Arbitration Law in Cape Verde
Arbitration Law in Cape Verde
Cape Verde has a developing legal framework for arbitration, particularly in commercial disputes. The country is committed to providing a modern and efficient arbitration system to resolve disputes, both domestic and international. Cape Verde’s arbitration laws are aligned with international standards, notably through its membership in OHADA (Organization for the Harmonization of Business Law in Africa), as well as its support for the New York Convention on the recognition and enforcement of foreign arbitral awards.
1. Legal Framework for Arbitration in Cape Verde
OHADA
Cape Verde is a member of the OHADA system, which promotes the harmonization of business laws across member countries in West and Central Africa. The OHADA Uniform Act on Arbitration (1999) provides a comprehensive framework for arbitration in Cape Verde and other OHADA member states. This Act sets out the rules for arbitration, the procedure for appointing arbitrators, the powers of arbitral tribunals, and the enforcement of arbitral awards.
New York Convention (1958)
Cape Verde is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. This international treaty requires Cape Verde to recognize and enforce foreign arbitral awards, provided they meet the criteria set out in the Convention. This allows foreign businesses and investors to resolve disputes in Cape Verde with confidence that any resulting arbitral awards will be enforced.
Cape Verde’s Civil Code and Arbitration Rules
Cape Verde has incorporated arbitration provisions into its Civil Code, which governs dispute resolution mechanisms, including arbitration. The legal provisions regarding arbitration are also supplemented by ad hoc and institutional rules, with specific emphasis on commercial arbitration. However, the primary source of arbitration law is the OHADA Uniform Act, as Cape Verde follows OHADA's model.
2. Key Features of Arbitration in Cape Verde
Arbitration Agreement
- An arbitration agreement in Cape Verde must be in writing, which can be a stand-alone contract or an arbitration clause in a larger agreement.
- The agreement must specify key details such as the number of arbitrators, the seat of arbitration, and the rules under which the arbitration will be conducted. If there is no agreement, the court can intervene to appoint arbitrators.
Arbitral Tribunal
- The tribunal typically consists of one or three arbitrators. The number of arbitrators depends on the agreement of the parties. If they cannot agree, an arbitral institution or the court can appoint arbitrators.
- Arbitrators must be impartial, independent, and possess the appropriate expertise in the subject matter of the dispute. Parties can appoint arbitrators directly, or an institution such as the OHADA Court or local arbitration centers can assist with appointments.
Arbitration Procedure
- The procedure for arbitration is designed to be flexible, allowing the parties to determine how the proceedings will be conducted, including deadlines, evidence submission, and the conduct of hearings.
- If the parties fail to agree on procedures, the arbitral tribunal is authorized to determine the rules and steps for the arbitration.
- Interim measures (e.g., freezing assets or preserving evidence) can be ordered by the arbitral tribunal to ensure that the arbitration is effective.
Language of Arbitration
- The language of arbitration is typically agreed upon by the parties, and if no agreement is made, the tribunal will decide based on practical considerations, such as the language of the contract or the convenience of the parties.
3. Judicial Intervention in Arbitration
Limited Judicial Intervention
- As is common in modern arbitration systems, judicial intervention in Cape Verde is limited. The courts are generally supportive of arbitration and intervene only in specific circumstances, such as:
- Enforcing arbitration agreements, compelling parties to arbitrate instead of going to court.
- Appointing arbitrators when the parties cannot agree.
- Setting aside an arbitral award on limited grounds such as procedural errors or lack of jurisdiction.
- Enforcing arbitral awards, both domestic and foreign, in accordance with Cape Verdean law.
Setting Aside an Arbitral Award
- A court in Cape Verde can set aside an arbitral award on the following limited grounds:
- Invalidity of the arbitration agreement.
- Excessive authority by the arbitral tribunal (i.e., the tribunal exceeding the scope of the arbitration agreement).
- Serious procedural irregularities, such as the denial of the right to a fair hearing.
- Award contrary to public policy or the principles of Cape Verdean law.
Court’s Role in Interim Measures
- While arbitral tribunals can order interim measures, Cape Verdean courts also have the authority to grant interim relief, such as preserving assets or preventing actions that would undermine the arbitration process.
4. Enforcement of Arbitral Awards
- Domestic Arbitral Awards
- Domestic arbitral awards are enforced in Cape Verde in a manner similar to court judgments. If a party refuses to comply with an arbitral award, the prevailing party may seek court enforcement.
- Foreign Arbitral Awards
- As a signatory to the New York Convention, Cape Verde will generally recognize and enforce foreign arbitral awards rendered in other countries that are also parties to the Convention.
- A foreign arbitral award may only be refused recognition or enforcement if:
- The award is contrary to public policy in Cape Verde.
- There are procedural defects, such as a failure to provide an opportunity for the parties to present their case.
- The arbitral tribunal lacked jurisdiction or the award was made outside the scope of the arbitration agreement.
5. Arbitration Institutions in Cape Verde
Local Arbitration Institutions
Cape Verde has local institutions that can assist with arbitration, including the Cape Verde Chamber of Commerce and Industry. These institutions offer services for domestic and international arbitration, including facilitating the arbitration process, appointing arbitrators, and providing administrative support.
OHADA Court of Justice and Arbitration (CCJA)
As part of the OHADA framework, Cape Verdean parties can also resolve disputes through the OHADA Common Court of Justice and Arbitration (CCJA). This institution handles disputes between OHADA member states and provides a reliable forum for resolving regional disputes in the context of business law.
International Arbitration Institutions
In addition to local and OHADA institutions, Cape Verdean parties can choose to resolve disputes through international arbitration institutions such as:
- International Chamber of Commerce (ICC).
- London Court of International Arbitration (LCIA).
- Singapore International Arbitration Centre (SIAC).
6. Advantages of Arbitration in Cape Verde
International Alignment
Cape Verde’s arbitration laws are aligned with international standards due to its membership in OHADA and its support for the New York Convention. This ensures that arbitration conducted in Cape Verde is internationally recognized and enforceable.
Cost and Time Efficiency
Arbitration in Cape Verde can be more cost-effective and faster than litigation in the courts, especially for complex commercial disputes. The flexibility of arbitration also allows for quicker resolution of cases.
Confidentiality
Arbitration typically offers confidentiality, which is appealing for businesses that prefer to keep their disputes private.
Neutral Venue
Cape Verde can serve as a neutral venue for disputes involving parties from different jurisdictions, particularly in the context of West Africa and the broader African market.
Supportive Legal System
Cape Verde’s supportive judicial system ensures that arbitration agreements are enforced and arbitral awards are respected, providing stability and predictability for businesses.
7. Challenges and Considerations
Limited Awareness in Some Sectors
While arbitration is growing in popularity, some local businesses in Cape Verde may still be unfamiliar with its advantages over traditional court litigation. This could lead to a slower adoption of arbitration in some sectors.
Costs of International Arbitration
For international arbitration, the costs can be significant, particularly if international arbitration institutions are involved. The cost factor could be a concern for smaller businesses or individuals.
Public Policy Concerns
As with any jurisdiction, there is always the potential for courts to refuse the enforcement of an award if it is found to violate public policy or involve serious procedural issues.
Conclusion
Cape Verde has established a modern and internationally recognized framework for arbitration, primarily through its adherence to OHADA rules and the New York Convention. This makes the country a viable and attractive jurisdiction for resolving domestic and international commercial disputes. Cape Verde’s arbitration law ensures flexibility, efficiency, and enforceability, making it a competitive and reliable choice for businesses in the region.
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