The Intergovernmental Authority on Development (IGAD), which consists of member states Djibouti, Eritrea, Ethiopia, Kenya, Somalia, South Sudan, Sudan, and Uganda, will establish an international arbitration center in Djibouti focused on resolving business disputes in the region. The decision to create the center was made at the General Assembly of IGAD’s Business Forum held on February 14-15, 2015, in Djibouti.

The new center is aimed at providing private mechanisms for resolving commercial disputes, improving the business environment, and bolstering investor confidence in the region. IGAD expects the new center to be operational byMarch 2016. The World Bank, European Union, and other donors will reportedly provide funding for the center.

The selection of Djibouti as the location for the center is a natural choice for a number of reasons. Not only is IGAD headquartered in Djibouti, the country serves as a key port for the region and already has an international arbitration friendly legal regime in place, having ratified the Convention on the Recognition and Enforcement of Foreign Arbitral Awards – commonly referred to as the “New York Convention” – in 1983. Awards rendered through arbitral proceedings held at the center once it is established will thus be enforceable in any of the 154 countries that have ratified the New York Convention to date (to the extent the parties involved are not solely Djiboutian businesses or individuals).

IGAD was established in 1996 to foster regional cooperation in the areas of food security, environmental protection, peace and security, humanitarian affairs, and economic development and integration.

Further details on the establishment of the new center can be found here.