Out-Law News | 17 Mar 2021 | 2:47 pm | 2 min. read
Malawi has become the 167th country to accede to New York Convention which governs the recognition and enforcement of arbitral awards made in other countries.
The Malawi government said it would only apply the convention to awards made in the territory of another contracting state; where there were differences arising out of relationships considered as 'commercial' under the laws of Malawi, and for arbitration agreements concluded, or arbitral awards rendered, after the date of accession.
The convention will enter into force for Malawi on 2 June, making Malawi the 42nd African country to become a party to the Convention.
International arbitration specialist Rob Wilkins of Pinsent Masons, the law firm behind Out-Law, said: “Malawi's accession to the NYC is a testament to its commitment to attracting foreign investment. Foreign investors in Malawi are generally granted the same treatment as nationals, as the Malawian constitution protects investment irrespective of nationality. The government of Malawi also offers an array of fiscal and non-fiscal incentives which apply equally to domestic and foreign investors and to several sectors including manufacturing, agriculture and mining."
“The government is also trying to attract investments through bilateral cooperation, as shown by the Malawi-China Investment Forum and the Malawi-Japan Investment Forum held in 2018," he said. “The Malawian economy benefits from rich natural resources and there appear to be no restrictions on remittance of foreign investment funds, including capital, profits, loan repayments and lease repayments.”
The World Bank's 2020 Doing Business Report ranked Malawi 109th worldwide for the ease of doing business, a slight improvement from 2019 when the country was ranked 111th.
US development agency USAid said that Malawi’s energy sector has gone through recent reforms. The power market is being restructured, with strong investor interest for Independent Power Producers (IPPs) to enter the market, it said. It is seen as having good potential for solar and new hydro technologies.
The country is a member of the Southern African Development Community and the Common Market for Eastern and Southern Africa.
Earlier this year Malawi joined the African Continental Free Trade Area treaty (AfCFTA), becoming the 35th member state to ratify the agreement. The AfCFTA aims to create the world's largest free trade area, aiming to unite more than 1.2 billion people in a $2.5 trillion economic bloc. It aims to generate a range of benefits through supporting trade creation, structural transformation, productive employment and poverty reduction.
Wilkins said: "This is the latest of a series of steps taken by Malawi aimed at making it a more attractive destination for foreign investors. Malawi is an interesting market and investors from other New York Convention countries will take additional comfort from the fact that Malawi will now recognise and enforce international arbitration awards rendered on their projects. The next stage will be for Malawi to ensure that it receives legislative or judicial support."
27 Feb 2020