Ethiopia deposited an instrument of accession to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards/New York Convention (NYC) on Thursday, August 27.
On 13 February 2020 after Ethiopia’s parliament approved accession to the 1958 New York Convention, Ethiopia became the 163rd state signatory and the 39th African state to accede following the recent accessions of the Seychelles, Cabo Verde and Sudan.
The Council of Ministers supported the move to join the Convention in December 2019 and the House of People’s Representatives approved the accession on 13 February 2020.
The Convention will come into force on the 90th day following the deposit of its instrument of ratification or accession.
“In Ethiopia, it has always been a challenge for investors to determine the seat of the arbitration. Choosing whether or not to designate Ethiopia as the seat of arbitration always came with an opportunity cost. Now that Ethiopia has formally ratified the New York Convention on the Recognition and Enforcement of Foreign Arbitral Award (“NYC”), investors are ideally no longer tasked with concerns of enforcement in Ethiopia of foreign arbitral awards,” a lawyer told Capital.
“The ratification of the NYC comes at a time where the country is undertaking major economic and legal reforms including the privatization and liberalizations of mega sectors and enterprises such as the telecom and many others. As a major part of the reform process, Ethiopia has just recently enacted a new investment law whereby sectors that were formerly closed are now open for foreign investment,” the lawyer further added.
Ethiopia will apply the Convention on the basis of reciprocity to the recognition and enforcement of awards made only in the territory of another contracting State, and only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under the laws of Ethiopia.