The House of Peoples Representatives of the Federal Democratic Republic of Ethiopia has approved the Arbitration and Conciliation, Working Procedure Proclamation No. 1237/2021. In this legal brief, we will see arbitrability, i.e., what matters may be settled by arbitration and which may not from the perspective of this Proclamation.
As it can be seen from the preamble of the Proclamation, its aim is to “…contribute to the resolution of investment and commercial-related disputes and to the development of the sector” and its Article 3 (1) provides that the Proclamation shall be applicable, inter alia, “…to commercial related national arbitration, international arbitration whose seat is in Ethiopia…”. Thus, it can be concluded that the arbitrable cases for the purpose of this Proclamation are “commercial related” business relationships. What are “commercial related” business relationships?
Article 2 (7) of the Proclamation has defined “commercial related” business relationships to include “business relationship for the supply and exchange of goods or services, agreement for distribution, commercial agent, lease, construction, consultancy, engineering, license for commercial purpose, investment, finance, bank, insurance, mining; the joint venture, and other business organizations that are not prohibited by this Proclamation, transportation of persons and goods by air, sea, and land and includes similar businesses arising from contractual or extra-contractual relations of a commercial nature”. These listings are not exhaustive and the business relationship is arbitrable as long as it arises from contractual or extra-contractual relationships of a commercial nature and as long as they are not prohibited by the Proclamation. What are the prohibitions provided in the Proclamation?
Article 7 of the Proclamation has listed the following as non-arbitrable cases:
1. Divorce, adoption, guardianship, tutorship, and succession cases;
2. Criminal cases;
3. Tax cases;
4. Judgment on bankruptcy;
5. Decisions on the dissolution of business organizations;
6. All land cases including lease;
7. Administrative contract, except where it is permitted by law;
8. Trade competition and consumers protection;
9 Administrative disputes falling under the powers are given to relevant administrative organs by law;
10. Other cases that are not arbitrable under the law.
What are the exceptions of administrative contracts that can be amenable to arbitration? The Civil Aviation Proclamation No. 616/2008 (as amended by Proclamation No. 1179/2020) under its Article 10 (18) allows the Civil Aviation Authority to submit disputes to arbitration. Similarly, Article 6(11) of the Agency for the Government Houses Establishment Proclamation 555/2007, allows the Agency to submit disputes to arbitration. Please note that this Agency is dissolved by Proclamation No. 1022/2017 and its rights and duties are transferred to the Federal Housing Corporation. Finally, Article 6 (4) (d) of the Attorney General Establishment Proclamation No. 943/2016 empowers the Attorney General to “give decision for settlement of disputes arising between federal government offices through judicial means or out of court alternative dispute settlement mechanisms, and ensures the execution of the decision”. Although the provision of Article 7 (7) of Proclamation No. 1237/2021 prohibits the submission of administrative contracts for arbitration, the above stated can be taken as an exception to this general rule.
What are administrative disputes falling under the powers given to relevant administrative organs by law? The Federal Civil Servants Administrative Tribunal is established as one department under Federal Civil Service Commission. As per Article 79 of the Federal Civil Servants Proclamation No.1064/2017 mandates the Tribunal to “entertain civil service disputes and renders a decision”. Another instance could be, the Expropriation of Landholdings for Public Purposes, Payments of Compensation and Resettlement of Displaced People Proclamation No.1161/2019 under its Article 18 (1) provides that “Regional States, Addis Ababa, and Dire Dawa City Administrations shall establish Complaint Hearing Body and Appeal Hearing Council which shall have jurisdiction to entertain grievances arising from decisions under this Proclamation.” Thus, the disputes that ensue relating to civil servants as well as relating to an order of expropriation or who has an interest or claim on the property to be expropriated cannot be submitted to arbitration but rather be decided by the administrative tribunals established by these proclamations and the appeal on these cases will be submitted to courts having jurisdiction over the matter.
Finally, what are the other cases that are provided by other laws as non-arbitrable? The Proclamation does not specify the other laws or the provisions of laws that provide for non-arbitrable cases. However, from the cursory readings of the Civil Code of Ethiopia, the following can be found. Whether a bethrothal has been celebrated or not and whether a bethrothal is valid cannot be submitted to arbitration (see Article 722). Similarly, the determination of whether or not a marriage has been contracted and whether such marriage is valid is non-arbitrable (see Article 724). In a similar vein, Article 730, gives only to the court the mandate to decide whether an irregular union has been established between two persons.
Please note that the above legal brief relates to matters that ensues as of April 2nd, 2021, the date on which this Proclamation is published in the Federal Negarit Gazette.
Posted on May 15, 2021
| File | Description | File size |
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 Arbitration and Conciliation Working Procedure Proclamation.pdf | 1207 kB |