LIDW24: London retains deep connection to African disputes

The campaign to bring Africa-related disputes back to the continent is growing louder, but London is likely to remain a major centre for both African arbitration and litigation in the long term.

London’s courts and arbitral institutions have long benefited from African business. While there has been more discussion of developing African institutions, increasing representation among arbitrators or using African governing laws, that popularity shows no signs of waning.

African law firms were a visible presence during the recent (3-7 June) London International Disputes Week (LIDW), investigating this relationship and considering its future.

READING THE NUMBERS

Speaking at an event hosted by Mishcon de Reya, Ashleigh Brocchieri, special counsel to the ICC International Court of Arbitration, revealed that while the UK alone accounts for 15% of all ICC arbitrator appointments, the entire African continent provides just 5%. Just eight African seats were chosen in 2023, and only 142 over the past decade, compared to London which has been chosen as an ICC seat 808 times in the same period.

The London Court of International Arbitration (LCIA) has grown its proportion of African work, which now accounts for around 10% of its parties and 5% of total arbitrator appointments, according to its recently published annual report.

At an event hosted by RPC, Toyosi Odunmbaku of Jackson, Etti & Edu in Nigeria, reported that the main African arbitration centres average 20-80 arbitrations a year, while the major international centres such as the LCIA or ICC average 48 a year from Africa alone.

CENTRES OF EXCELLENCE

There is some hope. Brocchieri highlighted that the ICC’s 1990 statistical report listed Singapore among a list of new seats. Today, it is one of the world’s leading arbitration venues.

Leading African centres such as the Kigali International Arbitration Centre (KIAC) have many cases which are truly international all-African affairs with no local parties, pointed out Mishcon’s Greg Falkof, and while Leilah Bruton of Three Crowns, speaking at an event hosted by the arbitration boutique, said that African institutions need time to build their track record, Oluseye Opasanya of Olaniwun Ajayi was insistent that African arbitration should be seen as international, not regional.

There have been success stories, such as the Cairo Regional Centre for International Commercial Arbitration (CRCICA) and the Arbitration Foundation of Southern Africa (AFSA) whose reputation has grown thanks to South Africa’s 2017 International Arbitration Act and the recent alliance with the Southern African Development Community (SADC), but it is difficult for centres to build their profile.

ARBITRATOR APPOINTMENTS

Increasing the appointment of African arbitrators will help. Lise Bosman of the International Council for Commercial Arbitration (ICCA) and Permanent Court of Arbitration (PCA) said governments have started to be more proactive about making appointments to the arbitrator list at the International Centre for the Settlement of Investment Disputes (ICSID). Nonetheless, it is “disappointing how little progress has been made in the last decade” she said.

Bruton added that there is an “ever-deepening pool of experienced international disputes lawyers both in Africa and also elsewhere. They are taking up roles as counsel, as experts, as arbitrators, and as that continues that will also likely change the status quo”.

CHOICE OF LAW

As one commentator at the Three Crowns event pointed out, governments can play a role by insisting on an African governing law, but for now there is still nervousness about contracting under African law, especially from the transactional lawyers who draft the contracts.

Opasanya noted an increasing reluctance from the Nigerian government to use English law in some financing contracts, but Bruton added that some form contracts automatically identify European jurisdictions, so the onus is on parties and their counsel to change that.

Odunmbaku, speaking at RPC, noted that more governments are now insisting on African arbitral seats, but there is a long way to go.

IMAGE PROBLEMS

As Kamal Shah of Stephenson Harwood pointed out at the Mishcon event, African clients still want to come to London and value the speed and quality of its institutions. Speaking to ALB later, one African arbitration partner was blunt in their assessment that lawyers and clients talk a lot about building up African arbitration, but need to challenge their own preference for foreign hearings.

Delay and corruption are other criticisms often thrown at African jurisdictions, and Amaechi Nsofor of Grant Thornton said some parties use the slowness of African courts as a deliberate stalling tactic, adding that some other jurisdictions, such as offshore countries, can also be slow and yet do not receive the criticism which African countries do.

Likewise, said Shah, some use the perception of corruption as a negotiating tactic. Although some local courts can be corrupt, “the higher up you go it is less and less to the point where it is not an issue”.

TRANSACTIONAL RISKS

One event hosted by Herbert Smith Freehills (HSF) considered potential for disputes via joint ventures between African and foreign parties, with Aisha Abdallah of ALN Kenya identifying a lack of proper due diligence on joint venture partners as a significant risk that often does not come to light until it is too late.

Aakash Brahmachari and Busani Moyo-Majwabu of Control Risks, and Jonathan Ripley-Evans of HSF emphasised the importance of finding the right corporate structure to meet the aims of the project and warned about cultural misunderstandings between African and foreign parties or lawyers.

Despite discussion of moving African arbitrations back to the continent, it was clear from the LIDW speakers that the ties between London and Africa remain strong when it comes to legal matters.

Bruton added that as long as London remains a preferred seat for African parties and investments, then its courts and lawyers will play a role in those disputes.

Nsofor and Shah emphasised that the Commonwealth still has meaning, despite the institution’s colonial legacy, and Falkof stated that English law remains prominent, simply by being the status quo.