International Arbitration Legal And Case Developments: Middle East & Africa

AT A GLANCE

Important developments in the Middle East and Africa, with new CRCICA rules in force, new international arbitration center in Abu Dhabi, enactment of Malawi's International Arbitration Act and inaugural International Disputes Week and Arbitration Week hosted in Riyadh and Johannesburg, respectively.

We report on interesting cases rendered in the region, including a significant Nigerian Supreme Court decision and surprising Dubai Court of Cassation decision, as well as cases impacting parties in the region.

Legal Developments

Case Developments

LEGAL DEVELOPMENTS

NEW CRCICA RULES COME INTO FORCE

January 15, 2024

Replacing rules over 12 years old, the new Cairo Regional Centre for International Commercial Arbitration ("CRCICA") rules entered into force on January 15, 2024 (the "2024 Rules"). According to CRCICA, the 2024 Rules have been updated "to meet the needs of users and evolving dispute resolution and trade landscapes".

The 2024 Rules cover a range of topics previously unaddressed, including online filing, consolidation, multiple contracts, early dismissal of claims and third-party funding, as well as emergency arbitrator rules and expedited arbitration rules.

In doing so, they herald a shift towards modernization, reflect best practice and international standards and enable CRCICA to maintain its reputation as a prominent institution for arbitration in the MENA region. At the same time, users are likely to appreciate the increased efficiency, transparency, and affability that these modern rules afford them, particularly given the technological advancements integrated into the 2024 Rules (see articles 2(6), 17(3) or 28(2) for example) and their emphasis on clearer procedural guidelines.

Key features include:

1. the option for parties to opt-in to arbitration under the Expedited Arbitration Rules, contained in Annex 3 of the Arbitration Rules 2024;
2. the ability for any party to appoint foreign legal counsel in their arbitration (Article 5(1)); and
3. the "Applicable Law and amiable compositeur" paragraph under Article 36(4), which states that unless parties agree in writing on the application of other laws or rules of law, the law applicable to the arbitration agreement is the law of the place of arbitration.

ABU DHABI INTERNATIONAL ARBITRATION CENTRE'S (ARBITRATEAD) ARBITRATION RULES COME INTO EFFECT

February 1, 2024

In December 2023, the Abu Dhabi Chamber of Commerce and Industry announced the launch of the Abu Dhabi International Arbitration Centre (branded as "arbitrateAD") as an independent international arbitration centre based in Abu Dhabi. From February 1, 2024, arbitrateAD's governance structure and arbitration rules replaced those of the Abu Dhabi Commercial Conciliation and Arbitration Center ("ADCCAC").

While ADCCAC continues to administer pending cases under the existing ADCCAC arbitration rules, new disputes filed on or after February 1, 2024 are administered by arbitrateAD under its new arbitration rules in force from February 1, 2024 (the "arbitrateAD Rules").

Compared to the ADCCAC arbitration rules, the arbitrateAD Rules incorporate significant innovations in line with best international practices. In particular, they:

1. adopt a digital approach to communication and case management;
2. allow the parties to seek emergency interim relief before the tribunal is constituted;
3. allow the parties to conduct the arbitration on an expedited basis where the amount in dispute does not exceed AED 9 million;
4. allow the parties to consolidate ongoing arbitrations into a single arbitration;
5. allow the parties to join additional parties to the proceedings;
6. require the confidentiality of "any and all aspects" of the proceedings;
7. require transparency in respect of the third-party funding; and
8. empower the arbitral tribunal to order early dismissal of manifestly meritless or inadmissible claims/counterclaims.

Equipped with its cutting-edge arbitration rules and backed by a team of renowned arbitration practitioners, arbitrateAD is expected to contribute to the development of Abu Dhabi and the UAE as growing arbitration hubs in the region.

MALAWI ADOPTS INTERNATIONAL ARBITRATION ACT 2024

February 2, 2024

Malawi recently adopted a new legislative framework for international commercial arbitration – which received presidential assent on January 31, 2024 – adopting the International Arbitration Bill 2023 without modification. Published as the International Arbitration Act 2024 on February 2, 2024 (the "Act"), it is aimed at modernizing the international commercial arbitration law of Malawi to be in line with worldwide standards. The new framework also opens the door for Arbitration Foundation of South Africa ("AFSA") to support the Malawi International Arbitration Centre ("MIAC") and for MIAC to join the AFSA Alliance.

The Act additionally seeks to give effect to the obligations of the Republic of Malawi to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 (the "New York Convention"), which Malawi acceded to on March 4, 2021.

Among other things, the new Act makes provision for:

1. a new legal environment that will facilitate the establishment and operation of international arbitration centres in Malawi;
2. international commercial arbitration based on the UNCITRAL Model Law; and
3. recognition of the specific reservations made by the Republic of Malawi to the New York Convention.

In doing so, the Act demonstrates the positive strides that Malawi has made in developing its arbitration system and further supports the attractiveness of Malawi as a potential seat for the resolution of international and regional arbitral disputes.

FIRST-EVER RIYADH INTERNATIONAL DISPUTES WEEK TAKES PLACE IN SAUDI CAPITAL

March 3-7, 2024

In early March 2024, the first-ever Riyadh International Disputes Week ("RIDW") took place in the Saudi capital. RIDW welcomed close to 5,000 delegates from 79 countries.

The success of RIDW goes hand in hand with the rise of international arbitration in the Kingdom of Saudi Arabia ("KSA"), which can be explained by the development of the Saudi Centre for Commercial Arbitration ("SCCA") as a leading arbitration center in the region, the multiplication of giga projects in the construction industry of the KSA, and the presence of credible and sophisticated courts.

RIDW hosted 92 official events, including the SCCA 3rd International Conference and Exhibition held on 6 March 2024, which attracted around 1,200 attendees. During RIDW, Mayer Brown hosted, in cooperation with its partner firm based in Riyadh, Al Akeel & Partners, its own event titled "Saudi Projects: Interim Measures in Dispute Resolution" on March 7, 2024.

RIDW is set to become an annual go-to event that will bring together users, academics, institutional representatives, and practitioners in the field of international ADR. Its next edition is currently scheduled for February 23-27, 2025.

SCCA SIGNS COOPERATION AGREEMENT WITH ICSID AND MEMORANDUM OF UNDERSTANDING WITH SIAC

March 6, 2024

The SCCA signed an agreement with ICSID with the aim of promoting the use of arbitration and ADR methods to resolve international investment and commercial disputes. Under the agreement, both institutions will share knowledge and information with each other. The agreement also unlocks Article 63 of the ICSID Convention, which allows parties participating in ICSID proceedings the option of using the SCCA's facilities to have their case heard.

On the same day, the SCCA and Singapore International Arbitration Centre ("SIAC") signed a Memorandum of Understanding ("MoU") in order to promote international arbitration. The MoU commits the institutions to co-organise conferences, seminars, and workshops on international arbitration in the Kingdom of Saudi Arabia ("KSA") and Singapore. It also provides that SIAC will help to ensure preferential rates for SCCA arbitration hearings held in Singapore; the SCCA will do the same for SIAC hearings held in the KSA.

BAHRAIN AND SINGAPORE SIGN TREATY TO SET UP NEW BAHRAIN INTERNATIONAL COMMERCIAL COURT

March 20, 2024

Bahrain and Singapore recently signed a historic treaty to create a new Bahrain International Commercial Court (the "BICC"), modelled on the Singapore International Commercial Court (the "SICC").

This treaty will give the parties an opportunity to appeal from judgments of the BICC to a body composed of judges of Bahraini and Singaporean superior courts as well as to judges of the SICC (subject to the consent of the parties).

Besides the establishment of the BICC, Bahrain also endeavours to create the "Bahrain Arbitration Bay" ("BAB"), a sophisticated, neutral hub for international dispute resolution in Bahrain's capital, Manama. We understand that BAB is modelled on Singapore's Maxwell Chambers, an integrated dispute resolution complex housing international ADR institutions, law firms, chambers, and hearing facilities. Indeed, BAB is expected to house both the BICC and the revamped Bahrain Center for Dispute Resolution.

Bahrain is expected to work closely with Singapore to develop its international dispute resolution offering, and to implement the necessary legislation. It remains to be seen whether the launch of the BICC and BAB will replicate the success of Singapore's SICC and Maxwell Chambers.

JOHANNESBURG AND NAIROBI HOST KEY ARBITRATION EVENTS

April 9-11 and May 29-31, 2024

After being postponed in March 2020 due to Covid-19, the first ever Johannesburg Arbitration Week ("JAW") was hosted by the Arbitration Foundation of Southern Africa ("AFSA") between April 9 and April 11, 2024.

Symbolic of South Africa's increasing foothold in the international arbitration arena, JAW's exciting agenda included discussions on the AFSA-SADC Alliance, AI and technology advancements in arbitration, enforcement of awards and much more. Additionally, JAW showcased the prowess of Africa's arbitration abilities but also aimed to address global concerns, such as the China-Africa Joint Arbitration Centre and its application in other global powers. Combined with an array of notable speakers, the event provided attendees with valuable insight into African arbitration and illustrates the growing commitment in South Africa and the wider Southern African Development Community region to arbitration, sending a message to the global arbitration community that South Africa is doing more and more to position itself as a seat of interest to international parties.

On May 29-31, the 8th ICC Africa Conference on International Arbitration also took place in Kenya, Nairobi. This highly anticipated event, which annually attracts over 400 attendees from more than 20 countries, provided attendees key insights into the African arbitration landscape and emerging trends. Participants also had the opportunity to network with leading academics and arbitration practitioners, including Mayer Brown Partner Kwadwo Sarkodie. Following his session at last year's ICC Africa Conference in Lagos on the critical role of mediation and other ADR methods in resolving business disputes, this year Kwadwo chaired a notable ICC YAAF session panel, offering attendees valuable updates on the topic of transparency and confidentiality in international arbitration.

ICC BRINGS ADVANCED ARBITRATION ACADEMY PROGRAMME TO AFRICA AND MIDDLE EAST

May 2024

Designed for experienced arbitration practitioners aspiring to become arbitrators, the ICC's one year "Advanced Arbitration Academy Programme" covers the key stages of arbitration proceedings from the perspective of an arbitrator. Following successful launches in 2023 across Asia, Eastern Europe, Latin America and North America, the ICC has made the decision to launch an extended version of the programme that will include Africa and the Middle East.

The programme is considerably exclusive; despite taking place in four cities, across two continents, the programme is limited to 40 participants. Nevertheless, for those taking part, it offers a unique opportunity for aspiring arbitrators to delve into issues relating to arbitration under ICC Arbitration Rules including, but not limited to:

• arbitrator appointments;
• tribunal jurisdiction;
• case management;
• provisional remedies;
• security for costs;
• evidence;
• hearings;
• award and scrutiny; and
• award notification.

Ruslan Mirzayev, Head of Education and Training at ICC Dispute Resolution Services, said:

"The launch of the Advanced Arbitration Academies in Africa and Middle East serves the commitment to the ICC Court's purpose to enable access to justice across the globe. We aim to build the capacity of arbitrators throughout the world, thus contribute to the geographical, national, cultural and gender diversity and availability of professional arbitrators ready to render justice in different languages, in different regions and globally."

The Advanced Arbitration Academy for Africa is co-chaired by Olufunke Adekoya SAN (Arbitrator, Funke Adekoya Arbitration Practice) and Jacob Grierson (Founding Partner, Anima Dispute Resolution), with sessions scheduled to take place in Nairobi, Kenya in May 2024; Dakar, Senegal in September 2024; Casablanca, Morocco in December 2024; and Accra, Ghana in March 2025.

CASE DEVELOPMENTS

IMPORTANT NIGERIAN SUPREME COURT JUDGMENT SHOWCASES NIGERIAN JUDICIARY'S PRO-ARBITRATION ATTITUDE

December 15, 2023

Prior to the end of 2023, a judgment of notable significance to arbitral discourse in Nigeria was delivered by the Supreme Court of Nigeria (NNPC v. Fung Tai Eng. Co. Ltd (2023) LPELR-59745 (SC)).

The underlying disagreement between the Nigerian National Petroleum Corporation ("NNPC") and Fung Tai Engineering Company Limited ("Fung Tai") concerned the non-fulfilment of an arbitral award, in favour of Fung Tai, which effectively challenged the limits of judicial intervention in arbitration.

For NNPC, its decision to appeal to the Supreme Court was just another of many attempts to have the judgment overturned, having already reached out to the Lagos Division of the Federal High Court and the Court of Appeal, respectively.

However, in its decision, the Supreme Court reaffirmed the non-appellate nature of arbitration awards and the limited scope of judicial review in Nigeria, noting the precedent set by an earlier decision from 2000. Additionally, the Supreme Court provided a critical and robust discussion on the misuse of challenges as a means to unduly prolong disputes and avoid payments/fulfilling contractual obligations. In particular, the presiding Honourable Justice Mohammed Lawal Garba noted that: "[such behaviour] should not only be discouraged but strongly deprecated and penalised by the courts, otherwise, the primary purport of [an] alternative dispute resolution mechanism of arbitration would be eventually subverted in the country, thereby making it unattractive."

As such, this decision gives a notable insight into the Nigerian judiciary's approach to arbitration, in particular to: (i) its eagerness to minimize judicial intervention, thereby promoting Nigeria as "arbitration-friendly"; and (ii) its desire to reduce undue and mal-intentioned delays of proceedings through unnecessary and/or unfounded challenges.

DUBAI COURTS PREVENT RECOVERABILITY OF LEGAL FEES IN ICC ARBITRATION

February 5, 2024

The Dubai Court of Cassation ("DCC") has issued a judgment in Commercial Case No. 821/2023, where it upheld an earlier judgment of the Dubai Court of Appeal ("DCA") in partially setting aside an arbitral award issued under the ICC Arbitration Rules 2021 ("ICC Rules"), in respect of the recovery of legal fees under the UAE Federal Law No. 6 of 2018 (the "UAE Arbitration Law").

The DCA's judgment in Commercial Case No. 4/2023 held that the tribunal's authority to award costs and expenses extended only to its own costs and those of the tribunal's experts. By contrast, the DCA rejected the tribunal's authority to award the parties' legal and expert fees and expenses unless explicitly authorized to do so either by:

1. specific wording in the arbitration agreement;
2. agreement between the parties' representatives who are in turn authorized to do so as mentioned in their respective power of attorneys; or
3. the arbitration rules.

The DCC upheld the DCA's judgment in its entirety. The decision is surprising insofar as Article 46(1) of the UAE Arbitration Law does not curtail the tribunal's authority to determine the parties' fees and expenses, and the ICC Rules allow for the recoverability of legal fees. It remains to be seen whether the UAE courts will adopt the same approach in future cases under different sets of arbitration rules.

US COURT FINDS ZIMBABWE'S MINING DEVELOPMENT CORPORATION IS AN ALTER EGO OF THE STATE PERMITTING ENFORCEMENT

February 9, 2024

The State of Zimbabwe and State-owned Zimbabwe Mining Development Corporation ("ZMDC") have had an application rejected by the US District Court for the District of Columbia for the enforcement of a Zambian judgment enforcing an ICC award in Amaplat Mauritius & Amari Nickel v. Zimbabwe Chief Mining Commissioner & ZMDC.

In the Memorandum Opinion and Order, dated February 9, 2024, the court found that ZMDC's waiver of sovereign immunity was attributable to Zimbabwe since the two defendants were alter egos. The court thus decided that the waiver exception of the US Foreign Sovereign Immunities Act applied, providing the US courts with subject-matter jurisdiction over the case.

Additionally, the court found that both defendants had been validly served which, together with subject-matter jurisdiction, was sufficient to establish personal jurisdiction over the defendants. Finally, the court also rejected the defendants' motion to dismiss an amended complaint brought in the US court. The enforcement proceedings will thus move forward.

MOZAMBIQUE FACES NEW TREATY CLAIM AFTER INVESTOR SELLS BIT RIGHTS TO ASSET RECOVERY FIRM

February 14, 2024

Acumen Advisory Group ("AAG"), an asset recovery firm registered in Delaware, USA with a track record of international claim enforcement, has submitted an ICSID claim against the State of Mozambique over the "unlawful transfer" of a mining licence which it gained following its acquisition of said rights (and the right to bring the treaty claim against Mozambique) from UK-based company Pathfinder Minerals ("Pathfinder"). ICSID registered this case on February 14, 2024.

The underlying dispute concerned a 25-year mining concession for mineral sands which, Pathfinder argued, had been "unlawfully transferred" to its local partners – with the Mozambican government failing to intervene or acknowledge the UK High Court judgment setting out Pathfinder's rights over the concession.

Until recently, this development took place simultaneously to a separate dispute between Pathfinder and AAG over the potential proceeds from the arbitration. However, we understand that this has now been resolved due to amended payment terms to AAG.

DIAC AWARD ENFORCED UNDER DIFC-LCIA CLAUSE BY SINGAPORE HIGH COURT

March 15, 2024

In DFL v DFM [2024] SGHC 71, the Singapore High Court enforced a Dubai International Arbitration Centre ("DIAC") award rendered under an arbitration clause referring to the rules of the now-defunct DIFC-LCIA arbitration center (the "DIFC-LCIA"), because the respondent had submitted to the tribunal's jurisdiction.

The DIFC-LCIA was abolished in 2021 by Decree no. 34 of 2021 of the Ruler of Dubai. The London Court of International Arbitration ("LCIA") and the DIAC agreed that the LCIA would administer all DIFC-LCIA cases already registered while the DIAC would administer future cases referring to a DIFC-LCIA arbitration clause in accordance with its DIAC arbitration rules.

The relevant arbitration was commenced after the abolition of the DIFC-LCIA and conducted under the DIAC rules. The tribunal issued a provisional award granting the claimant interim relief. In the application for enforcement of the award, the Singapore High Court noted that the arbitration agreement had been frustrated as the reference to the DIFC-LCIA rules could not be read to refer to the DIAC rules.

Nevertheless, the Singapore High Court relied on the fact that the respondent had contested the claimant's application for interim relief on the merits. The Court therefore concluded that the respondent had showed an "unequivocal, clear and consistent intention to submit to the tribunal's jurisdiction" and allowed the enforcement of the award.

This decision provides helpful guidance to parties trying to enforce and/or set aside DIAC awards rendered under a DIFC-LCIA arbitration clause in Singapore, and illustrates that parties should be careful to conduct themselves in a way that will not be taken as a submission to the tribunal's jurisdiction, if they intend to raise a jurisdictional objection.

DIFC COURT OF APPEAL AFFIRMS INTERIM AWARD IS ENFORCEABLE AS AN "AWARD"

March 19, 2024

In its anonymized judgment dated March 19, 2024, the Dubai International Financial Centre ("DIFC") Court of Appeal affirmed that a provisional award granting interim measures in a London-seated arbitration under the rules of the Dubai International Arbitration Centre ("DIAC") is enforceable as an "award" under the DIFC arbitration law.

The DIFC Court of Appeal upheld a ruling by the DIFC Court of First Instance from September 2023, which had concluded that interim measures granted in arbitration proceedings seated in or outside the DIFC freezone are enforceable under the DIFC arbitration law provided they are granted in the form of an award.

In reaching its decision, the DIFC Court of Appeal considered that:

1. The DIFC courts can only refuse to recognize awards in specific, prescribed circumstances, none of which were relied on by the appellant.
2. The legislation allows tribunals to grant interim measures in the form of awards.
3. There is no reason why an award which is interim and, therefore, binding for a certain period of time, "should not be treated as an award for the purposes of enforcement".

There is no consensus among national courts as to whether awards granting interim measures shall be enforceable. Accordingly, the judgment of the DIFC Court of Appeal provides the parties seeking to enforce such awards in the DIFC with much needed clarity.

ENGLISH COMMERCIAL COURT ORDERS TRANSFER OF NATIONAL IRANIAN OIL COMPANY ("NIOC") LONDON PROPERTY TO CRESCENT PETROLEUM

April 15, 2024

In Edition 18, we explained that the England and Wales Court of Appeal had dismissed National Iranian Oil Company's ("NIOC") appeal against the summary dismissal of its application to set aside a USD 2.4 billion award (the "Award") in favour of UAE-based Crescent Petroleum ("Crescent") under Section 67 of the Arbitration Act 1996 on the basis that the tribunal had lacked jurisdiction.

On April 15, 2024, the Commercial Court in London decided that a GBP 100 million property in London with a link to NIOC should be transferred to Crescent to partially satisfy the Award.

The relevant property used to be in NIOC's sole ownership before it was transferred in 2022 to an Iranian pension fund (the "Fund") for no cost. Accordingly, Crescent applied to the English Commercial Court under provisions of the UK Insolvency Act 1986 in respect of "transactions defrauding creditors".

Having concluded that NIOC had transferred the property to the Fund for no value in order to put it out of Crescent's reach, the Commercial Court granted an order under the UK Insolvency Act 1986 to transfer the relevant property from the Fund to Crescent.

The decision demonstrates that English courts are ready to assist award creditors in enforcing their awards against the assets of award debtors. In this light, the decision reinforces London's position as a major arbitration hub where parties are held to their bargain.

US DISTRICT COURT ENFORCES USD 2.75 BILLION AWARD AGAINST NATIONAL IRANIAN OIL COMPANY ("NIOC")

April 30, 2024

In Crescent Petroleum Co. v. Nat'l Iranian Oil Co., the U.S. District Court for the District of Columbia granted default judgment on Crescent Petroleum's ("Crescent") petition to confirm an arbitral award issued in 2014. Crescent, a UAE petroleum company, filed the suit to enforce the award that resulted from a 13-year arbitration against the National Iranian Oil Company ("NIOC").

This action is the latest of several proceedings Crescent has filed to collect on the award, which arose out of NIOC's breach of a 2001 contract for NIOC to supply gas from the Persian Gulf to a Crescent entity, which in turn agreed to sell the gas to a joint venture between Crescent and another UAE company.

After NIOC failed to supply any gas, Crescent filed for arbitration in 2009, claiming USD 13.9 billion in damages. The original arbitral tribunal issued an award in 2014 finding that NIOC breached the agreement. The Commercial Court in London upheld the award in 2016. In 2021, a second arbitral tribunal issued a partial award on remedies, ordering NIOC to pay Crescent USD 1.1 billion to the joint venture and over USD 1.3 billion for lost profits but denying Crescent's request for pre-award interest. Crescent then filed its petition in U.S. federal court to enforce the partial award in 2022.

The district court found that it had subject matter jurisdiction over the petition because it fell under the arbitration exception to the U.S. Foreign Sovereign Immunities Act ("FSIA"). It also found that Crescent had adequately served NIOC under the FSIA, giving the court personal jurisdiction over NIOC. Finally, it found that there were no grounds for the court to refuse enforcement of the award and calculated the current value of the award, inclusive of post-award interest, at USD 2.756 billion.

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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.