitration Act, and its institutional arm (CCJA)) is well positioned in the field of investment arbitration.  If accepting legal instruments relating to investments and establishing certain correlative, institutional guarantees by the CCJA characterise a certain opening up of OHADA arbitration, it is important to consolidate this tendency as much with substantial arguments (definition of the notions of investment, investor, etc.) as with procedure (transparency of procedure, admission of amicus curiae, etc.).

The opening up of arbitration to other modes of dispute resolution: the case of expanded

OHADA mediation

The tempting offer of OHADA arbitration does not stand in the way of other alternative dispute resolution methods. It does not prevent a stage of prior dispute resolution. In this case, the Court will suspend proceedings pending the completion of the dispute resolution step (or finds failure to do so, if necessary.)

The example of mediation is a good one, especially as mediation is now the subject of uniform legislation in the OHADA space. At first glance, it should be noted that this does not apply to mediation undertaken voluntarily by an arbitral tribunal for the purpose of providing an amicable settlement of a dispute. Indeed, the Uniform Act on Mediation (UAM) governs institutional or ad hoc mediation, which is conventional, or which involves the intervention of a third party, an independent dispute settlement procedure, or a prior method of arbitration. In the latter case, supplementing the UAM, the Arbitration Uniformed Act unequivocally states that ”no arbitral or judicial proceedings relating to a dispute already arising, or which may arise later, is given effect by the arbitral tribunal or the state court until the conditions that go with it have been met.”

This procedure does not preclude, according to the text, initiating parallel proceedings for provisional purposes, or purposes that cannot be considered as a waiver or termination of the mediation. It is compulsory to execute the agreement resulting from the mediation and it may be exequaturated or endorsed by the competent court and taken back in the form of an award of agreement by the arbitral tribunal. This provision, which demonstrates the effectiveness of OHADA mediation and the institutional dialogue between methods of dispute resolution, also applies to mediation proceedings initiated without arbitration being in progress.

The arbitration proceedings: reliability, flexibility and speed

The new Uniform Arbitration Act proposes a reliable, flexible and timely arbitration procedure. It offers arbitration with institutional support from CCJA. Without the parties having to opt for the CCJA arbitration rules, they have the opportunity to benefit from the support of this institution. This is the case where an arbitrator’s challenge process is not provided for by the parties or carried out by the competent jurisdiction within 30 days; the competent jurisdiction is removed and the challenge may be brought before the CCJA. The competent court remains exclusively competent in the event of an appeal against a decision dismissing the challenge.

It is also worth mentioning that in the event of a judicial decision that has become possible as a result of an arbitration agreement that is manifestly void or inapplicable, the CCJA remains the sole body competent to receive a recourse against that decision.

The arbitral procedure’s reliability is assured by the obligation of independence and legal dedication of arbitrators. In particular, these requirements make it possible to avoid conflicts of interest and leads to arbitrators recusing themselves if necessary. The parties also enjoy equal treatment during the proceedings, allowing them to assert their respective rights. The litigant parties are received regardless of their quality or status. The reliability and flexibility of the procedure are also measured by the openness in applying international law standards in case where the parties are silent on the choice of law. From the point of view of procedural rules, the parties may refer to the rules of an arbitration center of their choice or determine a procedural law that suits them. These provisions show the opening of the “OHADA space” to “non-OHADA rules” and international best practices in arbitration. The celerity of the arbitration procedure is demonstrated through the competitive deadlines proposed at all stages of the procedure. If the parties disagree, or if there are insufficient contractual terms on the appointment of the arbitrators, the parties have between 30-75 days to do so with the intervention if necessary of the competent court. Likewise, the arbitration tribunal must be constituted within 6 months, unless otherwise agreed. The parties nevertheless have the option to extend the legal or contractual period. More generally, the parties are encouraged to act with speed and loyalty in conducting proceedings. They must refrain from using delay tactics. Otherwise, they risk sanction and closure of the proceedings, if necessary.

The outcome of the procedure: safety and efficiency

The new Act guarantees security and efficiency in the arbitration process. Whether it is the result of an agreement between the parties during the proceedings or a decision arising from the court hearing, the arbitral award has the authority of res judicata as soon as it is given. This award may provide a provisional enforcement to allow the parties to benefit quickly from its findings, without affecting the full judgement, including various remedies. This provisional enforcement remains valid even when an action for annulment is brought against the sentence in question.

As a general rule, the arbitration award must be exequaturated. The decision on the application for exequatur is obtained before the competent court of the relevant jurisdiction within 15 days. It is deemed acquired in the case of silence of the court. It is likely to provide cassation only before the CCJA when it is only negative.

The sentence thus rendered is not subject to opposition, appeal or judicial review. It may, however, be the subject of a review or an action for annulment before the competent court in the relevant jurisdiction whose decision is subject to review proceedings only before the CCJA. The flexibility of the OHADA arbitration procedure results from the fact that waiver clauses to the action for annulment may be provided by the parties, provided that they are not in conflict with international public policy. The new common law of arbitration therefore establishes the OHADA space as a new place of international arbitration that is very attractive, especially for foreign investors in Africa.