On 9 May 2014, Burundi was the 151st country to sign the 1958 New York Convention on the recognition and enforcement of foreign arbitral awards.
By acceding to the Convention, Burundi followed the footsteps of other African countries, being the 32nd African country out of 54 to adopt the Convention, thus lining up with the global arbitration expansion.
Burundi only made one reservation to the Convention, commonly referred to as the “commerciality reservation”, pursuant to which the convention will only apply to disputes characterized as commercial under municipal law.
Africa is opening up to international arbitration standards
Arbitration is becoming an essential instrument to foster economic development in African countries, which now have in majority legislation statutes on domestic and international arbitration. However, significant differences remain between these countries in their approach to the resolution of international commercial disputes. Inequalities show that some arbitration regimes are outdated and therefore not adapted to keep up with modern practices. However, a movement of modernization is also perceptible in other African countries:
- In some jurisdictions, such as Namibia and South Africa, national court judges tend to issue arbitration-friendly judgments by interpreting legislations that are out of step.
- In some countries, such as, for example, Morocco (see our posts here and here), Mauritius and Rwanda, legislators have recently updated their existing legislation statutes on arbitration.
- Some jurisdictions are taking part in both regional and international organizations, including ICCA, OHADA, UNCITRAL, UNCTAD and the Permanent Court of Arbitration, promoting international arbitration.
- Several arbitration centers were created in Morocco, Tunis, Cairo, Mauritius, Cameroun, Harare, Benin, etc…
By signing the New York Convention Burundi expresses its determination to comply with international arbitration standards, sending a strong signal regarding the country’s commitment to promote international arbitration.
Promoting arbitration to improve business
Growth in economies of African countries and the increase of foreign investments and cross-border transactions highlight the need for predictable methods of dispute resolution and the need for African practitioners to take a more prominent role in international arbitration practice. Adolphe Birehanisenge of the Burundian Agency for the promotion of Investments recently told Global Arbitration Review that Burundi entry to the New-York Convention is “an important step for the improvement of the business climate.”
International commercial operators are usually reluctant to arbitrate in jurisdictions that are not party to the New York Convention. Foreign businesses often prefer to trade with entities in jurisdictions applying the Convention knowing that local courts will ensure the efficiency of arbitration agreements and enforce arbitral awards. Therefore, signing the Convention is a means for African countries to establish a climate of confidence for investors and to promote international arbitration.
The announcement is available here.