The Role of Ethiopian Courts in Commercial Arbitration

Author:Hailegabriel G. Feyissa
Position:LL.B, LL.M, Lecturer in Law, Bahir Dar University School of Law.
Pages:297-333
SUMMARY

The role of arbitration in settling disputes which involves national and transnational commercial transactions is steadily growing in this era of globalisation. International and national rules governing various aspects of commercial arbitration have contributed to the effectiveness of arbitration as an alternative to litigation. The involvement of national courts is crucial to the overall... (see full summary)

 
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THE ROLE OF ETHIOPIAN COURTS
IN COMMERCIAL ARBITRATION
Hailegabriel G. Feyissa
Abstract
The role of arbitration in settling disputes which involves national and
transnational commercial transactions is steadily growing in this era of
globalisation. International and national rules governing various aspects of
commercial arbitration have contributed to the effectiveness of arbitration as an
alternative to litigation. The involvement of national courts is crucial to the
overall efficacy of arbitration, both domestic and international. Instances
calling for court intervention may appear at all stages of the arbitral
proceedings. There is, however, a need to maintain a balance between the level
of court involvement and the smooth functioning of arbitration – which is a
contractual alternative to judicial dispute settlement. This article deals with the
legal and practical role of Ethiopian courts during the three stages of arbitral
proceeding, i.e., at the beginning of arbitration, during the arbitral proceedings,
and after the end of the arbitration. And finally, I argue in favour of judicial
restraint particularly during the first two stages of arbitral proceedings.
Key words:
Commercial Arbitration, Ethiopian courts, arbitral proceedings, judicial
restraint
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Introduction
Arbitration is seen here as a non-judicial dispute settlement mechanism whereby
parties to a dispute resort to a third party (or parties) whose determination over
the dispute is as binding as comparable court decisions. Depending on various
factors, one can distinguish different types of arbitration.1 For instance, a
distinction can be made between international and domestic arbitration.2 Within
LL.B, LL.M, Lecturer in Law, Bahir Dar University School of Law.
• The author is grateful to Jennifer Ward and the anonymous reviewers for their
comments which enriched the initial version of the work.
1 See, e.g., Kröll, S. (2006) Arbitration, in Smits J. (ed.), Elgar Encyclopaedia of
Comparative Law. Cheltenham, Edward Elgar Publishing Limited, p. 78 [hereinafter
Kröll].
2 See n. 29 infra and the accompanying text.
298 MIZAN LAW REVIEW Vol. 4 No.2, Autumn 2010
the domain of international arbitration, one may further distinguish between
investment arbitration, commercial arbitration and arbitration between states.3
For the purpose of this article, commercial arbitration stands for arbitration
of commercial disputes between private parties to either domestic or
international transactions. I intend to use international commercial arbitration
to refer to arbitration between Ethiopians, on the one hand, and private parties
from foreign nations, on the other.4
This article mainly focuses on commercial arbitration – both domestic and
international. Particularly, it deals with the role played by Ethiopian courts in
commercial arbitration. It argues that Ethiopian courts should maintain a
friendly attitude towards commercial arbitration.
The first section of the article highlights the different approaches regarding
the role of courts in arbitration and examines the reasons why Ethiopian courts
should retain a minimalist approach regarding commercial arbitration. The
second and third sections deal with the historical and present state of the
Ethiopian legal regime on arbitration. And, the fourth section takes us through
the crux of the research, i.e. the practical role Ethiopian courts have thus far
played in commercial arbitration and its impact on the efficacy of the latter.
1. The Interaction of Courts and Arbitral Tribunals: The
Competing Approaches
Arbitration as a dispute settlement device has a history dating as far back as
ancient civilisations in Egypt and Greece.5 Literature indicates that arbitration
predates litigation.6 The gradual prominence of governmental dispute settlement
bodies led to a period of judicial hostility towards arbitration. In what are now
“arbitration friendly” jurisdictions like the USA, Great Britain and France, there
was a long-standing jurisprudence against arbitration.7 The main reason for the
3 Kröll, supra n. 1, p. 78.
4 But see n. 29 infra.
5 Barrett, J. (2004) A History of Alternative Dispute Resolution. San Francisco, Jossey-
Bass, pp. 1 et seq.; Zekos, G. (2008) International Commercial and Marine
Arbitration. London, Routledge- Cavendish, pp. 9 et seq. [hereinafter Zekos].
6 Zekos, ibid, p. 9.
7 Martinez-Fraga, P. (2009) The American Influence on International Commercial
Arbitration. Cambridge, Cambridge University Press, pp. 6-14[hereinafter Martinez-
Fraga]; Navarro, P. Challenges of awards vis-á-vis the finality of international
arbitration, pp. 11. Available from: <www.consulegis.com> [last accessed 31 Oct.,
2010][hereinafter Navarro]; see also n. 45 infra.
4(2) Mizan Law Rev. THE ROLE OF ETHIOPIAN COURTS IN COMMERCIAL ARBITRATION 299
hostility between courts and arbitration was, inter alia, the belief that arbitration
goes against public policy.8
Amidst this judicial attitude, however, the use and advantage of arbitration
gained gradual ascendancy. Crucially, judicial prejudice against commercial
arbitration has gradually faded away as the business sector “needed greater
speed and flexibility for the settlement of their disputes than that provided by
courts.”9 Moreover, neutral venues in the form of international arbitral tribunals
have been in demand as international trade grew dramatically after World War
II.10 This in turn led to gradual judicial accommodation of arbitration.
The traditional scepticism of arbitration now appears to have given way to
remarkable judicial restraint. Yet, states have always kept arbitration under a
certain level of court control. The desirability of a level of judicial assistance to
and control over arbitration is now well understood.11 Nonetheless, a
comparative analysis of national rules on commercial arbitration would reveal
that the level of interaction between courts and arbitral tribunals varies from
jurisdiction to jurisdiction.12
The most prevailing international trend confines judicial intervention to a
minimum.13 This minimalist approach is represented by the United Nations
Commission of International Trade Law Model Law on International
Commercial Arbitration (UNCITRAL Model Law) and other comparable
national arbitration laws. Aspects of this approach include the enforcement of
arbitration agreements, the recognition of the principles of severability and
competence-competence (Kompetenze-Kompetenze), the upholding of the
finality of arbitral awards subject to certain fairness standards, the relative
autonomy of arbitration from judicial intervention during the arbitral
proceeding, and the enforcement of arbitral awards. Whereas, the maximalist
approach is characterised by, for instance, the subjection of arbitral awards to
8 In the common law jurisdictions, for example, arbitration was perceived to be against
public policy for it “ousted otherwise competent courts of their jurisdiction”; see
Martinez-Fraga, p. 7.
9 Zekos, supra n. 5, pp. 16-20.
10 Craig, W. (1995) “Some Trends and Developments in the Laws and Practice of
International Commercial Arbitration,” Texas International Law Journal, (30), p. 2
[hereinafter Craig].
11See generally discussions under section 4 infra.
12 See generally Zekos, supra n. 5 for an excellent comparative analysis of the role of
English, US, Greek and Belgian courts in commercial arbitration.
13 See, e.g., Gu, W. (2009-2010) “Judicial Review Over Arbitration in China: Assessing
the Extent of the Latest Pro-Arbitration Move by the Supreme People’s Court in the
People’s Republic of China”, Wisconsin International Law Journal, (27), pp. 225-231;
Kröll, supra n. 1, p.78.

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