Out-Law News | 04 Jul 2014 | 4:13 pm | 1 min. read
The Convention will enter into force in the southeast African country on 21 September 2014. From this date, arbitral awards made in Burundi will be enforceable in all countries that are signatories to the Convention, while awards made in signatory countries will be enforceable in Burundi.
International arbitration expert Daniel Wilmot of Pinsent Masons, the law firm behind Out-Law.com, said that the international enforceability of arbitral agreements was one of the biggest advantages the dispute resolution process had over litigation; particularly where contracting parties were based in different countries.
"The New York Convention is one of the key instruments in international arbitration and now, with 150 signatories, it is also one of the world's most successful treaties in terms of state ratification and accession," he said. "Facilitating the enforcement of arbitral awards in signatory states, the New York Convention has been one of the biggest drivers of the increasing use of arbitration by parties as a mechanism for resolving international disputes."
"Burundi follows many of its neighbouring African states that have been signatories to the Convention for a number of years. Membership of the New York Convention is generally seen as beneficial to investors whether internal, incoming or outgoing; but is particularly so in Africa where it provides a standard of enforcement and certainty in what is otherwise a legally diverse continent, even accounting for OHADA," he said.
OHADA, which is known by its French acronym, is a system of business laws and implementing institutions adopted by 17 west and central African countries. The laws promulgated by OHADA are exclusively business related, and the stated purpose of the initiative is to facilitate and encourage domestic and foreign investment in the member states.
The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards dates back to 1958. Its aim is to prevent signatories from discriminating against foreign and non-domestic arbitral awards. Parties to the Convention must ensure that foreign awards are recognised and generally capable of enforcement in their jurisdiction in the same way as domestic awards. At the same time, courts located within the jurisdiction of parties to the Convention are prevented from hearing cases if the parties in dispute are bound under contract to refer the matter to an arbitral tribunal.