CHALLENGE OF THE ARBITRATION AWARD UNDER THE NEW ETHIOPIAN ARBITRATION LAW: A COMPARATIVE ANALYSIS

Abstract

Ethiopia ratified the 1958 New York Convention on February 13, 2020, and enacted a new arbitration law, known as Arbitration and Conciliation Working Procedure Proclamation No. 1237/2021, on April 2, 2021, to reform its arbitration law in line with the current global trend. The new law incorporates numerous provisions internationally recognized for modern commercial arbitration rules. However, there are still some flaws and legal problems with the provisions governing challenging arbitral awards. The main objective of this study is to examine the current Ethiopian legal regime governing challenging arbitral awards to reveal its legal gaps and to propose necessary relevant reforms. To achieve this goal, the researcher employed a doctrinal qualitative research method for data collection, analysis, and interpretation, essentially focusing on examining pertinent provisions of the new Ethiopian arbitration law in comparison with the UNCITRAL Model Law and the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The study's main findings revealed that the new Ethiopian Arbitration Law inserted numerous provisions that allowed a losing party and a third party to challenge arbitral awards before a regular court via a brought-before cassation bench, raising challenges against arbitral awards, setting aside awards, and refusing to execute awards, which can lead to unjustified court intervention in arbitration processes. Furthermore, the study discovered that, unlike the NYC and the UNCITRAL Model Law, the new law expanded the defense available to aggrieved parties by inserting additional grounds for setting aside and refusing execution of foreign arbitral awards. It also found that the lack of specific time limits for the enforcement of foreign arbitral awards in Ethiopia constitutes a legal loophole. Against this backdrop, the study strongly recommends that the Ethiopian government will have to amend the provisions governing the challenge of arbitral awards by adopting the internationally recognized legislative standards set out in international arbitration instruments to minimize the modes of challenging arbitral awards and limit the defenses available to losing parties.