European Development Fund (« EDF ») Arbitration: An Unknown Set of Arbitration Rules

The EDF Arbitration Rules, which entered into force on 29 March 1990, apply to disputes arising out of or in connection with the execution of construction, supply and service contracts financed by the European Development Fund.  It thus covers disputes between the private operator executing the contract and authorities of States belonging to the African, Caribbean and Pacific States Group (ACP States) having signed the Lome IV Convention.

Although the EDF has permitted the realisation of numerous projects during the past twenty years, its Arbitration Rules are often unknown to practitioners and private operators concluding EDF contracts.

The EDF Arbitration Rules present some particularities due to the fact that one of the parties to the dispute, the Employer, is a State or a private or public entity acting on behalf of the State.

One condition to the initiation of an arbitration procedure stems out: internal administrative procedures of the ACP State for such disputes must be exhausted or deemed to be exhausted.  In practice, this requirement poses interpretation issues as to what the concept of « administrative procedures » is in each of the ACP States.  Moreover, the arbitrators must be nationals of one of the States signatories to the Lomé IV Convention (Article 6).  The law applicable to the substance of the dispute and the lex arbitri are in principle those of the State, except if the contract provides otherwise (Article 14).  Finally, the arbitral procedure is seated in the State in which the contract is awarded or performed, unless the arbitral tribunal decides, with the agreement of the parties and for good cause, to conduct the arbitration in some other place (Article 16).

However, these ad hoc arbitration rules present some similarities with traditional institutional arbitration rules, as regards the form of the request for arbitration, the exchange of written submissions, the examination of witnesses and experts, the arbitral tribunal’s power to order provisional or interim measures, etc… The kompetenz-kompetenz is also recognised since the arbitral tribunal has the power to decide on jurisdictional issues (Article 22.1).

The award rendered under the EDF Arbitration Rules is « final and binding on the parties », who must carry it out without delay (Article 33.1).  Finally, it should be noted that all ACP States recognise all awards rendered under the EDF Arbitration Rules and ensure that it is enforced in their territory, as if it were a final judgment of one of their own courts or tribunals, which is an assurance of the legal authority recognised to such awards.

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