ALTERNATIVE-DISPUTE-RESOLUTION-IN-EAST-AFRICA

Alternative Dispute Resolution In East Africa

INTRODUCTION

Alternative dispute resolution (ADR as is usually referred to) refers to any means of resolving a dispute other than conventional litigation in the courts of law.

The construction industry is regarded as one of the most conflict and dispute ridden industries which has resulted in it being one of the most claim oriented sectors[1] there are several disputes that may arise during the execution of a construction contract ranging from omissions and errors in the terms and conditions of contract, failure to comply,  defects, delays, injuries resulting from not following safety standards, change of work, damages, Schedule acceleration and differing site conditions resulting from unanticipated obstacles on the site among others.

Traditionally, parties would pursue conventional litigation in courts of law and go through court proceedings to resolve their construction disputes. Court proceedings are lengthy and costly. Over the years, various methods of alternative dispute resolution have been introduced in the construction industry as a means of resolving construction disputes.

Thus, construction contacts will usually have a dispute resolution clause specifying the mechanisms for dispute resolution. The dispute resolution clause will determine whether a dispute should be litigated in the courts of law or whether it should be resolved using any Alternative Dispute Resolution method of choice.

Where the parties have provided a mechanism, in the absence of consent by both parties to use a different mechanism, parties are bound to follow the dispute resolution mechanism in the contract.

Where there is no choice of dispute resolution mechanism, courts have jurisdiction to determine disputes and disputes arising out of a construction contract can always be referred to court in the absence of dispute resolution mechanism in a contract.

Where the dispute resolution clause provides for Alternative Dispute Resolution,  the clause will  usually specify the Method to be employed.

There are various alternative dispute resolution methods. Key among them are the following.

  1. Negotiation
  2. Mediation
  3. Conciliation
  4. Expert determination
  5. Dispute review boards
  6. Adjudication
  7. Arbitration

NEGOTIATION

Parties themselves attempt to settle their dispute using a range of techniques using either concession, compromise, confrontation or even coercion. Negotiation is fast, cost saving (no legal costs involved), confidential, preserves relationship between the parties, provides a wide range of possible solutions, there is autonomy over the process and out come (no need for external intervation and negotiation can continue alongside other formal dispute resolution process. Its disadvantage is that its non binding unless put in writing in form of an agreement, requires good will of the parties without which the negotiation may yield no results, and can create power imbalances where a party with more bargaining powers will prevail over the one with less bargaining power.

MEDIATION

Mediation is a method of non-binding dispute resolution involving a neutral third party who tries to help the disputing parties reach a mutually agreeable solution. Mediation requires both parties to use an independent third-party mediator to identify issues and explore the options for resolution in an attempt to reach agreement. It works by a mediator facilitating dialogue and communication between the parties in a structured manner assisting them to reach a voluntary settlement. The core principal of mediation is that the parties control the out come, rather than being imposed upon them. The mediator has no decision making powers so the dispute is resolved on the parties own terms.Institutions which facilitate mediation have mediation rules for example Kenya Institute of Chartered Arbitrators has its mediation rules. Courts also have mediation rules.

Mediation has all the advantages of conventional negotiation ( flexible, speedy, confidential, less adversarial, can resolve a wide variety of disputes and suitable procedure where the parties wish to preserve their relationship). It is the preferred dispute resolution route in most disputes where conventional negotiation has failed. Its disadvantage is that it does not result into a binding decision.

CONCILIATION

 

Conciliation is similar to mediation save that the third party called a conciliator can propose a solution to the parties. Conciliation is a settlement of a dispute in an agreeable manner; especially a relatively unstructured method of dispute resolution in which a third party facilitates communication between the parties in an attempt to help them settle their differences. This process will usually be provided for by law and the conciliation procedure laid out in the law. In Uganda, municipal law provides for conciliation and its procedure in the Arbitration and conciliation Act.[2] Just like mediation, conciliation does not result into legally binding decisions.

DISPUTE REVIEW BOARDS

Normally set up early/ at the onset of the contract and remain in place throughout the duration of contract to assist the parties, if they so desire.

 

EXPERT DETERMINATION

This is a process in which an independent third party acts as an expert in the field, rather than a judge or arbitrator to settle a dispute. It is usually used for disputes of a technical nature where the issue at hand is one of fact rather than law and requires an expert to give their opinion which will form the decision. The decision of an expert who is impartial and is required to hear from both sides is binding. Parties may choose who is appointed as expert or may use an appointing body for example in Kenya there is the Chartered Institute of Arbitrators (CIArb) that makes appointment. Proceedings are confidential like in any other ADR process.

EARLY NEUTRAL EVALUATION

This is a private and non binding technique of dispute resolution where a third neutral party (often legally qualified) gives an opinion on the likely outcome at trial as a basis for settlement discussions. The aim of a neutral evaluation is to test the strength of the legal points in the case. It can be particularly useful where the dispute turns on a point of law.

ADJUDICATION

Adjudication is an alternative dispute resolution method provided to solve contractual disputes in a short time possible and at minimal cost as compared to other dispute resolution processes. It is an informal process operating under very tight time scales.

Adjudication as a method of dispute resolution is something that is familiar to the construction industry globally. It may be provided by statutory procedure or by an adjudication clause in the contract for swift interim dispute resolution. In fact, a number of commonly used standard forms of contracts contain adjudication clauses requiring adjudication as the first stage in the mechanism of dispute resolution prior to commencement of any arbitration proceedings or litigation.

At the regional level, there is no legal framework for adjudication of construction disputes. However, municipal laws of East African states have adjudication proceedings regulated under their domestic legal regimes in form of Adjudication Guidelines issued by Institutions undertaking adjudication in construction disputes.  For example, in Uganda, there are adjudication Guidelines issued by Uganda Institute of Professional Engineers (UIPE)[3] which provide information and standards of performance to all parties engaged in adjudication process. The guidelines provide for how to start an adjudication, appointment of the adjudicator, adjudication fees and costs, adjudication proceedings, adjudication decision, enforcement of adjudication decision, and process of appeal against adjudication decision. In Kenya, adjudication proceedings rely on the Construction Adjudication Rules issued by the Chartered Institute of Arbitrators (CIArb- Kenya) with related provisions.

The process of adjudication starts with the selection of an adjudicator by the parties, both parties meet with the adjudicator who acts as a judge in the case. The person who adjudicates will either be set by the contract or chosen and agreed upon by the parties to the dispute or may be nominated by an independent body.[4]

The law or guidelines on adjudication will usually specify persons who can act as adjudicators, their appointment and qualifications. Construction adjudicators are usually professionals from the construction industry like engineers, architects, surveyors or other professionals with in the industry. The adjudicator should be knowledgeable and experienced in the matter in dispute, preferably a construction expert and well versed in dispute resolution procedures.

Adjudication proceedings are commenced by any party to a contract when a dispute between the contracting parties arises under the contract by sending a written notice of adjudication to the other party. A dispute arises when a claim (whether financial or claim of right) is made under the contract and is dishonored by the recipient or the recipient does not agree with part of the facts. Rejection may not be direct but may be constructive.

An adjudication notice is a brief description of the dispute and the parties involved, when and where the dispute arose, what remedies are being sought. The adjudicator usually has no authority to decide matters that are not covered in the notice, therefore, the adjudication notice must be well drafted to comprehensively cover all matters relating to the dispute the party wishes to be adjudicated. Requests such as extension of time, payment of money considered to be due, payment of interest on any money considered to be due, payment for delay damages, payment of fees and adjudication expenses, and any other specific requests should be clearly itemised and stated in the adjudication notice, where they apply.

The proceedings are not like in ordinary litigation, there is no cross examination or formal evidence and no lengthy legal arguments or submissions. Facts may even be proved solely by documentary evidence.

Once both sides have laid out their side of the dispute, the adjudicator helps them to reach an agreement/decision.

The adjudicator is expected to be impartial and treat all parties fairly and without favour, and there must not be any appearance that the adjudicator might be impartial. To guarantee impartiality and neutrality of the adjudicator, the Rules will usually provide that the adjudicator must not be involved in the implementation or administration of the contract under which the dispute arises.

Most times, the contract will provide the time frame within which to seek adjudication once a dispute has arisen and as well as providing for the time within which the adjudicator should make a decision.

Adjudication is often subject to very strict time scales (strict time table), must be speedy and usually must be completed within 28 days or any other period specified in the contract.

Adjudication may be invoked at any time during the execution of the contract as long as there is a contractual relation ship between the parties. Adjudication can be commenced during the course of works to resolve interim disputes quickly, it assists cash flow and ensures progress of works continues (the speedy proceedings in adjudication allows construction works to continue and supports cash flow).

Adjudication decisions are binding unless they are revised through arbitration proceedings or litigation in the courts. Thus, adjudication does not necessarily achieve final settlement of a dispute because either of the parties has the right to have the same dispute heard afresh in court or where the contract specifies arbitration, in arbitration proceedings. Nonetheless, it has been observed that in most adjudication decisions, the parties accept the final result.

Adjudication fees will be charged in accordance with the Scale of Fees provided by the law or guidelines for adjudication or they may be provided by contract.  Adjudication fees are usually shared equally by the parties and adjudication costs are met by each party and the adjudicator usually has no powers to award additional costs unless specified in the contract.

Advantages and disadvantages of adjudication

 

Advantages

  • The process is speedy and usually the proceedings will be concluded within 28 days.
  • It allows cash flow since it provides an interim solution as construction works are ongoing.
  • Parties have control over the proceedings (choose the dates, the adjudicator and are involved in decision making).
  • The decision is binding unless challenged in arbitration proceedings or litigation. In practice, adjudication decisions are usually accepted and implemented by the parties-since the decision is usually the parties decision, its not imposed on the parties like in court proceedings.
  • Adjudication maintains the relationship of the parties at the end of the proceedings.
  • It allows power imbalance in the relationship to be dealt with so that weaker subcontractors have a clear route to deal with powerful contractors.

Disadvantages

  • Adjudication decisions are not final, they can still be challenged in arbitration proceedings or in court.

ARBITRATION

Arbitration is a non judicial process for the settlement of disputes where an independent, neutral third party, an arbitrator makes a decision that is binding on the parties.

Construction disputes will only be referred to arbitration where there is an arbitration agreement. An arbitration agreement  may be in the form of an arbitration clause in the contract or in the form of a separate  arbitration agreement.

Arbitration in East Africa is regulated first, at the national level of each individual country and second, at the regional level.

At the national level of an individual state, states have legal regimes on both domestic and international (commercial) arbitration. Due to increase in commercial activities related to foreign direct investment, arbitration has become the preferred mechanism for resolving commercial disputes, particularly those involving foreign investors. Proof of preference for arbitration can be found in the laws and institutions that have been set up for the efficient running of arbitration.

Sampling countries

UGANDA

Uganda has direct Legislation on arbitration embedded in the Arbitration and Conciliation Act 2000, Cap 4 which provides for both substantive and procedural law on arbitration.

The Act has provisions on domestic arbitration, international commercial arbitration, and enforcement of foreign arbitral awards as well as the law relating to conciliation of disputes. The Act applies to private persons, entities as well as government.[5]

An arbitral award made under the Act is recognized as binding and will be enforced by courts upon application in writing as if it were a decree of the court.

Domestic legislation establishes the Centre for Arbitration and Dispute Resolution as a body responsible for, among others: appointment of arbitrators; making appropriate rules, administrative procedures; qualifying and accrediting arbitrators; facilitation of certification, registration and authentication of arbitration awards and performing all other functions in relation to Arbitration in Uganda.

The Centre for Arbitration and Dispute Resolution has a governing body, a council that consists of; the chairperson; the executive director; the president of the Uganda commercial court; three representatives appointed by the Minister from the existing private sector organizations or their representatives; and a representative of the Uganda Law Society.

Uganda recognises and enforces international arbitration agreements and awards.  Domestic legislation has provisions enabling enforcement of New York Convention Awards, which refers to an arbitral award made, in pursuance of an arbitration agreement, in the territory of a State (other than Uganda) which is a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”) adopted by the United Nations Conference on International Commercial Arbitration on 10th June 1958. An award is treated as made at the seat of the arbitration, regardless of where it was signed, dispatched or delivered to any of the parties.[6] The arbitral award are recognized as binding and upon application in writing to the court. The  party relying on an arbitral award or applying for its enforcement must furnish the duly authenticated original arbitral award or a duly certified copy of it; and the original arbitration agreement or a duly certified copy of it. If the arbitral award or arbitration agreement is not made in the English language, the party must furnish a duly certified translation of it into the English language.

There are also provisions enabling the enforcement of ICSID Convention Awards which refers to an arbitral award rendered pursuant to the Convention on the Settlement of Investment Disputes between States and Nationals of other States (the “ICSID Convention”) which was opened for signature on 18th March 1965. An ICSID Convention award includes any decision interpreting, revising or annulling an award, being a decision pursuant to the ICSID Convention, and any decision as to costs which under the Convention is to form part of the award; and an award is deemed to have been rendered pursuant to the ICSID Convention on the date on which certified copies of the award were pursuant to the ICSID Convention dispatched to the parties.

A person seeking enforcement of an ICSID Convention award is entitled to have the award registered in the court subject to proof of the prescribed matters above.

In addition to the pecuniary obligations imposed by the ICSID Convention award, the award is registered for the reasonable costs of and incidental to registration. If at the date of the application for registration the pecuniary obligations imposed by the ICSID Convention award have been partly satisfied, the award is registered only in respect of the balance, and if those obligations have been wholly satisfied, the award shall not be registered.

KENYA

It goes without saying that Kenya is the most developed economy of all East African economies. Kenya has an arbitration regime enshrined in its National Constitution[7], domestic legislation and Rules of institutions engaging in arbitration of disputes in Kenya.

Kenya has the Arbitration Act 1995 (and amended in 2009) which is modelled on the UNCITRAL Model Law on International Commercial Arbitration 1895 (UNCITRAL Law Model). Kenya also has the Nairobi Centre for International Arbitration (NCIA) established in 2013 under the NCIA Act 2013. Kenya also has the Chartered Institute of Arbitrators. The Arbitration Act 1995 applies both to domestic as well as international arbitration governing proceedings and enforcement of awards. The Act expressly incorporates the UN Convention on the Recognition and Enforcement of of Foreign Arbitral Awards 1958  (New York  Convention).

All the domestic laws and rules on arbitration have common provisions. Arbitration agreements are required to be in writing (in other words it must be contained in either a document signed by the parties; or an exchange of letters, a telex, a telegram or other means of telecommunication which provides a record of the agreement).

All construction disputes arising out of an arbitration agreement must be handled by way or arbitration proceedings. A court faced with a matter arising out of an arbitration agreement is required to refer the matter back to arbitration unless the arbitration agreement is null and void , inoperative or incapable  of being performed. A matter will still proceed under arbitration notwithstanding the matter before court and courts are not to intervene in matters under arbitration except on appeal or enforcement of arbitral awards.

Parties will usually appoint their own arbitrators and agree on the procedure for arbitration. An arbitrator will however be appointed by the appointing authority where the parties have failed to appoint an arbitrator in which case the appointing authority must have regard to any qualifications required of an arbitrator by the agreement and to such considerations as are likely to serve the appointment of an independent and impartial arbitrator.

During arbitration proceedings, the parties must be treated with equality, and each party must be given a reasonable opportunity for presenting its case. The parties are free to agree on the procedure to be followed by rules of the arbitral tribunal in the conduct of the proceedings. Where there is no agreement on the procedure the arbitral tribunal will conduct the arbitration in a manner it considers appropriate, including powers to determine the admissibility, relevance, materiality, and weight of any evidence. Every witness giving evidence and every person appearing before an arbitral tribunal will have at least the same privileges and immunities as witnesses and advocates in proceedings before a court.[8]

The parties are free to agree on the place of arbitration and where the parties fail to agree, the place of arbitration is determined by the arbitral tribunal having regard to the costs and the circumstances of the case and to the convenience of the parties. Unless the parties agree, the arbitral proceedings in respect of a particular dispute will commence on the date on which a request for the dispute to be referred to arbitration is received by a respondent. The arbitral proceedings will be conducted in the English language unless the parties otherwise agree to an interpreter.

The parties will file their statements of claim and defence; the claimant will state the facts supporting its claim, the points at issue and the relief or remedy sought, and the respondent will state its defence in respect of these particulars. The proceedings will go through hearing and filing of submissions. The decisions will be made by majority vote in the case of a panel with more than one arbitrator, the arbitral award must be in writing signed by the arbitrator or arbitrators. The decision is delivered to all the parties. Costs and expenses of arbitration being the legal and other expenses of the parties, the fees and expenses of the arbitral tribunal and any other expenses related to the arbitration will be as determined and apportioned by the arbitral tribunal in its award.

An arbitral award made under the Act is recognized as binding and will be enforced by courts upon application in writing as if it were a decree of the court.[9]

Besides the Arbitration mechanisms at the domestic level of individual states discussed above, there is an existing Regional Legal Regime on Arbitration at the East Africa Community Level.

Article 32 of the Treaty for the Establishment of the East African Community (as amended on 14th December, 2006 and 20th August, 2007) gives the East Africa Court of Justice (EACJ) jurisdiction to hear and determine any matter arising from an arbitration clause contained in a commercial contract or agreement in which the parties have conferred jurisdiction on the court. The Summit of the East African Heads of State on 30th November 2013 approved extension of the jurisdiction of the EACJ to include additional fields of trade, investment and matters associated with the EA Monetary Union. The extended jurisdiction has not been operationalised, the protocol for the extended jurisdiction was signed on 20th February 2015 and has not been ratified, and upon ratification by partner states, trade and investment disputes arising out of the implementation of the three EAC protocols[10] will be adjudicated.

The East African Court of Justice is the Judicial Arm and one of the seven key organs of the East African Community[11]. The East African Community comprises of six member states, originally three- Uganda, Kenya and Tanzania and eventually admitted Rwanda, Burundi, and South Sudan. It was revived in 1999 when the treaty establishing the EAC was signed. The Treaty for the Establishment of the East African Community was signed in 1999 and came into force in July 2000 (23 years after the demise in 1977 of the old East African Community established by the 1967 Treaty).

This followed a process of re-integration which was embarked on in 1993, and which involved tripartite programs of co-operation in political, economic, social, and cultural fields, research and technology, defence, security, legal and judicial affairs.

The state parties agreed to fundamental operational principles; among them; peaceful existence; peaceful settlement of disputes; cooperation for mutual benefit; the rule of law and social justice.[12] In this regard, each partner state undertook to enact and implement legislation necessary to give effect to the East African Community Treaty.[13] The objectives and fundamental principles serve as a guide in the interpretation and application of the treaty.

Its almost two decades ago since the judges to the EACJ took oath on 30th November 2001. The court is a judicial body with jurisdiction over matters of interpretation and application of the Treaty. Article 32 gives the court jurisdiction to hear and determine any matter arising from an arbitration clause contained in a commercial contract or agreement in which the parties have conferred jurisdiction on the court.

The first case was instituted 4 years after the court started its operations and the court has since delivered several decisions in respect to disputes in accordance with its mandate. By doing so, the court has created a body of case law and developed the courts jurisprudence.

The court has rules of procedure as mandated by the treaty (the first rules having been developed in 2004 and latest in 2019) in order to ensure efficiency of proceedings. A number of advocates and litigants choose the EACJ as the dispute settlement mechanism.

The EACJ has its main registry in Arusha Tanzania (which remains a temporary seat until the summit determines its permanent seat), and sub registries in member states (Dar-Es- Salaam Tanzania; Kigali- Rwanda; Nairobi-Kenya; Bujumbura-Burundi; and Kampala -Uganda; more details can be accessed at the official website of the EACJ); and the High Courts of the partner states serve as sub-registries.

The court has judges appointed by the summit from among sitting judges of any national court of judicature or from jurists of recognised competence. The court is headed by the president and vice president appointed from among the judges by the summit. The court has two divisions, the First Instance Division and the Appellant Division. The first instance division has 10 judges;  power to hear a party’s case, administer justice and relevant laws. It has original jurisdiction on any matter within the scope of the treaty and protocols except, it may not render advisory opinion or preliminary ruling on case stated or entertain arbitration. Its decisions may be appealed to appellant division.

The appellant division has has five judges. It has appellant jurisdiction over appeals from the First Instance Division. It also has original jurisdiction in providing advisory opinion[14], entertaining preliminary ruling requests[15] and arbitration proceedings.[16]

The Court does not have jurisdiction to review decisions of national courts but has jurisdiction to determine whether the decision of a national court constitutes an infringement of the treaty. The court also has jurisdiction over residents of the EAC only.

ARBITRATION PROCEEDINGS AT THE EACJ

Introduction

As already noted, Article 32 of the Treaty for the Establishment of the East African Community (as amended on 14th December, 2006 and 20th August, 2007) gives the East Africa Court of Justice (EACJ) jurisdiction to hear and determine any matter arising from an arbitration clause contained in a commercial contract or agreement in which the parties have conferred jurisdiction on the court. Arbitration proceedings are heard in the Appellant Division of the court. The Court has Arbitration rules[17]

Commencement of proceedings

Arbitration proceedings may be commenced by a party by submitting a request to the court. A party/claimant wishing to have recourse to arbitration commences by notifying the respondent in writing of the request for the dispute to be referred for arbitration.[18]

The request for arbitration should contain particulars of the parties ( their names, description and address); statement of the claim and supporting evidence including the arbitration agreement. There will be exchange of pleadings( service of statement of claim within 7 days; filing defence to claim by the respondent within 15 days; and any counterclaims).

Matters are determined according to the law chosen by the parties (in the choice of law clause under the agreement) or parties may expressly authorize the court to decide on the substance of the dispute according to considerations of justice or fairness without being bound by rules of law.

Where the parties did not have a choice of law clause, the tribunal will apply rules of law it considers appropriate given all the circumstances of the dispute.

Procedures usual to other arbitration proceedings are followed: there will be a preliminary/scheduling conference to determine the terms of reference; hearing date will be set by the parties; proceedings will be conducted in accordance with the Arbitration Rules of the court. Proceedings are in English language and where more than one Arbitrator is involved, decision is by way of majority.

The arbitral award must be in writing, signed by the arbitrators, must state the reasons upon which it is based (unless the parties have agreed that no reasons shall be given or the arbitral award is on agreed terms). The award must be made and dated at the place of arbitration.

The arbitral award once made is final, and by submitting the dispute to arbitration under Article 32 of the Treaty, the parties undertake to carry out the resulting award without delay.[19]

Costs can be claimed during the proceedings by the successful party which include filing fees,travel, expert advice and legal representation expenses.

The rules provide that enforcement of the arbitral awards shall be in accordance with the enforcement procedures of the country in which enforcement is sought. This is derived from Article 44 of the Treaty for the Establishment of the East African Community which provides for execution of Judgments of the court. Article 44 provides that the execution of the Judgement of the court which imposes a pecuniary obligation on a person shall be governed by the rules of civil procedure in force in the partner state in which execution is to take place.

An arbitral award holder can successfully enforce the award in any East African states which are state parties to the New York Convention or which has domestic laws enabling recognition and  enforcement foreign arbitral awards.

The New York Convention

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly known as the New York Convention (also known as”New York Arbitration Convention”)  was adopted by a United Nations diplomatic conference on 10 June 1958 and entered into force on 7 June 1959.

There are two two basic actions contemplated by the New York Convention.The first action is the recognition and enforcement of foreign arbitral awards, i.e., arbitral awards made in the territory of another State.[20]  The general obligation for the Contracting States is to recognize such awards as binding and to enforce them in accordance with their rules of procedure.[21] A party seeking enforcement of a foreign award needs to supply to the court (a) the arbitral award and (b) the arbitration agreement.[22]

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 limited by the convention to specific grounds.[23] The court may on its own motion refuse enforcement for reasons of public policy.  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.[24] 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.[25]

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.

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. The Convention is widely considered the foundational instrument for international arbitration.

Under the Convention, an arbitration award issued in any other state can generally be freely enforced in any other contracting state, only subject to certain, limited defenses. These defenses are:[26]

  1. A party to the arbitration agreement was, under the law applicable to him, under some incapacity, or the arbitration agreement was not valid under its governing law;
  2. A party was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings, or was otherwise unable to present its case;
  3. The award deals with an issue not contemplated by or not falling within the terms of the submission to arbitration, or contains matters beyond the scope of the arbitration (subject to the proviso that an award which contains decisions on such matters may be enforced to the extent that it contains decisions on matters submitted to arbitration which can be separated from those matters not so submitted);
  4. The composition of the arbitral tribunalwas not in accordance with the agreement of the parties or, failing such agreement, with the law of the place where the hearing took place (the “lex loci arbitri“);
  5. The award has not yet become binding upon the parties, or has been set aside or suspended by a competent authority, either in the country where the arbitration took place, or pursuant to the law of the arbitration agreement;
  6. The subject matter of the award was not capable of resolution by arbitration; or
  7. Enforcement would be contrary to “public policy“.

Additionally, there are three types of reservations that countries may apply:

  1. Conventional Reservation – some countries only enforce arbitration awards issued in a Convention member state.
  2. Commercial Reservation – some countries only enforce arbitration awards that are related to commercial transactions.
  3. Reciprocity reservation – some countries may choose not to limit the Convention to only awards from other contracting states, but may however limit application to awards from non-contracting states such that they will only apply it to the extent to which such a non-contracting state grants reciprocal treatment.

States may make any or all of the above reservations.

State Parties to the Convention

As of March 2021, the Convention had 168 state parties, which includes 164 of the 193 United Nations member states plus the Cook Islands, the Holy See, and the State of Palestine. Thirty UN member states have not yet adopted the Convention. In addition, Taiwan has not been permitted to adopt the Convention (but generally enforces foreign arbitration judgments) and a number of British Overseas Territories have not had the Convention extended to them by Order in Council. British Overseas Territories to which the New York Convention has not yet been extended by Order in Council are: AnguillaFalkland IslandsTurks and Caicos IslandsMontserratSaint Helena (including Ascension and Tristan da Cunha).

Many countries have adopted Arbitration laws based on the UNCITRAL Model Law on International Commercial Arbitration. This works with the New York Convention so that the provisions on making an enforceable award, or asking a court to set it aside or not enforce it, are the same under the Model Law and the New York Convention. The Model Law does not replace the NYC, it works with it. An award made in a country which is not a signatory to the NYC cannot take advantage of the Convention to enforce that award in the 168 Contracting States unless there is some bilateral recognition, whether or not the Arbitration was held under the provisions of the UNCITRAL Model Law

International arbitration is an increasingly popular means of alternative dispute resolution for cross-border commercial transactions. The primary advantage of arbitration over court litigation is enforceability: an arbitration award is enforceable in most countries in the world. Other advantages of arbitration include the ability to select a neutral forum to resolve disputes, that arbitration awards are final and not ordinarily subject to appeal, the ability to choose flexible procedures for the arbitration, and confidentiality.

Public information on overall and specific arbitration cases is quite limited as there is no need to involve the courts at all unless there is a dispute, and in most cases the loser pays voluntarily.

The Convention’s predecessors, the Geneva Treaties of 1923 and 1927, required that the parties were subject to the jurisdiction of the States Party to the Treaties. Such condition for the field of application is not required by the New York Convention under which it suffices that the award be made in the territory of another (Contracting) State or in the enforcing State if it is considered as non domestic.

According to Article I(1), the Convention applies to the recognition and enforcement of an arbitral award made in another (Contracting) State or an award which is considered non-domestic (see above). These two definitions exclude the Convention’s applicability to the recognition and enforcement of an arbitral award made in an enforcement State which are considered domestic in that State

A country may, however, unilaterally adopt the Convention’s system for the enforcement of certain arbitral awards. An example is the UNCITRAL Model Law on International Commercial Arbitration of 1985 which contains in Articles 35 and 36 a system that is almost identical to Articles IV – VI of the Convention for the enforcement of an arbitral award “irrespective of the country in which it was made”

The expression “persons, whether physical or legal” in paragraph 1 of Article I refers, as it suggests, to both natural persons and entities having a separate legal identity, such as a company.

The actions governed by the Convention do not include the setting aside (vacatur, annulment) of an arbitral award. It is a generally accepted rule that the setting aside of an arbitral award pertains to the exclusive jurisdiction of the courts in the country of origin (i.e., the country in which, or – rather theoretically – under the law of which, the award was made) and is to be adjudicated on the basis of the arbitration law of that country.

CONCLUSION

There are several alternative dispute resolution mechanisms employed in the resolution of construction contracts in east Africa ranging from non binding to binding mechanisms as discussed above. The mechanisms are largely at domestic level of a state with enabling domestic legislation and institutions for facilitating the procedures except international arbitration framework.

[1] Goodman Derrick LLP https://www.gdlaw.co.uk/

[2] Chapter 4 Laws of Uganda

[3] Uganda Institute of Professional Engineers (UIPE) is a professional Organisation that brings together all engineers, Technologists and Technicians in Uganda.

[4]  For  example in Uganda, the  Uganda Institution of Professional Engineers (UIPE) is a professional organization that brings together all Engineers and is the Dispute Adjudication Board (DAB) that appoints specific adjudicators for all engineering projects as per the FIDIC Yellow Book subclause 8.2.

[5] Section 73 of the Act

[6] Section 39 to 44 of the Arbitration and Conciliation Act Cap 4

[7]Article 10 of the 2010 Constitution which provides inte alia that Justice will serve all irrespective of status, Justice will not be delayed and Alternative forms of dispute resolution including reconciliation, mediation, arbitration and traditional dispute resolution mechanisms will be promoted.

[8] Section 18 and 19 of the Act.

[9] Section 36 of the Act

[10] Protocols under the Treaty comprise any agreement that supplements, amends or qualifies the provisions of the Treaty. Once signed and ratified by the state parties, protocols become and integral part of the Treaty. There are three protocols that have been signed by partner states, and they include: The Protocol Establishing the East African Customs Union signed on 2nd March, 2004 and came into force on 1st January, 2010. This protocol provides for the first stage of the East African Community- namely, a customs union in which tariffs and non- tariff barriers are reduced and progressively dismantled. The Protocol establishing the East African Common Market (signed on 20th November, 2009 and came into force on 1st July, 2010. This Protocol elaborates the freedom of movement of goods, services, labour, capital, person, information and technology, and the rights of establishment and residence- that are germane to the common market. The Protocol for the establishment of the East African Monetary Union signed on 30th November, 2013. all partner states have signed and ratified the protocol and this protocol delineates the road map to a single East African currency by 2024.

[11] The East African Community has seven key organs: The Summit of the Heads of States, and government (“the summit”); the Council of Ministers; the Coordination Committee; the Sectoral Committee; the East African Court of Justice (EALJ); the Legislative Assembly (EALA); and the EA Secretariat. These organs have been created by the treaty as mechanisms to achieve its goals under Article 9 of the Treaty.

[12] Article 7 of the Treaty

[13] Article 8 of the Treaty.

[14] Article 34

[15] Article 36

[16] Article 32

[17] The East Africa Court of Justice Arbitration Rules, 2012, also accessible at the official website of the EACJ

[18] Rule 3 of the Arbitration Rules.

[19] Rule 27

[20] Article 1 of the Convention

[21] Article 3 of the Convention

[22] Article 5 of the Convention

[23] Article 5 of the Convention

[24] Article 6 of the Convention

[25] Article 7 of the Convention

[26] “”Enforcement of Arbitral Awards under the New York Convention – Practic” by Joseph T. McLaughlin and Laurie Genevro”. scholarship.law.berkeley.edu. Retrieved 21 March 2016.