Solving China-Africa Investment Dispute Priority Arbitration-Exportimes

Solving China-Africa Investment Dispute Priority Arbitration

Date : 2019-02-20 | From : Original

In recent years, more and more Chinese companies have taken root in Africa. When Chinese enterprises have disputes in the local area, they often choose to resolve such disputes through arbitration through a series of concerns such as distrust of the African judicial system, lack of understanding of the local business environment, and difficulty in enforcement. Compared with litigation, arbitration is relatively efficient and free, bringing a lot of convenience to investors.

According to Zhu Weidong, a researcher at the Institute of West Asian and African Studies at the Chinese Academy of Social Sciences, Africa has a suitable arbitration environment. “To eliminate the concerns of foreign investors, most African countries have joined the Washington Convention. When a foreign investor has a dispute with an African member of the Washington Convention, the dispute can be submitted to a settlement investment established under the Convention. The International Center for Dispute (ICSID) was settled through arbitration.” Zhu Weidong said that in order to ensure the smooth implementation of the general international commercial arbitration ruling, 30 African countries have ratified the New York Convention, paving the way for the recognition and enforcement of arbitral awards the way.

Zhu Weidong suggested that Chinese companies should pay attention to the following three aspects when choosing arbitration to resolve non-investment disputes:

First, understand the arbitration legal system of relevant African countries. Although many African countries have enacted their own arbitration laws, there are still some differences between the arbitration legal systems of different African countries. Only by knowing the arbitration legal system of the relevant country will it not cause the signed arbitration agreement or arbitration clause to be invalid because it violates the provisions of the relevant state arbitration law, thus making the expectation of using arbitration to resolve the dispute fall through. For example, the arbitration laws of many African countries stipulate that the parties to the arbitration may choose the place of arbitration, the laws and procedural rules applicable to the arbitration, etc., but some African countries impose restrictions on this, and it is likely that the relevant arbitration clauses are invalid.

Second, choose to arbitrate in a permanent arbitration institution. The permanent arbitration institution has its own management organization and complete arbitration procedure rules, which is conducive to the smooth conduct of arbitration. However, for investment and trade disputes in African countries, considering the transportation costs and other factors, parties in African countries are generally reluctant to submit disputes to these arbitration courts for arbitration. When this happens, the Chinese party can negotiate with the African country and submit the dispute to the permanent arbitration institution, but the arbitration is required to be conducted in African countries. It is also possible to agree with the parties in the African countries to submit the dispute to a permanent arbitration institution in the African region, such as the Cairo Regional International Commercial Arbitration Center, the Lagos Regional International Commercial Arbitration Center or the South African Arbitration Fund. In this way, it can save a certain cost and help the dispute to be resolved quickly and fairly.

Third, choose to arbitrate in African countries where the court has less arbitration intervention. If the court intervenes too much in arbitration, it will not only affect the smooth progress of arbitration, but also cause the dispute to be resolved through arbitration under certain circumstances. Therefore, if the Chinese party decides to conduct arbitration in Africa, it should choose the court to conduct the African countries with less arbitration intervention.

In addition, the bilateral investment protection agreement signed between China and Africa also formally recognizes the status and role of arbitration in the settlement of China-Africa investment disputes through treaty forms. To date, China has signed more than 30 bilateral agreements on the promotion and protection of investment with African countries. In many BITs, international investment arbitration procedures are stipulated. In the case of investment host government violations of investor protection obligations, Chinese investors have the right to submit disputes to international investment arbitration and require the government to compensate.


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