SPEECH BY HON. THABO CHAKAKA-NYIRENDA, ATTORNEY GENERAL OF THE REPUBLIC OF MALAWI, AT THE 11TH EAST AFRICA INTERNATIONAL ARBITRATION CONFERENCE 2024 ON 19-20 SEPTEMBER 2024, AT SHERATON ADDIS HOTEL, ADDIS ABABA, ETHIOPIA.
PROTOCOL LIST
- Dr. Ermias Yemanebirhan, State Minister of Justice for the Federal Democratic Republic of Ethiopia
- His Lordship Justice Nestor Kayobera, President of the East African Court of Justice
- Honourable Judges
- All invited distinguished guests
- Partners and sponsors of various events
- Ladies and gentlemen
We thank you, Ethiopia for the warm welcome accorded to us since our arrival here in Addis Ababa, the horn of Africa].
I extend hearty greetings to you all from the Warm Heart of Africa, the Republic of Malawi where I am privileged to be in this position and serving this great nation as its Attorney General and by virtue thereof as Chairperson for Legal Education and as Head of the Bar.
I sincerely feel hugely honoured and highly privileged to be invited as a Guest Speaker at this auspicious 11th East Africa International Arbitration Conference 2024 whose theme is “International Arbitration in Africa: Arbitrating in a New Age.”
It is my conviction, and indeed the conviction of Malawi’s political leadership, and I believe everyone who has shown up for this event, that not all the legal battles we take to the already overwhelmed Judiciary or defend, are worth that platform of settling disputes. You can agree with me that any Judiciary, wherever we come from, invests more time and financial resources to clear the backlog of commercial disputes before them, many of which could easily and efficiently be dealt with through other appropriate means of dispute resolution like arbitration, mediation etcetera. All or almost all African countries have a legal framework for arbitration which is soothing. As we are seated in Ethiopia, it would be unfair not to recognize Ethiopia’s successful effort to enact Ethiopia enacted a new arbitration law, known as the Arbitration and Conciliation Working Procedure, Proclamation Number 1237/2021 (the “Proclamation”) on 2 April 2021. The preamble to Ethiopia’s Arbitration legislation aptly summarises the benefits of establishing Alternative Dispute Resolution and Conciliation, namely complementing the right to justice and, in particular, contributing to the resolution of investment and commercial-related disputes and the development of the sector. Not only that, the preamble to the Ethiopia Arbitration legislation lauds arbitration and conciliation as helping in rendering decisions by reducing the cost of the contracting parties, protecting confidentiality, allowing the participation of experts and the use of simple procedures which provide freedom to contracting parties.
Thus, commercial arbitration is not only about investment, commerce and trade but also about the rule of law. The rule of law is the fulcrum of any civilised society.
So, at the highest level of our respective laws, the law has recognized arbitration and it is now for arbitral institutions to fill the space.
Arbitration proceedings are less formalistic, speedier and more substantive (i.e with subject matter experts presiding over Arbitral Tribunals) compared to litigation, which is why they are the most preferred mode of resolving commercial disputes.
Distinguished guests, ladies and gentlemen;
We, as Malawi, admire the successes of many African arbitration centres in the East African Region such as the Nairobi Centre for International Arbitration is ranked among the top five (5) arbitral institutions in Africa under the African Arbitration Survey conducted by SOAS University of London. In the year 2023, the Centre received the African Arbitration Association award of Arbitral Institution of the Year 2022, and also lately this year, the Centre was recognised as a Leading Arbitration Service Provider at the East Africa International Arbitration Conference. What more can we ask for?
Distinguished guests, ladies and gentlemen;
Transforming or repealing outmoded laws is key to a successful arbitration regime. Adopting the UNCITRAL model arbitration law should be the minimum requirement. You would be interested to learn that Malawi ratified the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, (in short ‘the New York Convention’) effective 2nd June 2021.” Malawi became the 167th Contracting State to the 1958 New York Convention. In November 2023 Malawi Parliament passed a supporting International Arbitration Act to adopt the UNCITRAL Model Law to complete the legal architecture for facilitating international arbitration following the accession to the New York Convention. The ratification of the New York Convention and the enactment of the International Arbitration Act is a testament to Malawi’s renewed commitment to her international obligations, including international commercial arbitration. This means that the awards by arbitral centres from East Africa would be enforceable in Malawi. Our legal environment fully welcomes your work.
Malawi has also embarked on a process to establish a seat/Centre of international commercial arbitration. On 15th August 2022, we had a pre-launch conference in the Capital City, of Lilongwe for the establishment of this Centre. We had our arbitration symposium on the 5th and 6th of September 2024 in Lilongwe, Lilongwe to celebrate the establishment of the Malawi International Arbitration Centre. The symposium brought together the business community, lawyers and arbitration practitioners. My friend and colleague Samuel Mbiriri Nderitu from the Nairobi Centre for International Arbitration, Kenya Branch was invited as a guest speaker.
You can see that what we are dreaming of back home in Malawi, you our brothers and sisters are already living that dream here in the East African Region. It is for this reason that I found the 11th East Africa International Arbitration Conference 2024, a must-attend event because as Malawi, we share the aspirations the respective East African Arbitral Centres were founded on. We will draw lessons from you and invite you to guide us as we all try to take back the African continent to Africans even in the area of resolving commercial disputes. Instead of constantly exporting our problems, Africa must find African solutions to African problems and create an environment for welcoming the international community. We must, therefore, seize every opportunity to share experiences and lessons to facilitate collaborative efforts in consolidating and building the standard for making the region and the continent a place to go for the resolution of international commercial and investment disputes. As African countries, we must, as your theme says: “International Arbitration in Africa: Arbitrating in a New Age.” and I am saying we must do so together. Let’s collaborate on these efforts to create seamless continental effective service delivery for business.
Distinguished guests, ladies and gentlemen;
The political leadership, the business community, the legal profession in Malawi, and indeed myself, realise that commercial arbitration is a reliable mechanism of resolving commercial disputes. Commercial arbitration achieves fairness and justice compared to the traditional modes of resolving commercial disputes. Expeditious and economic disposal of commercial disputes can be achieved faster in the commercial arbitration route than through the court system which is more adversarial as opposed to inquisitorial.
Thus, arbitration is one of the pillars of alternative dispute resolution and is consonant with civilization and development. In the wisdom of Lord Diplock, in Bremer Vulkan v South India Shipping Corp. [1981] A.C. 909, 977:
‘Every civilised system of government requires that the state should make available to all its citizens a means for the just and peaceful settlement of disputes between them as to their respective legal rights. The means provided are courts of justice to which every citizen has a constitutional right of access in the role of the plaintiff to obtain the remedy to which he claims to be entitled in consequence of an alleged breach of his legal or equitable rights by some other citizen, the defendant. Whether or not to avail himself of this right of access to the court lies exclusively within the plaintiff’s choice; if he chooses to do so, the defendant has no option in the matter; his subjection to the jurisdiction of the court is compulsory.’
Added to this is the concept of arbitration which because of shortcomings in the traditional court system complements the traditional court system.
Distinguished guests, ladies and gentlemen;
State and private institutions should embrace arbitration and mediation in resolving commercial disputes because of the following reasons:
- Investors seek to achieve a fair return on their investment. They do this by assessing various risks including legal risks. A country that does not have modern alternative dispute resolution mechanisms is considered to contain legal risks. To attract investment, a host state must adopt international best practices in resolving commercial and investment disputes.
- Arbitration is the preferred dispute resolution mechanism for many investors and entrepreneurs. When international disputes are resolved promptly, they allow the flow of trade without unduly disruptions.
- Traditional litigation in a national court can be a costly, time-consuming, cumbersome and inefficient process, which obstructs, rather than facilitates, the resolution of business disputes. The formal adversarial structure and the possibility of national bias can destroy the business relationships which are conducive to the smooth flow of international trade. Access to the national courts may be restricted because of the overcrowded court dockets in many countries. The intricacies of the national procedures may be unknown to one or more of the parties. Moreover, foreign judgments may be difficult to enforce. For these reasons and others, businessmen seek alternatives to traditional litigation and that alternative is arbitration.
- Ideally, commercial disputes should be resolved promptly so that the flow of trade is not unduly disrupted. However, it has been suggested that the resolution of these disputes in national courts can substantially increase the risk, and therefore the price, of an international contract entered into on a fixed-price basis.’ The price increase has been estimated to be as high as 50 per cent.’ This risk factor represents the contingent liability as perceived by one of the parties when any dispute must be resolved by a foreign court rather than by an arbitral tribunal in some internationally recognized forum. Traditional litigation in a national court can be a costly, time-consuming, cumbersome and inefficient process, which obstructs, rather than facilitates, the resolution of business disputes. The formal adversarial structure and the possibility of national bias can destroy the business relationships which are conducive to the smooth flow of international trade. Access to the national courts may be restricted because of the overcrowded court dockets in many countries. The intricacies of the national procedures may be unknown to one or more of the parties. Moreover, foreign judgments may be difficult to enforce. For these reasons and others, businessmen seek alternatives to traditional litigation.” Arbitration is a potentially more efficient and attractive mechanism.
- Properly conceived and properly drafted arbitration permits the final and binding resolution of disputes in a neutral venue by arbitrators chosen by parties or an independent third party.
- Arbitration reduces legal risks associated with trade, investment and business.
- Recourse against an award is very restricted under the model laws thereby enhancing the reliability and security of international arbitration.
You can agree with me that if as regions, or indeed as the African Continent, utilise the power of arbitration, we will make more economic gains than losses. We all know the impact that lengthy litigation may have on the construction of a bridge, a hospital or a school. Since the Government is a serial commercial participant, delays in concluding commercial matters adversely impact on Government’s ability to provide services to communities aimed at preventing or ameliorating harm and providing opportunities or benefits. Arbitration complements the court system. Additionally, courts have a supervisory role in the arbitration process.
Distinguished guests, ladies and gentlemen;
The fact that every civilised system of government requires that the state should make available to all its citizens a means for the just and peaceful settlement of disputes between them as to their respective legal rights, requires setting up institutions that support peaceful settlement of disputes. The ADR system requires a legal framework which refers to frameworks in which law is organized, such as regulatory structures and legal systems. It also requires institutions, which refers to organizations, norms, and practices related to the adoption, implementation, and enforcement of law. Furthermore, ADR requires regulatory design in the form of law exhibits a policy or policies, which form regulatory objectives. Ethiopian’s Arbitration and Conciliation Working Procedure, Proclamation Number 1237/2021, for example. constitutes part of the legal framework that supports ADR. I do not doubt that the regulatory design in most East African countries including the host Ethiopia supports ADR as I have read several judicial decisions that promote the ADR policy through, among others, requiring disputes involving commercial agreements that have arbitration clauses to be resolved through the arbitral mechanism.
You all know that with globalization, huge volumes of international contracts crop up. And with international contracts, the conflict of laws issues which conventional courts have been grappling with also crop up and arbitration has been globalized through the New York Convention. In my view, arbitration is very efficient in resolving the conflict of law challenges. Because of this, there is a need to equip ourselves with new trends in international commercial arbitration.
It is my conviction that through this event here in Addis Ababa, we will learn one or two things following the establishment of the seat of the International Commercial Arbitration Centre in Malawi known as the Malawi International Arbitration Centre (MIAC). It is a great milestone not only for Malawi but also for Africa which according to statistics has been losing over US$5 billion annually to Western and Far Eastern countries in the arbitration of commercial disputes.
Parties to international commercial or investment disputes have been forced to conduct arbitration in countries such as France, Britain, the United States of America and China. This has been favouring parties with deep pockets as potential claims by less financially capable parties to commercial disputes have been stifled by exorbitant and unaffordable costs of conducting arbitration in Western countries.
Distinguished guests, ladies and gentlemen;
Interestingly so, and worthy of note, we have several arbitrations being heard outside Africa by arbitrators, parties, lawyers and witnesses who all fly from Africa at an astronomical cost to sit outside the continent to have a hearing. Africa as a block has goals and targets to achieve as set out in African Union Agenda 2063 and also the UN Sustainable Development Goals. For these to be achieved, we need access to justice and fostering and promotion of the rule of law. Specifically, the African Union Agenda 2063 aspires to ‘An Africa of good governance, democracy, respect for human rights, justice and the rule of law.’ All these aim at achieving sustainable development. Without meaningful access to justice, all these will forever remain a pipe dream. In one of his Lectures, Adam Smith observed that “the imperfection of the law and the uncertainty in its application” was a factor that retarded commerce. Max Weber, lauded the importance of “rational” law in economy and society. Friedrich Hayek also discussed relevant legal concepts to support liberty as the cornerstone of wealth and growth. Consequently, Africa’s economic growth and development rely on the rule of law and access to justice particularly through ADR which as I said before, is quicker than conventional courtroom litigation. There is, therefore, a need to enhance the credibility and efficiency of alternative dispute resolution. Not only that but also to make Africa arbitration-friendly.
Consequently, Africa’s economic growth and development rely on the rule of law and access to justice particularly through ADR which as said before, is quicker than conventional courtroom litigation. There is, therefore, a need to enhance the credibility and efficiency of alternative dispute resolution. Not only that but also to make Africa arbitration friendly. Sachs J submits that if respect for the judiciary is to be regarded as integral to the maintenance of the rule of law, it should be, such respect will be spontaneous, enduring and real to the degree that it is earned, rather than to the extent that it is commanded[1]. Sachs J’s observations apply with equal force to any arbitration centre. I can confidently say that NCIA’s global enduring respect has been earned and not commanded.
We should be finding solutions to delays in concluding arbitration cases which have long-hamstrung courtroom litigation. Talking of the adjournment culture the former Chief Justice of England and Wales, the Rt. Hon. Lord Judge pointed out that over the years England and Wales suffered from the adjournment culture which is being gradually killed off with the introduction of much more stringent rules of procedure in both criminal and civil cases in addition to residential training by judges. He narrates of how, after one very long hearing, with many adjournments, a judge in England complained that a case had taken him seven days to try. He [the judge who took seven days to try the case] then pointed out that that was one day longer than the Almighty himself needed to create the entire universe[2].
Distinguished guests, ladies, and gentlemen:
International commercial arbitration also provides for a certain level of predictability in how a matter will be resolved. As tribunals of arbitration are selected in the contracting phase of the proceedings, the parties are able to pre-determine the specialisation of the arbitrators and this often lends a certain amount of predictability to the outcome of arbitration. As international commercial arbitration often has a larger initial cost outlay, this disincentivizes vexatious or frivolous disputes being referred to arbitration by the parties to the agreement.
Distinguished guests, ladies, and gentlemen:
In our pursuit of professionalism and excellence in our distinguished profession, we must embrace any knowledge, including from this event, which can further enhance our performance. I hope and believe that this event will imbue us with such knowledge.
To conclude, distinguished guests, ladies, and gentlemen;
My best wishes for a successful 11th East Africa International Arbitration Conference 2024.
Once again thank you all. And a big thank you to the organisers of the 11th East Africa International Arbitration Conference 2024. I will forever remain indebted to you for the invitation extended to Malawi to attend this auspicious event. And I know that this gift is divinely inspired.
Asante Sana
May the Almighty God bless you all.
[1] S v Mamabolo (CCT 44/00) [2001] ZACC 17; 2001 (3) SA 409 (CC); 2001 (5) BCLR 449 (CC) (11 April 2001 at
[2] Op. Cit.
