Recognition and Enforcement of Foreign Arbitral Awards in Civil and Commercial Matters in Ethiopia

Author:Tecle Hagos Bahta
Position:LL.B (AAU, 2002), LL.M: European and Comparative Law (University of Ghent, 2006)
Pages:105-140
SUMMARY

Ethiopia is not yet party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. It can also be said that Ethiopian arbitration laws fail to cope with the emerging modern laws and practices in international commercial arbitration. However, as of 1965, with the introduction of the Civil Procedure Code (CPC), rules on the recognition and enforcement of foreign... (see full summary)

 
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RECOGNITION AND ENFORCEMENT OF
FOREIGN ARBITRAL AWARDS IN CIVIL AND
COMMERCIAL MATTERS IN ETHIOPIA
Tecle Hagos Bahta
Abstract
Ethiopia is not yet party to the New York Convention on the
Recognition and Enforcement of Foreign Arbitral Awards. It can also be
said that Ethiopian arbitration laws fail to cope with the emerging
modern laws and practices in international commercial arbitration.
However, as of 1965, with the introduction of the Civil Procedure Code
(CPC), rules on the recognition and enforcement of foreign judgments
and arbitral awards are set out whose interpretation, unfortunately, have
remained thus far inconsistent. Thus, the criteria must be clearly
interpreted and applied so that the rules can be conducive to the steadily
increasing practice of modern arbitration. This article attempts to shed
some light on these conditions.
Key words:
Foreign arbitral awards, commercial arbitration, enforcement of foreign
judgments, Ethiopia.
_____________
Introduction
Commercial arbitration is becoming increasingly indispensable in international
trade. The ease of enforceability of arbitral awards across borders should have,
inter alia, been the driving factor for the eminence of international commercial
arbitration in international trade. Thus, award-creditors may need to move
across borders looking for a forum within which the award-debtor might have
placed or deposited sufficient assets towards the satisfaction of the arbitral
award.
LL.B (AAU, 2002), LL.M: European and Comparative Law (University of Ghent, 2006),
PhD candidate (University of Warwick Law School), Assistant Professor of Law, Mekelle
University, College of Law and Governance, Department of Law. The author can be
reached at <pppillars@fastmail.fm>
106 MIZAN LAW REVIEW Vol. 5 No.1, Spring 2011
It is believed that once an arbitral award is rendered, the award-debtor
unconditionally complies1 with it or attempts to negotiate for discounted
settlement over the arbitral award, or, at times, refuses to comply with it at all.
In the second scenario, the award-creditor may have to trade-off between the
offer and the available options. The third scenario, however, leaves the award-
creditor with no option but to pursue legal action2 in the optimal forum for the
‘recognition and enforcement of the foreign arbitral award’.
States favorably tend to recognize arbitral awards rendered in other countries
with the objective of avoiding continued harassment against the defendant,
waste of time, money and effort and with the view to promoting international
investment and trade. In so doing, to ensure that proper justice is administered, it
is expected that national courts should ascertain that any foreign arbitral award
is free from substantial defects which may hinder its enforcement in the state in
which recognition and enforcement is sought.
This article is aimed at expounding the conditions set out under Article 461
of the Civil Procedure Code for the recognition and enforcement of foreign
arbitral awards. Incidentally, however, an attempt has also been made to put the
doctrine of reciprocity in its proper perspective in its application not only to the
recognition and enforcement of foreign arbitral awards but also to foreign
judgments.
1. Recognition and Enforcement/Execution: The Conceptual
Framework
1.1- Execution or Enforcement
‘Execution’ or ‘enforcement’3 of foreign judgments and arbitral awards should
be distinguished from the actual attachment and sale of property in satisfaction
of the judgment or award decree. This article does not deal with the procedures
1 S. Azadon Tiewul and Francis A. Tsegah, (1975) ‘Arbitration and The Settlement of
Commercial Disputes: A Selective Survey of African Practice’, Int’l & Comp. L. Q,
vol. 24, at 410 (“… compliance with arbitral awards is in most cases voluntary
because of the desire of the parties to continue their business relationship and the spirit
of goodwill which is engendered by the resort to arbitration rather than the courts.”)
2 Ibid, (“For people to have confidence in any system of arbitration, there must be a
mechanism whereby the award rendered can be enforced”).
3 It seems that the draftsman of the CPC preferred to use the terms ‘execution’ and
‘enforcement’ interchangeably [Art.15(3)]; thus, the consistent usage of the term
‘execution’ for foreign judgments [Arts.456-460] and ‘enforcement’ for foreign
arbitral awards [Art.461] could only be taken to serve the purpose of observing
internal consistency rather than intending to treat them differently.
RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS IN ETHIOPIA 107
of attachment or other procedures by which the decision in the award will be
carried out. Such technical procedures, which are different in all countries of
the world, are not the purpose of this Article; furthermore, they present nothing
special as far as arbitration is concerned. The purpose of this Article is rather
only to scrutinize the litmus paper under which an arbitral award classified as
‘foreign’ must pass so as to merit a ‘go-ahead’ order by the Ethiopian courts by
which the claim embodied in it may earn the status of having full legal force and
be enforced by the claimants.
1.2- Recognition and Enforcement
Briefly put, the difference between recognition and enforcement is that, “an
award may be recognized, without being enforced; but if it is enforced, then it is
necessarily recognized by the court which orders its enforcement.”4 Thus, an
award-creditor in a foreign arbitral award may seek only for its recognition or
its recognition and enforcement.5 The purpose of recognition on its own is to act
as a shield; it is used to block any attempt to initiate fresh proceedings, issues
which have already been decided in the arbitration that gave rise to the award
whose recognition is sought.6 The purpose of enforcement is, however, to ‘act as
a sword, not a shield’.7
The recognition of an award by a court gives a res judicata effect thereto.
Enforcement, however, goes a step further than recognition. As Redfern and
Hunter noted, “… where a court is asked to enforce an award, it is asked not
merely to recognize the legal force and effect of the award, but also to ensure
that it is carried out by using such legal sanctions as are available”.8 Thus, the
terms ‘recognition’ and ‘enforcement’ can be used together where the latter is
the necessary follow-up of the former in judgments and awards which carry
pecuniary obligations.
The difference between ‘recognition’ and ‘enforcement’ is further
summarized as follows:9
Recognition is an undertaking by a state to respect the bindingness of foreign
arbitral awards. Such awards may be relied upon by way of defence or set-off in
any legal proceedings concerning the subject- matter of the award commenced in
4 Alan Redfern and Martin Hunter (1999), Law and Practice of International
Commercial Arbitration, 3rd ed., (London: Sweet and Maxwell), at 10-09. (Hereinafter
referred to as ‘Redfern and Hunter’).
5 See also ibid.
6 Ibid.
7 Ibid.
8 Ibid.
9 Ibid.

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