Ethiopia ratifies New York Convention in boost to economic ambitions

Out-Law News | 27 Feb 2020 | 12:54 pm | 1 min. read

Ethiopia has committed to recognising and enforcing international arbitral awards after ratifying the New York Convention, as the latest move in a series of wide ranging economic reforms aimed at boosting foreign investment.

Ratification was approved by the Ethiopian parliament on 13 February, having been agreed by ministers in December.

The 1958 Convention on the Recognition and Enforcement of Arbitral Awards (New York Convention) is an international treaty governing the recognition and enforcement of arbitral awards made in other countries. Awards made in countries that have signed the convention are enforceable in all other participating states. Ethiopia is the 162nd state to sign up to the convention, and the 33rd in Africa.

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Rob Wilkins

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These moves will no doubt improve Ethiopia’s attractiveness as a destination for foreign direct investment.

International arbitration expert Rob Wilkins of Pinsent Masons, the law firm behind Out-Law, said: "The ratification comes at a time when Ethiopia is also consulting on a new domestic arbitration law based on the UNCITRAL model law which will further boost the support for arbitration as an effective and efficient means of resolving disputes".

"These moves will no doubt improve Ethiopia’s attractiveness as a destination for foreign direct investment and will provide comfort to contractors, funders and other parties assessing the risk and reward of entering the Ethiopian market that any dispute which may arise will result in an enforceable arbitral award," he said.

Ethiopian prime minister Adiy Ahmed has made economic reform one of his main priorities since assuming office in April 2018. The government's Homegrown Economic Reform Agenda is aimed at boosting private sector investment, jobs and economic growth.

In December, the International Monetary Fund (IMF) reached provisional agreement on a $2.9 billion financing package for the programme. Prime minister Ahmed has also established a national committee to resume negotiations with the World Trade Organisation (WTO) on Ethiopia's future membership after a gap of eight years.