Silas Eugene Oloo[1]
According to Thomas Crum, how we handle conflict determines the quality of our lives, not whether we have it or not.[2] On the diverse and resource-rich African continent, trade has traditionally offered both possibilities and challenges.[3] Building good commercial partnerships across borders has proven to be a challenge predisposed by the different languages spoken in Africa and legalese that have made trade practice impracticable. The idea of an integrated African market is one step closer to reality with the ratification of the African Continental Free Trade Area (AfCFTA) by 53 of the 54 countries in Africa.[4] However, the question remains: How can disagreements over cross-border trade be settled amicably without deteriorating relationships? This is where alternative dispute resolution (ADR) comes in, providing an elegant, flexible, and business-friendly means of enhancing trade ties by settling disputes without the need for drawn-out legal proceedings.[5]
The AfCFTA: Africa's turning point
In the history of African commerce, the AfCFTA is the most important development. With a combined GDP of more than $3 trillion, it purports to create the largest free trade area in the globe in terms of geographic area.[6] Its objectives include lowering economic barriers between African nations, unifying trade laws, and establishing a unified market for products and services.[7] According to the United Nations Economic Commission for Africa (UNECA), if successfully executed, intra-African commerce was torise by 52% by 2022.[8]
Despite these lofty ambitions, several challenges still loom. Trade across Africa's borders has long been hindered by bureaucracy[9], a lack of infrastructure,[10] and a convoluted web of state legislation.[11] More significantly, it's critical to have the capacity to settle issues amicably and swiftly. Trade conflicts are unavoidable, and ADR stands out as a crucial tool to prevent trade ties from being severely damaged in an area where legal systems differ greatly.[12]
ADR's function in handling trade conflicts
Compared to traditional court litigation, ADR provides a flexible, informal, and quick manner of settling conflicts. ADR processes like arbitration and mediation assist parties in settling problems amicably and maintaining their business relationships, in contrast to litigation, which is sometimes slow, expensive, and contentious.[13]
Under AfCFTA, arbitration can provide a neutral forum for settling cross-border disputes in the context of commerce. Arbitration ensures a fair and unbiased dispute settlement procedure by allowing opposing parties to choose independent arbitrators, unlike litigation, which is constrained by the laws of a certain nation.[14] Another important ADR procedure is mediation, which aims to assist parties in coming to a mutually beneficial solution. After a conflict, mediation frequently helps not only to preserve but also to improve trade relations.[15] In the next section, this paper will demonstrate hypothetically how ADR can solve disputes effectively under AFCFTA.
The following hypothetical scenario will seek to explore the use of arbitration in a cross-border trade dispute.
Two African countries, Country A and Country B, are participants in the African Continental Free Trade Area. A company from Country A exports agricultural products to a distributor in Country B. A dispute arises when the distributor claims that the delivered products do not meet the quality standards specified in their contract, while the exporter asserts that the goods were in excellent condition at the time of shipment.
Instead of engaging in litigation in the courts of either country, the parties agree to pursue arbitration under the AfCFTA's dispute resolution framework. They select a neutral arbitrator with expertise in international trade and agricultural standards. The arbitrator reviews the relevant evidence, including inspection reports and shipping documents, ultimately concluding that the products were damaged in transit due to inadequate handling by the distributor's logistics provider. Consequently, the arbitrator awards the exporter partial compensation for the damaged goods and recommends that the distributor enhance its handling processes to mitigate future disputes. The arbitration process is concluded within six months, allowing the business relationship between the two parties to remain intact while they continue trading under revised contractual terms.
The following hypothetical scenario will seek to explore: mediation in a joint venture dispute.
Two companies from different African countries, Company X (located in Country C) and Company Y (based in Country D), established a joint venture to develop a renewable energy project. After two years, conflicts arise regarding profit-sharing and management responsibilities. Company X alleges that Company Y has mismanaged funds, while Company Y contends that Company X is not contributing its fair share of resources.
The parties agree to engage in mediation under the AfCFTA's ADR framework. A mediator experienced in international business and renewable energy projects facilitates constructive discussions between the two companies. Throughout the mediation process, the parties uncover the underlying causes of their conflict, including miscommunication and ambiguous contractual terms.[16] The mediator guides them in negotiating a revised agreement that clarifies profit-sharing arrangements, establishes a joint management committee, and implements regular performance reviews.
The mediation lasts for three months, and ultimately, the joint venture continues to thrive, with both companies reaping the benefits of the project's long-term growth. This scenario underscores how mediation can effectively resolve disputes while also strengthening business relationships through collaboration and mutual understanding.
Having demonstrated how ADR is more than capable of solving disputes effectively under AFCFTA, the next section of this paper will address how ADR is used to strengthen trade relations.
Using ADR to Strengthen Trade Relations
Sometimes, court judgments elevate disputes to greater heights.[17] Borrowing wisdom from a renowned Nigerian lawyer, Kekarias Kenneaa, who asserted, "When the judge proclaims a winner, that is the beginning of the real conflict." [18] Stronger commercial ties are mostly fostered by the use of ADR without the bitterness that sometimes accompanies legal disputes.[19]
In Africa, ADR techniques have a long history. Respected elders mediated disputes in the past, a process that is quite similar to mediation and arbitration procedures in the present day. Traditional conflict resolution methods are engrained in the cultural and social fabric of African communities, highlighting the principles of reconciliation, mutual respect, and the restoration of harmony[20]. For example, in various West African cultures, the 'palaver' system brings community members together to openly discuss and resolve disputes, intending to reach a consensus that satisfies everyone involved. Similarly, the 'Gacaca' courts in Rwanda were designed to address community conflicts, prioritisng restorative justice over punitive measures[21]. ADR is, therefore, a sensible approach that also respects Africa's cultural legacy.[22] It strengthens its capacity to customise solutions to the unique requirements of the parties concerned. For example, in certain situations, the parties' interests can go beyond just receiving money; they might also involve potential joint ventures, trade agreements, or other types of collaboration. ADR can consider these wider interests by providing a commercially sound solution that enhances future commerce in addition to a legal one.[23]
Comparing traditional and modern ADR
Modern Alternative Dispute Resolution mechanisms, such as mediation and arbitration, exhibit several similarities to traditional practices. Both approaches prioritise the interests and needs of the involved parties, striving for a mutually acceptable resolution. They also emphasise the significance of dialogue and mutual understanding rather than relying on decisions imposed by an external authority.[24]
However, modern ADR has evolved to more effectively address the complexities of contemporary commercial disputes. While traditional methods were often informal and community-based, modern ADR is structured and may involve professional mediators or arbitrators with specialised expertise in particular industries. This evolution enables ADR to be more adaptable to the unique demands of today's trade relations, including cross-border disputes and intricate commercial agreements.[25] After illustrating how ADR is used to strengthen trade relations, the next section will address the obstacles and potential solutions to address AfCFTA's ADR implementation.
Obstacles and suggestions for the AfCFTA's ADR implementation
The African justice system faces serious challenges due to courtroom overcrowding. Since judges and magistrates sometimes handle more than 100 cases per day, motion hearings can take months to complete, and trials can go on for years. Due to this inefficiency, disputants are saddled with escalating legal expenditures for frequent, sometimes pointless court appearances and get annoyed with the "come today, come tomorrow" approach.[26] ADR is a useful substitute in this situation. ADR can ease the burden on overburdened courts by offering a quicker, more adaptable, and economical means of settling conflicts.[27]
Nonetheless, there are unique obstacles to ADR acceptance in Africa. Businesses and organisations alike are still mainly ignorant about ADR methods, and many nations lack the legal structures required to effectively apply them. [28] While this section effectively highlights key challenges, it would greatly enhance its impact by delving deeper into potential solutions. For instance, further harmonisation of ADR rules throughout the continent is necessary to provide uniformity and predictability in the dispute resolution procedure.[29]
To provide examples of potential harmonisation models, this section refers to established ADR frameworks in Africa, such as the Kigali International Arbitration Centre (KIAC) and the Nairobi Centre for International Arbitration (NCIA). These institutions exemplify best practices in the establishment and operation of ADR centres, offering valuable insights into institutional design, case management, and the enforcement of arbitration.[30]. The KIAC has successfully positioned itself as a hub for international arbitration in East Africa, while the NCIA has played a pivotal role in promoting arbitration and mediation in Kenya and beyond[31].
Moreover, African trade organisations and governments must fund capacity-building programs that encourage the use of ADR to get over these challenges. This includes developing cross-border agreements that make it easier for arbitration rulings to be enforced, training arbitrators and mediators, and educating companies about the advantages of alternative dispute resolution.[32] For instance, the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards establishes a vital framework for the enforcement of arbitration awards across various jurisdictions, promoting international legal cooperation and ensuring fairness in dispute resolution.[33] African nations that are signatories to the New York Convention can utilise its provisions to enhance the recognition and enforcement of arbitration awards under the AfCFTA. Additionally, the AfCFTA Secretariat could develop a protocol specifically addressing the enforcement of ADR outcomes, drawing on the principles of the New York Convention and tailoring them to the unique needs of African states. [34]
Capacity-building initiatives could include the establishment of regional ADR training centers [35], the development of standardised ADR curricula[36], and the creation of online platforms for ADR education and training [37]. These measures would help bridge the knowledge gap and promote the widespread adoption of ADR mechanisms across Africa.
Conclusion
Under AfCFTA, Africa is moving towards deeper economic integration, and one important vehicle for bolstering commercial ties is ADR. Trade disagreements may be prevented from impeding the continent's economic progress by using alternative dispute resolution, which provides a more effective, flexible, and culturally sensitive method of settling disputes. ADR may be the cornerstone of a strong, cohesive African commerce network that is advantageous to all parties involved with the right investment in legal frameworks, education, and awareness. As I conclude, I call upon policymakers, trade organisations, and businesses to invest heavily in ADR capacity building and harmonisation.
[1] Third year student, Kabarak University.
[2] Thomas Crum, The magic of conflict: Turning a Life of Work into a Work of Art, Simon and Schuster, 1987, pg 4.
[3] United nations conference on trade and development, 'UNCTAD 2024 World investment forum' UNCTAD, 2023 >https://unctad.org/fr/node/27294 > on 17 October 2024.
[4]Trade Law Centre, 'Status of AfCFTA Ratification' TRALAC, 2023 —>https://www.tralac.org/resources/infographic/13795-status-of-afcfta-ratification.html>
[5]Agreement establishing the African Continental Free Trade Area Agreement Area, 21 March 2018, article 3..
[6]AFCFTA, ECA_Official video channel , 2013, 1:09 to 2:06<https://youtu.be/sG7gdhCa-NY?si=0yPJNFD9Xv5bxT7S < .
[7] Agreement establishing the African Continental Free Trade Area Agreement Area, 21 March 2018, article 3..
[8] Busola Aro, 'AfCFTA: Intra-African trade increased by 20% in 2022, says UNECA' TheCable, 2 March 2023 —>https://www.thecable.ng/afcfta-intra-african-trade-increased-by-20-in-2022-says-uneca/.
[9] East African Community, 'Trade' East African Community, 2023 . Available at >https://www.eac.int/trade>
[10] African Union, 'Trade and Industrial Development' African Union, 2023 —>https://au.int/en/trade-and-industrial-development.
[11] African Continental Free Trade Area Agreement, 2018 —>https://au.int/sites/default/files/treaties/36437-treaty-consolidated_text_on_cfta_-_en.pdf.
[12] Dao Tri Uc, 'The Impact of Globalization on National Legal Systems' 4 VNU Journal of Science: Legal Studies (2024) 27.
[13] Steven Shavell, 'Alternative Dispute Resolution: An Economic Analysis' 24 Journal of Legal Studies (1995) 1.
[14] World Intellectual Property Organization, 'guide to WIPO arbitration' 919 WIPO publication (2020) 8. .
[15] World intellectual property organization, 'Guide to WIPO Mediation', WIPO publication(2020)..
[16] Uche Ewelukwa Ofodile, "Dispute Settlement Under the African Continental Free Trade Agreement: What Do Investors Need to Know?", Kluwer Arbitration Blog , 2019.
[17] Ernest E. Uwazie, 'Alternative Dispute Resolution in Africa: Preventing conflict and enhancing stability', Africa center for strategic studies, 2011, pg 2.
[18] Kekarias Kenneaa, at an Alternative Dispute Resolution (ADR) training in Addis Ababa, , 29 December 2007.
[19] V Edirisinghe, D Marsh, A Cotgrave and others, 'Attributes of ADR in the Sri Lankan Construction Industry' 4 Journal of Advances in Engineering and Technology,30 September 2022.
[20] Enyinna Nwauche, 'The Palaver System in West Africa: A Model for Modern ADR?'24(3) Arbitration International, 2008, pg 345.
[21] Phil Clark, The Gacaca Courts, Post-Genocide Justice and Reconciliation in Rwanda ,Cambridge University Press, 2010.
[22] Laura Nader and Elisabetta Grande, 'Current Illusions and Delusions about Conflict Management-In Africa and Elsewhere' 27 Law and Social Inquiry ,2002, pg573.
[23] Kwang-Soo Kim, 'A Study on the Composition and Operation of the South-North Commercial Arbitration Committee at the Kaesong Industrial Complex', 1 June 2014.
[24] Carrie Menkel-Meadow, 'The History and Development of ADR' in Michael Palmer and Simon Roberts (eds), Dispute Processes: ADR and the primary forms of decision-making ,2 Cambridge University Press, 2006.
[25] Emilia Onyema, International Commercial Arbitration and the Arbitrator's Contract , Routledge, 2010.
[26] Uwazie, Alternative Dispute Resolution in Africa, 2.
[27] African Continental Free Trade Area Agreement, 21 March 2018, Article (2).
[28] Uwazie, Alternative Dispute Resolution in Africa, 3.
[29] Poomintr Sooksripaisarnkit, 'Harmonization of choice of law rules in commercial contracts in the One Belt One Road countries: Will the Hague principles on choice of law in international commercial contracts serve as a good model?' Law, Business, 2018.
[30] Kigali International Arbitration Centre,Annual peport 2021,12-15, <www.kiac.org.rw> on 10 october 2023.
[31] Nairobi Centre for International Arbitration, Strategic plan 2020-2025, 8-10, ,, <www.ncia.or.ke> on 10 October 2023.
[32] Uwazie, Alternative Dispute Resolution in Africa, 2011.
[33] United Nations, Convention on the recognition and enforcement of foreign arbitral awards,(New York, 1958), Article III, accessed October 10, 2023, <www.uncitral.org> on 10 October 2023.
[34] African Union, Protocol on Rules and Procedures on the Settlement of Disputes under the AfCFTAArticle 20, ,< www.au.int> on 10 October 2023.
[35] Karl Mediation and Arbitration Center, Karl Mediation and Arbitration Center (LinkedIn Page).
[36] Ernest Uwazie (ed), Alternative Dispute Resolution and Peace-building in Africa ,Cambridge Scholars Publishing, 2014.
[37] Program on Negotiation, 'Mediation Curriculum: Trends and Variations', Harvard Law School, https://www.pon.harvard.edu/daily/mediation/mediation-curriculum-trends-and-variations/ On 8 February 2025.