AG urges legal reforms in arbitration at international bar conference to strengthen African sovereignty

Attorney General and Minister of Justice Godfred Yeboah Dame has called for major reforms to the legal regulatory procedures governing international arbitration in Africa.

Speaking at the International Bar Association’s annual conference in Mexico City, Dame highlighted the growing impact of arbitration on African economies due to rapidly changing business environments and the increasing use of alternative dispute resolution clauses in commercial contracts.

Godfred Dame was concerned about the potential abuse within the arbitration system, citing the secrecy of the proceedings and the finality of the awards as contributing factors.

He noted that this framework has led to some questionable outcomes for African countries.

“Despite all its touted benefits, the nature of arbitration, particularly its secrecy and finality, can inadvertently become an instrument of fraud and abuse against the African people,” he said.

He highlighted examples of companies that were unable to substantiate their claims in African courts but were able to obtain significant damages in international arbitration.

Godfred Dame also pointed to the financial burden of conducting arbitration proceedings outside the continent, usually in locations such as London, Paris or New York, even when the disputes involved African parties.

This not only limits the opportunities for African arbitrators, but also hinders the development of Africa’s arbitration capacity.

One notable example cited by the Attorney General was the 2023 case between the Nigerian government and Process & Industrial Development Limited (P&ID), which resulted in an $11 billion arbitration award against Nigeria, but was overturned by the High Court in London.

According to Godfred Dame, such cases highlight the prejudices that African countries often face in international arbitration forums.

“While international arbitration promises neutrality and efficiency, African countries have often been victims of unfair and biased rulings,” he said.

He added that Africa must work to create a justice system that guarantees transparency, fairness and the rule of law.

Despite these challenges, Godfred Dame did not advocate that Africa should move away from international arbitration, but rather that it should reform the way arbitration is conducted on the continent.

He called for stronger safeguards in trade disputes involving African states, especially given the high stakes and vulnerability of sovereign wealth funds.

The Attorney General stated that arbitration should take place in Africa, within African legal frameworks, in cases involving African countries.

Godfred Dame noted that Ghana is already taking steps to address this problem by reforming its arbitration framework.

The country amends the State (Property and Contracts) Act of 1960 to provide that all contracts involving the state shall have Ghanaian law as the governing law and Ghana as the seat of arbitration.

This would eliminate the need for costly arbitration proceedings in foreign jurisdictions and allow such cases to be handled domestically.

Removing global regulatory barriers:

Godfred Dame further urged world leaders, and particularly those overseeing the legal profession, to reconsider rules governing cross-border legal practices.

In today’s interconnected world, he argued, the legal profession has become inherently international. It is therefore essential that African lawyers meet global standards and participate in resolving disputes with cross-border implications.

“We must remove the licensing barriers that limit the ability of lawyers to practice in jurisdictions outside the region in which they were trained,” said Godfred Dame.

He acknowledged the challenges posed by different legal systems and professional standards in different countries, but noted that international legal practice has already laid the foundation for such changes.

Godfred Dame highlighted the contradiction of allowing state lawyers to represent countries in international arbitration proceedings without a specific license, but then prohibiting them from appearing before national courts in the same jurisdictions.

He called for the removal of such barriers to allow lawyers to practice across borders, particularly in disputes involving countries.

Impact of AfCFTA on legal practice:

Regarding the African Continental Free Trade Area (AfCFTA), the AG stressed the importance of the regional integration initiative for African lawyers.

AfCFTA, which aims to connect 1.3 billion people and create a $3.4 trillion economic bloc, has established a dispute settlement body to deal with trade disputes between member states.

Godfred Dame noted that while AfCFTA offers enormous opportunities, it also raises questions about possible conflicts between the dispute resolution mechanisms and those of individual countries.

He stressed the need for African lawyers to actively support the work of AfCFTA and ensure the success of the dispute resolution body.

“I call on all of you to support AfCFTA, especially to ensure that the dispute settlement body becomes successful,” said Godfred Dame.

He called for conscious efforts to train African lawyers to deal with the complexities of regional trade disputes and promote the benefits of regional integration.

The Attorney General reiterated the need for Africa to implement legal reforms in the areas of arbitration and cross-border litigation to enable the continent to reap the full benefits of globalisation while protecting its sovereignty.

According to him, in this way Africa can not only develop its legal expertise, but also create a fairer and more transparent business environment for its people.

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