INTERNATIONAL ARBITRATION 1/3LY
Q & A PATRI CK ZHENG, PARTNER AT CLYDE & CO INT ERV IEWS MR JUN CUI , FORMER VP OF CHINA OVERSE A S CONSTRUCT ION CORPORAT ION Q The past decade has seen a rise in the number of I prefer amicable negotiation as the first step to settle any contractual disputes. However, when drafting the contractual
Q Have you noticed a difference in relation to the options available for resolving disputes in Africa now compared with in the past? A Alternative Dispute Resolution (ADR) has become a more popular option in African countries in recent years. For example, adjudication is becoming themost popular option for resolving construction contract disputes as FIDIC standard forms are used. However, arbitration at an offshore centre is still the first option for contracting parties in the investment sector. Q What is your experience/view on the enforcement of arbitral awards following disputes with African states/ state-owned entities? A Enforcing arbitral awards in African states can be very tough indeed. It is worthwhile trying to plan ahead for this scenario when agreeing contract terms or as soon as a dispute arises. Local courts are often unreliable and it is common for them to refuse to enforce arbitral awards. The situation is particularly uncertain in the case of states that are not signatories to the New York Convention. Often there is very little you can do. Q Do China-Africa Bilateral Investment Treaties offer adequate protection for Chinese investors? A In practice, invoking a BIT to protect the interests of Chinese investors is often not an easy business. Unless the relevant government is overtly involved in the dispute, parties are often best advised to look for contractual remedies. There is a viewheld bymany that BITs will provide protection to Chinese parties only to the extent that they are skilled at making use of BITs.
Chinese companies investing in Africa. What has been your experience of doing business there and which countries do you have specific experience of? A Operating in Africa brings both opportunity and risk. Over the years, I’ve been involved in projects in countries including Kenya, Tanzania, Ethiopia, Chad, Cameroon, Angola and Tunisia. Even themost carefully planned ventures can encounter problems, not only arising from contracts but also caused by environmental factors in the host country. The thorny issues that Chinese companies operating in Africa face, on the one hand, involve security risks such as political instability, civil war, terrorismand internal disorder. On the other hand, Chinese companies encounter situations such as local government failure to pay employees or breach of contract by other parties to the contract. Q What factors do you consider when entering contracts with African parties? Do you have a preference in relation to dispute resolution clauses in contracts? A Contracts should be carefullymanaged and compiled. Themain priorities for contract terms are as follows: (1) Forcemajeure: its identification, procedure and remedy; (2) Breach of contract clause: its identification, events establishment; (3) Compensation arising frombreach of contract: detailed procedure; (4) Dispute settlement: choice of arbitration venue, procedure and enforcement of arbitral award; (5) Applicable law; (6) Other contract terms and conditions should be as detailed as possible.
provisions it’s best to avoid amicable negotiation as the pre-arbitration procedure. Arbitration in London or Paris is much less risky than the local courts in African countries. Q What is your preferredmethod and/or forum for resolving disputes in Africa?What makes this method reliable and effective? A I would choose arbitration in any third place, like
London or Paris, rather than the local courts in African countries, with the exception of South Africa. The primary concern, when drafting dispute resolution clauses, is to avoid interference from the host government should a contractual dispute occur. Sometimes it’s best to draft the clause with OHADA (Organisation for the Harmonization of Business Law in Africa) actes uniformes inmind because some French-speaking countries like Chad aren’t members of the New York Convention but are signatories to OHADA’s Droit de l’arbitrage , for example. It’s important to do everything in your power to ensure that the arbitration clause is valid. It should include essential provisions such as arbitration institution, applicable arbitration rules, venue of arbitration and the number of arbitrators. It’s also important to plan ahead in terms of enforcement of arbitral awards in the host country, ensuring that it will be possible to enforce the award if youwin the case.
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