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Addis Ababa Chamber Commerce and Sectorial Association Arbitration Center
The Addis Ababa Chamber of Commerce and Sectorial Associations, established in 1947, provide technical and advocacy services to help business people start, run, and grow their businesses. Today the AACCSA is the only organization that provides a wide range of non-financial assistance to business in the country. The AACCSA also plays a major role in voicing the business concerns to the government. With over 7,000 registered members, the AACCSA is the largest and oldest chamber of commerce in Ethiopia. It is the only representative body that speaks with authority on behalf of the business community. The AACCSA is an autonomous non-governmental, non-political and non-profit organization that acts on behalf of its members. Since, its establishment it has served its members in promoting socio-economic development and commercial relations with the rest of the world. Its major objective is to promote the establishment of conditions in which business in general and in Addis Ababa in particular can prosper. The AACCSA is today one of the most dynamic civil society organizations representing business in Ethiopia and is active in matters of importance extending beyond its regional geographic base.
B. Mission Statement
The Addis Ababa Chamber of Commerce is set to create an environment in which business in Addis Ababa can develop and grow at a much faster pace. In doing so, the Chamber will encourage the Addis Ababa business community to direct its resources on the critical issues facing our city. In the coming years the Addis Ababa Chamber of Commerce will forge a partnership between the private and public sectors:
- to strengthen Addis Ababa’s economy across the six zones,
- to promote a more flexible and hospitable condition for small and medium businesses,
- to promote business ventures that contribute to a large employment base.
- to improve the overall physical condition of the city.
This will be achieved not only by building a team of highly trained and dedicated staff but more importantly by forging a consensus among all stake holders on how best to promote faster and widely shared economic growth.
The AACC strives to strengthen the relationship and co-operation of itself and its members with counterpart organizations and partners in the sectors of International Trade, and Investment. Strengthening friendly cooperative relations by promoting the exchange of business delegates from time to time, and the exchange of publications and other information related to trade, technology and the economy in general, is mutually advantageous in promoting investment and trade relations in various fields. Thus, the Chamber serves as a link between its members and foreign companies by hosting trade missions and providing forums for the exchange of opinions. It also organizes trade missions to different countries and facilitates the establishment of business contacts. The Chamber receives visitors from various countries and organizes business trips for its members abroad.
C. Arbitration Rule of the Chamber
The rule has got articles which are put in to different categories. The first chapter is about the preliminary points, the second about the initiation of the proceeding, the third about the composition of the tribunal, the fourth about the arbitral proceeding, the fifth exclusively about the nature of the award, the sixth about the cost of arbitration and two more schedules dealing with the cost of the proceeding and the declaration of independence to be signed by arbitrators. As we did for the EACC rules, let's see this rule in light of the prevailing principles of the concept.
Short Summary on Rules of Arbitration of AACC
I. Institution of proceeding - Any disputes to be settled by AACC should fulfill certain pre-conditions required by the institute. The arbitral proceeding shall start by written application of the parties to the institute which may be in the form of an arbitration clause in a contract or a separate agreement stating disputes which have arisen or which may arise in the future (Art 3). The claimant, up on depositing a down (installation) payment specified in annex1 of the chamber, shall made application for arbitration. Such application must contain the name and address of the claimant, respondent, arbitrator (if more than is to be appointed) and advocate, if any, and all documentary evidences on which the claim is based on (Art 4(1) (i) and (ii)). The secretariat of the institute examines the technical sufficiency of the claim and if it finds not sufficient, it shall reject to be completed the formality. But if the secretariat finds sufficient, then it shall send a notice of arbitration with the copy of the claimant’s application. It shall send also a copy of arbitration rules, list of arbitrators and arbitration fee schedule simultaneously to both parties (Art 4(2)).
The respondent shall, within 45 days (subject to extension by the institute if there are justifiable reasons) from the date of receipt of the notice, submit his documentary evidences and written defence appoint his arbitrator to the secretariat. However if the respondent has counter claim, by paying the down payment specified in the annex, he shall submit with his statement of defence the facts and reason, and documentary evidences on which the claim is based to the secretariat (Art 5).
The arbitral tribunal may allow the parties to amend their respective claims if it is not too late to raise the request, and such amendment does not affect the proceeding. If the respondent fails to file his defence, then the proceeding shall be conducted by ex-parte hearing. The same rule shall also be applicable when the claimant fails to file a reply against the respondent’s counter claims (Art 5).
ii. Appointment of arbitrations - the parties under the arbitration rues of AACC shall freely determine the number of arbitrators, if not agreed, the tribunal shall decide to be three arbitrators (two of them appointed by each and one jointly). But where the case is not complex, the institute may appoint a sole arbitrator. The arbitrators, to keep the confidentiality and interest to the parties, are expected to be absolutely impractical and independent. There are also other obligations imposed on the arbitration such as entering in to oath and signing on the following "arbitration declaration of independence" and performing in utmost good faith and disclosing any facts or circum stances connected with the case which may put into question his independence in the eyes of the parties (Art 9).
Here it is
I, The Arbitrator whose name is hereunder mentioned, hereby declare and confirm that:
"To the best of my knowledge, there is no reason why I should not serve the Arbitral Tribunal Constituted by the Arbitration Institute of the Addis Ababa Chamber of Commerce with respect to a dispute between -------------------- and -----------------."
."I shall keep confidential all information coming to my knowledge as a result of my participation in this proceeding, as well as the contents of any award made by the Tribunal."
"I shall judge fairly as between the parties, according to the applicable law, and shall not accept any instruction or compensation with regard to the proceeding from any source except as provided in the International Conventions and in the Regulations and Rules made pursuant thereto."
"A statement of my past and present professional, business and other relationships (if any) with any one of the parties is attached hereto."
Name of Arbitrator: -----------------------------
Date of Declaration: ----------------------------
Up on reasonable grounds, the parties have a right to challenge appointment of any arbitrator within 15 day from date of appointment. Generally an arbitrator may be replaced only on the following grounds; when an arbitrator dies (Art 12(1)); when he removed due to failure to perform de jure and de facto his duties (11(10)); and when both parties agree to replace him or the challenge got acceptance by the tribunal (12(3)). However, taking into consideration the comment of the parties and arbitrators, the court may decide, when it deems appropriate, to continue the proceeding with the remaining Arbitrators (Art 12(7)).
iii. Arbitral Proceeding - In the absence of agreement between the parties, the court shall determine the applicable law (Art 21(1)), the language (Art 15) and the place (Art 14) of arbitration on which awards shall be made. On this stage parties have a right to treat and present their case equally. When the court deems necessary, it shall decide whether the proceeding shall be conducted on the basis of the documentary evidences, witnesses (Expert) hearing or oral arguments. But if such party requests to conduct so, the court shall follow it (Arts 13(2) and 16(3)). Subject to prior summon to the parties to appear before it on the day fixed for first hearing, the court shall hear the presentation of their cases in person or representative capacity.
If a party duly summoned fails to appear, without good cause, the Arbitration tribunal shall proceed with the hearing (Art 17(2)). Finally, when the tribunal satisfied that the parties have had a reasonable opportunity to present their cases and evidences, it shall declare the proceeding closed.
iv. Awards and its effects - any order or decision shall be made by majority vote and when there is no majority, the presiding judge may decide on his move. The award shall be in writing and a copies signed by the arbitrators shall be given to the parties. It shall also be final and binding preventing the parties’ right to appeal against the awards.
Before an award is made, a proceeding may be terminated on the following grounds:
- If the parties settled their dispute by their agreement (Art 22(1)),
- If continuation of the proceeding becomes unnecessary or becomes impossible (Art 22(2)),
- If a party fails to pay an additional provisional costs in advance during the proceeding (Art 26 (4) and 29(2-4)),
After an award is made, either parry with notice to the other party, may request the tribunal:
- To interpreter the award (Art 23),
- To correct the award on errors in computation, clerical …etc (Art 24)
- To give additional award on claims presented in the proceeding but omitted from the award and can be rectified without any further hearing or evidence (Art 25)
The award includes determination of cost arbitration which are fees and expenses of arbitration expert witnesses, institute’s administrative expenses and legal & other reasonable costs of the parties during the proceeding. These costs are determined in advance according to the scale set out in annex 1 and considered as partial payment principally and cost in advance shall be payable in equal share by both parties. But the institute may set separate advances on costs corresponding to their claims or set offs (Art 26(2&5)).
The final award shall fix costs of arbitration and decide which party, in what proportion they shall bear them. However, if the proceeding is suspended or terminated, the institute shall render an accounting to the parties on deposits received and return any unexpended balances to the parties (Art 29(5)).
II. Comments on Rules of Arbitration of AACC
First and for most, according to the provisions of the civil code and civil procedure a party submitting an arbitral submission should be capable under the law and have the capacity to dispose of a right without consideration ( for gift ) on the matter in dispute (Arts 3326(1) civ.c. & 315(3) c. pr. c.). However, provisions of rules of arbitration of AACC does not clearly state such pre-requests except to have a defined legal relationship, whether contractual or not, irrespective of his minority, interdiction or any other reason incapacitating him to discharge his function properly. The same is true to arbitrators that he could not be an arbitrator if he is not of age, where convicted by a court or unsound mind …etc (Art 3340(1) c.c.). But no such pre conditions under the chambers rules have been put.
Secondly, Arbitrators shall be appointed freely by the parties and in the absence of such agreement or in case of request, the ordinary court and the institute may appoint arbitrators under the codes and the chamber, respectively (Arts 3332 (3) c.c., 316(1) c. pr. & 7 of AACC). Under the civil code without any regard to his nationality, any person can be appointed as arbitrator. However, if the parties are of different nationalists, the institute may appoint a sole arbitrator or chairman of a nationality, other than of the parties unless otherwise agreed or deems necessary by the institute (Arts 3339(1-2) c.c. & 8 of AACC). Can you justify this part of the rule and whether it is in line with the provisions of the civil and civil procedure codes?
Thirdly, the proceeding before the arbitral tribunal under the civil procedure shall, as near as or be the same as in a civil court. For instance if a witness duly summoned fails to appear, with out good cause or intentionally avoided the service of summon the court may issue arrest warranty with or within bail and he may be liable to criminal prosecution for his failure to assist justice (Arts 118 &317 of c. pr. and 440 cr.p.c. and notes by R. Alen Sedler on Ethiopian C. pr). Even the proceeding in AACC is also more or less similar with that of court proceeding, the institute or arbitral tribunal shall not have a power to order arrest warranty for a witness who is duly summoned and failed to appear before it.
Fourthly, all persons have a right to appeal to a court against any order or judgment of a tribunal which first heard the case (Art 20(6) FDRE Constitution).
The parties shall not waive their right of appeal except such waiver made by the party with full knowledge of the circumstances (Art 350 (2) civ pro). However, the institute clearly prevented the parties to exercise their right to appeal (Art 20 (4) of AACC) except to made application to correct errors on awards. In addition, unlike the arbitration rules of the civil procedure, the institute does not also contain provisions applicable to setting aside awards (Art 355-357 of civ pro) because the institute’s award would be final and binding.
Fifthly, as we stated earlier, it is inevitable during the proceeding that the institute and the arbitrators would incur costs and the disputants shall pay in advance as partial payment, when the proceeding started to secure to bind the parties by the decision of the arbitrations. The fees shall be calculated according to the scale in Annex 1 of the chamber put below.
a. Administrative service Fee Schedule of AACCSA Arbitration Institute
Sum In Dispute in ETB
Up to 50,000
From 50,001 to 500,000
2,500+3.50% of the amount above 50,000
From 100,001 to 500,000
4,250+1.70% of the amount above 100,000
From 500,001 to 1,000,000
11,050+1.15% of the amount above 500,000
From 1,000,001 to 2,000,000
16,800+0.70% of the above 10,000,000
From 2,000,001 to 5,000,000
23,800+0.30% of the amount above 2,000,000
From 5,000,001 to 10,000,000
32,800+0.20% of the amount above 5,000,000
From 10,000,001 to 50,000,000
42,800+0.07% of the amount above 10,000,000
From 50,000,001 to 80,000,000
70,800+0.06% of the amount above 50,000,000
From 80,000,001 to 100,000,000
b. Miscellaneous fees
- Registration fee-500.00 ETB
- Arbitrator/Adjudicator/Conciliator appointment fee-1000.00 ETB
- Ad-Hoc Arbitration/Adjudication/Mediation Service fee-4000.00 ETB per three months.
If we take for instance the first schedule for claims involving up to 50,000 Birr, assume there is 10,000 Birr claim in the dispute:
Then the parties would pay,
- 2000 Birr for administrative expenses
- 500 Birr for registration fee
- 1000 Birr for Arbitrators fee
- 4000 Birr for Ad-hoc Arbitration service per 3 months
- Some other costs of expert witnesses, if any
Finally the parties would pay approximately > 7,500 Birr for a dispute having a claim value of 10,000 lasted for 3 months. Therefore, this seems very unreasonable and disproportional with claim instituted and the cost the parties would pay in courts of law. In other perspective for a giant companies like construction and infrastructure companies which are involved in arbitration proceeding, the fee might be reasonable because-
- The companies carried out their transaction through a huge amount of moneys even the scale is at increasing rate in the first nine schedules, finally it is constant.
- The dispute involving such companies is more complex in nature, and needs relatively longer time to settle. So due to these reasons the arbitral proceeding would incur higher expenses, fees and costs required the parties to be paid become reasonable. However, the registration fee (500 Birr) is not proper at all for parties to a mere technical matter.