The Ministry of Justice has set its sights on transforming Addis Ababa into a global arbitration hub. Minister Hanna Arayaselassie told Parliament this week that her office is in talks with global arbitration organizations in a bid to realize the ambitions.
She told MPs about the initiative while presenting a half-year report to the parliamentary Legal and Justice Affairs Committee.
Hanna highlighted the steps being taken to make Addis Ababa a center for the international legal community in facilitating the resolution of contractual disputes and addressing the interests of different parties both at home and from abroad.
Henok Tesfaye, director of Civil Justice Administration at the Ministry, told The Reporter the government has begun engaging with prominent international arbitration organizations, inviting them to establish offices in the capital.
The organizations include the Permanent Court of Arbitration (PCA), the London Court of International Arbitration (LCIA), and the International Chamber of Commerce (ICC), according to Henok.
He pointed to the approval of the New York Convention and the Arbitration and Reconciliation Proclamation as progress in creating a favorable environment for arbitration.
The Director stated the Permanent Court of Arbitration recently expressed interest in signing a host country agreement with Ethiopia. The agreement has been forwarded to the Ministry of Foreign Affairs, which holds the authority to finalize the deal, according to Henok.
The Ministry has also reached out to the London Court of International Arbitration, expressing a desire to see it establish a branch in Addis Ababa, Henok said.
He is optimistic that this move will significantly enhance the arbitration profession in Ethiopia, providing a platform for resolving international disputes and generating additional revenue for the country.
Lawmakers ratified the Arbitration and Conciliation Working Procedure Proclamation in 2021, in a bid to establish a legal framework for domestic commercial arbitrations and for cases involving international entities with a presence in Ethiopia.
Experts say the Ministry’s ambitions to make Ethiopia a leading destination for arbitration, attracting professionals and businesses from around Africa and beyond, must be complemented by an even more favorable and practical environment to make this vision a reality.
Leyou Tameru, an arbitration expert and founder of I-Arb Africa, an online arbitration hub, emphasized Addis Ababa’s potential to grow into an arbitration powerhouse due to the presence of foreign diplomatic missions, the African Union, the United Nations Economic Commission, and the ongoing economic liberalization.
She observes that, despite the prevalence of arbitration cases in Africa, many parties are still traveling outside the continent to seek arbitrators.
This situation places Ethiopia in a unique position to assert itself as a preferable destination for arbitration due to its proximity to the rest of the continent and other countries beyond.
Leyou explained that in arbitration, the “seat” refers to the legal jurisdiction governing the arbitration proceedings, essentially the legal domicile of the arbitration, while the “venue” is the physical location where the arbitration hearings will occur.
Thus, the seat determines the applicable law and supervisory court, while the venue is just the geographical location where the proceedings happen.
Leyou noted that countries including Kenya, Rwanda, and Mauritius are promoting their countries as seats by emphasizing their favorable legal and juridical environments.
Leyou suggested Ethiopia must work further to become a home for arbitration organizations by providing more training, developing more jurisprudence, and practicing new laws to gain experience and legal clarity.
