International Commercial Arbitration and African States: Practice, Participation and Institutional Development

Asouzu, Amazu A. International Commercial Arbitration and African States: Practice, Participation and Institutional Development. Cambridge, UK: Cambridge University Press, 2001. 533 pp.

This book, a publication of the Cambridge Studies in International and Comparative Law, is an important contribution to the study of international commercial arbitration and other methods of dispute resolution involving primarily the African states. Although written from an African perspective and focusing on dispute resolution regimes affecting and concerning African states and their nationals, the book has practical as well as policy implications for foreign investment, commercial arbitration and other forms of dispute resolution in other regions of the world, particularly the developing countries. International commercial transactions often produce disputes between parties in a host country and foreign governments or investors, transnational corporations and others. The author maintains that arbitration and alternative dispute resolution (ADR) methods can satisfy the expectations of foreign investors and traders for profits and can also contribute to the economic development and prosperity of African states and their citizens.

The thirteen chapters of the book are divided into five parts. In Part 1, the author discusses the advantages and disadvantages of various dispute resolution methods available to commercial parties in Africa, and maintains that the use of arbitration has relative advantages as compared to traditional forms of dispute resolution, litigation, and other forms of ADR mechanisms. Having advanced arguments for the use of arbitration, the author then focuses on the development of institutional arbitration in the continent and critically analyzes the functions and activities of the regional arbitration centers in Part 2 (chapters 2 and 3).

Under the auspices of the African-Asian Legal Consultative Committee (AALCC), several regional arbitration centers were created in Africa for the purpose of promoting and establishing national arbitral institutions. The regional centers, which adopted a modified version of the UNCITRAL Arbitration Rules, are meant to provide a relatively inexpensive and fair procedure for the settlement of international commercial disputes within the region. Yet, parties to disputes rarely select African cities as venues for the settlement of their disputes. The prevailing perceptions are that the courts in Africa cannot be trusted and the national legal frameworks for arbitration are not conducive for international dispute resolution. There are other notions that the relevant states do not possess the institutional or administrative facilities for holding arbitrations, and they may not be parties to the 1958 New York Convention or other pertinent treaties, and therefore, enforceability of arbitral awards and agreements cannot be guaranteed.

The author addresses those issues and discusses the infrastructural development of arbitral institutions in Africa. In Part 3 (chapters 4 to 6), he discusses the developments and trends in arbitration laws in Africa from the colonial time and the problems and prospects of UNCITRAL Model Law as well as the 1958 New York Convention treaty in the African setting. While many African states have enacted arbitration laws following the Model Law, only a few states have incorporated the New York Convention into their legislation and legal system. The author suggests that ratification of the New York Convention by more African countries would provide international traders and investors with more security and confidence in the commercial environment of the continent. This would facilitate and enhance commercial activities and would ultimately contribute to economic development and prosperity of the continent.

The International Center for Settlement of Investment Disputes (ICSID), an independent institution initiated by the World Bank in early 1960s, received rather widespread support from the majority of the African states, primarily because of the expectation that much-needed foreign investment for economic development would flow into their countries. Although most African states ratified the ICSID Convention, they had attracted a much lower flow of foreign investment than the Latin American states, which initially opposed the Convention. The author examines the factors behind Africa's failure to attract foreign investment as well as its experience under the ICSID Convention in great length in Part 4 (chapters 7 to 12). Some jurisdictional issues of the ICSID Convention regarding bilateral investment treaties are dealt with in depth in three chapters, where a number of ICSID cases and awards as well as the investment laws of a number of countries are discussed to illustrate some of the problems and controversies concerning the Convention. One fundamental point the author points out is that although the ICSID Convention is an international entity, none of its proceedings so far have taken place outside the U.S. and France. Recognizing the general lack of ICSID arbitrators and conciliators from the developing countries, he insists on appointing more arbitrators and conciliators from Africa to ICSID tribunals or commissions.