INTERNATIONAL ARBITRATION 1/3LY
MARKET COMMENTARY 09
CONS T RUC T I ON D I SP U T E RE SOLU T I ON A CROS S A FR I C A
THE STATE OF PL AY Inbound foreign direct investment (FDI) into Africa has increased significantly over the past few years, giving rise to a surge in commercial activity including numerous infrastructure and other construction projects across the continent. The surge has brought with it an increase in international disputes in Africa, with companies looking towards arbitration as themainmethod of resolving disputes involving international parties. However, themarket is also witnessing an increasing level of pre-arbitration mechanisms (such as the appointment of designated persons or bodies) in contracts to prevent the escalation of disputes and to aid early settlement. Despite arbitration being the dominant method for the settlement of international disputes, regional preferences are beginning to emerge for construction disputes: • Anglophone Africa: dispute boards also tend to be used (or at least considered) • South Africa: the trend is for adjudication or a combination of adjudication and arbitration • East Africa: the primarymethod of funding for construction projects is by FDI and as a consequence, companies generally seek to use established arbitral centres/rules to resolve disputes, such as LCIA or ICSID • Maghreb and other parts of Francophone Africa: ICC arbitration continues to be a very popular choice Regional centres are also beginning to emerge across Africa in places such as Egypt, Mauritius, Morocco and South Africa. However, due to the lack of developed arbitral systems, international jurisdictions (mainly across Europe or theMiddle East) remain popular, particularly on international projects.
BY ELS A JORDAAN AND WARREN HIEPNER, PARTNER AND CONSULTANT AT CLYDE & CO
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