On its session held on 13th of February 2020, the Ethiopian House of Peoples’ Representatives has ratified the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The same is published on the Negarit Gazette as Proclamation No. 1184/2020 on 13th of March 2020. Ethiopia became the 162nd Contracting State to the Convention.
The sole point enshrined into the preamble of Proclamation No. 1184/2020 provides for the rationale of the ratification as "ratifying the Convention enhances foreign investment by boosting a country's goodwill in enforcing contracts of foreign parties".
The provision of Article 2 of the Proclamation declares as follows:
1. “In accordance with Article 1 (3) of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the Government of the Federal Democratic Republic of Ethiopia declares that it will apply the Convention for Recognition and Enforcement of Arbitral Awards made only in the Territory of another contracting State”.
2. “In accordance with Article 1 (3) of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the Government of the Federal Democratic Republic of Ethiopia declares that it will apply the convention on differences arising out of legal relationships, whether contractual or not, which are considered commercial under the National Law of Ethiopia”.
The provision of Article 3 of the Proclamation states its “Reservation” as the “Convention only applies in the Federal Democratic Republic of Ethiopia with respect to Arbitration Agreements concluded and Arbitral Awards rendered after the date of its accession to the Convention”. In addition, the Attorney General of the Federal Democratic Republic of Ethiopia is authorized by the provision of Article 4 of the Proclamation “to undertake, in collaboration with the Ministry of Foreign Affairs and other Government Organs, all acts necessary for the implementation of the Convention”.
Some Ethiopian legal scholars on this subject matter argue that the reservations put forward by Proclamation No. 1184/2020 are "numerous" and the Proclamation will come into effect "once the ratification process is completed".
The below brief notes are taken from the official webpage of the Organization which is in charge of the Convention (http://www.newyorkconvention.org).
The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done in New York, 10th of June 1958 (the New York Convention), is described as the most successful treaty in private international law. The more than 1,400 court decisions reported in the Yearbook: Commercial Arbitration show that enforcement of an arbitral award is granted in almost 90 percent of the cases. The two basic actions contemplated by the New York Convention are the recognition and enforcement of foreign arbitral awards and the referral by a court to arbitration.
1. Recognition and Enforcement of Foreign Arbitral Awards
The first action is the recognition and enforcement of foreign arbitral awards, i.e., arbitral awards made in the territory of another (Contracting) State. This field of application is defined in Article I. The general obligation for the Contracting States to recognize such awards as binding and to enforce them in accordance with their rules of procedure is laid down in Article III. A party seeking enforcement of a foreign award needs to supply to the court (a) the arbitral award and (b) the arbitration agreement (Article IV).
The party against whom enforcement is sought can object to the enforcement by submitting proof of one of the grounds for refusal of enforcement which are limitatively listed in Article V (1). The court may on its own motion refuse enforcement for reasons of public policy as provided in Article V (2).
If the award is subject to an action for setting aside in the country in which, or under the law of which, it is made ("the country of origin"), the foreign court before which enforcement of the award is sought may adjourn its decision on enforcement (Article VI).
Finally, if a party seeking enforcement prefers to base its request for enforcement on the court's domestic law on enforcement of foreign awards or bilateral or other multilateral treaties in force in the country where it seeks enforcement, it is allowed to do so by virtue of the so-called more-favourable-right provision of Article VII(1).
2. Referral by a Court to Arbitration
The second action contemplated by the New York Convention is the referral by a court to arbitration. Article II (3) provides that a court of a Contracting State, when seized of a matter in respect of which the parties have made an arbitration agreement, must, at the request of one of the parties, refer them to arbitration (unless the arbitration agreement is invalid).
In both actions the arbitration agreement must satisfy the requirements of Article II (1) and (2) which include in particular that the agreement be in writing.
Published on 20th of April 2020 and further edited on 23rd of April 2020
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 The New York Convention.pdf | 1083 kB |