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Arbitration as the Best Option for the Settlement of China-African Trade and Investment Disputes

Published online by Cambridge University Press:  05 April 2013

Weidong Zhu
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Abstract

The effective resolution of trade disputes related to Sino-African investments will have a major impact on the development of trade and investment between China and African states. Arbitration is considered the best option for the settlement of disputes between China and African states as it offers unique benefits and is both suited to the current environment in African countries and accepted by Chinese and Africans. To make full use of this dispute settlement approach, the Chinese government should take active measures to promote the knowledge of arbitral legal systems in Africa among the Chinese businesses investing or trading locally. Beijing should encourage them to settle disputes with their African counterparts through arbitration. It is also important for Chinese companies to learn about arbitration laws in African states, and choose a favourable arbitral institution and proper arbitration seat.

Type
Research Article
Information
Journal of African Law , Volume 57 , Issue 1 , April 2013 , pp. 149 - 163
Copyright
Copyright © School of Oriental and African Studies 2013

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References

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7 The Treaty on the Judicial Assistance in Civil and Commercial Matters between the People's Republic of China and the People's Democratic Republic of Algeria was concluded on 10 January 2010 and came into effect on 10 February 2010.

8 Some states only acceded to the convention with certain reservations. See Appendix for more details.

9 Asouzu International Commercial Arbitration, above at note 3 at 49.

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14 Algeria, Djibouti, Libya, Mauritania, Morocco, Sudan and Tunisia. See the Appendix for more details.

15 This organization currently has 17 member states. See the Appendix for more details.

16 With the exception of Equatorial Guinea and Guinea-Bissau, where Spanish and Portuguese are spoken respectively, and the English-speaking provinces of Cameroon.

17 With the exception of the English-speaking provinces of Cameroon, which have the common law tradition.

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23 Ajayi and Rosario “Investments in sub Saharan Africa”, above at note 12.

24 CRCICA annual report 2009–10. The author thanks Dr Mohamed Abdel Raouf, CRCICA secretary general, for sending him this report.

25 OHADA Treaty, art 21.

26 For example, an exhibition and sales centre for African goods was established on 1 April 2011 in Yiwu, a famous international small commodity market in China, to promote the import of goods from African countries. So far, Africans have set up more than 360 trading agencies in Yiwu and more than 1,000 African businessmen work there.

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30 Id at paras 4.4.7 and 4.4.8.

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32 See Appendix for full details.

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34 According to responses to the questionnaire about legal issues relating to Chinese business in Africa that the author designed in 2010, most Chinese businesses would choose arbitration instead of litigation in Africa in the case of disputes with their African counterparts.

35 The list of contracting states can be found at: <http://www.newyorkconvention.org/contracting-states/list-of-contracting-statesb (last accessed 5 December 2012).

36 See notes 4–7 above.

37 In the current lists of arbitrators for the arbitral institutions in African countries, there are no or few arbitrators from China, and vice versa. This impacts on a party's consideration of where to submit their dispute. For example, according to the arbitrators' list published by CIETAC in May 2011, among nearly 300 foreign arbitrators, only three are from Africa and they are all from Egypt. See: <http://cn.cietac.org/Arbitration/ArbitrationBeadroll.shtml> (last accessed 4 December 2012). Meanwhile there are no arbitrators from China in the arbitral institutions in Africa. For example, though CRCICA has accepted many cases involving Chinese parties, it currently has no arbitrators from China. Taking into account the fact that, to date, most China-African civil and commercial disputes have occurred in Africa and were settled in African arbitral institutions, the arbitral institutions in Africa may consider drawing some arbitrators from China. In November 2011, the China Law Society legal delegation to Africa (of which the author is a member) visited Nigeria and South Africa. In discussions with the RCICAL director and other staff, the author proposed that the centre include some Chinese arbitrators in its arbitrators list; this generated considerable interest.

38 For example, a model arbitration clause for China-African business disputes could be drafted as follows: “(1) Both parties agree to submit their disputes arising from, or relating to, contracts to the following arbitration institution to settle through arbitration: [select one from the list] The China International Economic and Trade Arbitration Commission; The Cairo Regional Centre for International Commercial Arbitration; The Lagos Regional Centre for International Commercial Arbitration; The Nairobi Regional Centre for International Commercial Arbitration; The Arbitration Foundation in Southern Africa; or [please specify]. (2) The arbitration shall proceed in accordance with the arbitration rules that the parties have designated or negotiated in: [select one from the list] Beijing; Cairo; Lagos; Nairobi; Cape Town; or [please specify]. (3) The arbitration award shall be final and binding on both parties.”

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