INTERNATIONAL ARBITRATION 1/3LY
MARKET COMMENTARY 11
Across Africa, stakeholders find the court systemchallenging, as inmost cases it is a long, expensive and arduous process. Local dispute resolution is also affected by a skill shortage at the administrative level and difficulties in securing appropriate experts, as well as allegations of corruption. As a result of these issues, international contractors are generally keen to negotiate international arbitration clauses and not to rely on the local courts. On large scale projects, most parties prefer to agree that any arbitrationwill take place in arbitral centres with longstanding experience and expertise. For this reason, arbitrations are still generally taking place in Europe, theMiddle East or the United States. MITIGATING RISK AND THE FUTURE What does the future of construction dispute resolution in Africa look like? Across Africa, particularly South and East Africa, there has been increased activity in the construction industry insofar as infrastructure and resources are concerned. This is likely to translate into an increase in construction disputes and alternative ways inwhich to resolve them. At present, arbitration remains themost widely accepted formof dispute resolution, thoughwe expect to see an increase in other forms of dispute resolution, such as disputes boards, in the future. It is also hoped that this increased activitywill lead to a transfer of know-howand skills, resulting in bothmore expeditious local methods for resolving disputes andmore efficient projects. Those looking to undertake a project in Africa should be aware of the range of legal issues that theymay encounter, fully understand the implications of any contractual clauses relating to dispute resolution and ensure clear communication between parties at all times.
WHAT IS C AUSING DISPUTES IN CONSTRUCTION ACROSS AFRIC A? Disputes across Africa tend to be generated by issues such as: • Poor design documents and drafting, as well as poorly adapted versions and non-standardised contracts • Delayed access to the site • Delayed progress with the works • Failure to complywith contractual obligations (at all or in a timelymanner) • Lack of understanding of project requirements and professional negligence • The difference in construction contract negotiations and in contract management between public parties and private parties Construction projects in Africa are also prone to difficulties caused by the challenging environments inwhich they are negotiated and the asymmetrical knowledge and experience of the various parties to the contract. CHOOSING THE RELE VANT SE AT OF ARBITRATION Selecting the appropriate arbitral seat always requires careful consideration. Inmost cases, the competent court of the jurisdictionwhere the arbitral tribunal has its seat will be competent for any annulment procedure. South Africa is often chosen because its developed systemof precedent provides parties with legal certainty. It is also a signatory to the New York Convention (whichmany African countries are not) and ismore cost effective thanmany other African jurisdictions. Owing tomarked differences between African jurisdictions, in contractual discussions it remains important that stakeholders carefully consider the consequences before agreeing to amendments to any dispute resolution clauses.
WE HAVE L AUNCHED A GLOBAL GUIDE TO DI SPUTES IN THE CONS TRUCT ION INDUS TRY. PLE A SE EMA IL INFRA S TRUCTURE@CLYDECO. COM TO RECE I VE A COPY.
OWING TO MARKED DIFFERENCES BET WEEN AFRI C AN JURI SDI CT IONS , IN CONTRACTUAL DI SCUSS IONS I T REMA INS IMPORTANT THAT S TAKEHOLDERS C AREFULLY CONS IDER THE CONSEQUENCES BEFORE AGREE ING TO AMENDMENT S TO ANY DI SPUTE RESOLUT ION CL AUSES .
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