I am a Corporate law and arbitration expert. I am very, very much fascinated by international arbitration: commercial, maritime, and investment. The more I read about arbitration, the more I want to know. I would also like to specialize in the subject matter which I think is helpful to Ethiopia in the future. In my personal life, I like to hang out with my friends and have fun. After all, I think life is short.

Moreover, I like to read books, watch movies, travel a lot, which has become recent addiction, and learn new things. I also want to learn how to make a good documentary, which I want to develop as a hobby. I also like to blog here at Abyssinia Law. 

Corona Virus and Force Majeure

A post on American Bar Association’s (ABA) website and a comment by a colleague prompted me to write this. Let me begin by posing a question: can a pandemic be considered as a force majeure? The importance of this post may be revealed later as the economy opens up and creditors require debtors to perform their obligation, repudiate an agreement or hold debtors liable for failure.

 

Covid-19 is shaking the world- all 6 continents are being put to the test- who expected life to be like this some months ago? Covid-19’s impact goes far beyond the health system. It is having enormous amount of political and economic pressure on governments. The unavailability of vaccine, scientists’ lack of understanding of its real nature and the origin makes the virus dreadful. Though billions of dollars are poured to research, no pharmaceutical firm managed to come up with a long lasting solution except socially engineered solutions like social distancing, staying at home, cleaning hands, etc.

 

Obviously, the pandemic has a deep economic impact on start-ups and big firms. Many governments are devising stimulus package and/or these businesses are asking for a bailout. This means that the performance of many commercial agreements will be disrupted: debtors will keep getting emails, phone calls from creditors asking to deliver a thing, sell their service or whatever scenario which comes to your mind.

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The Quest to modernize: Is acceding to the New York Convention the right thing for Ethiopia?

 

It would be appropriate to begin by saying few words about the New York Convention for the Recognition and Enforcement of Foreign Arbitral Awards which came into being in 1948. By the way, our Civil Procedure Code was enacted in 1948 E.C; while the convention was passed in 1948 G.C. Now, simply put, it is a very popular convention in the international arbitration community and is used to enforce an arbitral award (both commercial and non-commercial) in another country.

 

The main point of this post is not to explain the nature of the convention, but to ask if Ethiopia’s initiation to accede to the convention is the right thing. Recently, the Ethiopian government is weighing pros and cons of approving the instrument. It is inviting legal professionals and major stakeholders to speak their concerns or forward their comments on the advantages or disadvantages of signing the New York Convention.

 

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የሦስተኛ ወገኖች መብትና የግልግል ሂደት

 

ግልግል በፍትሐብሔር ሕጋችን እውቅና ከተሰጣቸው የሙግት መፍቻ ዘዴዎች አንዱ እንደሆነ ይታወቃል፡፡ ተከራካሪዎችም ጉዳያቸውን ወደ ግልግል የሚወስዱት በመካከላቸው በሕግ ፊት የሚጸና የግልግል ስምምነት እስካለ ድረስ ብቻ ነው፡፡

በዚህ ጽሑፍ በግልግል ሂደት መብታቸው የሚነካ ሦስተኛ ወገኖች ምን ዓይነት መፍትሔ ሊያገኙ ይችላሉ የሚለውን ለመመልከት ይሞክራሉ፡፡ በዚህ ጽሑፍ ላይ የቀረበው በየካቲት ወር 2009 ዓ.ም ለገበያ ከበቃው ‹‹የግልግል ዳኝነት በኢትዮጵያ›› ከተሰኘው መጽሐፍ ላይ የተቀነጨበ ነው፡፡

ዝርዝር ሐሳቦችን ለማግኘት እንዲሁም ስለ ፍሬ ሐሳቡ በጥልቀት ለመረዳት መጽሐፉን ማንበብ ጠቃሚ ነው እላለሁ፡፡ ይህ ጽሑፍ የወጣው የሕግ ባለሙያዎች በየጊዜው ከሚገጥመን ወይም ሊገጥመን ከሚችለው የሕግ ክርክር በመነሳት ሲሆን ዋናው ዓላማውም ውይይትን መፍጠር ነው፡፡

በግልግሉ ሂደት መብታችን ወይም ጥቅማችን ተነካ ብለው የሚያስቡ አካላት ወደ ግልግሉ ጣልቃ ለመግባት ፍላጎት ማሳየታቸው አይቀሬ ነው፡፡ በዚህ ረገድ ግልግል በሁለት ወገኖች ብቻ የሚደረግ ሂደት በመሆኑ ጣልቃ ለመግባት የሚፈልግ ሰው አቤቱታው በገላጋዮቹ ተቀባይነት ሊያገኝ ይችላል? የሚለውን ጥያቄ መመለስ የግድ ይላል፡፡

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አትሌቶች፣ ዶፒንግና ግልግል (arbitration)

 

ማሪዮን ጆንስ፣ ማሪያ ሻራፖቫ፣ ክላውዲያ ፔከንስታይ እና ላንስ አርምስትሮንግን የሚያመሳስላቸው አንዱ በስፖርቱ ዓለም ገናና ስም የነበራቸው መሆኑ ነው፡፡ ማሪዮን ጆንስ የኦሎምፒክ የወርቅ ሜዳልያ ተሸላሚ ናት፡፡ አርምስትሮንግ ደግሞ በብስክሌት ግልቢያ የሚያህለው አልነበረም፡፡

ማሪዮን ጆንስ አጭሩን ርቀት በሚያስገርም ፍጥነት ታጠናቅቅ ነበር፡፡ የአሸናፊነት ምልክትም ሆና ለብዙ ዘመን ቆይታለች፡፡ አርምስትሮንግም እንዲሁ፡፡ ከችሎታውና ብቃቱ የተነሳ ስፖንሰሩ ለመሆን ያልተሯሯጠ ኩባንያ አልነበረም፡፡

በአንደኝነት ያላጠናቀቀበት ውድድርም ማግኘት አዳጋች ነበር፡፡ ‹‹ቱር ደ ፍራንስ›› በመባል የሚጠራውን የብስክሌት ውድድር ብዙ ጊዜ አሸንፏል፡፡ በብር ላይ ብር፣ በክብር ላይ ክብር ደርቧል፡፡ እሱ ካለው ዝና የተነሳ የካንሰር ታማሚዎችን የሚደግፈው ‹‹ሊቭ ስትሮንግ›› የተሰኘ ግብረ ሰናይ ድርጅቱም በርካታ ሚሊዮን ዶላሮች ይጎርፉለት ነበር፡፡ ከእርሱ ጋር መሥራት ‹‹ኩራታችን›› ነው ያሉ ድርጅቶችም ብዙ ነበሩ፡፡ የ44 ዓመቷ ክላውዲያ ፔከንስታይ የበረዶ ላይ መንሸራተት ስፖርተኛ ናት፡፡ ገድሏ እንደሚተርከው ባደረገቻቸው ዓለም ዓቀፍ ውድድሮች 60 ሜዳሊያዎችን አሸንፋለች፡፡

ፍጻሜው

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Immediate appeal in Ethiopian Arbitration Law?

 

An interesting article, published on Jimma University Journal of Law, entitled “the immediate appealability of a court order against arbitration: it should be allowed and even made compulsory”, argues that an immediate appeal against a court order which is against arbitration must be allowed; article 320/3/ of the Civil Procedure Code should be amended to take the special nature of arbitration into account.

This post counter argues the thesis forwarded by Mr. Berhanu Beyene, the author of the article cited above: there lies no reason to amend article 320/3/, immediate appeal against a court order which is against arbitration must be disallowed. To support my argument, I will forward the following points: practically, parties ought to wait untilfinal judgment is rendered; immediate appeal might create congestion on the appellate court,repeated interruption of trial and weakens the efficient operation of the case by the trial court.

VALIDITY OF ARBITRATION AGREEMENTS

It is generally accepted rule that arbitration agreement cannot be assumed; the parties have to show a clear and unequivocal intention to refer their case to arbitration.This rule is consolidated by a recent Federal Supreme Court Cassation Decision File Number 97021. According to article 3325/1/ of the Civil Code, arbitral submission is a contract whereby the parties to a dispute entrust its solution to a third party, the arbitrator, who undertakes to settle the dispute in accordance with the principles of law.

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The Chromalloy syndrome: enforcement of foreign arbitral awards in Ethiopia

In 1996 the case between Arab Republic of Egypt Chromalloy Aero services brought a new debate to the international arbitration world. Chromalloy Aero services (“Chromalloy”), an American corporation, entered into a military procurement contract with the Air Force of the Arab Republic of Egypt (“Egypt”) to provide parts, maintenance, and repair for helicopters.

A dispute arose and Chromalloy commenced arbitration proceedings on the basis of the arbitration clause in the contract. An arbitral tribunal found for Chromalloy. Egypt filed an appeal with the Cairo Court of Appeals, seeking nullification of the award, and filed a motion with the United States District Court for the District of Columbia to adjourn Chromalloy’s petition to enforce the award.

The Cairo Court of Appeals suspended the award and Egypt filed a motion in the United States filed a motion in the District Court to dismiss Chromalloy’s petition to enforce the award. Subsequently, the Cairo Court of Appeals issued an order nullifying the award. On the contrary, Chromalloy had already opened a file for enforcement of the award. Paradoxically, the court said that the arbitral award is enforceable because:

1.     recognizing the decision of the Egyptian court would violate United States public policy in favor of final and binding arbitration of commercial disputes;

2.     according to art 5(1)(e) of the NYC, the court has a discretion to  to enforce the award that “has ... been set aside ... by a competent authority of the country in which, or under the law of which, that award was made”; and,

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Interim measures of protection in international commercial arbitration in Ethiopia

Introduction 

Arbitration is crafted in a way that can satisfy parties’ interest from the beginning until final award is rendered. In each step, decisions rendered by arbitrators may potentially affect the interest of adversarial parties. Any one closely following the evolvement of international commercial arbitration will not be surprised to see interim measures of protection become a centre of debate. From the publication of scholarly articles until the amendment of UNICTRAL model law, the international arbitration community is making various efforts to adopt uniform application and enforcement of interim measures of protection in international commercial arbitration.

Yet, Ethiopia’s arbitration law is not lucky enough to share from this chalice. Ethiopia’s arbitration law is currently regulated by the 1960 Civil Code (CC) and the 1965 Civil Procedure Code (CPC). Form the close reading of both codes, it is easy to notice that there is huge involvement of national courts in arbitration proceedings. This sentiment towards arbitration tribunals is manifested through the broad construction of the provisions found in the codes.

This paper aims at dissecting the anatomy of interim measures of protection in international commercial arbitration in Ethiopia. The application and enforcement of interim measures of protection in Ethiopia is better fleshed out through closer examination of provisions in CPC. It also seeks to argue that Ethiopia needs to become party to the 1958 New York Convention on Recognition and Enforcement of Foreign Arbitral Awards (NYC) and enact new arbitration law. This and other similar moves will help the arbitration regime to become firmer, party friendly, modern and stable.

This essay will have three sections: the first section will give a short overview of how arbitration works in Ethiopia followed by a legal and case law analysis of the application and enforcement of interim measures of protection in international commercial arbitration in Ethiopia. The last section is dedicated to propose solutions to solve the existing conundrum in relation to application and enforcement of interim measures of protection in international commercial arbitration in Ethiopia.

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Appeal and arbitration under Ethiopian Arbitration Law

What would you answer if you are confronted with a question: is appeal a fundamental right? Would you say yes, no or neither? I think the argument leans towards yes, does not it? Art 20(6) of the constitution affirms the right of any person to “appeal to the competent court against an order”; yet, I do not aim to discuss appeal in courts, but its general perception in arbitration.

Before any arbitration proceeding is underway, it presupposes a valid dispute settlement clause. In the book prepared by FreshFields Law Firm, called The FreshFields Guide to Arbitration and ADR, a valid arbitration clause should include inter alia applicable law, arbitrating institution, whether or not the tribunal will grant provisional measures, exclusion of appeals, and language of arbitration.

The civil code and the civil procedure code aspire to govern arbitration proceeding from its beginning until an award is executed. Among the main issues that I find unanswered and perplexing is the question of appeal in arbitration. Art 350 et seq of Ethiopian Civil Procedure Code (CPC) is devoted about appeal, set aside of an award. The CPC looks more liberal than expected: it allows for parties to contractually waive their right to appeal, commonly referred as finality of arbitration clause. Appeal against arbitral awards is made in the same way as appeal from judgments is conducted. Art 352 specifies the court that has appellate jurisdiction: it is the “appellate court which would have had appellate jurisdiction” had the case been filed to a court.

Black’s Law Dictionary defines appeal as a proceeding undertaken to have a decision reconsidered by a higher authority; especially the submission of a lower court’s or agency’s decision to a higher court for review and possible reversal. Taking this definition into account, any civil procedure law lays down grounds of appeal. When it comes to arbitration, the conditions for making an appeal are stipulated under art 351. It remains debatable whether the conditions indicated under art 351 should be considered as a standard or ground of appeal. Art 350(1) of the code uses the term “condition”. I think the terminology chosen by the drafter makes the concept of appeal against arbitral awards vaguer.

It would have been better if the legislature differentiated between standard and ground as they did on art 356 of CPC. Leaving this discussion aside, which I hope to return to it in another post, I would like to frame a question for the reader: would Ethiopian law allow arbitrating parties to contractually limit or expand the “conditions” of appeal stated under art 351? To restate it, if parties are allowed to fully waive their right to appeal, would it be logical to assume that they can contractually limit the “conditions” of appeal?

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Ethiopia’s Arbitration Regime and the New York Convention

I say 1958 was a year the international arbitration world took a remarkable move. The UN and other parties interested in international arbitration embarked an international convention to recognize and enforce foreign arbitral awards. The convention was signed in New York, The New York Convention to Recognize and Enforce Foreign Arbitral Awards (NYC), and it became the most popular convention in the whole wide world. The major trading nations, those that appear to be antagonistic have signed it without any kind of reservation. Thus far, round about 150 countries have signed and ratified it. Even, it is hailed as the “successful convention drafted by the UN.”

NYC aims to create a favorable environment for the recognition and enforcement of foreign arbitral awards, seeks to put a uniform system for the enforcement of international arbitral awards, plan to craft a standardized and homogenous procedure for recognizing and enforcing foreign arbitral awards. NYC is applicable to both international and domestic arbitral awards: art I(1) says, “… it shall also apply to arbitral awards not considered as domestic awards where their recognition and enforcement are sought.”

Inevitably, the introduction of NYC has helped the international arbitration community to move one step higher. Prior to its enactment (the 1923 Geneva Protocol was the governing rule), nation states have had their own grounds and criterion for enforcing foreign arbitral awards.

Under NYC, states are under the obligation to recognize an agreement to arbitrate, though some questions like granting judicial provisional measure before the constitution of the tribunal. When the court of a nation state is seized of an action in matter in respect of which the parties have made an agreement, it has to refer decline jurisdiction and refer the parties to arbitration (art II(3)).

The specificity and main achievement of NYC is that it has adopted only 4 grounds enforcement of an arbitral award (art V of NYC): if the arbitration agreement is void, signed under incapacity; the award debtor was not given prior notice and was not heard; the issue was inarbitrable or the award contains decisions beyond the scope of the submission to arbitration; the composition of the arbitral tribunal was not in accordance with the parties’ agreement; the award is not yet binding on the parties or has been set aside by a compete authority; the subject matter of the dispute is incapable of being submitted to arbitration; and, the recognition and enforcement of the award is contrary to public policy.

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Period of Limitation, Lapse of a Morgage Vs Art 3058 of the Civil code

In 2002, when I was doing my undergraduate degree, our contract law teacher started talking about period of limitation and its effect. I neither had a concept nor an argument about period of limitation under art 1845 of the civil code. I attended the whole class, tried to understand arguments, justifications and ration d’être of the period of limitation. Mulugeta Mengist, in his monograph says that period of limitation is used to ensure certainty and predictability in transactions.

Now, with some years of working experience and exposure, I feel like I have understood what period of limitation in a private contractual relationship. To restate what Mulugeta wrote unless there is a time limit after the lapse of which the right cannot be enforced, people do not feel secure to do whatever they like with respect to their property.

A limitation period is the period of time within which a party to a contract must bring a claim. Limitation period starts counting when the contract is breached, or when the damage is suffered. Period of limitation is a period of time, the expiry of which extinguishes parties’ legal remedies and also parties’ legal right. This is an absolute defense beneficial to the debtor but the burden of proof of the statute of limitation is with the debtor.

However, one court decision still perplexes me: Development Bank of Ethiopia v. Mr. Tigabu Teferra, Cassation No 78444/2005, found in vol 14. In order to give a glimpse of the case, the respondent, Mr Tigabu, borrowed money from the bank against collateral, in which the immovable property was registered in Megabit 23, 1989 E.C. After 14 years, it renewed the registration of the immovable property in the local registrar office, Merab Wolega Registration Office. The respondent argued that the renewal of the registration is against article 3058(2) of the civil code. On the other hand, the bank said that it had already given notice based on article 3 of proclamation 97/90.

At last, the cassation decided that art 3058(1) & (2) are not concerned with period of limitation but lapse of mortgage. Citing a precedent, Cassation Decision 44800/2002, Vol 10, it concluded that

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