From Abidjan to Tunis, arbitration centres are on the rise in Africa. This upward trend has mirrored the growth and gradual diversification of many African economies. The growth can be seen to be driven along sector lines, with the vast majority of disputes coming before such institutions emanating from the telecoms, infrastructure and energy sectors. Clear leaders in this space are the Kigali International Arbitration Centre which, in just over two years, has heard around 30 cases, several of which were international disputes, and the Mauritius International Arbitration Centre which, wisely connecting itself to the LCIA, has the support and credibility to become an arbitration platform for the entire continent. We focus here on two recent initiatives in Nigeria and Djibouti that are emblematic of the next generation of African arbitration centres.

The Arbitration in Lagos Project is a joint initiative of the Lagos Court of Arbitration (the “LCA”) and the Lagos Chamber of Commerce International Arbitration Centre (the “LACIAC”). Acting jointly under a Memorandum of Understanding, the LCA and LACIAC are leading the charge in encouraging the seating of arbitrations in Lagos, Nigeria for international and domestic arbitrations. The more recently established LACIAC is expressly dedicated to promoting Lagos as a centre of choice for the resolution of Africa-related arbitrations. With significant competition from elsewhere on the continent, these institutions face a number of challenges in distinguishing themselves and attracting membership.

Historically, socio-political and security challenges have impacted on the desire of parties to seat arbitrations in Nigeria. These concerns have been exacerbated by a perception that Nigeria’s legislative and judicial architecture was poorly positioned to support alternative dispute resolution at the interlocutory or enforcement stages for reasons of delay, as well as an interventionist judiciary. These trends are evidently changing, as is clear from the recent decisions of the Nigerian Court of Appeal. In Statoil (Nigeria) Ltd & Anor v Nigerian National Petroleum Corporation and Others[1] it was held that Nigerian courts have no jurisdiction to issue injunction orders to restrain or otherwise intervene in arbitral proceedings, except as provided for in Nigeria’s Arbitration and Conciliation Act. The ruling in that case (and that in Nigerian Agip Exploration Ltd v Nigerian National Petroleum Corporation[2]) is indicative of a pro-arbitration stance in the courts, that recognises the role of arbitration in a modern investor-friendly economy.

LACIAC’s implementation of a modified version of the UNCITRAL Model Law in its 2015 rules includes provisions for interim measures as well as the appointment of an emergency arbitrator. Such modern arbitral trends should reassure foreign investors that an arbitration seated in Lagos will be governed by laws that accord with internationally recognised principles.

The economic pressure Nigeria is currently facing and the fall in oil prices may present an opportunity for institutions like LACIAC and LCA. Cost optimisations arising from the decline in commodity prices are expected to lead to project deferrals or parties seeking to extricate themselves from arrangements that are no longer economically viable, which in turn can lead to disputes. LACIAC and LCA are well placed to capitalise on this growth opportunity and distinguish themselves from the rest of the pack of African arbitral institutions.

Fresh competition, however, comes from Djibouti, where the Intergovernmental Authority on Development resolved last year to establish the International Arbitration and Amicable Dispute Resolution Centre. The choice of Djibouti for this initiative was a shrewd one, given its location at the intersection of the Red Sea and the Gulf of Aden, making it a key regional deep-water port. Having received a favourable report in the recent World Bank’s Doing Business survey, along with other stakeholders (including the World Bank and the European Union) Djibouti hopes the centre will boost investor confidence in the region. It is hoped that as a forum for the settlement of international disputes, this new institution will itself attract foreign direct investment.

As a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Djibouti has ensured that awards of the Djibouti institution will be enforceable in any of the countries that have ratified the convention to date.

Whilst dominance across the continent may be some way off for the institutions in Nigeria and Djibouti, with the right support to ensure expediency and the ability to attract outstanding arbitration practitioners, there may be scope in time for each to carve a space for itself as a sub-regional arbitration hub for investor protection.