Introduction

The first part of this two-part series was published on 7 February 2024. Back then, the Lusaka International Arbitration Center (“LIAC”) had not been officially launched. This changed on 5 April 2024 when the Zambian President, Hakainde Hichilema, officiated at the launch of LIAC.The golden thread in all the speeches at the said launch was that LIAC was ready to adjudicate local and international commercial disputes. A question may be posed – is the international arbitration community as confident of this? 

Further, in the first part of this series, we traversed the challenges that African arbitration centers have faced during the last few decades and how LIAC was likely to face similar challenges. In this part of the series, we offer suggestions on how African arbitration centers, and LIAC in particular, can position themselves to acquire a larger share of the international arbitration market.

Recommendations for Improving International Arbitration in Africa

Having identified the challenges that have plagued Africa in the international arbitration arena, it is necessary to identify some recommendations that can help to improve its competitiveness. At the very least, Africa should be able to retain most of the arbitration disputes that arise from its member states and/or corporations. The recommendations are prescribed below:

(i) Aggressive Development of Markets and Economies

It is unlikely that Africa will make any massive improvement in international arbitration without significant growth in its markets and economies. This is seemingly the route that the Asia relied on to catch up with Europe and the Americas in international arbitration. An increase in economic activities arguably leads to increased resources for the improvement and modernization of arbitration centers. It also leads to increased disputes which the said arbitral centers will be able to adjudicate. 

In respect of improving its markets and economies, Africa appears to be on the right trajectory, at least in terms of policy. In 2018, 54 of the 55 African states entered into the African Continental Free Trade Agreement (“AfCFTA”). It has been described thus by the World Bank: 

“The African Continental Free Trade Agreement represents a major opportunity for countries to boost growth, reduce poverty, and broaden economic inclusion. Implementing AfCFTA would… boost Africa’s income by USD450 billion by 2035 (a gain of 7 percent) while adding USD76 billion to the income of the rest of the world.”

Further, with the world responding to the climate change challenge by moving to clean energy sources, Africa is argued to be in line to benefit in this manner:

“According to the International Energy Agency, demand for minerals critical to the energy transition to renewables could increase by as much as six-fold by 2040. With the African Continental Free Trade Agreement (AfCFTA), a regional electric battery global value chain involving some sub-Saharan countries could be globally competitive”.¹

The foregoing opportunities have the capacity to spur Africa’s economic development massively. For Africa to be competitive in international arbitration, it is recommended that it takes advantage of the opportunities above and many others available to aggressively grow its markets and economies. Zambia is arguably at the frontier of the critical minerals revolution as it is home to several of them. Thus, in line with the arguments above, LIAC has a great opportunity for exponential growth in the years ahead.

(ii) Knowledge Transfer in International Arbitration

One of the challenges identified in the first part of this series is the lack of exposure of African lawyers and arbitrators to international arbitration. Parties in international arbitration matters do not engage African lawyers and arbitrators as frequently as their counterparts in other regions of the world – there is a perception that the former do not have the requisite experience to handle such matters. 

To alleviate this challenge or perception, it is proposed that Africa engages in a methodical transfer of knowledge in international arbitration to its legal community. In some African states, such practice has already been undertaken as can be seen below: 

“An analysis of the ICSID cases involving East African state parties shows that all of them, save for one involving Burundi, involved the state being represented by an international law firm (ILF). In many cases, these ILFs partnered with co-counsel who were based locally. This should be formalized in the legal policy of African states, such that partnership between ILFs and locally based firms is mandatory in any arbitration involving the government.”²

The formalization of this practice by African states, in the international arbitration matters they are engaged in as parties, will afford the African legal community a fair chance to obtain knowledge in international arbitration and more importantly practice in the field. 

At the launch of LIAC by the republican President of Zambia, there was a suggestion that the Zambian legal community would play an enhanced role in adjudicating arbitral disputes that involve their country. It is this that LIAC can latch onto to enhance the arbitral market in Zambia.

(iii) Collaboration with Renowned International Arbitration Centers

Europe and North America have had centuries of experience in international arbitration, whilst Asia has had rapid development within a short period of time in the said field. African international arbitration centers can learn from both continents for both their long- and short-term development in international arbitration. Some arbitration institutions in Africa have already proceeded to solicit collaboration with renowned international arbitration centers:

“South Africa’s leading arbitral institution, Arbitration Foundation of Southern Africa (AFSA), has achieved a degree of success and has demonstrated a keen desire to develop further. Following an ambitious legal exchange programme with China, in August 2015, AFSA launched a new international arbitration center dedicated to the resolution of commercial disputes between Chinese and African parties – the China Africa Joint Arbitration Centre (CAJAC).”³

The Common Court of Justice and Arbitration (“CCJA”) of the Organization for the Harmonization in Africa of Business Law has also been previously engaged in collaborative work with renowned international arbitration centers:

“…the CCJA has made considerable efforts towards modernization, including the signature of various cooperation agreements, in particular a partnership with the ICC signed in June 2016. Under this partnership, the ICC will deliver training across the region and co-host an annual conference on alternative dispute resolution each year in a different OHADA country.”⁴

It is therefore recommended that more African arbitration centers should seek partnerships, collaborations, and joint ventures with the renowned arbitration centers in Europe, North America and Asia. This should aid the continent’s arbitral centers to provide world class arbitration services. As LIAC takes its formative steps, this may be an avenue of interest to ensure that lessons learnt over numerous decades and in some cases a century are taken on swiftly.

(iv) Modernize Arbitration Laws and Court Support

It is conceivable that international arbitration users select seats based on how well the seat’s laws and courts support arbitration. The perception remains that African courts and laws do not effectively support arbitration. This is not helped by instances such as that in Tanzania where:

“…the question of the interference of the courts lingers. For example,  the…Tanzanian High Court decision in Dar-es-Salaam… to grant an interim injunction in ICSID proceedings where the parties had not expressly agreed court had the authority to do so (in the self-contained ICSID system, unless the parties agree otherwise, only the tribunal may grant provisional measures).”⁵

The foregoing, together with other legal challenges such as enforcement of awards makes selecting an African seat difficult for an international arbitration user. Therefore, it is recommended that African countries should revise and/or modernize their arbitration laws to align them with international standards; and they should also ensure improvement in the court’s supportive role to arbitration. 

It is arguable that Zambia has a robust legal regime that supports arbitration and aligns with international standards. Moreover, the arbitration statutes are reportedly undergoing further refinement. This will augur well for LIAC as it begins to position itself to the region and international community as an arbitration center of choice.