New York Convention comes into force for Ethiopia

The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards has taken effect in Ethiopia on 22 November, 2020. (view press release) Amidst the volatile political situation in the country, currently taking place in the northern most region of the country, this development provides some good news for businesses intending to enforce arbitration awards under the Convention in Ethiopia.

The Convention is widely recognized as a foundation instrument of international arbitration and requires courts of contracting States to give effect to an agreement to arbitrate when seized of an action in a matter covered by an arbitration agreement and to recognize and enforce awards made in other States, subject to specific limited exceptions.

It is to be recalled the Convention was adopted by the United Nations diplomatic conference on 10 June 1958 and entered into force on 7 June 1959. Ethiopia signed the Convention early on but stalled the ratification for more than six decades.  With the coming into force of the Convention in Ethiopia this month there is optimism among professionals and international businesses alike that it would serve to strengthen the legal landscape of the country.

The ratification proclamation itself expresses this hope in its preamble stating “The ratification is expected to enhance foreign direct investment by boosting the country’s goodwill to enforce contracts involving foreign parties”.

The proclamation designates the Office of the Attorney General to oversee the implementation of the Convention. How Ethiopian authorities and international businesses act after the coming into force of the convention remains to be seen.

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