- Introduction
Ethiopian Capital Market Administrative Tribunal (ECMAT) is established as an independent, specialized judicial body established by Proclamation No. 1248/2021 to ensure the effectiveness and reliability of the nation’s capital market. Modeled after similar successful international tribunals, its creation addresses a key economic need while aligning with Ethiopia’s practice of establishing specialized courts. The Tribunal’s primary role is to resolve conflicts within the capital market ecosystem swiftly and impartially. This legal update delves into its structure, power and roles in the administration and dispute resolution process of the emerging capital market system.
- Legal Basis for its Establishment
The Ethiopian Capital Market Administrative Tribunal (ECMAT) is an independent institution established under Article 64 and subsequent Articles of the Capital Market Proclamation. The establishment of such a specialized court to deal exclusively with capital market matters aligns with common and successful international practice, as seen in countries like Canada, India, and Nigeria. Furthermore, this is consistent with Ethiopia’s constitutional allowance for specialized courts and its historical practice of establishing similar bodies.
- Rationale and Objective
The primary purpose of establishing a capital market system in Ethiopia is the recognition that it can help address the nation’s economic challenges. The ECMAT plays a significant role in realizing this system, ensuring the developing capital market’s effectiveness, establishing it as a reliable source of investment capital, and properly protecting the rights and interests of investors.
The central objective of the Tribunal is to maintain the soundness and reliability of the securities trading system. It achieves this by delivering impartial, credible, and rapid decisions to resolve conflicts that emerge within the capital market ecosystem. To meet this objective, the Proclamation obligates the Tribunal to render its decisions within 3 months.
- Institutional Structure and Powers
ECMAT is a self-contained body. Its budget is allocated by the government, and its Presiding Judge and Judges are appointed by the Prime Minister. The Tribunal is required to submit an annual report to the Prime Minister and possesses the necessary staff to carry out its judicial functions.
- The Tribunal’s Judicial Power
The tribunal’s judicial power is primarily focused on examining appeals filed against decisions made by the Ethiopian Capital Market Authority, or by any person executing the functions and powers of the Authority. These appeals must be based on the Capital Market Proclamation, its implementing regulations and directives, and other pertinent laws. Following its examination, the Tribunal has the authority to affirm, revoke, or issue any other decision accordingly.
- Scope of Jurisdiction
The Tribunal’s decisions concentrate on disputes arising between specific entities and concerning particular matters within the capital market. Its jurisdiction covers:
- Disputes involving the Authority and entities such as a Securities Exchange, a Self-Regulatory Organization (SRO), or market participants.
- Disputes between market participants, or between market participants and clients/investors, or SROs.
- Disputes involving registered (public) companies and the Authority, the Securities Exchange, or SROs.
- Disputes concerning the denial of securities registration by the Authority, or the suspension or revocation of a license or recognition issued by the Authority.
- Disputes where the Securities Exchange has rejected securities registration, suspended securities from being sold on the Exchange, or removed securities from its registry (delisted).
- Disputes between Capital Market Service Providers or Securities Exchanges and an investor who has suffered financial harm due to their actions.
- Timeline for Appeal
Any person aggrieved by a decision of the Authority may appeal to the Tribunal by filing a notice of appeal with the Registrar, accompanied by the prescribed fee, within twenty-eight (28) days from the date of service of the decision. On the other hand, a party dissatisfied with a decision of the Tribunal may, within thirty (30) days of being served with notice of such decision, file a notice of appeal to the Federal High Court, provided that such appeal shall lie on a question of law only.
- Authority to Enforce its Decisions
The Administrative Tribunal is granted the same authority as a regular court under the Civil Procedure Code to enforce its decisions, rulings, orders, and to regulate the conduct of its proceedings.
- Conclusion
The ECMAT is a crucial, self-contained institution whose objective is to provide impartial, credible, and rapid decisions to maintain the soundness of the securities trading system. It has the judicial power to examine appeals against decisions of the Ethiopian Capital Market Authority and related entities, with the authority to affirm or revoke those decisions.
In Ethiopia’s emerging capital market, where transactions are expected to intensify and become increasingly complex, disputes, disagreements, and appeals against administrative decisions of the Authority are inevitable. In this context, the establishment, competence, and structured functioning of the Tribunal will be invaluable to ensuring market confidence and credibility.
Compiled by Melkamu Destaw (Junior Legal Associate at MAP Legal Services LLP)
Disclaimer: This legal update is for informational purposes only and does not constitute legal advice. Million Alemu and partners Legal Services assumes no responsibility for any actions taken based on the information contained herein. Should you need any legal advice in this regard, please contact Million Alemu and partners Legal Services llp. We are your trusted legal partners and can guide you through the legal process. Feel free to reach out to us at info@millionlegalservices.com
