By : Beverley Agbakoba Onyejianya and Chukwunoyenim Okoh
In a 2024 survey conducted by Olisa Agbakoba Legal, the International Chamber of
Commerce (ICC) ranked as atop alternative dispute resolution institution that
respondents had utilised. 1 In a similar survey in 2018 by White & Case and Queen Mary
University, African respondents chose the ICC and LCIA as the top two institutions. 2 The
Lagos Court of Arbitration (LCA) ranked as the highest African arbitration institution,
although in sixth place. This shows that despite the presence of over 90 alternative
dispute resolution institutions in Africa, 3 over 80% of African counterparties prefer to
resolve their disputes primarily under the auspices of the ICC and other foreign
arbitration institutions. 4This article delves into the discussion surrounding the conscious promotion of African alternative dispute resolution institutions by both African governments and users.
Dominance of Foreign Alternative Dispute Resolution Institutions in Africa.
In Nigeria precisely, Litigation and International Arbitration remains the preferred
alternative dispute resolution mechanism for commercial disputes for most parties 5 . In
2020, the Arbitration in Africa Survey Report recorded over 90 ADR institutions or
organisations operating on the continent. 6 Despite this sizable number, most disputants still tend to favour foreign ADR institutions for resolving disputes. This preference is
largely due to the proven track records and substantial experience, which underlie their
well-established reputations. The emphasis on reputation, recognition and experience
effectively results in a greater weighting towards long-established foreign institutions.
According to the International Chamber of Commerce (ICC) in its 2019 Dispute
Resolution Caseload Statistics, parties from sub-Saharan Africa accounted for
approximately 5 percent of all parties in its 2019 caseload, with Nigerian (19), South
African (13), and Mauritian (10) parties taking the lead. 7 In Investor-state Arbitrations, 9
percent of the combined caseload in 2023 at the International Centre for Settlement of
Investment Disputes (ICSID) involved disputes from Sub-Saharan Africa, with the
Middle East and North Africa accounting for another 9 percent of disputes. 8 Despite the
emergence of numerous African arbitration institutions, some African users seem to
prefer resolving their commercial disputes primarily under the auspices of foreign ADR
institutions. As the market matures, particularly in African jurisdictions of importance
such as Kenya, Nigeria, Ghana, South Africa, and increasingly in Francophone African
States, governments and ADR practitioners should advocate for these disputes to be
adjudicated in Africa rather than being ‘exported’ to international centres.
Governmental Role in Promoting Local ADR Institutions
Western Countries, such as the US, remain highly vested and interested in Africa. In
2022, the United States alone invested up to US$7 Billion across Africa, the highest
since 2018. 9 Asian commercial interest in the continent is also on the rise and in 2023,
Africa became the largest recipient of Chinese commercial investment, worth US$21.7
Billion. 10 With the rise in investments between China and Africa, disputes between
both contracting states and continents have also risen.
One can posit that ADR grows in direct proportion to trade and commerce. Hence, to
summarise, where trade goes ADR follows. Trade is essentially commercial dealings
and when such trade patterns and activity increases in volume, it goes without saying
that the number of commercial disputes will also increase in frequency and value, as will
the imperative to quickly resolve them. With the expected growth in investments in
Africa and also in anticipation of increased inter African trade relations, thanks to
ACFTA. Therefore, African Governments need to take cognisance that deliberately
promoting alternative dispute resolution could lead to an indirect positive impact on
economic activity, with conference centres, hotels and local lawyers all set to benefit.
Asides that, a recognised arbitral centre is also a great show of ‘soft power’, helping to
underline broader messages about political and legal stability, and give comfort to
foreign investors.
African governments should therefore consider it a duty to actively promote local ADR
institutions, following the example of the Egyptian government. The Egyptian
government provides caseload opportunities for the Cairo Regional Centre for
International Commercial Arbitration (CRCICA) by selecting CRCICA as the institution
of choice in bilateral and multilateral agreements. Governments are the most frequent
appointers of arbitrators, as well as the most frequent instructors of counsel, and they
are often represented by international law firms or international ADR practitioners. If
African parties continue to outsource African work to foreign counterparts, local ADR
institutions will never reach their full potential and enjoy significant patronage. The
reality remains that African ADR practitioners do not get a healthy bite of the ADR pie.
The imbalance becomes more vivid when it is noted that European state parties do not
tend to instruct African counsel, and the European counsel they instruct, often do not
partner with African Counsel in defending European States. 11 The African government in
supporting local ADR institutions must insist that only local counsel are instructed and
the institution of arbitration are African institutions.
Asides from the method mentioned above, we must not neglect the impact multilateral
agreements could have. The majority of newly registered cases in FY 2023 (37%)
invoked ICSID jurisdiction on the basis of a bilateral investment treaty (BIT). Similarly, a
large variety of multilateral agreements also accounted for a significant share of new
cases, most notably the Energy Charter Treaty (13% of cases), the North American
Free Trade Agreement (12% of cases), and the United States-Mexico-Canada
Agreement (12% of cases). Parties also instituted proceedings relying on the Dominican
Republic-Central American Free Trade Agreement (4% of cases), the ASEAN-China
Investment Agreement (2% of cases), the Canada-Peru Free Trade Agreement (2% of cases), and for the first time, the Mexico-Costa Rica-El Salvador-Guatemala-Honduras-
Nicaragua Free Trade Agreement (2% of cases). A further 10% of cases were brought
on the basis of contracts between a host State and investor, and 6% on domestic
investment laws. 12
CONCLUSION
The current state of International arbitration in Africa shows an interplay between the
dominance of foreign alternative dispute resolution (ADR) institutions and the seeming
emergence of African arbitration institutions. Despite the proliferation of ADR institutions
on the continent, African parties still predominantly opt for foreign ADR institutions in
Commercial Arbitration, Construction Arbitration and other ADR matters. However, with
the African Continental Free Trade Agreement (AfCFTA) setting the stage for enhanced
intra-African trade and investment, there arises a critical opportunity to promote African
arbitration institutions as integral components of the region’s economic growth.
1 Beverley Agbakoba, Cornelius Gabriel, Chukwunoyenim Okoh, “ Assessing the Landscape of ADR in
Nigeria: Equity, Inclusivity and Accessibility (OAL 2024) <https://oal.law/assessing-the-landscape-of-adr-
in-nigeria-equity-inclusivity-and-accessibility/> date accessed 24 March 2024
2 ‘2018 International Arbitration Survey: The Evolution of International Arbitration’, (White and Case 2018)
<https://arbitration.qmul.ac.uk/media/arbitration/docs/2018-International-Arbitration-Survey—The-
Evolution-of-International-Arbitration-(2).PDF> date accessed 3 April 2024
3 ‘2022 Year in Review: Africa’ [2023] Kluwer Arbitration Blog
<https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://arbitrationblog.kluwerar
bitration.com/2023/02/10/2022-year-in-review-
africa/&ved=2ahUKEwjStNTkoI2FAxVYW0EAHfSFDY8QFnoECCoQAQ&usg=AOvVaw1EVGvcv1gB7nro
pZjIkGi7
> date accessed 24 March 2024
4 Robert Wheal, Elizabeth Oger-Gross, Tolu Obamuroh, Opeyemi Longe, ‘Institutional arbitration in Africa:
Opportunities and challenges’ ( White & Case LP 2020) <https://www.whitecase.com/insight-our-
thinking/institutional-arbitration-africa-opportunities-and-challenges> date accessed 24 March 2024, ibid 2
5 “ GTDT-Market Intelligence Dispute Resolution 2023 Nigeria (Lexology 2023) <https://uubo.org/wp-
content/uploads/2023/06/Lexology-GTDT-Market-Intelligence-Dispute-Resolution-2023-Nigeria.pdf>
6 ‘2022 Year in Review: Africa’ [2023] Kluwer Arbitration Blog
<https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://arbitrationblog.kluwerar
bitration.com/2023/02/10/2022-year-in-review-
africa/&ved=2ahUKEwjStNTkoI2FAxVYW0EAHfSFDY8QFnoECCoQAQ&usg=AOvVaw1EVGvcv1gB7nro
pZjIkGi7
> date accessed 24 March 2024
7 Ibid 4
8 ICSID, ICSID Releases 2023 Caseload Statistics available at <https://icsid.worldbank.org/news-and-
events/news-releases/icsid-releases-2023-caseload-statistics> date accessed 24 March 2024
9 EY, Africa Attractiveness Report 2023, available at <https://www.ey.com/en_za/attractiveness/21/africa-
attractiveness-report-> date accessed 24 March 2024.
10 Jevans Nyabiage, ‘Global green transition is re-energising China’s investments in Africa after pandemic
slowdown’(South China Moring Post 2024).
<https://www.scmp.com/news/china/diplomacy/article/3252032/global-green-transition-re-energising-
chinas-investments-africa-after-pandemic-slowdown> accessed 24 March 2024.
11 Adebayo Adenipekun, ‘The Role of Governments in support of African Arbitration’ (AAA 2019)
<https://afaa.ngo/page-18097/7302993> 23 March 2024
12 Michael Ostrove, Ben Sanderson and Andrea Lapunzina Veronelli, ‘Developments in African Arbitration’
(DLA Piper 2018) <https://globalarbitrationreview.com/review/the-middle-eastern-and-african-arbitration-
review/2018/article/developments-in-african-arbitration#endnote-001> accessed 24 march 2024
