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

This piece provides a bird’s eye view of the draft proclamation on the Federal Courts with a particular focus on the issue of Cassation. Needless to say, the Ethiopian legal system typically follows a 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 the decisions of courts will not have a binding and precedential value to settle future related cases.

However, with the advent of system of Cassation in Ethiopia legal system, which empowered to decision which have a binding effects on the lower courts at any level, Cassation over Cassation, yardsticks for the measurement of basic and fundamental error of law and competence of Cassation to review final decision of arbitral tribunal becomes the most controversial issues in Ethiopia jurisprudence. There is a draft proclamation that aims to amend both Federal Court Proclamation No. 25/96 and Proclamation No. 454/2005.   

2. Spotting the controversies and an overview of the proposed solution by the draft Proclamation

a. Cassation over Cassation

The Federal Democratic Republic of Ethiopia Constitution under Article 80 state that:

  1. The Federal Supreme Court shall have the highest and final judicial power over Federal matters.
  2. State Supreme Courts shall have the highest and final judicial power over State matters.
  3. Notwithstanding the Provision of sub-Articles 1 and 2 of this Article;

a. The Federal Supreme Court has a power of cassation over any final court decision containing a basic error of law. Particular shall be determined by the law.

b. The State Supreme Court has power of cassation over any final court decision on State matters which contains a basic error of law. Particular shall be determined by law.

Federal Court Proclamation No. 25/96 under Article 10 made it abundantly clear that “in case where they contain fundamental error of law, the Federal Supreme Court, shall have the power of cassation over: final decisions of the Regional division of the Federal Supreme Court and final decisions of the Regional Supreme Court rendered as a regular division or in its appellate jurisdiction.” Moreover, Article 2(1) of Proclamation No. 454/2005 state that “interpretation of a law by the Federal Supreme Court rendered by the Cassation Division with not less than five judges shall be binding on Federal as well as regional council at all level.”(Underline supplied). This sweeping provision poses the most controversial constitutional issue: Cassation over Cassation. There is intense academic debate on the constitutionality of Cassation over Cassation.

The main argument seems emerged from the very nature of federalism. Since the federal system of government envisaged under the constitution, allow state courts to provide a final decision for state matter and federal courts for federal matter, it will be unconstitutional for the Federal Supreme Court Cassation Bench to review final decision of Regional Supreme Courts. This is the case for instance, in USA where the state supreme court passed the final decision regarding state’s matter as a last resort for appeals in civil and criminal matters. If the matter doesn’t involve any federal laws then the state Supreme Court will have the power and the mandate to render “final and determinative rule in the case.” Thus, the practice of Cassation to review decision of the state Supreme Court even if a case does not involve federal matter is not within the spirit and grain of federalism.

The draft Proclamation takes a drastic shift in this regard by abolishing Cassation over Cassation by way of curbing the power of Federal Cassation to review only decisions of Regional Cassation decisions only in restricted instances. As per Article 10 of the draft Proclamation, the Federal Supreme Court Cassation Division will have the mandate and competence to review decision of Regional Supreme Court Cassation Division if and only if the decisions of Regional Supreme Court Cassation “violate the Constitution” and misinterpreting a legal provisions or by applying an irrelevant law to the case and when these cases involve “high public interest and national importance.”  This provision of the draft proclamation failed to recognize the nature of constitution.

The Constitution as a grand norm of the country contains some of the most fundamental rules and principles and hence, it’s drafted in a broader manner. Since the Constitution stand as a supreme normative act within the legal order of a state, it’s usually drafted in a more general manner.  Moreover, the Constitution under Article 9(4) state those treaties that are ratified by Ethiopia are part and parcel of the law of the land. Thus, if we read the above-cited provision, i.e., Article 10 of the draft Proclamation, in line with the broader nature of the Constitution, one can possibility conclude that every decision of the Regional Supreme Court Cassation will in one way, or another affect or violate Constitutional provisions. This will open the door to bring decision of Regional Supreme Court Cassation decision to Federal Supreme Court Cassation Division by alleging, the Regional Supreme Court decision violate or affect their constitutional right(s).  

The other very vague and ambiguous wording in the above-cited provision of the draft proclmation is “if the decision contrary to the law and has high public interest and national importance.”  The scope and content of public interest and national importance is unknown. What is the meaning of “high public interest and national importance”? What is the difference between high public interest and average or normal public interest? Who is entitled to determine the existence and non-existence of high public interest in any given case? Does high public interest static or fluctuate from time to time? The proclamation failed to say any thing, even provide a clue, for these and similar questions. Moreover, as somewhere indicated the issue of public interest is “very vague, nebulous, intractable and lacks meaningful and consistent contents that can guide its definition and applicability.” Like that of public policy, criteria of public interest are “a very unruly horse, and when you get astride, you never known where it will carry you.”

This implies that the court has unconstrained discretion to determine what is public interest in each context by taking into account the benefits in terms of enhance of happiness in one hand and cost on the other hand. This in turns create unceratinity in the legal system.  

b. Grounds that constitute basic error of law

True, as per Article 80(3) of the Constitution, Federal Supreme Court Cassation Division entertains only “basic and fundamental error of law”. From the close reading of the above-cited provision, one can infer two points: an error of fact and a minor error of law by the lower courts are not eligible for review by the grand court. However, there is no clear yardstick as to what constitute an issue of fact and issue of law. Even worse, there is no criteria to distinguish basic error of law and minor error of law.

The draft proclamation with the view to shed light on what constitute a basic error of law provided an illustrative list of grounds which considers as basic and fundamental error of law.  The draft proclamation under Article 2(4) define basic or fundamental error of law as error of law that includes final judgment, ruling, order or decree which may filled in Federal Supreme Court Cassation division pursuant to Article 10 of this Proclamation and/ or contains either one or similar of the following basic errors and grossly distresses justice.

As per the above-cited article of the draft proclamation, grossly distresses justice includes but not limited to violation of the constitution, misinterpreting a legal provision or by applying an irrelevant law to the case, by framing the appropriate issue or by framing an issue irrelevant to the litigation, denying an award judgment to a justiciable matter, giving an order in execution proceedings unwarranted by the main decision, the absence of jurisdiction over the subject matter dispute, an administrative act or decision rendered in a contradiction with the law and finally, any decision in contravene with the decision of cassation  is considered as basic and fundamental error of law.

These illustrative grounds of what constitute fundamental error of law as per the draft proclamation will make uncertainty and is like walking in the dark for the case to be presented for Federal Supreme Court Cassation Division. Take for instance, basic error of law that arise “if the court denying to an award judgment to justiciable matters.”   This article is drafted with the assumptions that defining justiciable matter is easy and there is clear difference between what constitute justiciable and non-justiciable matter.

However, the term justiciable is not unambiguous and most of the controversies surrounding the matter the issue is arise out of the ambiguous of the word justiciable itself. By the very nature, the concept is uncertain has uncertain meaning and scope. As results of rights by very nature are indivisible, interdependent and inter-related, it’s very difficult to put a clear-cutting line between justiciable and non-justiciable rights. This is especially true for cross-cutting rights like that of right to equity, due process of laws and judicial protection. On top of this, there is a consensus amongst contemporary scholars that the distinction between justiciable and non-justiciable rights is more of historical and descriptive than inherent and normative.

The other condition is that fundamental error of law arises “if the court renders decision without having a proper jurisdiction over a subject matter.” This assumes that issue of jurisdiction is such simple to understand and determine. However, jurisdiction is such controversial and complex matter. In cementing this, the most authoritative scholar in this area state that “jurisdictions are hard to decide, and parties often make mistakes about them, courts themselves sometimes go wrong about their jurisdiction.”

Moreover, the draft proclamation failed to differentiate between material jurisdiction and local jurisdiction. As per the Ethiopian Civil Procedure Code, failure to raise local jurisdiction and material jurisdiction by the defendant has completely different implications. Despite the fact that the court lacks local jurisdiction, it doesn’t prevent it from rendering a valid and enforceable judgement. It’s only lack of material jurisdiction that will make the court from passing a valid and enforceable claim. The draft proclamation failed to appreciate this difference and the complexity of jurisdictional issue. All in all, the yardstick provided in the draft proclamation as showcase for basic or fundamental error of law will pose many difficulties and uncertainties.

c. Competence of Cassation to review decisions of Arbitral Tribunals

There is an ongoing and intense academic debate as to the competence of Cassation to review final decision of arbitral tribunal. The main argument is originated from the very wording of Article 80(3) of the Constitution “the Federal Supreme Court has a power of cassation over any final court decision containing a basic error of law.”(Underline supplied) Needless to mention, decision of Tribunal is not court decision and hence, Cassation shall not have the competence to review decisions of arbitral tribunals.

Arbitration proceeding represent a deliberate decision of the parties to exclude court proceeding for one or other reason. Since arbitration is primarily the result of consent of the parties, it’s possible to waive the right to appeal to court by agreement. From comparative analysis the most common methods of challenging decision of arbitrators are two: setting- aside or appeal.  However, the draft proclamation provides an answer for this issue by empowering Cassation to review any final decision which includes judgement, ruling, order or decree that finality disposes the case and/or decision, ruling, order or judgment that has completed the possible appeal mechanisms and rendered by courts, organ vested with judicial power, by institutions or an alternative dispute resolution mechanism. This is the reinforcement of Cassation decision in a case between National Mineral Corp. Pvt. Ltd. Co. v. Danni Drilling Pvt. Ltd. Co. The grand court in this case held that the mere existence of agreement not to appeal to Cassation will not prevent the bench from entertaining the case if the decision of the Tribunal has basic and fundamental error of law.

This provision will pose substantial trouble for cases emanated from international arbitration. Recently Ethiopia has ratified the New York Convention. One of the typical features of the Convention is that the right of award-winning party (award-creditor) to enforce the judgment without much difficulties. The enforcing country court can only refuse to enforce the arbitral award only by invoking those grounds listed under Article 5 of the Convention. It’s in nowhere indicated that the judgement enforcing country will have the power and mandate to review the final international arbitration award by way of Cassation. However, the previous experience demonstrates that Federal Supreme Cassation Division review final decision of international arbitral awards. For instance, in case of Consta Joint Venture v. Ethio-Djibuti Railways Company whereby an Ethiopia party who lost in an arbitration proceeding, managed to nullify the award before the court of Cassation by arguing that the applicable law is Ethiopian law and an error of law is allegedly committed by the Arbitration tribunal.  Thus, as it stands, the draft proclamation will contradict the New York Convention on recognition and enforcement of foreign arbitral awards.

3. Concluding Remarks

Despite the fact the draft federal court proclamation aimed at to ensure effective, efficient and predictable judicial system, the very content and the way it’s drafted makes it impossible to achieve these objectives. As it stands, the draft proclamation is more of a confusing and mystifying than clarifying the existing ambiguity surrounding the issue of Cassation in Ethiopia and the writer of this piece demand revisit of the draft proclamation to provide clearer criteria and yardsticks.

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Saturday, 15 June 2024