5 - Existing Dispute Settlement Forums

Summary

Each type of law previously discussed in Chapter 2 encapsulates a specific type of dispute settlement forum that is to be used in the event that parties to an agreement breach, or are otherwise unable to abide by, their contractual obligations under investment agreements. The AfCFTA, on the other hand, is notably missing a final provision on dispute settlement. As will be further detailed in the following chapters of this book, the Agreement does include a Protocol on the Rules and Procedures on the Settlement of Disputes (the “Protocol”), which closely reflects the current dispute settlement provisions of the WTO.

This Protocol provides for the establishment of a Dispute Settlement Body (DSB) that will have the power to establish Dispute Settlement Panels and an Appellate Body. At the same time, the Protocol provides that the parties may, by mutual agreement, refer disputes to arbitration, bypassing the DSB. However, the Protocol does not specify the details of either the DSB or the arbitration option, including where, and under what rules, disputes will be settled using either of these mechanisms. The African Union has made clear that the Protocol is to be further developed by Member States, now that the Agreement has been enacted. This leaves several questions open, but also presents an opportunity for Africa to shape its own future in investment arbitration. To do so, however, the continent must move swift ly to consider what possibilities exist for dispute settlement under the AfCFTA.

Before delving into what AfCFTA should consider, it is important to look at the forums currently used under existing investment law. These will be discussed in this chapter, and the mechanisms used for dispute settlement will be discussed in the next chapter. Generally speaking, the options for dispute settlement forums include domestic courts, regional arbitration centres and international arbitration centres. This chapter will look closely at the positives and negatives of each of these forums, from the perspective of both African nations and foreign investors.

1. DOMESTIC COURTS

When there is no specific law on the books dictating otherwise, local disputes are resolved in local courts. Everyday business in a country, by locals or foreigners, is governed by local law. Every country on the continent then has local domestic courts that will resolve business-related disputes in the same way that they will resolve disputes between citizens.