Major Departures of the New Micro-Finance Business Proclamation


Unlike the mainstreaming financial institutions, microfinance institutions play an important role in providing access to finance for rural farmers, small businesses, and other people who are engaged in similar activities, and hence, it was necessitated to have a legal framework to govern this issue i.e., Proclamation No. 626/2009. However, for a variety of reasons the existing proclamation needs amendment and the lawmakers came up with a new proclamation, Proclamation No. 1164/2019 (‘the new proclamation’), which introduces some innovative concepts to the existing proclamation. Therefore, in this piece, I will display some of the fundamental issues which are introduced in the new amending Proclamation. 


The existing Proclamation defines ‘company’ as a share company in which capital is fully owned by Ethiopian nationals and hence, it clearly excludes foreign nationals of Ethiopian origin. As part of the policy shift however, the new Proclamation expands the meaning of ‘company’ as a share company as defined under the Commercial Code in which capital is fully owned by Ethiopian or Foreigners of Ethiopian origin (diaspora) or jointly owned by the Ethiopian and Foreigners of Ethiopian origin. Even though the company is registered in another country, as far as its capital is contributed by Ethiopian or Foreigners of Ethiopian origin, as stated under Proclamation No. 270/2002, the law still recognizes it as a ‘company’. Still and all, the new Proclamation excluded foreigners from the microfinance business. 


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Fly-by-Night: A Brief Overview of the Federal Courts Draft Proclamation



1. Introduction

This piece provides a bird’s eye view of the draft proclamation on the Federal Courts with particular focus on issue of Cassation.

Needless to mention, the Ethiopian legal system is used to be typical follow continental legal system as it mainly contains four substantive codes i.e., Civil Code, Criminal Code, Commercial Code and Maritime Code and two procedural codes i.e., Civil Procedure Code and Criminal Procedure Code.  This implies that decisions of courts will not have a binding and precedential value to settle future related cases.

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An Overview of the Draft Arbitration Proclamation - Part Two


In the first part I had discussed some issues under the draft proclamation. This includes arbitrability of administrative contract, competency-competency, separability doctrine, pauper proceeding, appeal and the standard to challenge the arbitrators. In this part, I will briefly discuss the role of the court in arbitration proceeding, the New York Convention and the nature and impartiality of the Center as envisaged under the draft proclamation.

1. The role of the court in arbitration proceeding:- In every jurisdiction there is a competing and conflicting interest of maintaining the balance between excessive judicial intervention and necessary intervention of the court in the arbitration proceeding. However, the contemporary trend is that the court as much as possible should minimize their intervention in Arbitration proceeding.

In principle arbitration proceeding takes place without court intervention unless the law specified otherwise. Although arbitration is an independent proceeding, the Tribunal might need the assistance of the court during the process. The first and foremost role of the court is to oversee the enforceability of arbitration award. Enforcement of an arbitration award is only possible through the involvement of court as the Tribunal has no such power. Second, unlike court proceeding whereby the judges are appointed by the parliament, the arbitrators are chosen by the parties in arbitration proceeding. However, if one of the parties failed to choose, the court may choose the arbitrators.

Third, arbitration clause or submission is a contractual transaction and binding only on the contracting parties. This implies that the Tribunal doesn’t have a cohesive power over third party. Therefore, the Tribunal might need the assistance of the court to bring third party into the proceeding. Fourth, interim measures of the Tribunal will not be directly enforced and hence court intervention or assistance is required. And finally, the aggrieved party might appeal to the court for seating aside of the judgment.

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An Overview of the Draft Arbitration Proclamation - Part one



When we come to commercial dispute which arise out of not respecting contractual obligations by one or more parties, settlement of dispute through court come in the for front. However, the existing Ethiopian court system is extremely sluggish, rigid and expensive. On the contrary arbitration is praised for its speedy proceeding, flexible process, confidentiality of the proceeding, finality of dispute which ultimately saves time and money. Although there are some critics against the heart of the system, arbitration stands out as one of the most popular means of dispute settlement mechanism.

One of the many definitions of arbitration is “non-state institution that resolves the disputes entrusted by the parties that found themselves in a dispute.”  The existing Ethiopian arbitration law is found in the Civil Code of Ethiopia, Article 3325 to Article 3346 of the Civil Code and partly in Civil Procedure Code, Article 315 to 319 and Article 350 to 357. However, recognizing the fact that arbitration is becoming part and parcel of the mainstreaming dispute resolving mechanism, the law maker come up with the draft arbitration rule. Structurally, the draft has 11 sections and 86 Articles. The main reason to came up with this draft is for the establishment of international arbitration center in Ethiopia which is financed by the government. In this brief, I will discuss, if I can, the main typical feature and some areas of concerns that popped-up during the discussion with various stakeholders.

  1. Continuity of uncertainty over arbitrability of administrative contract – it’s generally accepted principle that arbitrability or non- arbitrability of any matter is the concern of public policy. In emphasizing this point the competent authors in the field state that: “the concept of non-arbitrability is in effect public policy limitation upon the scope of arbitration as a method of settling disputes. Each state may decide, in accordance with its own public policy considerations as to which matters are incapable of being settled by arbitration under the law of the place of agreement or of arbitration.” (emphasis supplied) In the same token recognition and enforcement of an award since it may be refused if the subject-matter is not arbitrable under the law of the country where enforcement is sought.

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‘ጠባቂ የሌለው ጠበቃ’ ጥቂት ስለ ኢትዮጵያ የሕግ ባለሞያዎች ማህበር



  1. መነሻ ነጥብ[1]

የኢትዮጵያ የሕግ ባለሙያዎች ማህበር በ1958 ዓ.ም.በእድርና እቁብ አይነት ቅርጽ የተመሰረተ ድርጅት ነው፡፡ በሰዓቱ ከአርባ የማይበልጡ አባላት የነበሩት ሲሆን አባሎቹም በከተማይቱ አዲስ አበባ የጥብቅና አገልግሎት የሚሰጡ ነበሩ፡፡ ይህ ማህበር የተደራጀና የአባላቱን እንዲሁም የተከበረ ሙያ የሆነውን የጥብቅና ሙያ ለማስጠበቅና ለመጠበቅ ሳይሆን በማህበርተኞች መካከል ለሚፈጥሩ ማህበራዊና ሰዋዊ ችግሮች ለመረዳዳት ተብሎ የተመሰረተ ተቋም ነበር፡፡ ይህ ስብስብ በተመሰረተ በአመቱ ማለትም በ1959 ዓ.ም. በቀድሞው አጠራር የሀገር ግዛት ሚኒስቴር ተመዝግቧል፡፡ ከአብዮቱም በኋላ የኢትዮጵያ የጠበቆች ማህበር የሚለውን ስያሜ የያዘ ሲሆን በማህበሩ ውስጥ ጠበቆች፣ የሕግ መምህራን፣ ዳኞች፣ የሕግ ጉዳይ ፀሐፊዎች እና ሌሎችም አባል ሆነው ይሰሩ ነበር፡፡ ስሙን ቀይሮ የመጣው ማህበር የግብርና የዓላማ ለውጦችንም በማድረግ ደረጃውን የጠበቀ የጥብቅና ሙያ እንዲኖር ግንባር ቀደም ዓላማው አድርጎ ተነሳ፡፡ በወቅቱም ልክ አሁን እንዳለው ተመሳሳይ አሰራር የጥብቅና ፍቃድ በማሳየትና የአባልነት ክፍያ በመክፈል አባል መሆን ይቻል ነበር፡፡

ብዙ ያነጋገረው የበጎ አድራጎት ድርጅቶችና ማሕበራት አዋጅ ማለትም አዋጅ ቁጥር 621/2000 ከወጣ በኋላም ማህበሩ በድጋሚ ምዝገባ የማህበሩን ስያሜ ከኢትዮጵያ የጠበቆች ባለሙያዎች ማህበር ከሚለው ወደ የኢትዮጵያ የሕግ ባለሙያዎች ማህበር ለውጦ ተመዝግቧል፡፡ የስም ለውጡ በሁለት አበይት ምክንያቶች የመጣ ነው፡፡ አንደኛው በክልሎች ላይ የጠበቆች ማህበር የሚለው ስያሜ ስላለና ይህንን ተመሳሳይ ስም ሌላ ማህበር መጠቀም አይችልም በማለት ሲሆን ሁለተኛው ዐብይ ምክንያት ደግሞ ማህበሩ ላይ ተሳታፊ የነበሩ አባላት ጠበቆች ብቻ ስላልነበሩ የጠበቆች ሳይሆን የሕግ ባለሙያዎች ቢባል ሁሉንም አካታች ስለሚሆን መልካም ነው በሚል ነው፡፡ በአሁን ሰዓት ማህበሩ ከሰባት መቶ ያልበለጡ አባሎች ያሉት ሲሆን ወርሀዊ መዋጮውም ሀምሳ ብር ነው፡፡

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Book Review - Getting to Yes: Negotiation agreement without giving in

Getting to Yes: Negotiation agreement without giving in by Roger Fisher and William Ury page 200+xiii, price 11.00 $ ,publisher Penguin book publisher [1]

Either to earn or to learn if anyone is interested in negotiation a small but coherent book getting to yes should be a start-up book to read. As Newsweek perfectly stated it is a lucid brief for win-win negotiation which if it takes hold, may help convert the age of ‘Me to the Era of We’. [2] You can’t spell negotiation without this book.

Like it or not, we are a negotiator. Every day we negotiate knowingly or unknowingly. Negotiation is a basic means of getting what you want from others. Although negotiation takes place every day, it is not easy to do well.  This book is all about how to get yes without going in to war and giving in.

Getting to yes is not a sermon on the morality of right and wrong; it is a book on how to do well in a negotiation. In our daily life there are different types of people those shy, outgoing, verbal and logic-chopping, structured, less comprehensive, tactful, blunt and others. These all are what we witness and one may wonder how to negotiate with different people in principle but flexible manner. This book is all about creating a principled negotiation which brings victory for both sides.

There are three ways of negotiation and three types of negotiators. Soft negotiators who think that the other side is friend, the goal is agreement, soft on the people and the problem, trust other, disclose their bottom line and insist on agreement. On the other hand there are  hard negotiators who believes that the other side is adversarial, goal is victory, hard on both the people and problem, distrust others, make treat, mislead as to you bottom line. The third ways is a novel concept called principled negotiation.

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Hammering Labor Rights: Succinct Summary of the Draft Labor Proclamation



Labor is the most important activates of a human being crate both material productivity and social values. Now a day it is not a point of disagreement that the development of any given country is highly dependent upon high level of labor productivity, quality and efficiency. This being said, legally speaking labor right is one of the most fundamental human rights recognizing under various international instrument to which Ethiopia is a party. Furthermore, labor right is one of rights which patronizing to constitutional protection. The draft labor proclamation brought untold roaring from Ethiopia Workers Confederation Union (EWCU) and others stakeholders. This mini-article is meant to summarized and explore the draft labor proclamation.

Historical Background of Labor Right

Although the evolution of labor relations had witnessed considerable national varies even in Europe the general path of development display many similarities. As a general pattern of development, the landlord-tenant relationship and the guild society of the feudal mode of production gradually gave its way to capitalism.Under capitalism mode production the governing and overriding principle was freedom of contract.

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ጥቂት ስለአስቸኳይ ጊዜ አዋጅ የኢትዮጵያ መስፈርት ከአለምፍ ሕግ ጋር ሲቃኝ


ሀገሮች የዜጎቻቸውን የንብረት፣ የህይወት በአጠቃላይ የስብአዊና ዲሞክራሲያዊ መብቶቻቸውን ለማስጠበቅና ለማረጋገጥ የተለያየ ሕጎችን ያወጣሉ፡፡ እነዚህም ሕጎች ከሕገ-መንግስቱ (የየሃገሩ የበላይ ህግ) ጨምሮ አዋጆችን፣ ደንቦችንና መመሪያዎችን ያካትታል፡፡ በእነዚህ ሕጎች የተደነገጉት መብቶችን ማራመድ አንዳንድ ጊዜ የሌላውን ሰው መብትና ደህንነት አደጋ ላይ ሊጥል ይችላል፡፡ በእንደዚህ ሁኔታ ላይ ሲሆን ሕግ እነዚህ መብቶች ላይ ገደብ (limitation) ያስቀምጣል፡፡ ይህ የመብት ገደብ ዘለቄታና በቋሚነት የሚፀና ነው፡፡ ለምሳሌ ያህል በሕገ- መንግስታችን አንቀፅ 29 ሀሳብን በነፃነት የመግለፅ መብት ተደንግጓል ፡፡ ነገር ግን በተመሳሳይ አንቀፅ ሃሳብን በነፃነት የመግለፅ መብት ወጣት ዜጎችን እና የሌሎች ሰዎች መብትና ክብር ለመጠበቅ ሲባል በህግ ሊገደብ እንደሚችል ተደንግጓል፡፡ ይህ የመብት ገደብ ሲሆን ተፈፃሚነቱም በዘለቄታዊነት ነው፡፡ ከዚህም በተጨማሪ የመብት ገደብ ነገሮች ተፈጥሮዊና በተለመደው ሥርዓት ላይ እያሉ የሚተገበር ነው፡፡

በአንፃሩ አንድ ሀገር የአስቸኳይ ጊዜ አዋጅ (state of emergence) የምታውጀው አንድን ክሰተት ባለው ነባርዊና በተለምዶ በተዘረጋው ሥርዓት መቆጣጣር ሳይቻል ሲቀር እንዲሁም የሀገሪቱን ህልውና የሚፈታተን አደጋ ሲያጋጥም ነው፡፡ እንደዚህ ዓይነት ሁኔታ ሲያጋጥም በሕግ የተደነገጉ መብቶችን ሁሉ ተግባራዊ ላድርግ ማለት አዳጋች አንዳንዴም የማይቻል ሊሆን ይችላል ነው፡፡ በዚህም የተነሳ ሰፊው የስብአዊና ዲሞክራሲያዊ መብቶች ሊገደቡ ይችላሉ፡፡ ይህ የመብት ገደብ ከላይ ከጠቀስነው የመብት ገደብ የሚለየው ነገር ቢኖር በአስቸኳይ ጊዜ አዋጅ ወቅት የመብት ገደብ ዘላቄታዊ ሳይሆን ጊዜያዊ ነው፡፡

የተለያዩ ዓለም አቀፍና አህጉራዊ ስምምነቶች የአስቸኳይ ጊዜ አዋጅ የመደንገግ እና በዚህም የተነሳ መብቶች ሊገደብ እንደሚችሉ እውቅና ይሰጣሉ፡፡ እነዚህም ዓለም አቀፍ ስምምነቶች  ይህንን አስቸኳይ ጊዜ አዋጅ የመደንገግ መብት ሲሰጡ በተመሳሳይ መልኩ ምን ምን የሥነ-ሥርዓት (procedural requirements) እና የይዘት (substantive requirements) መስፍርቶችን መሟላት እንዳለባቸው ደንግገዋል፡፡

  1. የይዘት መስፈርቶች

ሀ. የአስቸኳይ ጊዜ አዋጅ  እጅግ አስፈላጊ መሆን አለበት (necessity test)

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Case Summary and Issue for Reflections - Formality requirement in Insurance Contract


{tip title="The Case" content="In this case the applicant was the Ethiopia insurance company and respondant was Benshangul Gumuz Burea. Panel judges of federal supreme cassation court were Ato Abdulkadir Mohammed, w/ro Hirut Melese, Ato. Tafesse Yirega, Ato. Medhineh Kiros and Ato. Sultan Abate."}The Case{/tip}

The case involves the failure to comply with the formality requirements more specifically the failure of witnesses and parties to the contract to put signature on insurance policy as ground for non-existence of contract of insurance.  Asosa Zonal court upheld that there is no contract of insurance because signature is missed. The Higher Court confirms the decision of the Zonal court. Then Ethiopia Insurance Company appeal against this judgment by alleging that there is fundamental and basic error of law.

Material facts

  1. The respondent expresses its desire to insure its ten vehicles by written letter contain the signature of manager and seal of the authority.
  2. After receiving a written letter from the authority, the insurer i.e. Ethiopia Insurance Company issues policy and sign on it.
  3. The insured i.e. Benshangule Gumuz Bureau was not signed on the insurance policy.
  4. The contract was not attested by witnesses.
  5. The insured is not willing to pay the premium which is 55, 068.56 Birr.


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Note on Invalidation of Suspect Transaction under Ethiopian Bankruptcy Law


  1. The Meaning of Suspect Transactions

Bankruptcy law works with the assumption that debtor asset is insufficient to meet the demands of creditors. In principle, a solvent debtor has every right to effect payments to any of his creditors since in this case there is no race to court room problem. Thus, to understand suspect transactions, it is necessary to define what insolvency means and when do we say the person is insolvent?  

Simply, insolvency is inability to pay the debt when they become due and payable.  There are two primary tests which have been employed in determining whether a person or a company is insolvent. These are cash flow test and balance sheet test. 

The cash flow test provides that a company is insolvent when it is unable to pay its debts as they fall due. The important point is whether or not the company pays its debt in carrying on the business. If a company fails the test it means in effect, that it has insufficient resources available to pay creditors.  On the other hand, balance sheet test states that if its total liabilities (including the cost of liquidation) out weight the value of its assets and therefore the company’s assets are insufficient to discharge its debt.  UNCITRAL guideline to insolvency law define balance sheet test based on excess of liability over assets as an indication of financial distress.  Thus, a payment or transfer of debtor asset with in suspect period will have detrimental effect to the other creditors and hence it is suspect transaction. It is reasonable to raise the question, what means by suspect transaction?

Suspect transaction is simply transactions which result in a creditor obtaining an advantage or irregular payment.  Thus, it is a transaction which benefits one or more creditors at the expense of other creditors. This creates a race of the most diligent which in turn dependent up on access to information. Furthermore, such type of transactions encourages favoritism by the debtor to some selected creditors by anticipating future relationship.

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