40 SPECIAL REPORT
INTERNATIONAL ARBITRATION 1/3LY
Regional initiatives have aimed to develop effective arbitration in the region, and in particular the 1993 Treaty on the Harmonisation of African Business Law in Africa (creating the organisation known as “OHADA”) is one such instrument now signed by 17 Sub-Saharan Francophone jurisdictions with the aimof harmonising business and arbitration laws. The OHADA treaty also established the Common Court of Justice and Arbitration in Abidjan (Ivory Coast) which is a regional arbitration institutionwith jurisdiction over contractual disputes where one party has its domicile in amember state, or where the contract was executed or is to be fully or partially performed in amember state. As part of the OHADA Treaty, member states also adopted the UniformAct on Arbitration (based on the UNCITRALModel Law) which supersedes the member states’ national arbitration laws. Arbitral institutions have been developed in various parts of Africa, in particular inMauritius, Kigali and Nairobi, with the aimof attracting not only domestic arbitrations but also arbitrations with international parties. Although the range of arbitration options is increasing, it remains to be seenwhether there will be a trend towards arbitrating within the Sub-Saharan region, or whether for themore complex disputes parties will continue to prefer the established arbitral centres of London and Paris. Given the range of options and the potential pitfalls, the drafting of arbitration clauses in Sub-Saharan oil &gas contracts remains a topic that requires particular consideration to be given to the applicable lawand seat of the arbitration, and the selection of the arbitral institution. INVESTOR – STATE DISPUTE SET TLEMENT In addition to the general arbitration framework, there are some specific instruments which relate to investor-state disputes in Sub-Saharan Africa, although recent developments have presented investors with considerable challenges. While the region’s countries are party to almost 600 concluded bilateral investment treaties (BITs), seeking to offer a level of investor protection, over half have not been ratified or are terminated. Further, South Africa has already indicated an intention to terminate or not renew its BITs, replacing themwith the Protection of Investment Act 2015. 1 Commentators have suggested that this Act significantly reduces investor protections in a number of ways including in relation to expropriation, security and protection and access to independent dispute resolution procedures, all of whichmay be concerning to upstreamoil &gas industry participants.
Regional organisations such as the Southern African Development Community (SADC) and the CommonMarket for East and Southern Africa (COMESA) are not generally thought to offer at present a reliable level of investor protection. Membership of the International Centre for the Settlement of Investment Disputes (ICSID), headquartered inWashington DC, is however relativelywidespread (South Africa, Angola and Equatorial Guinea being notable exceptions), and this can provide a useful mechanism for investor protection, either through BITs or contractual provisions. Given the pressures discussed above on government revenues fromnatural resources, the ICSID process and ICSID awards have been open to challenge in Sub-Saharan Africa however, with examples of this occurring in Tanzania and Nigeria. LOOKING TO THE FUTURE Although it remains to be seen how the framework within Africawill develop in the future, there is a current need for industry participants to keep closely inmind the various options available to them to resolve their disputes efficiently and effectively.
1 Atthetimeofwriting(June2016),theProtectionofInvestmentActawaitsPresidentZuma’sproclamationto enteroperation.
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