Arbitration and Conciliation, Working Procedure Proclamation No. 1237-2021 defines and addresses international arbitration within its scope of application.
Definition of International Arbitration
An arbitration is considered an International Arbitration if it falls under one of several specific conditions. Firstly, it is international if the principal business place of the contracting parties is in two different countries at the time the agreement is concluded. Secondly, it is deemed international if the legal place of the arbitration chosen according to the arbitration agreement is in a foreign country, or if the place of the principal business where a substantial part of the obligations of the commercial or contractual relationship is to be performed is in a foreign country.
Additionally, it qualifies as international if the place of business with which the subject-matter of the dispute arose and is most closely connected is located in a foreign country. Lastly, an arbitration is international if the parties have expressly agreed that the subject-matter of the arbitration agreement relates to more than one country. For the purpose of implementing this definition, if a party has more than one place of business, the relevant place of business will be the one closest to the arbitration agreement. If there is no place of business, the principal residence of the contracting parties will be considered.
Applicability of the Proclamation to International Arbitration
The Proclamation outlines its application to international arbitration as follows. Generally, this Proclamation shall apply to international arbitration whose seat is in Ethiopia, without prejudice to international treaties acceded to and ratified by Ethiopia. Notwithstanding this general provision, specific Articles (8, 9, 25, 26, 27, 51, 52, and 53) of this Proclamation shall apply to International arbitration situated outside of Ethiopia, meaning certain provisions regarding arbitration agreements, interim measures, recognition, and enforcement are relevant even if the arbitration is conducted abroad.
Applicable Laws in International Arbitration Cases
In international arbitration cases, the arbitral tribunal has specific obligations regarding the applicable laws. The tribunal shall have the obligation to apply the substantive law chosen by the contracting parties. Unless explicitly agreed otherwise, any choice of law made by the parties is presumed to refer to the substantive law of that country, not its conflict of laws rules. If no substantive law has been chosen, the tribunal may select a substantive law that is closest and most relevant to the subject matter of the dispute.
However, if the subject matter of the dispute does not have an element of international arbitration, Ethiopian law shall apply. An arbitral award can only be granted based on equity or known commercial practices if express power is given to the tribunal by the contracting parties or if the applicable law authorizes such application.
Arbitrator Appointment in International Arbitration
When an international arbitration is conducted by a sole arbitrator, the court (First Instance Court) or the tribunal must consider that the citizenship of the arbitrator is different from either party.