The Rising Commercial and Investment Interface between Africa and Asia: Challenges and Opportunities
Reporters: Soma Hegdekatte and Dr. Mariel Dimsey (CMS Hasche Sigle, Hong Kong LLP)
The event was hosted by MCCI Arbitration and Mediation Center (“MARC”) and supported by CMS Hasche Sigle, Hong Kong LLP during Hong Kong Arbitration Week 2018, and took place in the beautiful setting of the China Club. The overarching theme for the discourse was “The Rising Commercial and Investment Interface between Africa and Asia: Challenges and Opportunities”.
The keynote speaker of the event was Mr. Neil Kaplan CBE QC SBS. Mr. Kaplan first introduced the features of MARC and then the latest developments at the Center. The most notable of these developments were the key features of the newly revised MARC Arbitration Rules 2018, for example, provisions for an expedited procedure and for summary dismissal of claims and defences.
The topic of the first panel was “Main challenges in arbitration between African and Asian parties”. Dr. Klaus Sachs, Dr. Jalal El Ahdab, Ms. Aisha Abdallah and Ms. Cheng Yee Khong were the panelists for this discussion and Ms. Anjana Khemraz-Chikhuri acted as the moderator.
Dr. Ahdab started the discussion by addressing the cultural clashes that arise out of different legal systems, i.e. common law and civil law, in the conduct of arbitral proceedings. He stated that the differences emerge when interpreting concluded agreements, as each party relies on the laws and precedents of its own respective jurisdiction. Ms. Abdullah added that the issue becomes particularly difficult in the context of Kenya when it comes to punctuality. The panel also discussed how culture affects party perception of the role of a tribunal. Dr. Sachs shared an observation that Japanese parties expect arbitrators to play a very active role in a dispute. By way of contrast, as suggested by Ms. Abdullah, Kenyan parties may perceive an active tribunal as one tainted with corruption.
Ms. Khong added the perspective of a third-party funder to the discussion. She spoke about the various dispute settlement mechanisms established under the Belt and Road Initiative and the importance of such initiatives.
The topic of the second panel was “Maximising protection of investments from Asia into Africa through efficient arbitration”. Dr. Nicolas Wiegand, Mr. Arthur Ma, Dr. Jamsheed Peeroo and Mr. Alexander Yanos were the panelists for the discussion, with Ms. Dipna Gunnoo acting as the moderator.
The panel first emphasized the growing trade relations between Asia and Africa. On the issue of undertaking due diligence before investing in Africa, Mr. Yanos explained the various steps parties should take. These steps include hiring a local partner and assessing the existing infrastructure. Mr. Ma added assessing political risk and hiring a local counsel to the list.
Dr. Wiegand discussed extensively the issue of corruption being used as a defense in investor-state arbitration. He discussed the various cases that have dealt with the corruption defense and emphasized that the trend is unhealthy, for both states and investors. The panel further discussed the precautions investors should take with respect to corruption. Dr. Peeroo highlighted the importance of investing in countries that have signed bilateral treaties with the investor’s home country. A notable observation raised by a member of the audience was the importance of understanding and adhering to local laws.
The event prompted interesting and thought-provoking discussion about the development of international arbitration in two very dynamic regions and was attended by a group of approximately 50 interested practitioners.