CDR | 6 September 2016
Angola to join the New York Convention
by Andrew Mizner
Enforcement of international arbitral awards will be possible in Angola following the government’s decision to ratify the New York Convention, as it seeks to attract international investment beyond the oil sector
Angola will become the 157th country to be a party to the New York Convention following the government’s endorsement of its ratification on 12 August. The ratification will go through 90 days after notification of the United Nations.
As Africa’s second-largest oil producer, Angola’s economy has been hit by the decline in oil prices over the past two years, making reform that opens it up to outside investment all the more urgent.
Angola is not a member of the International Centre for Settlement of Investment Disputes (ICSID), the World Bank’s dispute resolution body, nor of Organisation pour l’Harmonisation en Afrique du Droit des Affaires (OHADA), the West and Central African organisation, limiting its access to international arbitration mechanisms.
Joining the New York Convention, which allows for recognition and enforcement of overseas arbitral awards, will make Angola part of the international arbitration mainstream and ease international investors’ concerns about bringing business to the country.
“It will definitely make the country more appealing,” says Richard Trinick, an international arbitration associate with Hogan Lovells in London. “It is not something that on its own is going to change things drastically, but for most investors it is something that they expect as a minimum starting point before consider investing in a lot of the places.”
The change is especially pressing as the country’s civil justice system is seen as slow and out of date, with many domestic disputes settled through independent negotiation and the legal system is closed to foreign law firms. The 2003 Voluntary Arbitration Law, based on the UNCITRAL model, has brought the possibility of domestic arbitration, but it excludes disputes in certain industries, including insolvency, land, employment and some non-commercial disputes.
Local courts have been supportive of arbitration and are able and willing to issue interim proceedings and enforce awards, and the Supreme Court has a good record of complying with foreign awards, but the introduction of the convention makes that arrangement much more secure.
Trinick says: “It makes all the difference in the world. As soon as a country is party to the New York Convention, it means that it can be a party to the global arbitration network, it allows countries to rely on the well-established arbitration principles that work everywhere else in the world and it makes it a much more attractive place to bring enforcement proceedings and other substantive proceedings.”
Because it has been outside of the New York Convention, there has not been much international arbitration relating to Angola. However, the country’s oil industry means that there should be a ready-made disputes market to kick in as soon as the ratification takes effect, says Trinick:
“There is already a market out there because it is a country that is very oil-rich and has attracted a lot of investment from oil companies, notwithstanding it not being party to the New York Convention.”
“Those kinds of companies will be quite quick to take advantage of the fact that arbitration awards will be able to be enforced much more easily in Angola,” he adds. “If, as is hoped, it becomes a bit more of a magnet for foreign investment then there will inevitably be more disputes arising out of it.”