Angola ratifies New York Convention on Foreign Arbitral Awards
Angola acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) on 12 August 2016, becoming its 157th Contracting State Party.
The New York Convention, also known as the New York Arbitration Convention, provides for the recognition and enforcement of international arbitration awards by domestic courts. As there is no similar international mechanism for the enforcement of foreign court judgments, foreign investors prefer making use of international arbitration as their preferred dispute resolution mechanism as the New York Convention ensures easier and more effective enforcement of international arbitration awards. International commercial arbitration is usually faster and less costly than litigation in domestic courts, with the added benefit that parties can choose the arbitrators and the applicable procedures and rules.
This move by Angola is seen as a big step forward in making Angola’s investment regime more transparent and predictable. It provides for the recognition of the authority of arbitral awards regardless of the seat of arbitration or nationality of the parties involved. In the past foreign investors could only rely on Angolan procedural law for enforcement of foreign arbitral awards.
One of the Convention’s main principles is that of reciprocity, which means that Contracting States normally only have to apply the Convention’s provisions on recognition and enforcement to awards issued in the territory of another Contracting State. This is of course also good news for domestic Angolan businesses, as it means that they can have international arbitration awards recognised and enforced in 156 other countries.
As the enforcement of commercial agreements in many African countries can often be difficult or prohibitively expensive, investors need to ensure that their agreements contain the proper dispute resolution mechanisms.
Clients are welcome to contact our offices for assistance on possible investments and the drafting of suitable international commercial agreements.
© Trade Law Chambers 2016