Task Order No. 72066319F00001 Implemented by: Millennium DPI Partners, LLC Two Boars Head Place, Suite 130 Charlottesville, Virginia 22903-4678 Project Address: Intercontinental Addis Building, 7th Floor P. O. Box 62114 Addis Ababa, Ethiopia January 30, 2020 DISCLAIMER: This document was produced for review and approval by the United States Agency for International Development. It was prepared by Millennium DPI Partners, LLC. The views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. QUARTERLY REPORT OCTOBER 1, 2019 – DECEMBER 31, 2019 USAID’S FETEH (JUSTICE) ACTIVITY IN ETHIOPIA
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Task Order No. 72066319F00001
Implemented by:
Millennium DPI Partners, LLC
Two Boars Head Place, Suite 130
Charlottesville, Virginia 22903-4678
Project Address:
Intercontinental Addis Building, 7th Floor
P. O. Box 62114
Addis Ababa, Ethiopia
January 30, 2020
DISCLAIMER:
This document was produced for review and approval by the United States Agency for International Development. It
was prepared by Millennium DPI Partners, LLC. The views expressed in this publication do not necessarily reflect the
views of the United States Agency for International Development or the United States Government.
QUARTERLY REPORT OCTOBER 1, 2019 – DECEMBER 31, 2019
USAID’S FETEH (JUSTICE) ACTIVITY IN ETHIOPIA
Task Order 72066319F00001 Millennium DPI Partners USAID’s Feteh (Justice) Activity, Quarterly Report January 30, 2020
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TABLE OF CONTENTS
TABLE OF CONTENTS ........................................................................................................................... i
LIST OF ACRONYMS ............................................................................................................................... ii
ABOUT THE ACTIVITY ......................................................................................................................... 1
ANNEX A. Financial Management ..................................................................................................... 39
ANNEX B. Monitoring, Evaluation, and Learning Progress ............................................................ 41
ANNEX C. Success Story .................................................................................................................... 44
ANNEX D. Activity Deliverables ........................................................................................................ 46
Component 1 (Activity 1.2.2 - Year 1 Work Plan)............................................................................ 46
Component 3 (Activity 3.2 - Year 1 Work Plan)............................................................................... 46
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LIST OF ACRONYMS
ACSO Agency for Civil Society Organizations
AGO Attorney General’s Office
COP Chief of Party
CSO Civil Society Organization
DCOP Deputy Chief of Party
DCJA AGO’s Directorate for Civil Justice Administration
DLDAR AGO’s Directorate for Legal Drafting, Analysis, and Research
ECSF Ethiopian Civil Society Forum
FSCE Federal Supreme Court of Ethiopia
GoE Government of Ethiopia
HOPR House of Peoples' Representatives
IT Information Technology
JLRTI Justice Legal Research and Training Institute
LHR Lawyers for Human Rights
NBE National Bank of Ethiopia
PMO Prime Minister’s Office
RFA Request for Applications
SOW Scope of Work
STTA Short-Term Technical Assistance
TOT Training of Trainers
UN United Nations
USAID United States Agency for International Development
Task Order 72066319F00001 Millennium DPI Partners USAID’s Feteh (Justice) Activity, Quarterly Report January 30, 2020
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ABOUT THE ACTIVITY
In February 2019, the United States Agency for International Development (USAID) awarded the
two-year Feteh (“Justice,” in Amharic) Activity in Ethiopia to Millennium DPI Partners LLC
(Millennium DPI) under Task Order No. 72066319F00001. The objective of this Activity is to
provide flexible, rapid response technical assistance to the Attorney General’s Office (AGO),
relevant legal drafting sub-committees within the AGO, the Federal Supreme Court of Ethiopia
(FSCE), and/or other related government entities in the process of reform. This includes making
grants to civil society organizations (CSOs) and the media to ensure public input on the democratic
reform process and to improve citizen engagement, as well as public consultation on proposed
changes to the country’s legal and judicial framework, which are the purview of the AGO and
FSCE, respectively.
The primary objectives of this Activity are to:
1. Build the capacity of the AGO, its 14-person Council, its legal drafting sub-committees, the
FSCE, and other rule of law actors to adopt and implement legal and judicial reforms
consistent with international human rights norms, with the AGO and FSCE’s concurrence
and buy-in
2. Support the ability of CSOs and the media to engage the AGO and its Advisory Council’s
legal drafting sub-committees on legal and judicial reforms
3. Support the appropriate committees in the House of Peoples’ Representatives (HOPR) to
ensure they gain sufficient capacity and know-how to approve the adoption of the legal
reforms
4. Support the FSCE to improve Ethiopia’s court management system
Feteh’s activities are led by a team of experienced international and national legal experts with in-
depth knowledge of the Ethiopian justice system. The team is supported by a wide range of
international and national experts who provide specialized expertise.
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EXECUTIVE SUMMARY
This quarterly report describes the activities undertaken and results achieved by Feteh between
October 2019 and December 2019. Key activities completed or advanced by Feteh during this period
include the following:
• Feteh produced a revised and translated (from Amharic to English) version of the 1960
Commercial Code of Ethiopia, drafted by local consultants as part of Feteh’s continuing
support to the AGO's Advisory Council in the review and translation of priority legislation
identified by the Government of Ethiopia (GoE) as key reforms. As related work, Feteh’s
consultants supported the consolidation of the three draft books of the Commercial Code
into one single, consistent legislative draft to be submitted to the HOPR. The new
Commercial Code will be a key element of the broader economic reform initiative advanced
by the GoE. In addition, Feteh’s local short-term technical assistance (STTA) personnel
completed the translation into English of the reviewed draft Criminal Procedure Code and
delivered it to the Advisory Council.
• Feteh supported the AGO in bringing together a team of local experts to fine-tune the draft
Conciliation and Arbitration Proclamation. Feteh previously ensured the draft’s substantive
review and translation from English to Amharic. This proclamation will be the first specific
and comprehensive legislation on the subject, and it anticipates Ethiopia’s upcoming
ratification of the New York Convention on the Recognition and Enforcement of Foreign
Arbitral Awards.
• Feteh conducted advocacy efforts to facilitate the HOPR’s enactment of the draft Federal
Prison Commission Establishment Proclamation and the Anti-Terrorism Proclamation,
whose substantive review and translation into English Feteh previously supported. These two
proclamations were adopted by the HOPR to replace previous legislation widely viewed as
designed to stifle dissent and suppress criticism of the government, as these laws were major
sources of abuse and human rights violations. The draft Administrative Procedure
Proclamation, also reviewed and translated into English by Feteh’s local STTAs, is currently
before the HOPR for an anticipated adoption next quarter.
• Feteh engaged two local STTA consultants, Mr. Yazachew Belew and Mr. Yinebebe Derseh,
to assess and draft revisions of Ethiopia’s banking and insurance laws. The consultants liaise
with the relevant working group members of the AGO’s Advisory Council, the National
Bank of Ethiopia (NBE), and other stakeholders both in government and the private sector.
This is a very significant initiative, as it is the first serious attempt by the GoE to modernize
its banking and insurance laws in many decades.
• Feteh ensured legislative reform efforts undertaken by the AGO have sufficient
administrative support by engaging a local consultant for six months to help coordinate the
work of the Advisory Council, lead its Secretariat, and assist its various volunteer working
groups tasked with drafting new laws. Feteh’s consultancy with the Head of the Secretariat
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ended on December 31, 2019. Taking into account lessons learned during Year 1 of its
operation, Feteh’s support to the AGO’s Advisory Council is anticipated to focus on more
substantive work during Year 2, such as providing technical assistance for evaluating existing
legislation and drafting new laws. This assistance will be provided in lieu of funding
administrative support for the Advisory Council’s Secretariat and the translation of draft
laws into Amharic and/or English.
• Feteh printed 3,000 copies of the Afaan Oromo version of the national Criminal Justice
Policy in order to make this key document accessible to all citizens. Printed booklets of the
Criminal Justice Policy, in three languages — Oromigna, Amharic, and English — were
provided to the AGO, which has distributed them to Oromia government justice bureaus, as
well as to law schools and other relevant institutions at the national level. The printing of
2,500 copies in the Tigrigna language is nearly completed, and they will be ready for
distribution to the Tigray regional government and other institutions in January 2020.
• Feteh conducted two training sessions on international contracts and arbitration for a total of
42 representatives of the AGO and other federal ministries and government institutions. The
training was part of Feteh’s efforts to support the AGO’s Directorate for Civil Justice
Administration (DCJA) in managing international contracts and arbitration disputes. The
training was conducted by international STTA Jesús Bores and national STTA Yazachew
Belew. In addition, these two experts helped the DCJA to develop a manual for the drafting
and review of contracts entered into by federal government institutions, as well as providing
templates for international contracts.
• Feteh awarded a fixed-price subcontract to Lawyers for Human Rights (LHR), in cooperation
with AGO’s Human Rights Action Plan Office, to provide regional training on recent
legislative reforms relating to the protection and promotion of human rights within
Ethiopia’s criminal justice system. Feteh developed this contract in order to build lasting
linkages between the AGO and CSOs in implementing legal reforms through civil society
engagement.
• Feteh drafted five directives supporting implementation of the new CSO Proclamation.
Through the services of two local STTA, Mr. Zenebe Burka and Ms. Blain Worku, Feteh
provided technical assistance to the Agency for Civil Society Organizations (ACSO) in
drafting these five directives, which were identified by the ACSO as addressing priority areas.
During the reporting period, the drafts of these five directives were completed and
submitted to the ACSO for review and approval.
• Feteh awarded two grants under its Request for Applications (RFA) for Ethiopian CSOs and
media organizations to increase public input on proposed changes to the country’s legal and
judicial framework. The two grantees, Ethiopian Civil Society Forum (ECSF) and ARTS
Media Production, started implementing selected activities.
• Feteh conducted a one-day orientation workshop on grants with CSOs working in
governance, rule of law, gender, and related areas in Ethiopia. A total of 41 CSO
representatives attended this workshop on December 18, 2019. This workshop presented a
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unique opportunity to provide guidance to Ethiopian CSOs on Feteh’s grant award
procedures, as well as to get their ideas for possible areas for Feteh grant activities in 2020,
thereby supporting the development of Feteh’s Year 2 Work Plan. The event also allowed
CSOs to network and share experiences with each other.
• Feteh assisted the FSCE in strengthening the specialized commercial benches established to
hear and handle commercial litigation. Feteh’s international STTA Judge Robert Makaramba
and national STTA Dr. Muradu Abdo completed an assessment of the current practices of
commercial benches in Ethiopian federal courts and provided recommendations. These
recommendations were delivered during the Conference on the State of the Judiciary
organized by the FCSE on December 21, 2019.
• Feteh conducted a Training of Trainers (TOT) session to build the capacity of commercial
bench judges at federal courts on December 6–8, 2019. A total of 24 federal judges
participated. These included commercial bench judges of the Federal High Court and
Federal First Instance Court, and selected judges of the FSCE who handle commercial cases.
Judge Makaramba and Dr. Abdo delivered the three-day training.
• In cooperation with the FSCE, Feteh conducted two assessments on services delivered by the
federal courts. Feteh engaged local STTA Mr. Bizuneh Bekele, an Information Technology
(IT) professional, to assess IT services provided by the federal courts at all levels. In
addition, local STTAs Mr. Mohamed Umber and Mr. Amare Ashenafi, a legal practitioner
and a human resource management professional, respectively, were engaged to identify the
organizational and capacity issues relating to non-judicial staff of federal courts. Both
assessments will outline issues in the existing systems and evaluate the specific needs of each
court level.
• At the request of the AGO’s Advisory Council, Feteh is conducting a diagnostic study and
drafting a new proclamation on freedom of peaceful assembly and protest. Feteh obtained
USAID approval to use the contract’s Windows of Opportunity funding for this assignment.
Feteh anticipates that the diagnostic assessment and the draft of the new legislation will be
completed in January 2020. Indeed, the GoE’s objective is to get this important
proclamation enacted by the HOPR before the general election planned in May 2020.
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PROGRAMMATIC CONTEXT
Feteh’s Year 1 Work Plan was approved by USAID on May 18, 2019, covering the period from
February 14, 2019 to February 13, 2020. Highlights of the Work Plan, which represents a
collaborative effort between the Project and the national stakeholders it supports, are summarized
below.
Component 1: Feteh will provide technical and substantive support for ongoing legislative initiatives
of the AGO and its Advisory Council, including secondment of one or more senior experts to assist
in the drafting and translation of key legislation. Feteh will also build the capacity of the AGO’s
directorates and agencies (including in particular the Directorate for Legal Drafting, Analysis, and
Research [DLDAR], DCJA, and ACSO) by providing training, assistance in drafting regulations and
directives for implementation, and developing manuals and other resource materials that incorporate
international best practices for facilitating the implementation of ongoing reforms.
Component 2: Feteh will support CSOs and the media to engage in dialogue with the AGO and
FSCE about Ethiopia’s legal and judicial reform agenda. Through grants or subcontracts provided
by Feteh, CSOs and the media will provide training, conduct public consultations about ongoing
reforms, improve public perception of the reform process, and create a more conducive
environment for dialogue between the Ethiopian government and CSOs.
Component 3: Feteh will support the FSCE to develop an improved and efficient court
management system in Ethiopia. In doing so, Feteh will:
• Revise framework laws governing the judiciary and sponsor related pubic consultations on
newly drafted laws
• Enhance case flow management by introducing international best practices and launch a
pilot backlog reduction and prevention program
• Strengthen commercial benches and develop or update civil and criminal bench books
• Assess the state of IT support provided to federal courts and identify the organizational and
capacity issues relating to the federal courts’ non-judicial staff
• Assist in reviewing and updating the Judicial Code of Conduct and Rules of Disciplinary
Procedure, developing judicial performance evaluation standards, and if requested,
proposing criteria and procedures on judicial vetting to strengthen judicial ethics and
accountability.
Importantly, the Year 1 Work Plan reflects an understanding of the political and social context of
Ethiopia, the fragility of an emerging democracy, and the challenges presented by the GoE’s
ambitious reform agenda. In this context, the Work Plan should be considered a living document
that may change as priorities shift, new opportunities arise, and subsequent activities and tasks are
identified, with USAID’s concurrence.
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QUARTER ACTIVITIES AND RESULTS
COMPONENT 1
Activity 1.1: Support the AGO’s Advisory Council and Secretariat
1.1.1 Provide technical support for ongoing legislative initiatives
1.1.1.1 Provide technical assistance to manage and oversee legislative drafting efforts by Advisory Council working groups, including secondment of one or more senior experts to the Advisory Council Secretariat as requested by the AGO
One of Feteh’s central mandates is to assist the AGO in amending or replacing priority laws
identified in the GoE’s reform agenda. To help ensure that these reform efforts have sufficient
administrative support, and pursuant to a request from the AGO, on July 1, 2019 Feteh engaged
Mr. Abadir Ibrahim as a local consultant for a six-month period to help coordinate the work of the
Advisory Council, lead its Secretariat, and assist its various working groups tasked with drafting new
laws.
Effectively coordinating working group efforts is critical to ensuring reform activities move quickly
and their intended outcomes are achieved. To support this, Feteh’s Chief of Party (COP), Deputy
Chief of Party (DCOP), and Component 1 Leader have been holding biweekly meetings with
Mr. Ibrahim to follow up on the technical assistance provided to the Advisory Council’s working
groups. Although Feteh has built a high-quality partnership with all its national counterparts,
including other AGO’s directorates and agencies, the Advisory Council’s Secretariat has not met
expectations as a vehicle for facilitating Feteh’s assistance to the Advisory Council and the working
groups. This appears to be due to a perception by the Head of the Secretariat that Feteh is merely a
funding source. Consequently, Feteh has relied on its contacts and good relations with working group
members to successfully coordinate and complete most of the planned legal drafting activities as
described in the sections below. Mr. Ibrahim’s engagement ended on December 31, 2019.
Taking into account lessons learned during Year 1, Feteh’s support to the AGO’s Advisory Council
during Year 2 is anticipated to focus on substantive work, such as providing technical assistance to
conduct diagnostics of existing legislation and drafting of new laws. This assistance will be provided
in lieu of funding for administrative support to the Advisory Council’s Secretariat and the translation
of draft laws into Amharic and/or English. This option is also seen as more effective for Feteh since
other international donors are providing assistance to the Advisory Council’s Secretariat.
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1.1.1.2 In coordination with the Advisory Council’s working groups and the AGO’s Legal Research, Drafting, and Dissemination Directorate, conduct a substantive review of and translate certain key draft laws from Amharic into English and vice versa to facilitate additional expert review and public consultations
During the reporting period, Feteh continued to support the AGO’s Advisory Council in the
substantive review and translation of priority legislation as a key part of the GoE’s broad reform
program. Accordingly, local STTAs have revised and translated from Amharic into English, and vice
versa, draft Books One (Traders and Businesses), Two (Business Organizations), and Five
(Bankruptcy and Company Reorganization) of the 1960 Commercial Code.
The Commercial Code of Ethiopia has not undergone any major revision or modernization since its
enactment 60 years ago. The command-economy model and the communist-style ideology pursued
for the past five decades decimated the private sector, an otherwise critical player in the economy.
Because of rigid policies in place that essentially excluded the sector, it could not grow and play its
catalyzing role in the economy. Instead, policies continued to be applied that stifled the growth of
the private sector. As a consequence, the Commercial Code remained largely inapplicable,
inoperative, and irrelevant for much of its existence in many important areas of the economic
sphere. Many sectors in the economy were closed to the private sector (or were very restricted),
access to finance was strictly regulated, and state-owned (i.e., public) enterprises were the main
economic actors that dominated the economy. Successive regimes saw an ideological foe in the
private sector, one bent on challenging the government with a “neoliberal” agenda working hand in
glove with other enemies of the state.
With the recent change in government leadership, a broad range of economic reform measures were
introduced, spearheaded by Prime Minister Ahmed Abiy. These measures include massive economic
liberalization programs, including partial or total privatization of public enterprises such as the
telecom sector, logistics and shipping lines, and the airline industry. A clear shift was made from
what was a “state-managed” economic model to one that recognizes the critical role of the private
sector in the economy, including increased foreign investment and the opening of areas hitherto off
limits to foreign investment. These measures are viewed as key steps for structural transformation of
the economy, which has found itself in a dire position after decades of neglect.
The revision of the Commercial Code comes as a key part of the broader economic reform
initiatives advanced by the GoE. These initiatives require modern and up-to-date commercial laws
responsive to the needs of businesses. This requirement is even more evident given the ongoing
ratification process of the New York Convention on the Recognition and Enforcement of Foreign
Arbitral Awards (submitted by the Council of Ministers to the HOPR in December 2019 and
expected to be ratified in early 2020). The AGO is also currently leading the effort to ratify the
United Nations (UN) Convention on Contracts for the International Sale of Goods. Many more
economic measures are in the pipeline, indicating the revision efforts are timely and necessary.
The Feteh-supported revisions to these books of the Commercial Code reflect changes in law and
practice globally and respond to the needs of a burgeoning private sector, both domestic and
foreign, in a significantly liberalized economy. They are also being formulated as part of the GoE’s
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effort to improve Ethiopia’s ranking on the Ease of Doing Business indicators of the World Bank.
Indicators such as “making it easier to resolve insolvency” and “protection of minority
investors/shareholders” have underscored the additional need for revising the Commercial Code. As
of this report, Feteh’s local STTAs have handed over the three revised draft books to the Advisory
Council after the completion of review with the relevant working groups. As the three draft books
were treated separately by independent teams, their completion was immediately followed by an
effort to consolidate the books into a single Code, which was undertaken with Feteh’s support.
The consolidation effort, which will bring together the three draft books of the Commercial Code
into one single, consistent draft Code, is currently in progress with the support of Feteh’s well-
seasoned STTA, Mr. Zenebe Burka. Mr. Burka has already submitted a first draft of the consolidated
draft Code to the Advisory Council’s relevant working group for their feedback. Once revised and
updated by Feteh’s STTAs, the banking and insurance parts of the Ethiopian Commercial Code will
become the “Financial Services Code” (see Activities 1.1.2.1 and 1.1.2.2 below).
In addition, a reviewed English translation of the draft Criminal Procedure Code has been
completed by Feteh’s three local STTAs (Mr. Alemu Meheretu, Mr. Kelemework Mideksa, and
Mr. Simeneh Kiros) and submitted to the AGO’s Advisory Council. The revised draft introduces an
array of new legal provisions in view of the fact that the Criminal Procedure Code remained without
major changes for over six decades and was clearly in need of revision. The proposed changes reflect
important developments in the recognition and enforcement of rights of accused persons/suspects.
Some of the rationale behind the overhauling of the Criminal Procedure Code reflects and embodies
the principles and values enshrined under the Ethiopian Constitution of 1995 and international
agreements Ethiopia has ratified. As indicated in the preamble of the draft Code, there is a need to
fully and meaningfully respect and ensure the rights of the accused, suspects, and victims in the
administration of criminal justice. The firm desire to limit the “coercive powers” of the state over its
citizens in the enforcement of criminal law, and to ensure the prevalence of the rule of law so that
the criminal justice system works for the common good, is another reason for the revision. Lastly,
the reorganization of the rules of evidence so as to ensure consistency and effectiveness in the
search for truth in criminal proceedings is another important recommendation that Feteh’s reviewers
advanced.
Feteh also supported the AGO in organizing a meeting of consultative experts to fine tune the draft
Conciliation and Arbitration Proclamation prior to its submission to the Prime Minister’s Office
(PMO). Feteh previously ensured the substantive review and translation from English to Amharic of
this draft. This proclamation will be the first specific comprehensive legislation on the subject, and it
also anticipates Ethiopia’s upcoming ratification of the New York Convention on the Recognition
and Enforcement of Foreign Arbitral Awards.
The organization of a three-day workshop to allow DLDAR experts to finalize the draft Private
Legal Practice Proclamation (attorney’s licensing) was also materially supported by Feteh. The Project
will provide additional expert review and translation once the final draft is ready.
The Federal Prison Commission Establishment Proclamation, whose substantive review and
translation into English Feteh supported in April 2019, has finally been enacted by the HOPR. The
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proclamation incorporates new human rights provisions on the treatment of prisoners, including the
treatment of female prisoners, as enshrined both in the Ethiopian Constitution and the major
international human rights treaties the country has ratified. Given the penitentiary institution’s poor
record in the recent past vis-à-vis respecting the rights of inmates and its direct implication or
involvement in egregious violations of their rights, the proclamation represents a major shift in the
enforcement of human rights and the accountability of violators.
In addition, during this reporting period, the HOPR enacted the Anti-Terrorism Proclamation,
which was also substantively reviewed and translated into English with Feteh’s assistance in April
2019. This proclamation replaces previous legislation that was viewed by many as draconian and
designed to stifle dissent and suppress any criticism of the government. The use of the former
legislation to imprison, exile, torture, or kill journalists, activists, politicians, and others has been well
documented. Reorientation to ensure the proclamation observes the rights of suspects has been the
overriding consideration in its replacement, as also recommended by Feteh’s STTAs. The new
proclamation removes provisions that were major sources of abuse and dismissed the rights of
citizens.
The draft Administrative Procedure Proclamation, reviewed and translated into English by Feteh’s
local STTAs, is also currently before the HOPR. This is an important piece of legislation that
institutes — for the first time in Ethiopia — judicial review of administrative rules, decisions, and
actions. Administrative justice is the most democratic form of justice, in that it impacts the broadest
segment of the population. This judicial review will ensure the accountability of the executive branch
if there is any violation of the law. It will also significantly increase transparency in the administrative
rule-making process and establish mechanisms of redress if administrative authorities infringe on or
violate citizens’ rights. Once the new proclamation is enacted by the HOPR, Feteh will support its
future implementation to build public confidence in the government and the courts.
1.1.1.3 Assist the Advisory Council to record, compile, and publish all background documents and reports of drafting initiatives
Prior to the introduction of the current reform agenda, legislative drafting and deliberations were
not transparent, with no meaningful or regular public consultation and no documentation of the
proceedings. With no documentation of the process, it was often difficult to understand the context
in which they were enacted. This information vacuum was further aggravated by the stark absence of
regular, robust, and meaningful public consultations or other stakeholder engagement.
The GoE now understands that the consistent recording, compilation, and publication of back-
ground documents and preparatory works is critical for future reference. Systematic documentation
of the outputs of the AGO’s Advisory Council and the various volunteer working groups under it
should provide policy context informing the GoE’s reform initiatives and their advancement,
adoption, and implementation.
During the reporting period, Feteh continued discussions with the Head of the Secretariat at the
AGO’s Advisory Council on the Scope of Work (SOW) and candidates for a local STTA to support
this work as envisioned in Activity 1.1.1.3 of the Year 1 Work Plan. Feteh engaged local STTA Dr.
Elias Nour who as of next quarter will start consolidating the background documents and reports on
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all drafting initiatives that the Advisory Council working groups have completed in support of the
AGO.
As a result, interested stakeholders, including the HOPR, government institutions, researchers/
academics — and most importantly the public — will have ready access to available materials about
the law drafting process, including the various consultations that took place at different stages within
the reform program.
1.1.2 Provide substantive support for ongoing legislative initiatives
1.1.2.1 Conduct an assessment of current carriage, insurance, and banking laws
This Work Plan activity was modified last quarter at the AGO’s request to focus on revising the
banking and insurance sections of the Ethiopian Commercial Code and drafting a new Financial
Services Code, thus excluding the “Carriage” part of the original plan. This quarter, two local STTAs
(Mr. Yazachew Belew and Mr. Yinebebe Derseh) have been engaged and started work on the
assessment and redrafting of the laws in both areas, based on the SOW developed for the purpose.
The consultants have developed an action plan for their nine-month assignment to be adopted by
the Advisory Council’s relevant working group. They have also liaised with the NBE — which is the
Ethiopian regulator of the financial sector — and other stakeholders in both the federal government
and the private sector. The assignment is expected to be completed in June 2020. This is a critical
area in the GoE’s reform initiatives, as it is intricately related to a series of measures being
undertaken by the GoE to liberalize the economy, enhance private sector participation, and attract
foreign investment. This initiative for the banking and insurance laws is also significant because the
GoE is resuming its accession negotiations with the World Trade Organization.
1.1.2.2 Provide technical assistance in drafting carriage, banking, and insurance laws
The assessment of STTAs Belew and Derseh under Activity 1.1.2.1 will be followed by the technical
drafting of the new Financial Services Code. The drafting process will involve key stakeholders such
as the NBE, associations of bankers and insurers, government institutions, members of the business
community, and other interested parties. Feteh may also engage one or several international STTAs
on specific areas as the need may be identified by the Advisory Council’s relevant working group.
Once the assignment of Feteh’s STTAs is finalized, the draft Financial Services Code will be
submitted to the Advisory Council and then to the AGO.
1.1.2.3 Conduct public consultations on the three completed books of the Commercial Code, including participants from Regional States
No public consultations on the Commercial Code have been conducted to date. Early plans to
convene consultation were cancelled by the Advisory Council. According to the AGO’s Advisory
Council, private sector representatives were already given substantial opportunities to provide input
on the drafts at various stages. With Feteh’s support, there will be public consultations on the final
draft of the Financial Services Code once it is ready (see Activities 1.1.2.1 and 1.1.2.2 above).
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Activity 1.2: Build the Capacity of AGO’s Directorates and Agencies
1.2.1 Build the capacity of the Legal Research, Drafting, and Dissemination Directorate
1.2.1.1 Develop a work plan to build long-term institutional capacity
This activity has been completed.
1.2.1.2 In liaison with the Justice and Legal Research and Training Institute (JLRTI), conduct training on legislative analysis and drafting
This quarter, the Feteh team completed preparations for a second round of training on legislative
analysis and drafting. A total of 50 participants drawn from the AGO, other federal government
agencies, the PMO, and the HOPR are expected to participate in the training. This second round
will be a rollout and extension of the TOT designed and conducted during the previous quarter by
international STTA Howard Fenton. The DLDAR director, Mr. Belayhun Yirga, who was trained
during the TOT, will be the main trainer for this second round.
The first round of training (held on September 3–5, 2019) focused on context setting and
emphasized public consultation aspects and vetting procedures for draft legislation and the
significance of legislative drafting in a democratic society, as well as the revitalized role of the
drafters in ensuring that the process is transparent and participatory. The second round, which is
expected to take place in January 2020, will broaden its scope and also include regional participants.
It will cover a wide range of topics, including public consultations and vetting procedures, in
addition to discussion of the new Administrative Procedure Proclamation that is due to be enacted
by HOPR. The latter represents a significant legal development since, for the first time,
comprehensive legislation will provide for the judicial review of administrative actions and decisions.
Other themes that could be highlighted during the training are: the role of administrative agencies in
rule making and their obligations under the upcoming Administrative Procedure Proclamation; the
legal drafting implications of the rights of citizens under this proclamation; and the AGO’s role in
the review of ministerial directives and as a repository of these directives.
1.2.1.3 Create synergies and establish formal linkages between (i) the AGO’s Legal Research, Drafting, and Dissemination Directorate, (ii) the legal drafting department of the Prime Minister’s Office, and (iii) Legal, Justice, and Administrative Affairs Standing Committee of the Parliament
The law-making process in Ethiopia has long been characterized by a near total absence of
transparency and meaningful participation by the private sector, the public, and non-government
stakeholders, in addition to unpredictability and a lack of coordination between engaged parties.
Indeed, this process was often unpredictable, arbitrary, and unchecked.
As a consequence, the quality of legislation left much to be desired in terms of both content and
form, since not only was it a product of a process that did not meaningfully engage the views of
stakeholders, but it was also not informed by the required legislative research. At some point there
was a belief that legislation was the panacea to every conceivable problem, and hence a plethora of
legislation was enacted in a rushed fashion in almost all cases. Worsening the situation, institutions
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involved in the legislative drafting process worked in silos and the severe fragmentation that
followed meant a significant number of laws had to be amended/changed far too quickly than
desired or reasonable and some still remain unenforceable.
As part of the effort to address these problems and make the legislative drafting process more
transparent, participatory, and predictable, Feteh is supporting the organization of a workshop that
will bring together representatives of the DLDAR, PMO, and HOPR to harmonize their efforts.
Preparations have now been finalized for this workshop.
A group of 20 participants drawn from these three institutions will come together to discuss
common issues in the law-making process, map ways of collaboration, and institutionalize their
cooperation. The TOT on legislative drafting and analysis conducted by international expert
Howard Fenton in August 2019 also drew participants from the DLDAR, PMO, and HOPR.
Preliminary discussions were held with the TOT participants, with some of the issues discussed are
now topics for the planned workshop. This workshop is due to be conducted in mid-January 2020
and will host officials and experts alike from these institutions.
1.2.1.4 Publication of the AGO’s Criminal Justice Policy in two local languages
This quarter, the printing of 3,000 copies of the Afaan Oromo version of the national Criminal
Justice Policy has been completed in order to make this key document accessible to all citizens in the
country. Printed booklets of the Criminal Justice Policy in three languages — Oromigna, Amharic,
and English — were delivered to the AGO on November 20, 2019. The AGO has since distributed
them to the Oromia government justice bureaus, as well as to law schools and other relevant
institutions at the national level.
The printing of 2,500 copies in the Tigrigna language is nearly completed, and these editions will be
ready for distribution to Tigray regional government and other institutions in January 2020.
Trilingual versions of the Criminal Justice Policy (Afaan Oromo/ Tigrigna, Amharic and English)
The broad purpose of the Criminal Justice Policy is to create conditions conducive to the “existence
of a just, fair, accessible, effective, predictable, transparent, and accountable criminal justice system.”
The policy document is essentially a response to the uncoordinated efforts and fragmentation that
affected law enforcement agencies in Ethiopia for over a decade. It also includes sections on the
rights of the accused, such as representation by legal counsel, and improving the justice system’s
response to vulnerable groups in the Ethiopian society.
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1.2.2 Build the Capacity of the Civil Justice Administration Directorate
1.2.2.1 In liaison with the JLRTI, conduct training on international contracts and international arbitration for Civil Justice Administration Directorate staff and experts from other key government institutions
The GoE is keen to build the capacity of government institutions in the justice sector, given the
need to expedite the reform process and the heightened role these institutions have in realizing
reform ideals. One of these institutions is the AGO, which is instrumental in enforcing citizens’
rights as enshrined under the Constitution and the international human rights treaties Ethiopia has
ratified. The AGO is also the main legal advisor to the federal government, and it is the principal
body for protecting the interests of the public and the government in civil matters.
Given the broad spectrum of responsibilities the AGO has to discharge1, the institutional capacity
needed to perform these tasks is enormous. Indeed, a brief capacity assessment of the DCJA
conducted by Feteh revealed acute limitations in the areas of drafting and negotiating international
contracts and in arbitration. Limited technical expertise in these areas, combined with a lack of
adequate and standardized manuals or operating procedures, means the DCJA cannot meaningfully
address a range of complex and significant issues. Evidence of this gap includes a number of abuses
of public property and finances and the country’s complete dependence on retained foreign lawyers
to represent Ethiopia in international arbitration.
To address this need for capacity building, Feteh engaged Mr. Jesús Bores as an international STTA
and Mr. Yazachew Belew as a national STTA to work jointly with the DCJA for a four-week
assignment starting on September 16, 2019. Their role was to: assess the DCJA’s management of
international contracting and arbitration involving federal entities, identify gaps, provide
recommendations for improvement, and conduct training on the subject for the AGO and
representatives of several other federal ministries and agencies.
During the reporting period, both consultants completed their assessment report and conducted two
rounds of training on international contracts and arbitration, the first on September 30–October 2
and the second on October 7–9, 2019 in Bishoftu (outside of Addis Ababa). The training module
was informed largely by the findings and recommendations of the assessment report. Major topics in
the three-day training sessions (in two rounds) included:
1 Specifically, the AGO:
• advises and participates in contract preparation and negotiation of government “mega projects” with relevant entities
• participates, advises, or intervenes in the preparation of contracts and negotiations when it is of the belief that public and/or government interests could be at stake
• institutes civil suits on behalf of federal government agencies • gives direction to government institutions on the management of civil litigation • causes execution of judgments in accordance with law • resolves disputes between federal government institutions judicially or through alternative dispute resolution
mechanisms.
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• An introduction to international contracts
• Drafting international contracts
• Negotiation skills with practical exercises and cases
• An introduction to international arbitration
• Drafting effective arbitration clauses with practical exercises and cases
• The AGO’s protocols and practices for international contracts
• Challenges and opportunities in international arbitration
The training also explored the current status of Ethiopia’s ratification of the New York Convention
for the Recognition and Enforcement of Foreign Arbitral Awards. Key features of the convention
and of the draft conciliation and arbitration proclamation, an important piece of legislation whose
drafting is also supported by Feteh, were also discussed and commented on by the trainers and
participants.
The training employed a mix of methodologies including presentations on key issues by the experts;
reactions, reflections and questions on the presentations; group discussions, and reporting followed
by Q&A sessions. The trainees at both sessions reported an overwhelming satisfaction with the
training; including the quality of the presentations’ delivery, relevance and topical content.
Across the two training sessions, a total of forty-two participants attended from the DCJA, PMO,
other federal government ministries, state-owned enterprises, and city government entities.
Training on International Contracts and Arbitration Session 2 group picture, October 7–9, 2019
Participants of the training on International Contracts and Arbitration Session 1 group picture,
September 30–October 2, 2019
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Training Participants Summary
First Round Training Date: Sep 30–Oct2, 2019 Second Round Training Date: Oct 7–Oct 9, 2019
Age Female Male Total
≤25 1 1 2
26–30 2 14 16
31–35 5 9 14
36–40 0 4 4
41–45 0 3 3
46–50 0 2 2
≥51 0 1 1
Grand Total 8 34 42
Percent 19 81 100
1.2.2.2 Develop a manual and/or other resource materials governing directorate work practices on international contracts and international arbitration
During the reporting period, STTAs Bores and Belew also prepared two draft manuals that will
serve as operational guidelines for the DCJA.
The first draft manual relates to procedures for the DCJA in its provision of legal advice to
government institutions regarding international contracts. This is a critical area needing support as
the assessment of the existing procedures noted that they were not adequate and responsive enough
to the needs and challenges in this area. The draft manual provides guidance for the drafting and
review of international contracts entered into by federal institutions. A wide range of items are
covered, including the submission of contracts for review, contract assignment and prioritization,
contract modifications, planning, standards of conduct, contract administration, and audits.
The second draft manual relates to templates for international contracts with the main objective of
helping the AGO monitor the procurement of goods and services and construction works by federal
institutions in a manner that enhances access, competition, and fairness and results in the best value
or, where possible, the optimal balance of overall benefits to the citizens. It includes illustrative legal
provisions to adopt when drafting contracts and specific recommendations for challenges identified,
including on international arbitration.
Both manuals will be finalized next quarter in close cooperation with the DCJA.
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1.2.3 Support the AGO’s Human Rights Action Plan Coordination Office
1.2.3.1 In cooperation with CSOs, conduct training on recent legislative reforms relating to the promotion and protection of human rights (to be conducted through a grant/subcontract under Activity 2.1)
On December 9, 2019, Feteh entered into a fixed-price subcontract with LHR, a local CSO, to
provide regional trainings on recent legislative reforms relating to the promotion and protection of
human rights. The training plan puts emphasis on protecting the rights of female prisoners. LHR
will provide these trainings in cooperation with the AGO’s Human Rights Action Plan Office.
Regional public prosecutors and prison officers/officials from eight regional states and entities (Dire
Dawa, Afar, Amhara, Harari, Oromia, Somali, Southern Nations Nationalities and Peoples, and
Tigray) will be the target of these training sessions. The total number of trainees will be 280, and
they will be selected by the federal and regional AGOs. The training sessions will take place starting
in the next quarter in four locations (Adama, Bahir Dar, Dire Dawa, and Mekele), and they are
expected to be completed in May 2020.
Recently enacted legislation on the establishment of a prison commission incorporates a range of
human rights provisions on the treatment of prisoners. Mr. Ameha Mekonnen, Director of LHR,
was involved in drafting this legislation, which will form part of the training module. The training
comes at a time when recent reports of egregious human rights violations directly implicate
members of these regional institutions.
This activity will be also a foundation on which to build lasting linkages between the AGO and
CSOs in implementing legal reforms through civil society engagement.
1.2.4 Support the Civil Society Organizations Agency
1.2.4.1 In cooperation with the AGO’s Advisory Council and in liaison with the JLRTI, conduct training of CSO Agency staff on the new CSO law
This activity was completed in the previous quarter.
Subcontract signing on December 9, 2019 with Mr. Ameha Mekonnen, Director of Lawyers for Human Rights (LHR) and Feteh’s COP
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1.2.4.2 In cooperation with the ACSO and in liaison with the JLRTI, provide training to other ministries and government agencies involved in the implementation of the new CSO law
This activity was completed in the previous quarter.
1.2.4.3 Provide technical assistance to the CSO Agency’s working group that will engage in drafting the CSO Proclamation’s implementing regulation and the CSO Agency’s directives, guidelines, and manuals
The CSO Proclamation (No. 1113/2019) mandates the ACSO to issue directives on various areas of
the law in order to fully implement the Proclamation.
As part of this, Feteh retained the services of two local STTAs, Mr. Zenebe Burka and Ms. Blain
Worku, to draft five directives as identified by the ACSO. These are the:
• Directive on the Operational and Administrative Costs of CSOs (including organizations
exempted from the application of “80/20 rule”2)
• Directive on the Administration and Transfer of Properties and Appointment of Liquidators
• Directive on the Administration of Income Generating Activities, Public Collection, and
Cost Sharing Mechanisms
• Directive on the Registration and Administration of Professional Civil Societies
• Directive for the Operation and Administration of the Civil Society Fund
During this quarter, drafts of these five directives were completed in close collaboration with the
ACSO’s staff and have been submitted to the ACSO’s management for review and approval.
1.2.4.4 Conduct public consultations with CSOs on the Regulations and Directives to be drafted
During the reporting period, Feteh undertook all necessary preparations to conduct a stakeholder’s
consultation workshop in January 2020 on the five draft CSO directives prepared with Feteh’s
technical assistance. Three sessions are planned — one with 50 representatives of professional
associations to discuss the Directive on the Registration and Administration of Professional Civil
Societies, and two with 100 CSO representatives each, to discuss the four other directives noted
above.
2 According to the CSO Proclamation only 20% of a CSO’s income can be spent on administrative costs, which is a
slight improvement from the previous rule of 70/30. However, the new rule is much more specific about what constitutes administrative costs, which leaves program development and management to the discretion of the individual CSO.
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COMPONENT 2
Activity 2.1: Provide Grants/Subcontracts to CSOs and the Media and Monitor and Support Implementation
2.1.1 Develop and issue an RFA to award grants/subcontracts for CSOs to better participate in the reform process
As part of ensuring public input in the democratic reform process and public consultation on
proposed changes to the country’s legal and judicial framework, on June 3, 2019 Feteh released an
RFA (RFA No. 1/2019) seeking proposals from Ethiopian CSOs and media organizations.
Following the issuance of RFA No. 1/2019, 22 entities requested and received the RFA, and five
entities submitted proposals under the RFA’s requirements. These applicants were: Amen Events,
ARTS Media, ECSF, LHR, and Solomon Advert.
2.1.2 Review proposals and make grants/subcontracts
Last quarter, the RFA evaluation committee reviewed the applicants’ proposals and scored each
proposal individually according to the RFA evaluation criteria.
Two grant applicants, ARTS Media and ECSF, obtained the highest scores and were subsequently
proposed to undertake the activities of the RFA as indicated below.
ECSF proposed to undertake:
• TOT for 50 participants in two rounds on the new CSO Proclamation and repositioning to
the spirit of the new civil society environment.
• TOT for 25 participants on the integration of a Human Rights Based Approach in the
development programs of CSOs.
• Conduct a consultation workshop between CSO Networks/Consortia and the AGO to
identify and incorporate best practices in legal reform and engage CSOs in oversight and
compliance to develop long-term solutions for reform process.
• Organize town-hall dialogue sessions among Ethiopian government, media agencies, and
CSOs aiming at increasing public trust and public engagement in the legal and judicial
reform processes.
• Develop training for mass media professionals on producing and broadcasting positive
media products, promoting human rights, and improving public perception and awareness of
the judicial framework and the role of civil society in the reform process.
• Produce and broadcast regular mass media programs to publicize the major processes and
products of the dialogue and consultative meetings of the project.
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ARTS Media proposed to:
• Organize, record and transmit 36 forum discussions (regarding the new CSO Proclamation,
the Administrative Procedure Proclamation, the use of dispute resolution mechanisms in the
investment and commerce sector, and the court system and judicial reform).
• Produce and transmit 12 spotlights (concerning rural women’s access to farmland, youth
entrepreneurs, and best interest of the child).
• Produce and transmit 12 documentary dramas (relating to “Ethiopia’s Legislative Culture:
Recent Past & Present”; “Prisons & Prison Administration in Ethiopia”; “Agenda for
Reform”; and “Ethiopia’s Legislative Culture: Recent Past & Present”).
• Provide six training sessions to the police, legal drafters, judges, and police, as well as
training on the implementation of the new CSO Proclamation.
• Organize, record, and transmit three town hall meetings (on one of the following topics —
“Ethiopian legislative culture”; “Prison and prison administration in Ethiopia”; and “Teff,
Bio-Piracy, Ethiopian Farmers, and Transnational Litigation”).
On October 23 and 24, Feteh undertook an extensive pre-award assessment of ECSF and ARTS
Media’s management, finances, and operational capacity to undertake the proposed grants. The due
diligence of ECSF and ARTS Media in the pre-award survey concluded that both applicants had the
management, financial, and operational capacity to undertake the grants and implement all proposed
activities.
As proposed by Feteh, both grants were approved by USAID on November 13, 2019.
Feteh held signing ceremonies with ECSF and ARTS Media on November 26 and 28, respectively.
Preparations have been completed by ECSF to conduct training and by ARTS Media to broadcast
the first forum discussions in January 2020.
As mentioned in the discussion of Activity 1.1.3.1 above, during the reporting period Feteh also
entered into a fixed-price subcontract with LHR, to provide regional training on recent legislative
Grant Agreement signing with Mr. Dula Tessema, CEO of ARTS Media Production S.C, and Feteh’s COP
Grant Agreement signing with Mrs. Bilen Asrat, Executive Director of ECSF, and Feteh’s COP
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reforms relating to the promotion and protection of human rights. LHR will provide these training
sessions in close cooperation with the AGO’s Human Rights Action Plan Office beginning in
January 2020. This activity will be a foundation to build lasting linkages between the AGO and
CSOs in implementing legal reforms through civil society engagement.
Lastly, as part of improving public perception on the reform process, Feteh has received a proposal
from a local media company (Solomon Advert) to produce and broadcast radio spots on selected
areas of recent legal and judicial reform initiatives. Feteh completed its review of the proposal in
November 2019 and requested a detailed action plan, which Solomon Advert submitted on
December 4, 2019. This action plan was being reviewed at the quarter’s end. Feteh anticipates signing
a fixed-price subcontract with Solomon Advert in January 2020 for immediate implementation of
the proposed activities.
2.1.3 Provide relevant training for CSOs to effectively implement grants/subcontracts; monitor implementation of grants
On December 5, Feteh provided a half-day training to its two grantees, ECSF and ARTS Media. The
training was conducted by Feteh’s technical and operations team on financial management,
procurement, and monitoring and evaluation of grant activities.
Training Participant Summary
Training Date: December 5, 2019
Age Female Male Total
All 2 2 4
Grand Total 2 2 4
On December 18, Feteh conducted a one-day orientation workshop with 41 representatives of CSOs
working in governance, rule of law, gender, and related areas. During this workshop, Feteh
introduced its work and the Project’s overall objectives. Attendees were briefed on USAID’s grant
award process, financial management, procurement, and monitoring and evaluation of grant
activities, as well as the general requirements to apply for a grant with USAID.
Feteh’s current grantees (ECSF and ARTS Media) made short presentations for the workshop
participants about their experience with Feteh’s grant awards and implementing activities. In addition,
Feteh was able to garner ideas on potential areas of support and activities that could be implemented
through grants by CSOs in 2020. The event also provided an opportunity for CSOs to network and
gave the opening remarks at the beginning of the workshop.
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2.1.4 Monitor implementation of grants and sub-contracts
This activity will begin next quarter.
Activity 2.2: Establish Formal and Lasting Linkages between Civil Society and the AGO to Implement Reforms through Civic Engagement
2.2.1 Develop and support a committee of justice sector actors, including CSOs and the media, who can continue to inform public about legal reforms
During the quarter, grant agreements were executed by ECSF and ARTS Media for these activities:
• ECSF will conduct one consultation workshop between CSO networks/consortia and the
AGO to identify and incorporate best practices in legal reforms.
• ARTS Media will produce 12 forum discussions, six spotlights, four documentary dramas,
and one town hall meeting. With these productions, ARTS Media will work with several
representatives of the FSCE and AGO to improve public perception and engagement on
recent legal and judicial reforms.
2.2.2 Develop town hall meetings for rule of law actors, including CSOs and the media, to engage with public and raise awareness of reforms and human rights, particularly focusing on women and youth
This activity will be implemented by ARTS Media. ARTS Media will hold a town hall meeting by the
end of 2020 in Addis Ababa, which will be recorded and broadcast so it can be viewed by all citizens
across the country.
CSO representatives participating in the workshop Ms. Corinne Rothblum (center), Deputy Director of DG Office at USAID/Ethiopia, making opening remarks at workshop
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2.2.3 Assist the FSCE and the AGO to work with the media to improve public perception of the justice reform process, including signing two MOUs between the AGO’s and the FSCE’s Communication Directorate and the media
This activity will be implemented by ARTS Media. ARTS Media will produce 12 forum discussions,
six spotlights (short video clips spotlighting key issues), four documentary dramas, and one town
hall meeting. These productions will be aired on television and distributed online via social media for
wide coverage and reach.
With these productions, ARTS Media will work with several representatives of the FSCE and AGO
to improve public perception and engagement on recent legal and judicial reforms.
COMPONENT 3
Activity 3.1: Improve Laws Governing the Judiciary
The general objective of this activity is to improve the various framework laws and sub-legal acts,
including the Federal Judicial Administration Proclamation, the related Regulation on the Federal
Judicial Code of Conduct and Rules of Disciplinary Procedure, the Federal Judicial Performance
Evaluation Directive, and the Proclamation on the Federal Courts, which the FSCE has identified as
part of the national reform agenda and prioritized their revision.
These laws provide the foundation for the administration of justice by governing how the judiciary
and courts as an institution, and judges as individuals, should operate. The Federal Judicial
Administration Proclamation is aimed at providing a comprehensive framework for the
administration of judicial affairs, while ensuring the independence, impartiality, and accountability of
the federal judiciary. The new Proclamation on the Federal Courts, among other laws, is intended to
introduce changes in the jurisdiction of federal courts, while amending prior gaps and challenges,
including accessibility for all citizens.
As stated in previous quarterly reports, all activities intended to be undertaken under this activity
have been successfully carried out. The main sub-activities that were listed under this major activity
and their respective accomplishments are specified in the following sections.
3.1.1 Support FSCE efforts to revise various framework laws, including the Law on Judicial Administration and the Law on Federal Courts
As part of this activity, Feteh aims to support the FSCE’s legislative and regulatory efforts by
providing expertise on drafting issues, as requested, and preparing background documents and gap
analyses of the laws to be revised. In Quarter 3, Feteh engaged STTA Dr. Elias Nour as a national
consultant to work on these tasks. Dr. Nour collected and compiled the minutes and notes of
working groups and consultations conducted on the framework legislation, reviewed previous
studies conducted on the issues and challenges facing the judiciary, interviewed members of the
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Judicial Reform Advisory Council, and prepared a draft report with an analysis of gaps and the
changes introduced through the new laws.
Feteh reviewed Dr. Elias’ draft report in Quarter 3. In this quarter (Quarter 4), Dr. Elias finalized the
report incorporating Feteh’s feedback. The report then also supported the further progress of the
draft legislation through the final deliberations of the Advisory Council’s Drafting Committees and
the submission of the draft laws to the HOPR. Members of the Advisory Council and the leadership
of the Federal Courts used the draft background document as a source document while making final
revisions in the laws before submitting them to parliament. The report helped facilitate an
understanding of the new draft proclamation, the objective of the changes introduced into the
proclamation, and its implementation after the law is approved. The two draft proclamations are
currently being debated in the HOPR.
For Year 2, Feteh plans to conduct familiarization events for judges and other stakeholders on the
newly adopted key laws governing the judiciary.
3.1.2 Sponsor public consultations to solicit CSOs’ and stakeholders’ input on draft laws
This activity was successfully completed in Quarters 2 and 3.
3.1.3 Assist the FSCE in incorporating appropriate input into final drafts
To ensure that relevant input from the public consultations mentioned in Activity 3.1.2 will be
incorporated into the drafts of the Federal Judicial Administration Proclamation and the
Proclamation on the Federal Courts, and to assist the FSCE in making relevant changes in the draft
proclamations, Feteh prepared detailed reports with questions, feedback, and comments raised during
the consultations and submitted them to members of the Drafting Committee of the Judicial
Reform Advisory Council. These included: the tenure of judges and the qualifications and
experience required for appointment to various levels of the federal courts, the jurisdiction of the
federal courts vis-à-vis state courts, the cassation powers of the FSCE, the establishment of federal
circuit courts in regional states, the increased material jurisdiction of the Federal First Instance
Court, and other critical matters.
Subsequently, Advisory Council members made the necessary revisions, and the FSCE has
submitted the revised draft proclamations to the HOPR for deliberation and promulgation. These
laws, once passed by HOPR, will be the basis for further legislative and operational reforms that will
be undertaken to strengthen the judiciary.
Activity 3.2: Strengthen Commercial Benches
3.2.1 Assist the FSCE in strengthening commercial benches
As part of its effort to improve case management in Ethiopia’s courts, the FSCE intends to
strengthen the specialized commercial benches established to exclusively hear and handle
commercial litigation at the Federal First Instance and Federal High Court levels, in order to speed
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up the processing and resolution of commercial cases. The FSCE believes that assessing gaps in
commercial bench practices and proposing an action plan to fill them, setting time standards to
reduce the average time it takes to resolve commercial cases, and training the judges on commercial
benches in complex legal issues (such as those arising in bankruptcy and construction law) will
greatly facilitate speedy, reliable, and predictable resolution of commercial cases.
In Quarter 3, Feteh’s COP, DCOP, and Judicial Reform Specialist met with the Deputy Chief Justice,
the Deputy President of the Federal High Court, and the President of Federal First Instance Court
to refine the FSCE’s needs for commercial bench activities so that Feteh could finalize an SOW for
the required STTA.
In this quarter, after a long search for an international expert with extensive, hands-on experience in
commercial law and commercial courts, Feteh engaged Judge Robert Vincent Makaramba, a retired
judge of the commercial division of the High Court of Tanzania, to undertake the activities under
this assignment. Those activities aimed at strengthening the commercial benches of Ethiopian
Federal Courts. Feteh also engaged a national consultant STTA, Dr. Muradu Abdo, to collaborate
with Judge Makaramba.
Since the date of their engagement, both consultants, with the assistance of Feteh’s Justice Reform
Specialist, conducted a series of meetings with the Presidents and Vice Presidents of the various
levels of the federal courts, commercial bench judges, and other stakeholders, in order to identify
gaps or bottlenecks that would inform their assessment and determine areas of improvement. The
consultants also met with the IT Director of the Federal High Court and examined data generated
by the Court Case Management System of the Federal High Court and Federal First Instance Court,
to better understand the cost of litigation in the commercial benches.
Among other stakeholders, the consultants also held meetings with the Ethiopian Lawyers’
Association, private attorneys, the Arbitration Institute of the Addis Ababa Chamber of Commerce,
the American Chamber of Commerce, and representatives of other stakeholders, such as the
International STTA Judge Robert Makaramba and national STTA Dr. Muradu (in the middle), with Feteh’s Justice Reform Specialist and
Intern after meeting with the President, Vice Presidents, judges and Court Manager of the Federal High Court
Introductory meeting, from left to right: Feteh’s DCOP, International STTA Judge Robert Makaramba,
Chief Justice of the Federal Supreme Court, Ms. Meaza Ashenafi, National STTA Dr. Abdo Muradu, and
Feteh’s COP David de Giles
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Ministry of Trade and Industry and the Ethiopian Roads Authority. Some of these institutions (e.g.,
the Ethiopian Roads Authority) have several commercial disputes related to construction contracts
pending in commercial benches.
The consultants collected information through structured, open-ended interviews and discussions.
The consultants also engaged in a review of the relevant laws in Ethiopia, among which are the
Commercial Code and its currently proposed revision, and the Civil Procedure Code, various laws
relating to banking and credit, proclamations relating to commercial registration, business licensing,
and income tax, and various other regulations and directives. The consultants also undertook a
comprehensive review of the legal literature, in addition to data and documents collected from the
visited courts.
As part of the assessment, Judge Makaramba and Dr. Muradu prepared and distributed a Training
Needs Assessment Questionnaire to commercial bench judges at the Federal First Instance and
Federal High Court, in order to identify specific areas of training that could be delivered in the
future. The results of the needs assessment confirmed that judges need training in many commercial
law areas, such as bankruptcy law, company formation and dissolution, intellectual property,
construction law, insurance, and enforcement of foreign arbitral awards.
The consultants also observed court proceedings at the commercial bench of the Federal First
Instance Court, where they observed how the judge handled various commercial proceedings and
how parties and attorneys presented themselves and their cases at the bench.
After extensive discussion and review of relevant documents, the consultants prepared an
assessment report. The report provides background about access to commercial justice in Ethiopia,
and discusses the judicial landscape and sources of the commercial law in Ethiopia, including the
draft revised Commercial Code and the Civil Procedure Code. It also addresses the peculiar nature
Ato Debebe Hailegabriel, President of the Ethiopian Lawyers’ Association, in a meeting with national STTA
Dr. Muradu Abdo
Ato Solomon Worku, Director of IT Department at the Federal High Court, explaining the features of the Court
Case Management System to International STTA Judge Robert V. Makaramba and national STTA
Dr. Muradu Abdo
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of construction contracts and the impact of the non-ratification of the New York Convention on
the Recognition and Enforcement of Foreign Arbitral Awards.
The assessment report highlights the key challenges to commercial dispute resolution in Ethiopia.
Among these are:
• A lack of specialized knowledge and skills in commercial matters on the part of judges
• A lack of adequate courtrooms, special procedures, and support staff dedicated to
commercial benches
• Limited understanding of lawyers about commercial issues and the nature of accelerated
procedures
• A lack of cooperation between stakeholders, particularly among strategic ministries such as
the Ministry of Trade and Industry and commercial banks
• Poor enforcement of court decisions and orders
• Court annexed mediation is not being utilized fully and is not mandatory
The findings of the assessment also revealed that judges are overburdened with caseload.
Furthermore, despite having six commercial benches at the Federal High Court and five at the
Federal First Instance Court, the commercial benches exist in name only. This is due to the
following reasons: there is no special procedure for commercial litigation cases; some judges do not
have the required qualifications to deal with commercial cases and/or did not receive any specialized
training; commercial benches have no support staff of their own and have to share limited human
and financial resources with other benches; and there is no clear definition of what should be
considered a commercial case (these judges also deal with construction, banking, and insurance
related cases).
The assessment report also made reference to good practices from other jurisdictions that have
specialized benches and described the experience of Ghana, Tanzania, and Uganda, with a summary
of lessons learned from each. Recommendations are also provided which the Ethiopian courts can
adopt and implement on a short- and long-term basis.
Judge Makaramba and Dr. Muradu presented the findings of the assessment at the State of the
Judiciary event held on Saturday, December 21, 2019 at the UN Conference Center in Addis Ababa,
after the extension of Justice Makaramba’s mission based on the request of the Chief Justice. This
event was organized by the FSCE to discuss the current state of the federal judiciary, in the presence
of 850 participants and representatives drawn from the legislative and the executive branches, judges
of all levels of court, Regional Supreme Court Presidents, lecturers, selected students from the Law
School of Addis Ababa University, members of the business community, representatives of CSOs,
youth movements, development partners, and other stakeholders. The findings of the study were an
“eye opener” for the courts, as the study identified issues that had been overlooked, or seemed of
minor significance, as having a greater impact. Judge Makaramba and Dr. Muradu were the only
external speakers invited by the FSCE to make presentations at the State of the Judiciary.
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Judge Makaramba and Dr. Muradu, in addition to the assessment report, also produced a draft
training module and selection criteria for commercial bench judges, detailing the profile they must
possess in qualifications and experience. These deliverables are currently being reviewed by Feteh,
and once finalized, they will be submitted to the FSCE for additional feedback.
On December 19, 2019, Mr. Makaramba also delivered lectures to 20 graduate students of the Addis
Ababa University School of Law who are specializing in business law. Lecture topics included the
legal frameworks and practices regarding commercial arbitration, investment dispute settlement,
mediation and land dispute resolution, and other highly relevant issues in contemporary Ethiopia.
The lecture was so well received that Feteh’s management team is considering including a provision
for a guest lecture at the School of Law, subject to the request by the faculty, in the SOW for every
visiting international STTA.
3.2.2 Provide training to judges selected to sit on the commercial bench
International STTA Judge Makaramba and national STTA Dr. Muradu delivered a three-day TOT
on December 6–8, 2019 for commercial bench judges of the Federal High Court and Federal First
Instance Court and selected judges of the FSCE who handle commercial cases.
During the three-day session, training focused on prominent features of commercial dispute
resolution in Ethiopia. Judge Makaramba started the session by expounding the sources of
commercial law in the Ethiopian context. Dr. Muradu then gave a brief introduction of the
Commercial Code of Ethiopia and introduced judges to the salient features of the draft revised
Commercial Code, which judges expressed particular appreciation for.
Dr. Muradu also dedicated a session to training judges on the process of the Liquidation and
Dissolution of Companies, which was one of the areas judges identified as in need of training and
further capacity building during the assessment.
International STTA Judge Robert V. Makaramba delivering a lecture to graduate
students of Addis Ababa University specializing in Business Law
International STTA Judge Robert V. Makaramba presenting the findings of the assessment on commercial benches at
the State of the Judiciary event on December 21, 2019
National STTA Dr. Muradu Abdo, presenting the findings of the
assessment on commercial benches at the State of the Judiciary event on
December 21, 2019
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Judge Makaramba also provided training on the legal framework for commercial arbitration,
focusing on the role of courts in the enforcement of arbitral awards. In addition, Judge Makaramba
took trainee judges through introductory concepts on the training of judges, judge craft (the art of
judging), the Judicial Code of Conduct, and ethics and independence in judging.
Lastly, Judge Makaramba trained judges on one of the essential skills that judges are required to
develop: judgment writing. The session on judgment writing was the basis for a mock trial organized
by the trainers. Judges were given a hypothetical commercial claim, which they were expected to
deliberate on and resolve by preparing a mock trial judgment. For this purpose, the judges were
divided into three groups to discuss the hypothetical case, and the groups assigned roles among
themselves (to identify who would play counsel representing the plaintiff and the defendant and
judges to deliver and write a judgment). Judge Makaramba, after reviewing the judgments passed by
the selected presiding judges, gave his comments on the overall procedure, as well as issues related
to court decorum, and reviewed the mock judgments in light of the basic techniques of judgment
writing.
Participants of the TOT for Commercial Bench Judges conducted in Bishoftu, December 6–8, 2019
International STTA Judge Robert V. Makaramba, delivering training at the TOT for Commercial
Bench Judges conducted in Bishoftu, December 6–8, 2019
National STTA Dr. Muradu Abdo delivering training at the TOT for Commercial Bench Judges conducted in
Bishoftu, December 6–8,2019
National STTA Dr. Muradu Abdo delivering training at the
TOT for Commercial Bench Judges conducted in Bishoftu, December 6-8,2019
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Judges playing roles in a mock trial: Counsel for Plaintiff (left), Presiding judges (middle) and Counsel for Defendant (right) at the TOT for Commercial Bench Judges conducted in Bishoftu, December 6-8,2019
Trainee judges, the President and Vice President of the Federal High Court, and the Vice President
of the Federal First Instance Court, who attended the training session expressed their satisfaction
with the content and delivery of the training. They also requested further training on the specific
areas of commercial law that were identified during the assessment. After the completion of the
training, Judge Makaramba selected 13 judges from the training participants who could potentially
be future trainers, and provided them with further orientation.
As per the request of presidents and judges of the various levels of court, in Year 2, Feteh plans to
facilitate training on the specific areas of commercial law identified through the assessment,
including study tours to exchange experiences and best practices with commercial bench judges in
other East African countries.
Capacity building of commercial bench judges
Training Participant Summary
Training Date: December 6–8, 2019
Age Female Male Total Percent
≤25 0 0 0 0
26–30 3 3 13
31–35 6 6 25
36–40 2 7 9 38
41–45 2 2 8
46–50 2 2 8
≥51 1 1 2 8
Grand Total 3 21 24 100
Percent 13 88 100 --
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Activity 3.3: Enhance Case Flow Management
3.3.1 Assist in reducing case backlogs in selected courts
In Quarter 2, Feteh engaged international STTA Ms. Fabiola Kamariza to assist the FSCE in
improving case flow management and backlog reduction in the federal courts. During her mission,
she prepared terms of reference for the backlog reduction officers expected to participate in a pilot
program, developed a draft Case Flow Management Improvement Plan and a draft Backlog
Reduction and Prevention Strategy, and drafted a training manual for the legal professionals who
will be deployed for backlog reduction. Ms. Kamariza also reviewed and revised the Civil and
Criminal Case Flow Management Directives previously prepared by the FSCE. Feteh submitted these
deliverables on September 30, 2019 for the FSCE’s review and comment. The plan envisaged by
Feteh was to finalize the Case Flow Management Improvement Plan and the Backlog Reduction and
Prevention Strategy after receiving feedback from the FSCE on these deliverables, and then to
implement next steps, which include the training and deployment of the young legal professionals in
the selected pilot courts.
As reported in Quarter 2 and Quarter 3, Feteh was awaiting the recruitment of legal professionals by
the FSCE. These were to be chosen from the pool of applicants who applied for an Assistant Judge
position in the three levels of court announced by the FSCE, in order to proceed to launching the
pilot comprehensive backlog reduction program in the identified courts. Subsequently, identifying
potential candidates was underway through the review of each applicant’s curriculum vitae, a process
which took longer than anticipated.
Currently, with the assignment of the new Case Flow Management Coordinator at the FSCE, this
process has started moving forward once again. A recent development is that the recruitment of
these professionals from applicants for the Assistant Judge position was found to be impracticable,
as the position they applied for is to be handled through the appointment process of the Judicial
Administration Council, and on a permanent basis, without a contractual time limit. As a result, Feteh
now plans to engage experts for a pilot period of not more than six months. A final solution,
proposed by the FSCE and agreed to by Feteh, is to announce a new vacancy for the recruitment of
short-term legal experts who will be contractually hired for six months, with the possibility of
joining the judiciary as permanent staff depending on their performance. Accordingly, the FSCE has
issued the vacancy announcement for this position in a local newspaper.
3.3.2 Assist the FSCE in reviewing, updating, and finalizing the Cassation Guidelines
Preparatory activities necessary for the undertaking of this assignment were conducted in previous
quarters. During Quarter 2, Feteh’s COP met with Ms. Pauline Lecointe, the head of the French
Cooperation Agency, which supported the development of the original draft guidelines, to discuss
collaborative opportunities to update and finalize the draft Cassation Guidelines for the FSCE. The
Agency expressed its willingness to support Feteh in completing this task.
In addition, Feteh reviewed the current draft to determine what remains to be done and found that
several elements of the guidelines need to be updated. However, to do so, promulgation of the
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Proclamation on the Federal Courts, which is currently in review with the HOPR, must pass. Feteh
anticipates the proclamation’s adoption by February 2020.
In view of these and other developments, Feteh decided to postpone this assignment to Year 2. A
request for support was submitted by the FSCE, asking Feteh to undertake an assessment on making
the Cassation Division a discretionary review bench, which will determine the necessity for engaging
in the updating and finalization of the Cassation Guidelines.
3.3.3 Develop Criminal and Civil Procedure Bench Books for Judges
As part of its effort to improve case management in the federal courts through interventions
targeting efficiency and accountability, the FSCE intends to put in place an integrated Civil and
Criminal Procedure Bench Book to help judges properly conduct and dispose of their cases. The
FSCE envisions the integrated bench book to be a how-to manual — i.e., a resource for judges to
obtain immediate guidance on how to proceed while hearing cases. It will also help them deal with
situations they are likely to encounter on the bench.
In Quarter 3, Feteh prepared an SOW for a judicial process expert to review, update, and compile the
Civil and Criminal Procedure Bench Book, including material guiding the conduct of appeals. In this
quarter, Feteh was able to identify and engage Mr. Tafesse Yirga, a former judge of the FSCE, to
carry out this assignment.
Currently, Mr. Yirga is working on updating drafts that were developed more than a decade ago but
never adopted or implemented. In revising the criminal procedure guidance, Mr. Yirga is taking into
account the changes incorporated in the new Criminal Procedure Code, which has been submitted
to the Council of Ministers for approval. (The drafting of the Criminal Procedure Code was finalized
with Feteh’s technical assistance, see Activity 1.1.1.2 above.)
Mr. Yirga plans a single integrated bench book with three parts, which will address civil, criminal,
and appellate procedures. Prior to finalizing its format as one consolidated volume, Feteh intends to
seek consultative input from judges and other possible end-users as to whether they desire this form
for publication or would prefer separate, subject-specific volumes.
The completion of this activity will extend to Feteh’s Year 2 Work Plan.
Activity 3.4: Improve Court Administration
3.4.1 Conduct assessment on IT services provided by federal courts
One of the FSCE’s priorities is to improve court administration and the provision of services to
citizens through the use of IT tools in the federal courts. For this purpose, the FSCE intends to
conduct an assessment of the IT services currently provided within the courts in order to improve
the provision of services. Feteh is assisting the FSCE with this assessment by engaging an IT
professional to assess IT services provided within federal courts at all levels. This will help identify
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the specific needs of each court, outline issues and problems in the existing system, and evaluate
future IT needs.
In Quarter 3, an SOW was prepared, and a national consultant was identified by the Project,
pending approval by USAID. In this quarter, Mr. Bizuneh Bekele was engaged to undertake the
assignment starting November 6, 2019. Soon after his engagement, Mr. Bekele met with the Deputy
Chief Justice of the FSCE and the Head of the Case Flow Management Directorate, in the presence
of Feteh’s DCOP and Justice Reform Specialist, to discuss the prepared concept note regarding the
scope, approach, and methodology for the assignment.
After endorsement of the concept note by the Deputy Chief Justice, Mr. Bekele conducted a series
of meetings and interviews, facilitated by Feteh’s Justice Reform Specialist, with various court
personnel. He had an introductory meeting with the Vice President of the Federal High Court and
the Vice President of the Federal First Instance Court, followed by a meeting with judges, IT
directors, and IT staff working in system, network, database, and application administration, as well
as selected support staff, such as registrars, court managers, senior clerks in each of the three levels
of the courts.
Mr. Bekele is currently working on a draft report. He will complete the remaining interviews through
January 1, 2020 and submit a report by January 15, 2020. This report will inform Feteh’s future
assistance to improve case flow management in federal courts, particularly regarding the possibility
of putting in place an automated case management information system.
3.4.2 Assess gaps in non-judicial staff and provide recommendations to improve the performance of non-judicial staff
As part of its priorities to improve service delivery in the federal courts, the FSCE intends to
conduct an assessment of gaps in non-judicial staffing so as to improve their capacity, efficiency, and
effectiveness. Feteh will assist the FSCE in identifying gaps in capacity and training needs of court
support staff, as well as assessing the staffing and structure of the various court levels. The objective
of the assessment is to improve staff’s performance and enable them to provide better support to
judges, other elements of the judiciary and to the public.
During the reporting period, Feteh prepared an SOW, identified two national consultants,
Mr. Mohamed Umber and Mr. Amare Ashenafi (a legal practitioner and human resource
management professional, respectively) who will jointly undertake this assignment, and obtained
USAID approval for engaging them.
Both consultants have been engaged since November 6, 2019. Immediately following their
engagement, the consultants were asked to prepare a concept note describing the objective,
methodology, activity breakdown, and timeline of their work in order to ensure the involvement of a
large number of non-judicial staff within the timeframe they have been given for undertaking the
assignment. This was also done to ensure that the consultants complement each other, based on
their areas of expertise, in preparing the tools for gathering information for the assessment.
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The consultants, along with Feteh’s DCOP and Justice Reform Specialist, met with FSCE’s Deputy
Chief Justice and Head of the Case Flow Management Directorate to discuss the concept note they
prepared, and to receive additional guidance from the Deputy Chief Justice regarding the focus and
priority areas of the assessment.
Mr. Umber and Mr. Amare also held introductory meetings with the Presidents of the Federal High
Court and Federal First Instance Court, representatives of some directorates (such as the Strategic
Planning Directorate of the FSCE), and the Human Resources, Registrar, Clerks, IT, Finance, and
Procurement departments in the three court levels. The consultants will complete the remaining
interviews through January 1, 2020 and submit a draft report by January 30, 2020.
For Year 2, Feteh, depending on the results of the assessment, may provide capacity building or
training support to identified non-judicial staff of the federal courts.
Activity 3.5: Strengthen Judicial Ethics and Accountability
3.5.1 Assist the FSCE in reviewing, updating, finalizing, and implementing the Judicial Code of Conduct and disciplinary procedures
The drafting of a Code of Judicial Conduct and associated Rules of Disciplinary Procedure was
successfully carried out in Quarter 3.
Feteh plans to assist the FSCE in any further review, and the Project will provide copies for
distribution to all federal judges once the Code and Rules are adopted by the Federal Judicial
Administration Council (expected in the next quarter).
3.5.2 Conduct training on the approved Judicial Code of Conduct
This work plan activity was successfully carried out in the previous quarter.
In Year 2, Feteh will provide additional rounds of training to federal judges once the final version of
the Judicial Code of Conduct and the Rules of Disciplinary Procedure is adopted, via the trainee
judges identified through the TOT that Feteh organized in August 2019. These trainers will also help
federal courts institutionalize the provision of training on judicial ethics.
3.5.3 Review, update, and finalize the performance evaluation standards for judges
This activity was successfully carried out in Quarter 3.
In Year 2, Feteh will support the FSCE in any further review and, once the draft Judicial
Performance Evaluation Directive has been adopted by the Federal Judicial Administration Council,
in implementing the new performance evaluation system. In this regard, Feteh plans to provide
training to the courts’ judicial and administrative staff who will be in charge of managing the new
performance standards.
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3.5.4 As requested by the FSCE, assist in exploring mechanisms for vetting of judges and developing criteria and procedures that appropriately balance privacy and public interests
No activities were conducted this quarter, as no request was made by the FSCE.
WINDOWS OF OPPORTUNITY ACTIVITY
At the request of the Advisory Council’s Secretariat, Feteh sought and obtained USAID approval to
use Windows of Opportunity funding to support a diagnostic study and the drafting of a new
proclamation on the freedom of peaceful assembly and protest. Feteh interviewed several candidates
for the assignment and decided to engage two experienced local consultants, Dr. Kalkidan Negash
and Mr. Abdi Jibril.
The two consultants have already made progress in undertaking the assignment, working closely
with the Advisory Council’s relevant working groups. Feteh anticipates that the diagnostic assessment
and the draft of the new legislation will be completed in January 2020. Indeed, the GoE’s objective
is to get this important proclamation enacted by the HOPR before the general election planned in
August 2020.
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CHALLENGES AND RESPONSES
No. Challenge Response
1 Overlapping demands Overlapping demands within the same institution have forced
Feteh to make choices principally based on considerations of
building institutional capacity and sustainability, e.g., the AGO’s
Advisory Council initially requested Feteh to support the creation
of its separate website, but given the ad hoc and temporary nature
of this advisory body Feteh considered with USAID’s
concurrence that it would be more efficient and sustainable in the
long term to support the upgrade of the AGO’s website
(permanent institution) under the Year 2 Work Plan..
2 Shifting demands With USAID’s concurrence, Feteh has allowed adjustments in its
Year 1 Work Plan to accommodate shifting demands from
national partners, provided they fit within the overall program
objectives and adaptability, e.g., the Year 1 Work Plan was
modified at the AGO’s request to focus on revising the banking
and insurance sections of the Ethiopian Commercial Code and
drafting a new Financial Services Code,thus excluding the
“Carriage” part of the original plan..
3 Partner capacity Some national partners were unable to follow up on work plan
activities implemented due to an overload on internal capacity.
As a result, Feteh adopted a phased approach and engaged with
officials for outcomes that would be favorable for both them and
the Project.
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LESSONS LEARNED
• Identify the right expert with the right skills: Our partnering of international and local
experts has enabled Feteh to bring together technical expertise and contextual knowledge to
deliver the best outcomes, and also further build local expertise.
• Work closely with beneficiaries from the outset: Involving partner institutions in all
stages of planning and implementing activities has greatly helped the Project achieve
successful and more impactful implementation. Feteh will continue to strengthen this
collaborative approach in future planning and implementation processes. Feteh’s consistent
practice of securing a written agreement from the beneficiaries (e.g., the AGO or FSCE)
regarding the qualifications and skills of international experts before seeking USAID’s
approval has also helped to swiftly implement activities within a relatively short time frame
and to the satisfaction of the beneficiaries.
• Involve public participation and national ownership: Stakeholder consultation forums
on key draft legislation were largely facilitated by Feteh. These forums provided a rare
opportunity for primary stakeholders (such as judges) to freely discuss important legal issues
and contribute to the reform process. This approach also helped to create a positive
atmosphere and a sense of ownership within the community.
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PLANNED ACTIVITIES FOR THE NEXT QUARTER
The following main activities are planned for the next quarter.
COMPONENT 1
• Provide technical assistance in conducting a diagnostic assessment and the drafting the new
proclamation on the freedom of peaceful assembly and protest.
• Assist the AGO’s Advisory Council to record, compile, and publish all background
documents and reports on drafting initiatives.
• Finalize the assessment on existing banking and insurance laws.
• Consolidate three of the five previous Commercial Code Books (1, 2, and 5) into one single
code.
• Conduct training on Legislative Analysis and Drafting for the AGO, line ministry staff, and
others.
• In coordination with the AGO’s Human Rights Action Plan Coordination Office and in
cooperation with CSOs, subcontractor LHR will conduct trainings for regional prosecutors
and corrections officers on recent legislative reforms relating to the promotion and
protection of human rights.
• Provide technical support to the ACSO in drafting directives under the new CSO
Proclamation and conduct public consultations on the ACSO’s draft directives.
• Conduct a workshop to create synergies and establish formal linkages on legal drafting
between the AGO, the PMO, and the HOPR.
COMPONENT 2
• Follow up and provide support to grantees and subcontractors in the implementation of
activities.
• Review monthly progress reports (technical and financial) and provide feedback for grantees
and subcontractors.
• Monitor grantees’ and subcontractors’ activities and provide feedback on identified gaps in
the implementation process.
• Prepare an RFA for grants with CSOs and media organizations under the Year 2 Work Plan.
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COMPONENT 3
• Launch a pilot backlog reduction and prevention program in selected courts.
• Develop and institute monitoring and reporting mechanisms through which the FSCE and
court presidents can assess backlog reduction progress.
• Engage legal professionals to assist the courts in implementing backlog reduction
recommendations and strategies in the field.
• Train legal professionals on the backlog reduction and prevention strategies.
• Produce a first draft of the civil, criminal, and appellate proceedings bench book.
• Organize consultation workshops for the Federal First Instance Court, Federal High Court
and the FSCE on the draft civil and criminal case flow management implementation
directives.
• Finalize the assessment of IT services provided within the federal courts.
• Assess gaps in non-judicial staff and provide recommendations to improve the performance
of non-judicial staff.
• Conduct a consultation workshop on the findings of the non-judicial staff gap assessment
report.
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ANNEX A. FINANCIAL MANAGEMENT
USAID Rule of Law Feteh ActivityTask Order: 72066319F00001February 14, 2019 - December 31, 2019
II. Fixed Fee 240,602 120,300.75 - - - 120,300.75 120,300.75
III. Total Cost Plus Fixed Fee 4,000,000$ 1,263,719.46$ 176,072.64$ 170,744.79$ 95,580.39$ 1,706,117.28$ 2,293,882.72$
6=2+3+4+5
FINANCIAL REPORT
Quarterly Report: July - December 2019
Contract Amount Invoiced as of
September 30, 2019 Billed Expenditures
October 2019 Billed Expenditures
November 2019 Billed Expenditures
December 2019 Cummulative Expenditures
1 2 3 4 5
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ANNEX B. MONITORING, EVALUATION, AND LEARNING PROGRESS
Indicators Baseline FY 2018
Annual Target3
Q2 FY19
Q3 FY19
Q4 FY19
Q1 FY20
Performance Achieved by the End of the Reporting Period (%)4
1. Ranking on World Justice Project rule of law index5 118/126 115/126 N/A N/A N/A N/A N/A
2. Ranking on Open Government (Factor 3) of WJP Rule of law Index5 123/126 120/126 N/A N/A N/A N/A N/A
3. Number of laws or regulations that are consistent with international
human rights standards adopted with USG support
0 2 0 0 0 16 50
4. Number of standardized procedures developed 0 2 0 0 2 27 200
5. Number of priority laws presented to parliament for consideration and
adoption with USG Support
0 4 0 2 0 18 75
6. Number of AGO personnel trained with USG assistance 0 100 0 77 10 209 107
3 All annual targets were set as from the Activity start date, i.e. February 14, 2019. The reporting period will end on February 13, 2020 (not at the end of fiscal year (FY)
2019). 4 The percent achievement is calculated as a percentage of the sums of previous and the current values against the annual target during the reporting period (from
February 14, 2019 to February 13, 2020). 5 This indicator can only be measured annually through the World Justice Project Rule of Law Index Annual Report. 6 Prison Commission Establishment Proclamation, which was drafted and presented in previous quarters, is adopted by the Parliament in the reporting period. Like the
last Prison Commission Proclamation, the new proclamation boldly acknowledges that the treatment of prisoners shall be consistent with human rights conventions to which Ethiopia is signatory. Unlike the previous Prison Commission Proclamation, the present proclamation has explicit obligations for prisons to ensure that treatment of prisoners is according to human rights conventions. It includes special treatment of female inmates and their children; provision of decent accommodation; availing medical center in the prison; and ensuring freedom of religion and belief.
7 Feteh provided technical assistance for the AGO in the development of guideline on the provision of legal services to government institutions and a template for international contract.
8 Administrative Procedure Law for which Feteh provided substantive technical support for its drafting in previous quarters is presented to parliament during the reporting period.
9 Feteh conducted two training sessions on international contracts and arbitration for 20 AGO and 22 other government staffs.
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Indicators Baseline FY 2018
Annual Target3
Q2 FY19
Q3 FY19
Q4 FY19
Q1 FY20
Performance Achieved by the End of the Reporting Period (%)4
7. Number of curricula, modules, and/or resource materials developed on
legislative drafting and analysis
0 3 0 0 3 0 100
8. Number of civil society organizations (CSOs) receiving USG assistance
engaged in advocacy interventions (DR.4.2-2)
0 3 0 0 0 0 0
9. Number of consultations and/or roundtables between CSOs and AGO
to support reform process
0 2 0 0 0 010 0
10. Number of grants awarded to CSOs participating in the legal reform
process
0 3 0 0 0 310 100
11. Number of CSO members trained 0 20 0 0 0 010 0
12. Number of journalists trained and supported (DR.5.2-2) 0 10 0 0 0 010 0
13. Number of consensus building forums (multi-party, civil/security
sector, and/or civil/political) held with USG Assistance (DR.3.1-3)
0 1 0 0 0 010 0
14. Number of awareness events conducted to raise awareness and
improve public perception
0 2 0 0 0 010 0
15. Number of USG-assisted courts with improved case management
systems (DR.1.5-1)
0 3 0 0 0 0 0
16. Ranking on Civil Justice (Factor 7) of WJP Rule of Law Index5 111/126 108/126 N/A N/A N/A N/A N/A
17. Number of commercial benches/divisions strengthened with USG
assistance
0 1 0 0 0 0 0
18. Number of new procedures developed to improve court management 0 2 0 0 2 0 100
19. Number of judicial personnel trained with USG assistance (DR.1.3-1) 0 100 0 0 24 2411 48
10 Feteh signed fixed amount award agreements with Ethiopian Civil Society Organizations Form (ECSF) and ARTS Media Production Share Company on 26th and 28th
November, 2019, respectively. Feteh also signed fixed price subcontract with Lawyers for Human Rights on 9th December, 2019. These CSOs and Media have done preparatory works to embark on the actual activities according to the timeline set in the agreements.
11 Feteh provided TOT for strengthening commercial benches for 19 judges (11 of them being at commercial benches), 1 assistant judge, 3 vice presidents and 1 president.
Task Order 72066319F00001 Millennium DPI Partners USAID’s Feteh (Justice) Activity, Quarterly Report January 30, 2020
Page 43
Indicators Baseline FY 2018
Annual Target3
Q2 FY19
Q3 FY19
Q4 FY19
Q1 FY20
Performance Achieved by the End of the Reporting Period (%)4
20. Number of new procedures developed to strengthen judicial ethics and
accountability
0 1 0 0 2 0 200
21. Number of legal instruments drafted, proposed or adopted with USG
assistance designed to promote gender equality or nondiscrimination
against women or girls at the national or sub-national level (GNDR-1)
0 1 0 1 1 0 200
Task Order 72066319F00001 Millennium DPI Partners USAID’s Feteh (Justice) Activity, Quarterly Report January 30, 2020
Page 44
ANNEX C. SUCCESS STORY
Promoting the Role of Ethiopian Civil Society in Legal and Judicial Reforms
USAID’s Feteh is a two-year activity designed to provide flexible, rapid response technical assistance to the Attorney General’s Office, the Federal Supreme Court, and other institutions and organizations supporting legal and judicial reform in Ethiopia.
The new CSO Proclamation is viewed as a mechanism for reinforcing the freedom of speech, as enshrined both in the Ethiopian Constitution and the international human rights instruments the country has ratified
CSO group discussion during a public consultation on draft directives for the implementation of the Civil Societies’
Proclamation
Telling Our Story U.S. Agency for International Development Washington, DC 20523-1000 http://stories.usaid.gov/
SNAPSHOT
One of the most noticeable outcomes of the Ethiopian government’s recent reform drive is the enactment of the Civil Society Organization (CSO) Proclamation in March 2019. The CSO Proclamation has fundamentally changed the regulations for the establishment, type, and operation of CSOs in Ethiopia, lifting the previous government’s heavy restrictions on activities promoting human rights and democracy. Hundreds of new CSOs have registered since the new legislation came into effect. To help promote the continued growth of a vital civil society community, the USAID-funded Feteh (Justice) Activity is supporting Ethiopian authorities and organizations to fully realize the changes introduced by the new CSO Proclamation.
Due to the recent legal changes, along with the accompanying reconstitution of the CSO Agency, the Agency’s staff and government officials needed to be familiarized with the Proclamation and trained to provide services to a rapidly growing body of CSOs with increased demands and high expectations. To address these needs and build the critical knowledge and skills for providing these services, Feteh trained 77 members of the CSO Agency. In addition, Feteh also trained 22 staff from other relevant government agencies.
While the new CSO Proclamation has been adopted, related legislative tools are still needed to ensure its effective implementation and consistent application. Accordingly, Feteh’s experts drafted one regulation and five directives that will help the CSO Agency fully implement the Proclamation and facilitate the work of CSOs. Buy-in from the CSO community is critical to secure the gains promised by the new CSO Proclamation, and Feteh is supporting public consultations to garner feedback from CSOs and other stakeholders before these regulation and directives are adopted. As Dawit Seyum, Program Director at Orbis International Ethiopia, explained:
“The new proclamation is a good opportunity to make needed changes for CSOs. It is a big transformation for CSOs from not being heard to publicly provide feedback for directives and regulation. Knowing that their voices matter for the reform is a big change. This is a very promising future.”
Feteh has also launched a grants program to establish formal and lasting linkages between civil society and the Ethiopian government. So far, two grants have been awarded that will help Ethiopian CSOs learn about the dramatic changes of the new CSO Proclamation, and to engage civil society through town-hall dialogue sessions and the broadcast of regular mass media programs. In addition, Feteh organized a one-day orientation workshop with 41 local CSOs working in governance, rule of law, gender, and related areas to provide guidance on USAID’s grant award process and to get their ideas for new grants with Feteh.
With Feteh’s assistance, CSOs and the government of Ethiopia are collabor-ating to build a vibrant and democratic society that promotes the rule of law and human rights.
Task Order 72066319F00001 Millennium DPI Partners USAID’s Feteh (Justice) Activity, Quarterly Report January 30, 2020
Page 46
ANNEX D. ACTIVITY DELIVERABLES
COMPONENT 1 (ACTIVITY 1.2.2 - YEAR 1 WORK PLAN)
• Assessment Report on the Current Practices and Needs of the Federal AGO’s Civil Justice
Administration Directorate
• Training Modules
COMPONENT 3 (ACTIVITY 3.2 - YEAR 1 WORK PLAN)
• Assessment Report on the Current Practices and Needs of Commercial Benches in the
Federal Courts
• Framework for the Selection and Appointment of Judges to the Federal Courts’ Commercial
Benches
Task Order 72066319F00001 Millennium DPI Partners USAID’s Feteh (Justice) Activity, Quarterly Report January 30, 2020
Assessment Report on the Current Practices and Needs of the Federal AGO’s Civil Justice Administration Directorate
Component 1 (Activity 1.2.2 - Year 1 Work Plan)
ASSESSMENT REPORT
CURRENT PRACTICES AND NEEDS OF THE
FEDERAL ATTORNEY GENERAL OFFICE’S CIVIL
JUSTICE ADMINISTRATION DIRECTORATE
USAID’S FETEH (JUSTICE) ACTIVITY
IN ETHIOPIA
November 2019
DISCLAIMER
This document was produced for review by the United States Agency for International Development. It was prepared
by Millennium DPI Partners, LLC. The views expressed in this publication do not necessarily reflect the views of the
United States Agency for International Development or the United States Government.
ASSESSMENT REPORT
CURRENT PRACTICES AND NEEDS OF THE
FEDERAL ATTORNEY GENERAL OFFICE’S
CIVIL JUSTICE ADMINISTRATION DIRECTORATE
INTERNATIONAL CONTRACTS AND ARBITRATION
Ato Yazachew Belew, Local Expert Dr. Jesús Bores Lazo, International Expert
IV. BRIEF ASSESSMENT OF CURRENT PRACTICES AND NEEDS: SUMMARY OF
MAJOR FINDINGS 6
1. AGO’S PRIORITIES 7 2. AGO’S MANDATE IN CIVIL AND COMMERCIAL TRANSACTIONS OF
FEDERAL GOVERNMENT INSTITUTIONS 8 3. AGO’S CAPABILITIES TO DISCHARGE MANDATES 8 4. WORKING WITH THE AGO 9 5. DISPUTE SETTLEMENT 10
V. ROADMAP AND RECOMMENDATIONS 11
1. MANDATES AND AGO’S PRIORITIES 11
i. DEFINE “MEGA PROJECTS” 12 ii. ESTABLISH “REGISTRY” 12
iii. ESTABLISHMENT OF RULES FOR SETTLEMENT OF DISPUTES 12 2. PERCEPTION AND COMMUNICATION 13 3. MANUAL AND CONTRACT REVIEW PROCESS. 14 4. HUMAN RESOURCES 14 5. ACTIONS TO ENSURE COMPLIANCE AND SUSTAINABILITY 15
VI. ANNEXES 17
4
I. ACKNOWLEDGMENTS
Many persons and institutions have directly, or indirectly, extended their support generously to our
mission of reinforcing the capacity of the Civil Justice Administration Directorate of the Attorney
General Office of the Federal Democratic Republic of Ethiopia. Without their assistance we would
not have accomplished our overwhelming task in such a short period of time. The list of these persons
and institutions is too long to record it here. We sincerely remain grateful to them all.
However, the support we have received from certain individuals and institutions is simply too huge
to fail to mention here. Feteh (Justice) Activity in Ethiopia and its staff have been at our side at every
moment of our mission. Mr. David De Giles, Chief of Party of Feteh (Justice) Activity in Ethiopia
and Ato Mandefrot Belay, Deputy Chief of Party have immensely helped us in directing, organizing
and coordinating our mission. We are also highly indebted to all staff of Feteh (Justice) Activity in
Ethiopia. However, Yohannes Seifu, the Component Team Leader at Feteh deserves special
gratitude. We would like to record that his professional guidance and support and his personal
commitment to the mission has led us to a success.
We are also indebted to all the legal services heads and in-house counsels of government institutions
who were very kind enough to give interviews despite their busy schedules. We thank especially
Tsewaye Muluneh, Director of the Legal Services at the Public Property Procurement and Disposal
Services and her team for generously providing us all the information that we needed from their
office.
Finally, we would like to extend our special gratitude to Ato Mesker Tariku and Ato Henok Tesfaye,
Director and Deputy Director the Civil Justice Administration Directorate of the Attorney General
Office respectively, and all of their team of young public prosecutors, for their excellent support in
all matters we needed.
5
II. LIST OF ACRONYMS
AGO Attorney General’s Office
CJAD Civil Justice Administration Directorate of the AGO
CSO Civil Society Organization
PPPDS Public Property Procurement and Disposal Service
USAID United States Agency for International Development
6
III. INTRODUCTION
The Feteh (Justice) Activity in Ethiopia is a two-year project funded by the United States Agency for
International Development (USAID) to provide flexible and rapid technical assistance to the
Attorney General’s Office (AGO), the Federal Supreme Court of Ethiopia (FSCE), appropriate
committees in Parliament, and other Ethiopian institutions in the process of legal and judicial reform.
This assistance includes grants to civil society organizations (CSOs) to ensure public input to the
proposed changes to Ethiopia’s legal and judicial framework. Within this context, the current
assignment relates to activity 1.2.2 of Feteh’s Year 1
Work Plan, pursuant to which Feteh supports the AGO’s
Civil Justice Administration Directorate (CJAD or
Directorate) to “conduct training on international
contracts and international arbitration for Civil Law
Directorate staff and experts from other key government
institutions; and develop manual and/or other resource
materials governing Directorate’s work practices on
international contracts and international arbitration.”
To support the AGO under this activity, an assessment
was conducted by a team of Feteh experts in September 2019 covering the existing legal and
institutional frameworks and practices of the AGO and selected Federal Government institutions with
regard to the negotiation and drafting of international contracts and arbitration. This report presents
a summary of the assessment’s findings and recommendations. It is based on a review of the most
relevant proclamations, directives, rules, guidelines and protocols of the AGO and the Ethiopian
government, and reflects information obtained in meetings and interviews with the main
stakeholders. The purpose of the assessment was to assist in developing an approach to address the
constraints affecting the AGO and its ability to function as a legal body overseeing international
contracts and arbitration as part of its mandate to protect the interest of the public.
The assessment reveals the existence of certain structural problems that militate against the full
realization of the AGO’s mandate. The lack of adequate and trained manpower within the AGO’s
CJAD, the absence of clear and effective rules to guide the operation of the AGO internally and its
coordination with other public institutions, and the problem of a negative public perception towards
the AGO stand out as some of the major challenges and constraints.
Based on the findings of the assessment, training modules have been developed and training was
offered to the staff of the AGO’s CJAD and the in-house counsels of some of the other government
institutions. The interactive nature of the training sessions provided additional insights and
perspectives from the participants which significantly helped Feteh identify problems and develop
recommendations. Moreover, the assessment and the trainings were very useful in designing and
developing manuals and templates that can be used by the AGO’s CJAD in the course of drafting,
negotiating, reviewing international contracts and handling disputes arising from these contracts.
7
IV. ASSESSMENT OF CURRENT PRACTICES AND NEEDS: SUMMARY OF MAJOR FINDINGS
The Federal Attorney General’s Establishment Proclamation NO. 943/2016 provides the AGO with
a mandate to negotiate, draft and review domestic and international contracts involving Federal
government institutions, and to settle disputes arising from these contracts. The AGO is specifically
mandated to provide legal and advisory services (drafting, negotiating, reviewing of contracts and
representation) to government institutions involved in international transactions, and to ensure that
the outcome does not undermine the public’s interest. To carry out such a broad mandate, the AGO
requires trained staff and adequate financial resources. It also needs to have the stature that commands
compliance and cooperation from the other government institutions. Given the broad scope of the
AGO’s mandate, the existing budget constraints, and the complexity of international contracts and
arbitration, it is imperative that the staff of the AGO receive capacity building support. Feteh’s
intervention is therefore both timely and critical.
To develop a targeted approach to assisting the AGO build capacity, the Feteh team conducted a brief
needs assessment to identify and understand the challenges and gaps in the operation of the AGO
with respect to protecting the public interest in the areas of international contracts and arbitration.
The needs assessment was carried out through interviews and meetings. The team held a total of 26
meetings and interviews during this period. The interviewees are members of the in-house legal
counsels, largely heads of the legal services of Federal government institutions including the AGO
which is a principal beneficiary of Feteh’s capacity building activity. Selection of these Federal
government institutions was based on their exposure to and experience in international contracting
and arbitration. The assessment was also made by reviewing and analyzing existing legal and
institutional frameworks and practices of selected Federal government institutions with regard to
negotiation and drafting of international contracts and arbitration. The two rounds of trainings offered
to the staff of the AGO and other government institutions allowed participants to openly discuss and
present their views and experience, which further elucidated the challenges and gaps that the AGO
and other institutions have faced.
The purpose of the assessment is to identify areas for intervention. These included training, as well
as developing guidelines, manuals, templates or protocols that promote effective coordination
between the AGO and other government institutions. Open-ended questions that trigger wider
discussions were used to gather relevant information from the interviewees. The team was able to
raise diverse issues ranging from the mandate of each institution to its practical operations, the
challenges and experiences in handling international contracts and arbitration, the relationship
between the AGO other government institutions, the nature and types of model or standard contracts
used, issues of corruption, and the way forward to improve institutional capabilities to handle
international contracts and arbitration so as to protect the public interest.
The quick assessment helped to identify areas of priority for the AGO and other Federal Government
institutions working with the AGO, in matters of international contracting and arbitration. The
assessment also revealed gaps, problems, and challenges that the AGO and the government
institutions face in working with each other. The major problems identified through the assessment
process include the AGO’s lack of adequate, trained and skilled manpower in international
contracting and arbitration, which AGO’s mandate requires; lack of clarity and insufficient
articulation of the AGO’s mandate, lack of clear and adequate internal rules that guide the operation
8
of the AGO; absence of clear and authoritative rules that coordinate the smooth working relationship
between the AGO and other government institutions; and the negative perception of other institutions
and the public towards the AGO and/or its mandate. The assessment served to not only identify the
problems and gaps mentioned above but also to determine the priority areas of the AGO and key
government institutions. This was instrumental in designing the content and structure of Feteh’s
capacity building support. In particular, the assessment, coupled with the training exercises,
significantly helped to formulate the recommendations forwarded in this report.
Based on the need’s assessment, training modules for international contracts and arbitration have
been designed and developed by international and local experts contracted by Feteh. The modules
are designed in such a way as to meet the particular needs and interests of the trainees, who are drawn
from the AGO’s CJAD and the in-house legal counsels of other federal government institutions. The
trainees are public employees with largely limited experience, knowledge and skill in international
contracts and arbitration. The training modules were therefore designed to cover the fundamentals as
well as some advanced issues in international contracting and arbitration. The training was offered
in two rounds, each round for three consecutive days and for 25 persons.
The first round of training was conducted from September 30, 2019 to October 2, 2019, and the
second from October 7–9, 2019, both held in Bishoftu, a town in Oromia Regional State. The training
comprised both theoretical presentations and exercises on practical aspects of international
contracting and arbitration. As part of the third day of the training program, trainees were organized
in five groups, with each group consisting of five members and each group having at least one person
from the AGO. They were then required to debate and discuss the AGO’s Civil Justice
Administration Directorate Guidelines for International Contracts (the “Guidelines) and AGO’s
actual practices in the first workshop and to validate them in the second one. Trainees from the AGO
who were placed in each group presented the AGO’s Guidelines, practices, needs, gaps and
challenges. Each group then offered an assessment of the Guidelines from the perspective of their
institutions, focusing on “how it is now” and “how it should be.”. Finally, each group presented its
finding, comments and views to the plenary session. Each group produced its own minutes which
have been duly reviewed and incorporated into this assessment report.
The major findings of the assessment are summarized below.
1. AGO’s PRIORITIES
The AGO has the mandate of negotiating, drafting and reviewing international contracts as well as
leading the resolution of disputes arising from such contracts both through arbitration and litigation.
The CJAD is the unit responsible for discharging these duties. The CJAD is well aware of its mandate
and the challenges of fulfilling it. The CJAD is considerably constrained by the limited number of
staff (which is less than 20) who lack the necessary legal knowledge, skills, experience and expertise
needed to provide oversight and legal support to government institutions engaged in matters of
international contracting and international arbitration. A major priority of the AGO is thus to
strengthen its institutional capacity through training and more efficient business processes, and the
allocation of sufficient resources by the government.
9
2. AGO’S MANDATE IN CIVIL AND COMMERCIAL TRANSACTIONS OF FEDERAL GOVERNMENT INSTITUTIONS
Government institutions in the majority of cases are aware of the mandate of the AGO as provided
under Article 6(4) of the Federal Attorney General Establishment Proclamation No.943/2016 to
protect the public interest in civil and commercial transactions concluded by Federal government
institutions. They take no issue with the AGO’s mandate to protect the public interest as the legal
advisor of the Federal Government of Ethiopia.
3. AGO’S CAPABILITIES TO DISCHARGE MANDATES
All seriously questioned whether the AGO has the requisite manpower, technical expertise and
experience, organizational structure, budget, etc., to handle complex international transactions.
4. WORKING WITH THE AGO
The AGO has developed the rules and practice
for the review of draft contracts before they are
signed by a government institution. The request
may directly come from government institutions
or from the AGO itself. Some government
institutions request the AGO to review contracts
not necessarily because they think that the AGO
has the technical expertise and experience to
handle sector-specific transactions, but because
they are afraid of the consequences of failing to
make such a request if eventually the transaction
fails and leads to a loss of public money. The
recent crackdown by the AGO on officials of
certain institutions for alleged corruption is a
case in point. There are however certain
government institutions which do not request the
assistance of the AGO because they believe that:
the AGO does not have the requisite technical
expertise; they (the government institution) are
better equipped to handle contracts in their areas
of operations; and, they are ready to send
documents if AGO requests them but they are not
bound to wait for the AGO’s response nor bound
by its opinion if they think that the AGO has not
responded promptly, or that its views are not
convincing to them. There is also reluctance to
work with the AGO for fear of giving documents
and information that may be viewed as legally
questionable since some of these transactions are highly complex. The fear of legal liability arising
from these transactions is high and undermines cooperation among government entities. The AGO’s
Figure 1.- Trainning session at Bishoftu
10
recent crackdown on some government officials has reinforced this view. Others feel that they have
no legal duty to seek the AGO’s assistance and prefer to seek the review of their contracts by the
Prime Minister’s Office.
Constrained by a lack of trained manpower and a heavy workload, the AGO is not responding to
requests in a timely manner. The lack of clear rules governing the relationship between the AGO and
other government institutions is also another challenge. The AGO also believes that its manual for
the provision of legal services to government institutions is not adequate and needs revision based
on acceptable standards. There also seems to be a great need for a business process mapping to clarify
procedures, workflows, communication protocols; and to identify or designate who has authority,
and the responsibilities of each office and staff member.
Different government institutions use different types of model contracts and standard agreements
depending on the nature of the contract and the requirements of funding institutions. Model contracts
include the International Federation of Consulting Engineers (FIDIC) standards and the standard
bidding documents (SBD) which are in use by Public Property Procurement and Disposal Services
(PPPDS) for procurement of works, goods, and consultancy services. Other government institutions
are also in the process of developing their own model contracts tailored to their specific sector. Thus,
there is an absence of a single or harmonized model contract which makes it more difficult for the
AGO to effectively conduct reviews. Moreover, model contracts currently in use are not necessarily
adapted to the Ethiopian legal framework.
5. DISPUTE SETTLEMENT
With respect to the settlement of disputes through international arbitration, government institutions
report that they look to the AGO to lead on these cases, but the AGO lacks the expertise to do so and
relies on foreign law firms to represent the Ethiopian government. It should be noted that the AGO
has prepared draft arbitration rules to provide arbitration services in relation to disputes between
federal government institutions or between private parties and public institutions. While the dispute
settlement service falls within the legal mandate of the AGO, whether the AGO has the skilled
manpower and institutional independence to provide such service is yet to be seen.
11
V. ROADMAP AND RECOMMENDATIONS
The main recommendations are systematically developed and structured around the political
framework, the AGO’s mandates and the priorities of the CJAD:
1. MANDATES AND AGO’S PRIORITIES
The AGO has the authority to engage in litigation and enforcement toto secure the public interest. It
also advises the government on mega projects and settles disputes between public institutions, as well
as represents the Ethiopian government in international litigation, arbitration and negotiation in civil
law matters. These mandates are too broad and unclear, and too complex to be executed given the
capacity, expertise, experience and size of the CJAD staff. Four interrelated recommendations are
proposed to address problems arising from AGO’s mandates.
I. DEFINE “MEGA PROJECTS”
There is a need for the definition of “Mega Project” based on specific and clear criteria. This helps
the AGO to focus on priority areas where its intervention can make a difference in terms of protecting
the public interest. Taking the international experience of both developing and developed countries,
the following criteria are proposed to define Mega Projects in Ethiopia:
• Value of the project: 100 million USD, or 300 Million ETB.
• International participation (international element), or investment: contracts where
the other party is a foreign national or international investment
1. Mandate and AGO’s Priorities
2. Perception and Communication
3. Manual and Contracts Review Process
4. Human Resources1. Organigram
2. Capacity and Specialization
3. Others
5. Actions to ensure compliance and sustainability
RECOMMENTATIONS AND ACTIONS
12
• Contracts which are especially of specific interest to the Ethiopian Government or
general interest irrespective of their value or the identity of the other contracting party or
the nature of the investment. Here, depending on the degree of Government interest the
AGO may intervene in the negotiation, drafting or reviewing of contracts, or the AGO
may simply limit itself to oversight if necessary.
II.ESTABLISH “REGISTRY”
There should be a system by which the AGO gathers information on litigation or arbitration from
other public bodies and provides coordination to government institutions. The AGO needs to have
full information about threatened/potential or pending litigation and arbitration that involve
government institutions so that it can take appropriate action in a timely manner. Currently, there is
an information gap between AGO and government institutions. In this regard it is proposed that the
AGO establish a “Registry” in which government institutions send information about potential or
pending litigation or arbitration.
III.ESTABLISHMENT OF RULES FOR SETTLEMENT OF DISPUTES
The AGO, as indicated above, has drafted a new arbitration law and shared it for public consultation.
The AGO’s efforts to introduce modern arbitration principles especially those which reflect
international commercial arbitration standards is commendable. However, the draft arbitration law
has gaps and requires serious scrutiny. There is a clear intention on the part of the Government of
Ethiopia to adopt the New York Convention for the Recognition and Enforcement of Foreign Arbitral
Awards and this will need to be in synch with the AGO’s rules and procedures. The AGO has already
drafted the ratifying legislation which is under review. The AGO has also developed, in accordance
with its mandate, its own internal rules of arbitration to provide arbitration services to public
institutions. All of these need to be consistent so as to protect Ethiopia’s interests. The AGO needs
to push for the completion of the arbitration law and should review its internal arbitration rules to
make them compatible with the New York Convention once that is adopted.
13
2. PERCEPTION AND COMMUNICATION
Meetings and interviews with a number
of federal government institutions reveal
that there is an incorrect perception about
the AGO and the purview of its
mandates. While some question the
validity of AGO’s mandates in civil and
commercial matters others doubt if the
AGO has the requisite capacity and
expertise to deliver on these mandates.
Many also view the AGO as a faultfinder,
looking for evidence that implicates other
government institutions, and as such
personnel of other institutions do not feel
comfortable sharing information and documents with the AGO lest the latter uses the information
and documents to incriminate them. This has partly to do with the “public prosecutor” nomenclature
used by the AGO which implies prosecution of criminal behavior. The idea that the AGO’s function
is to provide legal advice and protect the public interest is not fully understood. To address the
negative perception of the AGO, the following recommendations are proposed:
• Change the name of staff of the CJAD who handle civil law matters, from “public
prosecutor” to “Attorneys/Counselors/Counselor Attorneys.”
• Distinguish between criminal and civil law matters. There should be a clear distinction
between the AGO’s civil and criminal mandates so that those who cooperate with the
AGO on civil matters are more willing to cooperate with their counterparts in the
AGO. If there are any incriminating circumstances, it should be referred to the public
prosecutor.
• The AGO needs to internally organize itself, develop effective processes, manuals and
guidelines or instructions, foster specialization, and provide training to build its
capacities.
• The AGO needs to develop a communication strategy that helps it improve public
perception. In this regard the AGO needs to develop a public facing webpage, and use
periodical publications to showcase its activities, guidelines, important cases, and
other information to raise public awareness of the AGO’s efforts to protect the public
interest.
3. MANUAL AND CONTRACT REVIEW PROCESS.
As requested by the AGO, a draft manual for drafting, reviewing and negotiating contracts and
managing disputes has been proposed by the Feteh (Justice) Activity. It includes a clear scope and
the procedures to be followed by the AGO in providing legal advice and contract reviews, and
clarifies the staff’s accountability and liability in that process. The manual also envisages the creation
of an AGO Registry system to improve communication, transparency and coordination among the
different government offices. The draft manual needs to be reviewed internally by the AGO staff and
also by main stakeholders from other governmental institutions and public agencies.
2. Perception and Communication
• Change Name of Civil Justice Adm. Dir –• Public Prosecutores - Attorneys / Counselors / Counselors Attorneys
• Clear Distinction between Criminal and Civil matters
• Internal Organization, Changes and development of Manual, Guidelines and Instructions
The queries and main general concerns followed the following structure. However, some specific
questions and matters were addressed considering the specialization of each Ministry or public body
contacted
QUESTIONNARIE / CHECK LIST
1. General Institutional information and main concerns.
2. Previous experiences, tools, protocols, model contracts and any other interesting
data to be considered.
3. Existing national and international legal framework and current proposals that may
affect these matters.
4. Current conflicts and main areas to be considered.
5. Experts and contacts to be met to obtain further information.
6. Level of knowledge of existing international conventions, models laws and other
relevant legal frameworks in the field of international contract and arbitration.
7. Specific areas of interest regarding the negotiation, drafting, administration and
execution of international contracts.
8. Specific areas of interest regarding commercial and investment arbitration.
9. Experiences and relevance of alternative dispute resolution.
10. Public Private Projects currently being developed.
11. Existing conflicts or legal problems to be addressed.
12. Any other relevant information not covered in the previous questions.
Task Order 72066319F00001 Millennium DPI Partners USAID’s Feteh (Justice) Activity, Quarterly Report January 30, 2020
Training Modules
Component 1 (Activity 1.2.2 - Year 1 Work Plan)
TRAINING MODULES ON INTERNATIONAL CONTRACTS
AND ARBITRATION FOR THE FEDERAL ATTORNEY GENERAL’S
CIVIL JUSTICE ADMINISTRATION DIRECTORATE
USAID’S FETEH (JUSTICE) ACTIVITY IN ETHIOPIA
November 2019
DISCLAIMER This document was produced for review by the United States Agency for International Development. It was prepared by Millennium DPI Partners, LLC. The views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.
1
TRAINING MODULES ON INTERNATIONAL CONTRACTS AND ARBITRATION
FOR THE FEDERAL ATTORNEY GENERAL’S CIVIL JUSTICE ADMINISTRATION DIRECTORATE
ASSESSMENT OF CURRENT WORK PRACTICES, IDENTIFICATION OF GAPS,
DEVELOPMENT OF GUIDELINES AND TRAINING FOR STAFF OF THE AGO’S CIVIL JUSTICE ADMINISTRATION DIRECTORATE AND OTHER KEY GOVERNMENT AGENCIES
Ato Yazachew Belew, Local Expert Dr. Jesús Bores Lazo, International Expert
NOVEMBER 2019
Millennium DPI Partners Consulting, LLC – Feteh (Justice) Activity in Ethiopia AID
Task Order Contract 72066319F00001
2
CONTENTS
I. PRESENTATIONS 4
1. INTRODUCTION TO INTERNATIONAL CONTRACTS 4 2. NEGOTIATION SKILLS 17 3. NEGOTIATION SKILLS PRACTICAL EXERCISES 38 4. INTERNATIONAL CONTRACTS DRAFTING 43 5. INTRODUCTION TO INTERNATIONAL ARBITRATION 52 6. ARBITRATION CLAUSES DRAFTING 61 7. FACT FINDING ON GAPS AND DEMANDS AT THE AGO’S CIVIL JUSTICE ADMINISTRATION DIRECTORATE 68 8. VALIDATION OF PROPOSALS TO THE AGO’S CIVIL JUSTICE ADMINISTRATION DIRECTORATE 72
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I. PRESENTATIONS
1. INTRODUCTION TO INTERNATIONAL CONTRACTS
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Introduction to the Legal Framework of International Contracts and Assessment
of the Current situation in Ethiopia
Dr. Jesús Bores, International Expert Ato. Yazachew Belew, Local
Expert
CONTENT
1. International Law: A Sceptical Analysis 2. Introduction to International Contracts 3. United Nation Conference for International Trade Law (UNCITRAL)
1. United Nations Convention on Contracts for the International Sale of Goods (“CISG”)
2. UNIDROIT 3. Global Impact
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Vinos de España
Quesos de Francia
Why
?
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AGE OF KNOWLEDGE
Solicitudes presentadas en 2017 según la Oficina Mundial Propiedad Intelectual
WHY?
PATENTS (INVENTIONS) TRADEMARKS
WORLD 3.170.000 WORLD 9.110.000
China 1.380.000 (44%) China 5.700.000 (63%)
USA 606.956 (19%) USA 613.921 (6,7%)
Japan 318.479 (10%) Japan 560.269 (6,2%)
Korea 204.775 (6%) EUIPO 371.508 (4%)
Europe (EPO) 166.585 (5%) Iran 45.881 (0,005%)
Africa (0,5%) Africa 619.996 (6,8%)
INTELLECTUAL
PROPERTY
PRIVATE
PROPERTY
PROPERTY
EVOLUTION OF PROPERTY
WIPO: PATENTS APPLICATIONS (2017)
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IMPORTANT LEGAL DISTINCTION
• PUBLIC INTERNACIONAL LAW IS PUBLIC IS INTERNATIONAL BUT IT IS NOT LAW
• PRIVATE INTERNATIONAL LAW IS LAW IS PRIVATE BUT IT IS NOT INTERNATIONAL
3 INITIAL QUESTIONS
1. WHY NATIONAL AND INTERNATIONAL LEGAL RULES ARE RELEVANT TO FIGHT THIS DISPARITIES?
2. CAN WE ENSURE PROTECTION OF ETHIOPAN GENERAL INTEREST IMPROVING THE DRAFTING OF INTERNATIONAL CONTRACTS?
3. SHOULD ARBITRATION BE MORE CONVENIENTTHAN COURTS OR TRIBUNALS (BOTH NATIONAL AND INTERNATONAL) ?
2. INTRODUCTION TO INTERNATIONAL CONTRACTS
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A contractual relationship is evidenced by
an offer, acceptance,
competent parties, and (4) a valid consideration. Each party
has rights and duties.
A voluntary, deliberate, and legally
binding agreement between two or more
parties, usually in writing
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Confirms the terms & conditions of the
agreement (rights & obligations)
stability, transparency)
Confirms the object of agreement
Confirms the parties agreement (predictability, Benefits
(Publication of Notices, Issuance of Solicitation Documents)
Starting Bidding Process
(Bids/Proposals received)
3 UNITED NATIONS CONFERENCE FOR INTERNATIONAL TRADE LAW (UNCITRAL)
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3.1. United Nations Convention on Contracts for the International Sale of Goods (“CISG”)
What is it?
• History • April 11, 1980 • Formally ratified by 11 nations in 1986 (including U.S.), became effective January 1, 1988
• Purpose: Provide modern, uniform and fair regime for contracts • Does Not Apply to:
• Sales in which labor or other services constitute a “preponderant part” of the transaction • Economic Value Test; then • Essential Test
• Manufacturing contracts where the buyer supplies a “substantial portion” of the materials • Consumer Contracts or Investment Securities, etc.
Notable Omissions: England, South Africa, India, Portugal, Ireland, Pacific Islands, portions of Central America and most of Africa
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Applicability
Supremacy Clause of the United States For international contracts between Contracting States (including U.S.), the CISG ALWAYS applies unless expressly excluded or varied:
“This Agreement shall be governed by laws of the State of Idaho.” “This Agreement shall be governed by the laws of the State of Idaho and Article 2 of the Uniform Commercial Code as enacted in the State of Idaho. Pursuant to Article 6 of the CISG, the parties expressly exclude application of the CISG in its entirety to this Agreement.”
Applicability: Where is the business?
Does the counterparty reside in a Contracting State? • 2 Hypothetical Scenarios:
• Multi-national corporations who may be administratively headquartered in one country but is shipping, receiving or manufacturing product in another country
• Assignment of one party from a Contracting State to a Non-Contracting State after some but not all performance in complete
• Courts have generally read the “before or at the conclusion of the contract” language of Article 1(2) of the CISG broadly and applied the CISG where in question
Applicability (cont.)
• GOLDEN QUESTION – Should you want the CISG to apply to your international transactions relating to the purchase and sale of goods?
• The answer - “maybe” • The CISG is generally considered to be more seller friendly than
the UCC in U.S.A.
Example: Non-Conforming Goods
• UCC: • “Perfect Tender”: Buyer has the legal right to reject goods that fail in
any aspect to conform to the contract.
• CISG: • “Fundamental Breach”: Buyer may declare the contract voided only if
the failure constitutes a fundamental breach. • Logical Conclusion
Non-Conforming Goods (cont.)
Additional Side Notes: Both the UCC and CISG use a “reasonable time” standard for a buyer providing notice of the non-conformity, the CISG has been interpreted to require a quicker response time than the UCC. CISG mandates more specificity in the notice of nonconformity.
Pro-Seller Result.
Example: Unilateral Price Reduction
• Unilateral Price Reduction Perhaps to offset the Non-Conforming Goods rules, the CISG grants Buyers a unilateral price reduction self-help remedy Under 2-601, 2-711, and 2-714 of the UCC, a Buyer can reject non-conforming goods, cancel the contract, or seek damages. The UCC would require a lawsuit or negotiated settlement to reach any of these results
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Unilateral Price Reduction (cont.)
• Under Article 5 of the CISG, if the goods “do not conform with the contract. . . . the Buyer may reduce the price in the same proportion as the value that the goods actually delivered had at the time of the delivery bears to the value that the conforming goods would have had at that time.”
• Pro-Buyer Result.
Oral Contract
• Under UCC 2-201: • Any contract for the sale of goods for the price of $500 must be in writing
(Statute of Frauds) • Amendments or modifications must also be in writing
• Article 11 of CISG: • A contract of sale need not be concluded in or evidenced by a writing
• Many nations (but not the US, nor China) have made a reservation requiring a writing
3.2. UNIDROIT
UNIDROIT Principles of International Commercial Contracts
• Drafted in 1994 by the International Institute for the Unification of
Private Law (Rome) • Establish a balanced set of rules designed for use throughout the
world • No binding effect • Persuasive authority
UNIDROIT Principles of International Commercial Contracts
• « Principles », i.e. no Convention or Model Law • First edition 1994 (120 art.) • Enlarged edition 2004 (185 art.) • Further enlarged 2010/2011 (211 art.) (Endorsed by
Uncitral) • Enlarged 2016/2017
UNIDROIT Principles of International Commercial Contracts
• Intended scope of application: international commercial contracts • Regulated matters: Formation (incl. Representation), Validity (defects
of consent, specific clauses), Interpretation, « Contents », Performance Non- performance and remedies, Set-off, Contractual Assignment of rights and contracts, Transfer of obligations, Limitations of Actions (Prescription)
• Additional chapters 2010/2011: conditional obligations, illegality, plurality of debtors or creditors, unwinding of failed contracts (restitution)
• Not covered: non-contractual assignment
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UPICC– INTERPRETATION AND GAP-FILLING
(Interpretation and supplementation of the Principles)
In the interpretation of these Principles, regard is to be had to their international character and to their purposes including the need to promote uniformity in their application.
Issues within the scope of these Principles but not expressly settled by them are as far as possible to be settled in accordance with their underlying general principles.
Each party must act in accordance with good faith and fair dealing in international trade.
UPICC– GENERAL PROVISIONS JURIDICAL ACTS
• Art. 1.2: No form required (unless ...), see further Ch. Formation
Effects and contents:
• Art. 1.3: Binding character of contract • Art. 1.7: Duty to act according to good faith & fair dealing
How intention is determined – interpretation of acts: Art. 4.1 and 4.2
• (4.1. for contracts, 4.2 for unilateral acts) – Quid merger clause (2.1.17) – No oral modification clause (2.1.18)
ARTICLE 3.2.6 (Threat) A party may avoid the contract when it has been led to conclude the contract by the other party’s unjustified threat which, having regard to the circumstances, is so imminent and serious as to leave the first party no reasonable alternative. In particular, a threat is unjustified if the act or omission with which a party has been threatened is wrongful in itself, or it is wrongful to use it as a means to obtain the conclusion of the contract.
ARTICLE 7.3.3 (Anticipatory non-performance) Where prior to the date for performance by one of the parties it is clear that there will be a fundamental non-performance by that party, the other party may terminate the contract.
ARTICLE 7.3.4 (Adequate assurance of due performance) A party who reasonably believes that there will be a fundamental non-performance by the other party may demand adequate assurance of due performance and may meanwhile withhold its own performance. Where this assurance is not provided within a reasonable time the party demanding it may
terminate the contract.
ARTICLE 6.2.2
(Definition of hardship)
There is hardship where the occurrence of events fundamentally alters the equilibrium of the contract either because the cost of a party’s performance has increased or because the value of the performance a party receives has
diminished, and
(a) the events occur or become known to the disadvantaged party after the conclusion of the contract; (b) the events could not reasonably have been taken into account by the disadvantaged
party at the time of the conclusion of the contract;
(c) the events are beyond the control of the disadvantaged party; and (d) the risk of the events was not assumed by the disadvantaged party.
ARTICLE 6.2.3
(Effects of hardship)
UNIDROIT: CASE STUDIES
A. ANTICIPATORY NON-PERFORMANCE IN A SHIPBUILDING PROJECT:
Scope of work: Shipbuilding contract in South Korea;
Client: Portuguese company;
Contractor: South Korean company;
Law of the contract: English law;
(ANTICIPATORY NON-PERFORMANCE IN A SHIPBUILDING PROJECT)
UNIDROIT Principle: the anticipatory non-performance UNIDROIT principle -Article 7.3.3, expressly allows the termination of the contract: "where prior to the date for performance by one of the parties it is clear that there will be a fundamental non-performance by that party, the other party may terminate the contract."
Article 7.3.3 establishes the principle that a non-performance which is to be expected is to be equated with a non- performance which occurred at the time when performance fell due.
Solution: In the mentioned case, the anticipatory non-performance principle would have allowed the Client to terminate the contract.
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B. THREAT IN A SHIPBUILDING PROJECT:
Scope of work: Shipbuilding contract;
Client: Portuguese company;
Contractor: European company;
Law of the contract: English law;
Problem: Due to continued significant delays, Client decided to terminate the contract and to transfer the ship to other yards. Before delivering the vessel, Contractor obtained the signature of a settlement agreement, providing for significant amounts on its account. Once the ship was transferred, Client, claiming it had signed this agreement under threat of non-delivery of the vessel, refused to pay
the settlement amount and then had to deal with a complicated dispute.
(THREAT IN A SHIPBUILDING PROJECT)
UNIDROIT Principle: the UNIDROIT threat principle Article 3.2.6 provides for that “A party may avoid the contract when it has been led to conclude the contract by the other party’s unjustified threat which, having regard to the circumstances, is so imminent and serious as to leave the first party no reasonable alternative”.
For the purpose of application of Article 3.2.6, threat is clarified to be not necessarily against a person or property but potentially also affect reputation or purely economic interests. In case of threat, the right of a party to avoid the contract is exercised by sending a notice to the other party, without the need for any intervention by a court.
Solution: The above UNIDROIT Principle would have allowed the Client the right to avoid the contract in said circumstances.
UNIDROIT Principles of International Commercial Contracts
• UNIDROIT Principles shall be applied when the parties have agreed that their contract is governed by them.
• Parties wishing to provide that their agreement (international commercial also national) be governed by the Principles might use the following wording:
“This contract shall be governed by the UNIDROIT Principles (2010) [except as to Articles …]”.
• Parties wishing to provide in addition for the application of the law of a particular jurisdiction might use the following wording:
“This contract shall be governed by the UNIDROIT Principles (2010) [except asto Articles…], supplemented when necessary by the law of [ jurisdiction X]”.
3.3. Global Impact and other International Principles
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Sources
• UN Convention on Contracts for the International Sale of Goods (CISG), Matt Bradshaw
• The Importance of Contract Management, Sabine Engelhard, IDB • International Sales, Isaac Samuels • UNCITRAL 2030, Joao Ribeiro
• UNIDROIT Principles, Pietro Galizzi
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2. NEGOTIATION SKILLS
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Workshop of International Contract and Arbitration
CHALLENGES FOR THE AGO’s DIRECTORATE FOR CIVIL JUSTICE ADMINISTRATION
Improving Negotiation Skills: Practical training
Dr. Jesús Bores, International Expert
What we will cover:
1. Introduction to International Negotiation 2. Defining the Negotiation Process 3. Critical Variables, Preparation “Secrets” and Time as a
“Game Changer” 4. Negotiating Strategies and Counter-Strategies 5. Case Study Negotiations
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1. Introduction to International Negotiation
Introduction
Negotiation is a skill acquired through practice AND by learning techniques
"you don't get what you deserve, you get what you negotiate“
International trade negotiations among the most complex negotiations ever
Negotiation is crucial in multilateral trade. Has great impact on wealth of your country and its population
Basic principles Strategy follows the structure
Structure shapes way in which negotiations are going to be conducted
► In your case, careful analysis is needed on:
- Issues at stake
- How are the rules established, and who establishes them? Is there some margin of manœuvre to play within the rules?
- Pre-existing attitudes
Basic principles • Good strategies shape the structure
« you can shape the game as well as play it »
► Rules are influenced by actions of the participants on:
- Setting the agenda
- The way you present your views
- Creating coalitions
- Leveraging linkages (linking or de-linking issues to create momentum)
► Sequence of moves « at the table » and « away from the table »
The rules of the game
What are the rules of the game and how can you shape them
Winner of negotiation is the one who can best shape negotiations: common mistake is to take the structure of negotiation as a given
“Think strategically but act opportunistically" : expect to be surprised and to have to modify your initial approach
Organize to influence
Moves “out of the table” (preparation phase) as important as moves “at the table”
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Building coalition
Secure a support as wide as possible
First step:
1) identification of influential parties, their interests and sources of power, 2) analysis of possible allies and potential blockers
Coalitions can also be defensive not to be cut off the deal (agriculture negotiations)
Power Imbalances
designed by Liu Young
Asian Western - American
Handling of Problems Play the frame game
Conflicts come often from substantive disagreements but sometimes also from misunderstandings on language
• Reframing to define the problematic issue, present it with a different angle, facilitating the « creation of value » and consensus-building
• Reframing to claim value and win the battle of the public opinion
Sequencing to create momentum What is sequencing? It is the order to approach the several stages of a
negotiation
Staging the process:
1) diagnostic phase (exploring relative merits of negotiation and alternative courses of action, gather information)
2) formula phase (parties seek the basic formula for agreement: it is the core set of principles that will serve as an overarching framework for agreement)
3) detailed bargaining phase (attention shifts to bargaining over specific terms)
Always an advantage for the first mover
Multi-channel influence
ØPublic relations, contact with the press
Be careful not to harm your coalition
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« The negotiator’s dilemma »
getting big slice of a small pie or reasonable slice of a much larger
pie?
22/03/2006
Create value Claim value
Learn Truthfully share information about interests in order to identify opportunities to create value
Gather accurate information about walk-aways; then use anchoring and commitment tactics to claim value
Shape perceptions Reframe the negotiations to emphasize integrative possibilities
Mislead counterparts about priorities in order to claim value when making trades
Conclusion
The negotiator is a chess player
"You have to have the ability to look at the big picture and set concrete goals. Then from those goals devise not only the strategy, but also the tactics for achieving the goals. It's the rare ability to combine the big things with the small, to see the forest and the trees"
Avi Gil, Oslo Process negotiator
2. Defining the Negotiation Process
Webster’s Dictionary Definition
• Negotiate: “to settle or conclude a transaction. To transfer or
sell. To succeed in crossing, moving through, etc.”
• Negotiation: “conferring or bargaining to reach an agreement.”
What Is Negotiating?
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Step 2:
Know Exactly
What They Want
The Negotiation
Process
Step 1:
Know Exactly
What You Want
Triangle Talk
Step 3:
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Approaches to Negotiation
Distributive Negotiation
• Positional bargaining, i.e. “this is my position and you can try and bargain me down from it”
• It’s the “fixed pie” mentality, and I’m going to grab the biggest piece of the pie that I can possibly grab
• Win/Lose strategy
Approaches to Negotiation
Integrative Negotiation
• Also known as interest-based bargaining • It seeks mutual benefit for all that are involved • “A rising tide raises all boats” – Reagan • Win/Win strategy
Distributive
Contemplating the Spectrum of Negotiations
Negotiating is a Process
1. When does the process commence? 2. Exchanging ideas 3. Influencing your environment 4. Analyzing information/technical skills 5. No right answer: Patience is paramount 6. Online negotiations
Negotiation Framework
Identify or anticipate a purchase requirement Determine if negotiation is
required
Plan for the negotiation
Execute the agreement
Establish Positions
Example is a buyer-seller price negotiation
Buyer
Zone of Likely Agreement
Aspiration
Point
B.A.T.N.A. Asp
iratio
n Po
int
B.A
.T.N
.A.
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Negotiation Skills Planning to negotiate
• Establish your objectives • Establish other party’s objectives • Frame negotiation as a joint search for a solution • Identify areas of agreement • Trouble shoot disagreements: bargain & seek alternative solutions,
introduce trade offs • Agreement and close: summarise and ensure acceptance
Negotiation Skills How to influence others
• The three ‘Ps’: • Position (power?) • Perspective (empathy) • Problems (solutions)
Negotiation Skills Factors for success
• Legitimacy of your case • Confidence in presenting it • Courtesy to the other party • Adaptation to the other party’s style • Rapport • Incentives and trade offs • Research the bigger picture
The 9 Phases of Negotiation
#1 Problem Identification
• Define the problem in a form mutually acceptable to both sides.
• Letter of Intent (LOI) • Request for Proposal (RFP)
• Keep the problem statement as simple as possible • State the problem as a goal and identify the known obstacles to attaining that goal • Depersonalize the problem – don’t “blame” the other person • Separate the definition from the search for solutions
The 9 Phases of Negotiation
#2 Preparation
• Understand the conflict situation
• Decide what your team wants
• Analyze the other side
• Develop a strategy to help them make the decision you want
• We will discuss various strategies later on in the course
• Need to be invited
• Learn the authority of those with whom you negotiate
• Start on a positive note
• Establish or set control over procedure
• Agree on ground rules, such as: – Not to leave room without decision
– All agree that we are not leaving early
– All agree there are to be no outside interruptions
The 9 Phases of Negotiation #3 Entry
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The 9 Phases of Negotiation
#4 Connecting with People
LISTENING!!! Be courteous
Investing in people intentionally
The 9 Phases of Negotiation
Invest in People Intentionally
As you go into any relationship, think about how you can invest in the other person so that it becomes a win-win situation. Here is how relationships most often play out:
I win, you lose - I win only once. You win, I lose - You win only once. We both win - We win many times. We both lose - Goodbye, partnership!
The 9 Phases of Negotiation
#5 Exploration or Probing
• Educate yourself, then them • Fully explore and question, so as to gain understanding on all
the issues, positions, and interests • The Five W’s and One H • Get them into the habit of saying “yes”
• Keep the discussion on track, on the issues
The 9 Phases of Negotiation
#6 Inventing
• Generate a range of alternative solutions
• Draft and proffer possible agreements that are favorable to both sides
The 9 Phases of Negotiation
#7 Bargaining
• Bargain for mutual enhancement rather than one-sided victory
• How: – Use reason – Make it easier for them to decide what you’d like them to decide
The 9 Phases of Negotiation
#8 Closure
• Don’t be pressured/don’t pressure • Summarize: Have both parties write a summary of what
their understanding of the agreement is • Consider a trial close • Make the agreement operational
• End on an affirmative, ceremonious note
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The 9 Phases of Negotiation
#9 Implementation
• Action Plan
• Support the agreement with the people you represent
• Plan for the next negotiation
Preparation A: Know Yourself and the Other Party
Three primary areas to prepare to be an effective negotiator:
Knowledge
Communication Skills Attitude
Benefit:
• Allows positional evaluations • Allows you to have solutions • Allows you to set goals • Predict the other side • Anticipate the worst • Re-strategize during process
What:
• The root to negotiating • Requires research • Assess property
Knowledge Preparation Knowledge Preparation
MOTIVATING FACTORS
•Know the other side •Appeal to ego •Motivate human behavior
Knowledge Preparation
MOTIVATING FACTORS
What Tangibles are at Stake?
• For Landlord: • Income Stream/Return on Equity • Appreciation
• For Tenant: • Space and Services • Economic Cost Limits • Quiet Enjoyment
Knowledge Preparation
MOTIVATING FACTORS
What Tangibles are at Stake?
• Both parties are interested in: • Length of contract • Wording of agreements • Specific settlements • Specific solutions • Price and rate (least important?) • Others?
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Knowledge Preparation
MOTIVATING FACTORS
What Intangibles are at Stake?
• Winning or Losing” • Maximizing the outcome • Defeating the other party • Preserving your reputation • Standing by your principles • Maintaining precedent • “Saving face” • Being fair: How do we define “fair”?
This is a visual representation of what negotiating stakeholders show each other.
Other Minimum
Your Minimum
OTHER YOU
Voluntary Exchange Zone
Probing
Preparation of Communication Skills
•Argument •Persuasion •Reading Body Language •Probing •Listening
Preparation of Communication Skills
Relating to the Other Negotiator
• Be prepared • Proceed with sensitivity • Seek common ground • Understand their wants and needs • Be wary of emotions – mine and theirs • Do you value other stakeholders?
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Preparation of Communication Skills
If I…
• Don’t want to be around people • Neglect to listen • Don’t offer people help • Ignore people • Am indifferent…
Preparation of Communication Skills
If I…
• Want to spend time with people • Listen to people • Want to help people • Am influenced by people • Respect people
Then…I Value People
Other Negotiator:
• Background of the decision maker
• Personality of decision maker
• Difficult? Proving something?
Mine:
• Attitude toward others • Your self-evaluation • Difficult? Proving
something? • Which is mine: selfish or
selfless?
Preparation of Attitude
3. Critical Variables, Preparation “Secrets” and Time as a “Game Changer”
Preparation B: Critical Variables During the Negotiating Process
Recognize the hand you’re dealt Make the best lemonade from the lemons you have Here are 3 critical variables: – Power – Time – Information
Critical Variable: Power
COMPETITION
• Leverage, Leverage, Leverage!
• You need alternative building choices and tenants
• BATNA
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feasibility and consequences.
• Improve weak BATNA position by:
brainstorming creativity experts who may not currently be on the team.
• The process is as follows: Develop a list of criteria on which the decision is being made. Determine your BATNA for each item. Utilize this tool as needed.
• Take in to consideration: cost,
Critical Variable: Power
BATNA
• Best Alternative To a Negotiated Agreement • Defined as the “if the wheels fall off the cart” plan; that is, if
Critical Variable: Power
LEGITIMACY
• True authority
Can be confused with:
• Perceived authority
• Imagined authority
• Willing for negotiations to be unsuccessful
How?
• Be patient
• Without spite
AND…
• Be willing to walk
Critical Variable: Power
RISK TAKING
Critical Variable: Power
COMMITMENT
With commitment, it is easier to make an amicable deal.
How?
• Communicate your position point by point
• Obtain commitments on each point
Critical Variable: Power
EXPERTISE
Establish expertise with:
3rd party experts
Documentation
How?
Be humble
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and
Critical Variable: Power
INVESTMENT
Invest in the asset you are negotiating. How?
• Acquire knowledge • Commit team resources • Spend money
Critical Variable: Power
IDENTIFICATION
• If they believe you identify with them • Being on the same team
How?
• Agree with other stakeholder • Disagree with other stakeholder
Critical Variable: Power PRECEDENT AND PERSISTENCE
• We’ve always done it this way • Persistence
“Nothing in this world can take the place of persistence.
Talent will not; nothing is more common than unsuccessful people with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated failures.
and determination alone are omnipotent.” – Calvin Coolidge
• Seek to understand the other side
– Positive – Negative
Critical Variable: Power POWER OF PERSUASION
Tools of persuasion:
• Logic • Mediate – Have facts and be practical
• Monetary Gains
Critical Variable: Power
ATTITUDE
It takes the right combination of attitudes.
• Have a winning attitude • Do not seem hungry or desperate • Have “win some” attitude
Be able to recognize their attitude.
• If their attitude is negative, then remember, “it’s just a game.”
Critical Variable: Power
SILENCE
Can be powerful because it may:
• Keep them talking • Help you learn motives • Help you gain information
knowledge
How?
• Probe and hush
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ry
Critical Variable: Power
MOMENTUM
• The process is flowing • It has fluidity • Things come together quickly • Creativity seems to be abundant
How?
• Keep engaging • Redefine goals and objectives as necessa • Momentum happens
Time Used as a Negotiating Tool: The “Game Changer”
• Different Power Strategy
• Time is a continuum
• No Beginning
• You are always negotiating
Time is a Continuum
• Take Your Time
• Time Can Be Advantage
• Time Limits
• Be Credible
Time as a Deadline
• Whose deadline?
• It is real or imagined?
• Make your own deadline
• Use proposals for evolving solutions
Time as a Tool
• Leave yourself room • Patience Pays • Beware of foot dragging • Problems? • Probe • Concessions
Face to Face Meeting
•What are the factors to consider? •What message does your choice send? •Housekeeping?
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Face to Face Meeting
Where do we meet and why?
• Your office • Neutral place • Lessor’s office • Lessee’s office • Country Club • Favorite Restaurant
Face to Face Meeting
Factors to Consider
• Time of Day • AM vs. PM?
• Choose your seat carefully • Head of table • Facing door or window • Next to opponent or client
• Who will attend? What are the roles of each attendee?
Face to Face Meeting
Factors to Consider
“He/She who controls the agenda, controls the meeting.”
What is/are the goal(s) for the meeting?
Face to Face Meeting
Prepare the Room
• Coffee • Pens • Paper • WiFi • Technology needs
Face to Face Meeting
Housekeeping
•Be on time = early!! •Dress appropriately: over, under or equal? •Everyone is there for a reason!
4. Negotiating Strategies and Counter-Strategies
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ANCHORING AND PIE-SHARING
Powerful Negotiating Strategies
THE SILENT TREATMENT
Powerful Negotiating Strategies
LOW- BALLING/ANCHORING
Powerful Negotiating Strategies
POWER OF PRINT
Powerful Negotiating Strategies
TIME: LAST MINUTE
Powerful Negotiating Strategies
GOOD GUY/BAD GUY
Powerful Negotiating Strategies
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MY MANAGEMENT
Powerful Negotiating Strategies
LEAVING MONEY ON THE TABLE
Powerful Negotiating Strategies
FAIT ACCOMPLI
Powerful Negotiating Strategies
APPEAR UNREASONABLE
Powerful Negotiating Strategies
CLARIFICATION OF POSITION
Powerful Negotiating Strategies
LISTING THE PROS AND CONS
Powerful Negotiating Strategies
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THE POWER OF GUILT
Powerful Negotiating Strategies
STRAW TIGER ISSUES
Powerful Negotiating Strategies
RED HERRING
Powerful Negotiating Strategies
SUMMARIES OF FACTS, STATEMENTS,
AND AGREEMENTS
Powerful Negotiating Strategies
RECESSES AND ADJOURNMENTS
Powerful Negotiating Strategies
CHANGING NEGOTIATORS IN MID-DEAL
Powerful Negotiating Strategies
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CONCILIATORY MOVES
CONCESSIONS
SPICE AND DRAMA
Powerful Negotiating Strategies
THREATS – ULTIMATUMS AND
INTIMIDATION
Powerful Negotiating Strategies
BLUFFS
Powerful Negotiating Strategies
WALKOUTS – DO NOTHING
Powerful Negotiating Strategies
LEAVING GRACEFULLY IF NO DEAL: BATNA
Powerful Negotiating Strategies
NEGATIVE SALESMANSHIP
Powerful Negotiating Strategies
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Low Moderate High
Concern for Relationship
Defeat
Be a winner
Collaborate
Creatively problem at any cost.
Compr omise solve so both parties win
Take whatever
Split the d difference Build friendly
you can get
Withdraw
relationships.
Accommodate
SPLIT DOWN THE MIDDLE / RE-ANCHORING
Powerful Negotiating Strategies
IT’S TOO COMPLICATED – LET’S MAKE IT SIMPLE
Powerful Negotiating Strategies
• Alternative of Choice Close • Left at the Altar • Making Balloon Futures • Calling in a Higher Authority • Crunch Time • Bring in the Dancer
Powerful Negotiating Strategies
• Huntley and Brinkley
• Turning Soviet
• Roaring Brains
• Needs vs. Wants Matrix
Powerful Negotiating Strategies
From How Successful People Think by John C. Maxwell than yourself.
Unselfish Thinking Makes You Part of Something Greater than Yourself
“We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear.” – George W. Merck
The lesson to be learned? Simple.
Conc
ern
for S
ubst
ance
Low
M
oder
ate
Hig
h
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Two Key Ideas about Negotiation & ADR
Focus on Interests not positions
Improve the Communication
Positions
Interests
GETTING TO YES
Separate People from Problem Interests not
Positions
Invent Options Objective Criteria BATNA
BEFORE THE NEGOTIATION
• Prepare. Prepare. Prepare. • Know your BATNA • Focus on interests, not positions • Know your interests • Prioritize your interests • Improve your BATNA before the negotiation starts • Improve your BATNA during the negotiation
BEFORE THE NEGOTIATION
Set a high goal for yourself
• Estimate their BATNA • Estimate their interests • Estimate the ZOPA (zone of possible agreement) • Talk with others who have negotiated with them
SOURCES
• International Negotiation, UNCTAD • Negotiation Theory and Practice A Review of the Literature, FAO • Negotiation Skills, William A. Burgess, The Burgess Company LLC • Negotiation and ADR, Prof. William S. Richardson, Univ. Of Hawaii • Negotiation Skills, Jon Boyes, University of Exeter • Negotiating Skills and Techniques, Barry Frawceet • Global Procurement Perspective, Ashkay Harma
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3. NEGOTIATION SKILLS PRACTICAL EXERCISES
38
WORKSHOP ON INTERNATIONAL CONTRACTS AND ARBITRATION
AGO’S CIVIL JUSTICE ADMINISTRATION DIRECTORATE
NEGOTIATION SKILLS - PRACTICE
PRESENTATION AND APPROACH TO THE PRACTICAL TRAINING.
Success in contractual transactions and personal relationships requires an understanding of negotiation strategies and skills
CIRCLE GAME
1. Purpose
The ability to persuade people is a useful skill both in personal and professional life. This exercise goes through a more demanding exercise that requires people to persuade each other strongly. It is an entertaining exercise as it involves everyone in a simple yet powerful setting. To truly get the best from this exercise, we will follow it with a review and discussion. Everyone will need to take notes during the exercise, and we will consider the strategies used by participants while persuading each other during discussions. Participants may then comment on the effectiveness of these techniques and discuss them.
2. Objective
Persuade the other person to move out of a circular area completely without touching or using any physical force.
3. Setup
Two volunteers. Pick two that are very competitive or think they are very persuasive. These two will go through the persuasion exercise while others watch. Setup the environment much like a wrestling match where one needs to push the other out of a circular area. Ask the two volunteers to stand in the middle of the circle. The audience should remain outside of the circle.
Explain that each person’s goal is to get the other person to go out of the circle.
The rules are: • They cannot touch each other or use physical force. • They can use any influence technique they like including arguments, lecturing, deception, diplomacy,
bribing, etc. • Ask the audience to cheer and encourage the people in the ring.
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• Explain that there will be a prize for the winner but don’t say what it is. • Start the match.
The game is over if a contestant is convinced to step out of the circle or the time is up and follow with a discussion.
4. Timing
Explaining the Exercise: 5 minutes Activity: 10 minutes Group Feedback: 10 minutes
5. Discussion
Who truly won this match; the person who remained in the circle or the person who stepped out in exchange for something he negotiated? What influencing strategies where employed during this match? Whose methods were more effective? Who was more convincing? Did any of the contestants offer something in return for getting the other person to step out? What was offered and was it accepted or not? How did the contestants negotiate over this? What was the role of the audience? Did the audience offer help and advice or influence the decisions in any way? What is the most important lesson you have learned in this exercise in regard with persuasion skills? What would you do differently if there was no prize for the winner?
STEREOTYPING
6. Purpose
In this exercise, participants examine stereotypes and understand the implications of stereotyping. It helps them to discover on their own that stereotyping is highly subjective.
7. Objective
Identify the description of a number of stereotypes and share that view with those of others.
8. Setup
Explain stereotyping. Stereotyping is assuming that all members of a particular group match the characteristics of the individual you have seen. Distribute the questionnaires to all delegates. Ask them to fill in the details based on their views. Allocate 10 minutes for this part. Bring back everyone together and go through the cases one by one and ask each delegate to present their description. Expect the descriptions to have similarities, but also differences. The fact that there are differences between opinions strongly suggests that stereotypes are not universal and are subjective. Follow with a discussion.
9. Timing
Explaining the Exercise: 5 minutes. Activity: 10 min activity + 10 min sharing = 20 minutes Group Feedback: 5 minutes. What did you learn in this exercise? What do you think when the stereotype of something is widely different from person to person? What does this tell you about your own stereotyping? How can you avoid it?
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Lesson learned: Stereotyping is subjective, not universal.
10. Stereotyping Questionnaire
Identify the following stereotypes: • American Negotiator • Russian Negotiator • U.N. Official • N.G.O. Representative • British Attorney at Law
CONFLICT MANAGEMENT
11. Purpose
This activity helps the delegates to resolve their internal conflicts by treating them as external conflicts. Internal conflicts are those conflicts between and you and yourself. External conflicts are those between you and others. The exercises help participants to view and resolve such conflicts in a systematic way.
12. Objective
Participants to present two sides of a subject which can become an internal conflict and resolve it with the help of another delegate.
13. Setup
Divide the groups into pairs. Ask the pairs to sit facing each other. Allocate a subject which can commonly become a reason for internal conflict to each pair. Delegates are also free to choose a subject of their own. Examples of such subjects are:
• Mining Contract, should we sell our resources to foreign companies? • Infrastructure and development versus environment protection and tradition • Accepting international contracts of having our own model contracts
One person in each pair should take one side of the conflict while the other person should take an opposite side. They should then proceed to voice their differences and attempt to resolve the conflict. Each person has 1 minute to present his case to the other person. After they have presented their cases, they have 5 minutes to discuss it further through a constructive conversation. Follow with a discussion
14. Timing
Explaining the Test: 5 minutes. Activity: 7 minutes Group Feedback: 10 minutes. Ask the group if discussing different sides of a conflicting subject helped them in resolving their problem? How can they use this technique when they are confronted with internal conflicts?
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STRATEGIC APPROACH TO A NEGOTIATION
You have interviewed a prospective new employee who could be a key member of your team. The new person’s required salary would compromise the integrity of your salary structure, because it is 20% higher than your most senior performer who has been with the company for over 10 years. Finances are tight, yet you believe this person could make a significant impact on future profits. If you paid the required salary for the new person, it would eliminate bonuses for all your staff that you feel they’ve earned this year. You’ve been searching for an individual with this skill level for three months. Analyze the power factors, set up your negotiation strategy, walk through a scenario with your partners (observers).
SUMMARY A GOOD NEGOTIATOR:
• Plans and prepares beforehand • Knows who they are meeting • Is objective about what they want to achieve but knows where ‘movement’ exists • Understands the information they hold, what they want to know and what they are prepared to share • Asks questions and listens to what others say • Takes their time and appreciates that people think and act at different speeds • Is confident but not arrogant • Is able to spot opportunities and think creatively • Is not intimidated by ‘power’ or ‘powerful’ behavior • Avoids being overly-emotional and letting the heart ruling the head • Seeks a win-win
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4. INTERNATIONAL CONTRACTS DRAFTING
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Workshop of International Contract and Arbitration
CHALLENGES FOR THE AGO’s DIRECTORATE FOR CIVIL JUSTICE ADMINISTRATION
Drafting International Contracts: Key legal elements
Dr. Jesús Bores, International Expert
Delivery of the goods by the seller* Price of the goods Payment terms Currently of sale Warranty & repair of goods Receipt of the goods by the buyer* Country of origin of the goods Export packaging* Notice to the buyer or seller* Mode of transport Transportation costs*
Agreement date and place Identification of the parties Authority to enter into contracts Applicable law Severability Dispute resolution Incoterms® 2010 rule / Technical Rules Description of the goods / work / Service Quality, grade, size & Specific condition Weights & quantities Substitution
International Sales Agreements:
• Claims
• Transfer of title • Penalty clause for late shipments • Customs clearance* • Payment of customs duties & taxes* • Amendments • Assignment • Force majeure
Contract of carriage* Provision of commercial documents* Provision of transport documents* E-commerce* Inspection of the goods* Diversion clause Transfer of risk* Cargo insurance*
International Sales Agreements:
International Sales Agreements: “Must-Haves”
• DESCRIPTION OFTHE GOODS: • Prose-based description of the goods • Description should be consistent with
product classification in the Harmonized System (H.S.)
• If possible, provide 6-digit HS number per the World Customs Organization
• Quantity with proper unit of measure (grams, dozen, liters, pairs, pounds)
International Sales Agreements: Clauses & Considerations
PRICE: For one-off transactions, list both unit and total price (show discounts) Spell out the currency ($ should be stated as USD) For long-term, multi-transaction contracts list clause for price adjustments Beware buying or selling in foreign currencies (if you do, need clause for bands of fluctuation) CAVAET: The negotiated Incoterms® may impact the final price of the goods
Unit versus landed cost
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International Sales Contracts: Clauses & Considerations
TYPE & TERMS OF PAYMENT:
• Cash in advance • Open account (30, 60, 90 days)
• When does the clock start ticking? (invoice date, transport document date, arrival date)
• Documentary collections • Cash against Documents
• Documentary credits • Letter of credit
International Sales Contracts Clauses & Considerations
INCOTERMS® RULE:
Incoterms® 2010 rules specify the division of delivery-related cost and risk between a seller and buyer In terms of scope, the negotiated Incoterms® rule is the single
most important component of a contract and all ensuing documents
ALWAYS specify an Incoterms® rule in a contract and list it on all documents ALWAYS add a clause in contracts that states “Incoterms® rules
will be interpreted pursuant to the ICC publication, Incoterms® 2010”
Incoterms rules carry a stipulation for delivery date or range of acceptable time frame
• Transfer of risk • Cargo insurance • Customs clearance • Payment of customs duties & taxes
International Sales Contracts: Clauses Covered by Incoterms® Rules
• Delivery of the goods by the seller
• Receipt of the goods by the buyer • Export packaging • Notice to the buyer or seller • Transportation costs
• Contract of carriage • Provision of commercial documents
International Sales Contracts Clauses & Considerations
• COUNTRY OF ORIGIN OFTHE GOODS Country of growth, assembly or manufacture of goods (not necessarily the country of export) Whether you are the buyer or seller, country of origin will impact the landed costs of the goods (customs duties are driven by this factor) C.O. is an important point, particularly if the States of the buyer and seller are party to a bi-lateral or multi- lateral trade agreement (NAFTA, KORUS,
US/Colombia)
International Sales Contracts Clauses & Considerations
• TRANSFER OF TITLE TO THE GOODS There is a big difference between the transfer of risk and transfer of title Contrary to popular myth, Incoterms do NOT deal with transfer of title International contract law does not do a very good job of addressing transfer of title Be explicit in your Agreements about transfer of title
Incoterms® 2010: Understanding & Application
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Incoterms® Defined
• By focusing on the seller’s delivery obligations within an international sales contract Incoterms® govern three critically important considerations: • At what physical point in a supply chain the risk of loss or
damage to the goods shifts from seller to buyer • At what physical point in a supply chain the responsibility
for all transportation, customs clearance, duties and related charges shift from the seller to the buyer
• Responsibility between seller and buyer for execution of certain functional activities
Incoterms® That Ceased To Exist 1/1/2011
Delivered at Frontier (DAF)
Delivered Ex Ship (DES)
Delivered Ex Quay (DEQ)
Delivered Duty Unpaid (DDU)
Incoterms® That Were Added on 1/1/2011
• Delivered At Terminal (DAT)
• Delivered At Place (DAP)
• CIP Carriage & Insurance Paid To (named place of destination)
• DAT Delivered At Terminal (named terminal at port or place of destination)
• DAP Delivered At Place (named place of destination)
• DDP Delivered Duty Paid (named place of destination)
• EXW Ex Works (named place of delivery)
• FCA Free Carrier (named place of delivery)
• FAS Free Alongside Ship (named port of shipment)
• FOB Free On Board (named port of shipment)
• CFR Cost & Freight (named port of destination)
• CIF Cost, Insurance & Freight (named port of destination)
• CPT Carriage Paid To (named place of destination)
The 11 Official ICC 2010 Incoterms® As of 1/1/2011
Ocean or inland water transport only:
FAS Free Alongside Ship (named port of shipment)
FOB Free On Board (named port of shipment)
CFR Cost & Freight (named port of destination)
CIF Cost, Insurance & Freight (named port of destination)
Any mode of transport:
EXW Ex Works (named place of delivery)
FCA Free Carrier (named place of delivery)
CPT Carriage Paid To (named place of destination)
CIP Carriage & Insurance Paid To (named place of destination)
DAT Delivered At Terminal (named terminal at port or place of destination)
DAP Delivered At Place (named place of destination)
DDP Delivered Duty Paid (named place of destination)
Incoterms® Use by Mode of Transport As of 1/1/2011
Incoterms® are Rules, not Laws
• Incoterms® were established as a standard set of rules for determining a seller’s delivery obligations, they are not laws
• Incoterms® have the force of law, however, when they are referenced in a valid and binding sales contract or agreement
• As part of a binding contract any questions on the seller’s delivery obligations are answered pursuant to the Incoterms® 2010 publication
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Meaning of the Term “Delivery”
• Sellers and buyers should never assume they understand the Incoterms® definition of the term “delivery”
• Within the context of Incoterms® delivery does not necessarily mean up to the final destination
• Under Incoterms® 2010 delivery can occur in either origin or destination
• In a contract for sale between a seller and buyer Incoterms® do not explicitly cover:
• Title transfer • Revenue recognition • Remedies for breach of contract • Payment terms • Any other non-delivery related
clause in a comprehensive sales contract
• In a contract for sale between a seller and buyer Incoterms® cover:
• Risk of loss or damage to the goods
• Responsibility for transportation, customs and related expenses
• Certain functional responsibilities related to the delivery of the goods (listed in the next slide)
What Incoterms® Do & Don’t Do
Functional Obligations Between Seller & Buyer
Because Incoterms® deal with the risks and costs associated with the seller’s delivery responsibility, they clearly define the division of functional obligations relevant to that delivery activity. They are:
Proper packaging of merchandise Securing of licenses, permits or special government requirements (including security related information) Inspection of goods at origin Export customs clearance Provision of commercial invoices Placing goods at disposal of the buyer at origin Handing goods over for transport to a designated carrier or forwarder at origin Procurement of Contracts of Carriage (bill of lading or airway bill) Pre-Alerts and Proof of Delivery Customs clearance at destination Delivering goods at destination
The seller’s delivery responsibility can end at his works, at
a forwarder’s facility or at a port/airport. Under each scenario goods
Destination plant
or warehouse Origin
FCA Free Carrier
(named place of delivery)
There can be more than one delivery point at origin (seller’s facility, forwarder’s facility, port or airport)
Delivery occurs when goods are presented to the carrier nominated by the buyer at the named place or port, cleared for export, from there all transport/customs related costs are for the buyer
If delivery is at seller’s facility, the seller must load the collecting vehicle
Port at origin Vessel at origin Inland freight Origin plant
or warehouse
port, cleared for export and loaded transportation only
FOB Free On Board (named port of shipment)
Delivery occurs in the port of shipment when goods are loaded on board the vessel and all costs/risks beyond that point are for the buyer
Export clearance and inland freight charges up to the delivery point are for the seller’s account
Not suitable for containerized cargo (use FCA in this case)
Transportation extends to destination Delivery is completed at origin
Destination Origin
Destination Mode of Origin port or
Group C Shipment Contracts:
Delivery vs. Transportation Obligations
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Destination Origin
Vessel at destination Port at origin Vessel at origin
Seller pays for ocean transport up Delivery occurs at the origin
port, cleared for export and loaded
CFR Cost & Freight
(named port of destination)
Delivery occurs in the port of shipment when goods are loaded on board the vessel, but seller pays transport costs to port of arrival Per above, risk shifts to the buyer at the port of shipment Not meant for containerized cargo (consider CPT as an alternative)
Transportation extends to a named port or Delivery is completed at origin
Destination Origin
Destination Any mode of
Risk shifts with the first carrier at origin (normally the collecting vehicle at the seller’s facility), but seller pays transport costs to the named place at destination
Can be used for any mode of transportation or combination thereof
CPT Carriage Paid To (named place of destination)
Destination Origin
Seller is responsible for risk of loss or damage and
transportation up to a named terminal at a port or place at
DAT Delivered At Terminal
(named terminal at port or place of destination)
Delivery is complete when the goods are placed at the disposal of the
Destination Origin
Seller is responsible for risk of loss or damage and
transportation up to named place at destination, but is not
• Seller delivers when goods are made available to the buyer at the named place in destination, not unloaded from the delivering vehicle, and seller must pay all
transport costs to that delivery point (does not include clearance, duties or taxes)
• Can be used for any mode of transport
DAP Delivered At Place (named place of destination)
Understanding Export Letters of Credit
Documentary Credits (Letters of Credit)
• In essence, a letter of credit is used to replace the creditworthiness (or lack thereof) of an international buyer with that of a bank
A bank undertakes to pay the seller based on performance Not a guarantee of payment, but rather a promise of payment based on performance (documents-driven)
• There are several different types of letters of credit • In all instances, bank(s) charge a series of fees for
engaging in an L/C transaction
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Documentary Credits (Letters of Credit)
IMPORTANT: Payment of the L/C is 100% dependent on the seller’s (exporter’s) timely presentation of
Complete, Correct and Consistent documents to the bank (The “Three C’s of Documentation”)
The true meaning of “performance” under an L/C is related to documentation Banks do not concern themselves with the physical movement of goods
L/C transactions are governed by the Uniform Customs & Practice for Documentary Credits (UCP 600) documents (performance)
• Time Draft: A “check” (bill of exchange) prepared by and payable to the beneficiary on a specified date beyond that of
presentation of documents (30, 60, 90 days) contingent upon presentation of stipulated
prepared by and payable to the beneficiary upon presentation of stipulated documents
bank in the country of the beneficiary that “advises” of the issuance of an L/C, without engagement
• Confirming Bank: Normally in the country of the seller, a bank that undertakes to pay
• Advising Bank: A branch or correspondent • Sight draft: A “check” (bill of exchange) documents stipulated by an L/C of credit on behalf of the applicant
Important Terminology & Definitions: Letters of Credit
• Applicant: The buyer or the party who • Amendment: A mutually approved change, requests a letter of credit to be issued addition or deletion to the terms of an L/C
• Beneficiary: The seller or the party to whom after its original issuance the letter of credit is payable • Discrepancy: Any error, omission or
A Quick Look at an Export
Letter of Credit Confirmation
A Quick Look at Export L/C
Basic Process for Issuing a Letter of Credit
Key Elements to Be Included In a Letter of Credit
• Type of L/C (confirmed irrevocable) • L/C number • Name(s) of issuing, advising and confirming
bank • Applicant/Beneficiary details • Description & quantity of the goods • Amount of credit (currency) • Percentage of variance allowed for final
credit amount (if at all)
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Key Elements to Be Included In a Letter of Credit
• Type of payment mechanism (sight or time draft) • Negotiated shipping term (Incoterms® 2010) • Documentation requirements (type and number) • Designation of freight forwarder • Instructions for preparing ocean bill of lading or
airway bill • Transshipment allowed (Y/N)
Key Elements to Be Included In a Letter of Credit
• Partial shipments allowed (Y/N) • Latest ship date (or time range) • Last date for presentation of documents • Bank upon which drafts are to be drawn • Location for document presentation • Responsibility for bank charges • Expiration date of L/C • L/C subject to UCP 600
L/C
ADVISING/
NEGOTIATING/
ISSUING
5 BANK
L/C BANK 6 3
7
BANK
L/C 1
SELLER
U.S. Export Letter of Credit: Players & Process Flow
4
Typical Documents Required For Payment Under an L/C
Proviso: Payment of a Documentary Letter of Credit has nothing to do with the physical movement of the goods
Remember: Banks only care about the timely presentation of designated documents at a specified place
Original L/C Commercial invoice Airway bill or ocean bill of lading Packing List Insurance policy or certificate Certificate of origin Phyto sanitary certificate Inspection certificate Sight/time draft
Tips for Working With Export Letters of Credit
• Take the lead in the negotiation process Be the first to present your preferred terms (send a checklist to the buyer before he/she applies for the credit)
• Currency always in USD • Minimize the number of banks involved
State your preferred bank for advice, confirmation and/or negotiation
• Stipulate that the credit is available at the counters of your bank
• Don’t use overly complex product descriptions
Tips for Working With Export Letters of Credit
Only agree to documents that your customer really needs (originals & copies) Allow for transshipments Allow for partial shipments Select the Incoterm that makes the most operational and financial sense for your company
Use the banking system to make sure you get paid before your customer gets the documents
“To Order” for ocean shipments Consigned to a bank for air shipments Use F.F. to control copies of docs at destination
Draw drafts on a bank, not your customer
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Tips for Working With Export Letters of Credit
• Don’t stipulate too much time for expiration of the L/C (no more than 4 months)
• When considering expiration, shipment and last presentation dates, make sure there are no holidays that may delay activities
• Have a central point of contact for the handling of all L/C’s
Logistics or finance
• Work with a bank that has strong on-line capabilities Visibility into all L/C activity
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5. INTRODUCTION TO INTERNATIONAL ARBITRATION
(1) 11
52
Workshop of International Contract and Arbitration
CHALLENGES FOR THE AGO’s DIRECTORATE FOR CIVIL JUSTICE ADMINISTRATION
INTRODUCTION TO INTERNATIONAL ARBITRATION
Dr. Jesús Bores, International Expert
UNCITRAL Dispute Settlement Texts
Convention on the Recognition and Enforcement of Foreign Arbitral 1958 Awards , 1958 (the "NewYork" Convention)
UNCITRAL Arbitration Rules 1976
UNCITRAL Conciliation Rules 1980
UNCITRAL Model Law on International Commercial Arbitration 1985 (amended in 2006)
Model Law on Arbitration
• Adopted in 1985, amended in 2006 • A framework for the conduct of arbitral proceedings • Consistent with the New York Convention • Reflects world wide consensus • Adopted in about 90 jurisdictions • Aims at reducing discrepancy between domestic
procedural laws affecting international commercial arbitration
• To achieve this purpose, uniform interpretation and application of the Model Law is equally important
Case Law on UNCITRAL Texts
• UNCITRAL established in 1988 a case-reporting system known as Case Law on UNCITRAL Texts (CLOUT)
• Collection of court decisions and arbitral awards relating to UNCITRAL texts for use by judges, arbitrators, lawyers, parties to commercial transactions, academics, students, etc.
• Available in all UN official languages • Relies on national correspondents for full texts and abstracts of
decisions and awards
The Digest on the Model Arbitration Law
Launched on 9 June 2012, features 725 cases from 37 States in 232 pages
Provides users with a means to better understand, interpret and apply the enactments of the Model Law Organized according to the chapters and articles in the Model Law
Summary of case law for each article, highlighting common views and reporting any divergent approach Footnotes with live links to cases Aims at identifying trends in the interpretation of the Model Law, and whether any divergence is a result of variation in 1) legislative enactment of the Model Law or 2) interpretation
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The 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards
Outline
1. Introduction to the New York Convention 2. Article-by-Article Analysis of the Convention 3. Issues Specific to [Roadshow host
jurisdiction] 4. Discussion Session
5. Closing Remarks
• Objectives of the Convention
• History and Adherence
• Scope (Article I)
• Relationship to Domestic Law and Other Treaties (Article VII(1))
• Current [hosting jurisdiction’s] Law on Enforcement and Recognition of Arbitral Awards
Objectives of the Convention: Recognition & Enforcement
• The NY Convention has two objectives: • The recognition and enforcement of arbitral agreements • The recognition and enforcement of arbitral awards
• Article II(1): “Each Contracting State shall recognize an agreement in writing which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration.”
• Article III: “Each Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon, under the conditions laid down in the following articles.”
Objectives of the Convention: The Convention is a Treaty
• The Convention is an international treaty and thus part of public international law
• Engages the responsibility of Contracting States on the international plane
• Interpreted according to the Vienna Convention on the Law of Treaties
Opening of the Conference
• Articles 31 and 32 provide rules of on the law of treaties, interpretation Vienna 1969
Objectives of the Convention: The Role of ICCA
• ICCA is a worldwide NGO devoted to promoting the use and improving the process of arbitration, conciliation, and other forms of international dispute resolution:
• General membership • Publications • Biennial arbitration Congresses • Projects (research and outreach) • Young ICCA
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Objectives of the Convention: The Role of ICCA
• ICCA’s Guide to the Interpretation of the 1958 New York Convention publication
Scope – Awards
• Article I(1): This Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought, and arising out of differences between persons,
whether physical or legal. It shall also apply to arbitral awards not considered as domestic awards in the State where their recognition and enforcement are sought.
Scope – Awards: Material Scope
• What is an “arbitral award?” Not defined in the Convention Scope limited to arbitration and arbitral awards
• What is “arbitration?” Consensual process as a substitute for litigation Leads to a final and binding resolution of the dispute
• What is an “award?” An award finally settles the issues that it seeks to resolve Can be final, partial, preliminary, or limited to costs, etc. The name given by the arbitrators to their decision is not determinative
Scope – Awards: Territorial Scope
• Expansive territorial scope • Applies to foreign and non-domestic arbitral awards • Foreign awards are awards made in any State other than the State
where recognition or enforcement is sought No requirement that State where award was made be a party to the Convention Generally, an award is “made” at the seat of the arbitration
• Non-domestic awards are defined by the State where recognition or enforcement is sought (mainly used in US)
Broadens the scope of application of the Convention
• Convention does not apply to domestic awards • Convention does not apply to setting aside of arbitral awards
Scope – Agreements
• Scope of application for arbitration agreements not defined • Convention does not govern the recognition of domestic
agreements • Three situations
• If agreement provides for foreign seat, apply Convention • If agreement provides for seat in forum State
Apply Convention if future award will be non-domestic May apply Convention if international component present
• If agreement does not specify seat, apply Convention if it is likely that the future award will be foreign or non-domestic
Scope – Reservations
• Reciprocity • Contracting States may restrict application to recognition
and enforcement of awards made in the territory of another Contracting State
• Approximately 2/3 of Contracting States have made this reservation (but no reported refusals)
• Commercial Nature • Contracting States may restrict application to disputes that
are commercial as defined by the law of the forum State • Approximately 1/3 of Contracting States have made this
reservation
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Relationship to Domestic Law & Other Treaties
• Article VII (1): The provisions of the present Convention shall not affect the validity of multilateral or bilateral agreements concerning the recognition and enforcement of arbitral awards entered into by the Contracting States, nor deprive any interested party of any right he may have to avail himself of an arbitral award in the manner and to the extent allowed by the law or the treaties of the country where such award is sought to be relied upon.
Relationship to Domestic Law & Other Treaties
• Article VII (1) permits a party seeking recognition and enforcement to rely on rules that are more favorable than those found in the Convention
No cherry-picking (all or nothing) Widely understood to apply to arbitration agreements • Bomar Oil N.V. v Etap (France 1993)
• UNCITRAL 2006 Recommendation
Relationship to National Law
• Three situations: • Convention Supersedes
• The Convention governs if the Convention and national law address the same issue and the Convention is more favorable.
• National Law Supplements • If the Convention has no rule on the issue, national law is used to supplement.
This is particularly true with respect to procedure.
• Express Reference to National Law • The Convention incorporates national law explicitly. See Articles I, III, and V.
Article II: Arbitration Agreements
• Article II(1): Each Contracting State shall recognize an agreement in writing under which the parties
undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal
relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration.
Article II: Arbitration Agreements
• Obligation to Recognize Agreement • Presumption of Validity
• Scope of Agreement • FionaTrust & Holding Corp v. Yuri Privalov (UK 2007)
• Parties to the Agreement • General principle: privaty of contract • Binding non-signatories?
Implied consent Other theories, e.g., alter ego, estoppel
• Article II (2): The term “agreement in writing” shall include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams.
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Article II: Writing Requirement
• Comparatively liberal substantive rule as a “maximum standard” • Application of more demanding domestic law is precluded • Not a minimum standard; see 2006 UNCITRAL Recommendation
• Pro-enforcement approach and liberal interpretation of the requirement
• Practical issues • Tacit acceptance • Incorporation by reference • Standard terms and conditions • No signature but subsequent performance • Exchange of electronic communications
Article II: Existence and Validity of Agreement
• Article II(3): The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative, or incapable of being performed.
Article II: Existence and Validity of Agreement
• Mandatory referral to arbitration • Stay of court proceedings or dismissal
• Three exceptions
• “Null and Void” • Invalid from the outset • Fraud, fraudulent inducement, illegality, mistake
• “Inoperative”
• Valid at one time but has ceased to have effect • Waiver, revocation, repudiation, or termination
• “Incapable of Being Performed” • Arbitration cannot proceed due to legal impediment
• E.g. Optional clause, concurrent jurisdiction of courts, inaccurate designation of rules or institution, blank clauses
Article III: Enforcement of
Arbitral Award
• Article III: Each Contracting State shall recognize arbitral awards as binding and enforce them with the rules of procedure of the territory where the award is relied upon, under the conditions laid down in the following articles. There shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement of domestic arbitral awards.
Article III: Enforcement of Arbitral Award
• Pro-enforcement bias: obligation to enforce awards • Pragmatic, flexible, and non-formalistic approach • Rules of procedure v. conditions
• Domestic law provides rules of procedure • Convention governs conditions for enforcement
• Not “substantially more onerous” than parity with domestic arbitrations (e.g., fees)
Article IV: The Applicant’s Requirements
Article IV:
To obtain the recognition and enforcement mentioned in the preceding article, the party applying for recognition and enforcement shall, at the time of the application, supply:
(a) The duly authenticated original award or a duly certified copy thereof; (b)The original agreement referred to in Article II or a duly certified copy
thereof.
2. If the said award or agreement is not made in an official language of the country in which the award is relied upon, the party applying for recognition and enforcement shall produce a
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Article IV: The Applicant’s Requirements
• Facilitates enforcement • Submission of two documents only (agreement and award) • Authentication
• Signatures on award are confirmed as genuine • Certification
• Copy of the award is identical to the original
• Translation • Pragmatic approach
Article V: Grounds for Refusal
• No review on the merits • Respondent bears the burden • Exhaustive grounds for refusal • Narrow interpretation • Limited discretionary power of the court to grant recognition and
enforcement even if one of the grounds applies • Article V (1)
Five grounds to be proven by respondent
• Article V (2) Court raises sua sponte
Article V: Grounds to be Proven by Respondent
• Article V (1):
Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority proof that:
Article V(1)(a): Incapacity or Invalidity
• V(1)(a): The parties to the agreement referred to in Article II were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made.
Article V(1)(a): Incapacity or Invalidity
• Incapacity • Mental incompetency, physical incapacity, and lack of authority to act
or power to contract.
• Invalidity • Competence-competence does not imply that the arbitration
tribunal’s competence is exclusive Dallah Real Estate &Tourism Holding Co v Pakistan (UK 2009)
• Defenses under this ground include: no agreement “in writing”; no agreement at all; illegality, duress, or fraud (controversial)
Article V(1)(b): Lack of Notice and Due Process
V(1)(b): The party against whom the award is invoked was not give proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case.
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Article V(1)(b): Lack of Notice and Due Process
Fair Hearing: Minimum requirements of fairness standard
• Adequate notice • Usually hearing on the evidence • Impartial decision by the arbitration tribunal
Ability to present one’s case • Iran Aircraft Industries v Avco Corp (USA 1992)
Article V(1)(c): Outside or Beyond Scope
• V(1)(c): The award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to
arbitration may be recognized and enforced.
• Arbitral tribunal may only consider matters the parties have agreed to submit to it
• Language of arbitration agreement is important (to determine scope)
• Partial enforcement of award possible
Article V(1)(d): Composition of the Tribunal
• V(1)(d): The composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place.
• Composition of arbitration tribunal • Have the parties agreed on composition? • Has an agreement been violated? • Minor procedural deviation is not sufficient
• Arbitration procedure • Minor procedural deviation is not sufficient
• If no agreement, court should apply law of arbitral seat
Article V(1)(e): Award Not Yet Binding/Set Aside
• V(1)(e): The award has not yet becoming binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.
• Not yet binding • Party entitled to apply for recognition and enforcement
of award once issued by arbitration tribunal • No double exequatur
• Courts differ as to when an award becomes “binding” • Set aside (also known as vacatur or annulment) at the seat
• Application to set aside does not suffice • Courts in some jurisdictions have granted enforcement of an award set aside
outside of the Convention regime (France is best-known example) and inside the Convention regime (NL)
Article V(2): Ex Officio Refusal by the Court
• Article V (2): Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that:
Article V(2)(a): Not Arbitrable
• V(2)(a): The subject matter of the difference is not capable of settlement by arbitration under the law of that country.
• Dispute involves subject matter reserved for courts, e.g., • Divorce • Child custody • Property entitlements • Wills and Estates • Bankruptcy • Winding up of companies • Criminal matters
• Modern trend is for this category to shrink
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Article V(2)(b): Contrary to Public Policy
• V(2)(b): The recognition or enforcement of the award would be contrary to the public policy of that country.
• No definition of “public policy” • Domestic principles of public policy • International concept of public policy
Narrower than domestic principles Most national courts have adopted this approach 2002 ILA Recommendations regarded as best practice
• Fundamental principles of justice or morality • Rules serving essential political, social, or economic
interests of State • Duty of State to respect its obligations
Article VI: Adjournment of Enforcement Decision
• Article VI: If an application for setting aside or suspension of the award has been made to a competent authority referred to in Article V(1)(e), the authority before which the award is sought to be relied upon may, if it considers it proper, adjourn the decision on the enforcement of the award and may also, on the application of the party claiming enforcement of the award, order the other party to give suitable security.
Article VII: More-favorable-right provision
• Article VII (1): The provisions of the present Convention shall not affect the validity of multilateral or bilateral agreements concerning the recognition and enforcement of arbitral awards entered into by the Contracting States, nor deprive any interested party of any right he may have to avail himself of an arbitral award in the manner and to the extent allowed by the law or the treaties of the country where the award is sought to be relied upon.
Key Points
• The NewYork Convention provides for the recognition and enforcement of arbitration agreements and awards
• As an international treaty, it is binding on Contracting States and their courts
• Courts should seek to promote the Convention’s uniform interpretation, always keeping in mind its pro-enforcement bias
• The NewYork Convention provides a maximum and not a minimum level of control; less favorable provisions of domestic law are superseded by the Convention; but it is always possible to apply more favorable provisions of domestic law
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6. ARBITRATION CLAUSES DRAFTING
(2) 12
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Workshop of International Contract and Arbitration
CHALLENGES FOR THE AGO’s DIRECTORATE FOR CIVIL JUSTICE ADMINISTRATION
DRAFTING AN EFFECTIVE ARBITRATION AGREEMENT AND ANALYSIS OFTHE ETHIOPIAN
LEGAL FRAMEWORK
Yazachew Belew
Outline:
1. Introduction 2. The Validity of an arbitration agreement 3. Parties to arbitration agreement 4. Analysis of arbitration agreement: Scope & basic elements 5. Defective arbitration clauses 6. Practical training: sample arbitration clauses and cases
1. Introduction
A. The Agreement to arbitrate
• Contractual nature of arbitration • Consent of parties is the essential basis, unlike national courts • Article 3325(1), Civil Code (CC): Arbitral submission is a contract • Compulsory arbitration: duty to arbitrate may also arise from the
law
Introduction …cont’d
B. Types of arbitration agreement
1. Arbitration clause:
• Agreement to submit future disputes to arbitration; Article 3328(1), CC
• Often inserted in the main contract,
• Looks to the future,
• Short-usually in the form of model clause; • Also called “midnight clause” to mean the last clause to be considered in
contract negotiation, insufficient thought is given to dispute process
Introduction…cont’d
2. Submission agreement:
• An agreement to submit existing dispute to arbitration; Article 3328(2), CC
• Looks to the past, • Usually long, provides for important elements, e.g. place of
arbitration, applicable law, names of arbitrators, description of dispute, etc.
• Tailored to fit the circumstances of the dispute that has actually arisen
• Not so easy to negotiate
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2.The Validity of Arbitration Agreement
i. The requirement of form ii. The existence of a defined legal relationship iii. Arbitrability of dispute iv. Capacity of parties
Validity… cont’d
• Arbitration agreement being a contract must satisfy the substantive requirements of a valid contract: consent, object, capacity, form, if any. Articles 3325 & 1678, CC.
• Only valid arbitration agreement has the procedural effect of ousting the jurisdiction of courts: Article 244(2)(g) Civil Procedure Code (CPC)
• The risk in Ethiopia: arbitrators do not have competence to decide on validity of arbitration agreement; they must refer the issue to courts; Article 3330(3)CC; dilatory tactic for respondent
Validity …cont’d
1. The requirement of form
• Written form as a common requirement. Eg New York Convention (NYC), Art. II.2; Model Law, Art. 7(2) require “writing”
• Ethiopian Law: • Civil Code: Art.3326(2): “Arbitral submission shall be drawn up in
the form required by law for disposing without consideration of the right to which it related”
• Civil Pro. Code: Art. 315(1): “…a written agreement” • Draft Arbitration Law of Eth:” in writing or electronically” Art.2(2)
Validity…cont’d
2. The existence of a defined legal relationship
• The defined legal relationship can be contractual or not • Art. 3328(3), CC: Arbitral clause relating to future dispute shall not be
valid unless it relates to a contract or other specific legal obligation. 3. Arbitrability of dispute
• Whether a dispute is capable of being resolved by arbitration or falls under the exclusive jurisdiction of regular courts
• The Civil Code provides no sufficient clue: Art. 3326(1) suggests that one is free to go to arbitration in relation to rights he can freely dispose.
Validity…cont’d
• Art. 315(2): Administrative contracts as defined under Art. 3132 of the Civil Code are not arbitrable
• Art. 3132: A contract shall he deemed to be an administrative contract where: (a) it is expressly qualified as such by the law or by the parties; or (b) it is connected with an activity of the public service and implies a permanent participation of the party contracting with the administrative authorities in the execution of such service; or (c) it contains one or more provisions which could only have been inspired by urgent considerations of general interest extraneous to relations between private individuals.
Validity….cont’d
• commercial and investment disputes are arbitrable • ZemZem Plc vs Ilubabor Education Bureau: cassation case no.16896 • Often cited, but not so understood • The cassation bench invoked Art.1731 of the Civil Code to refer the matter to
arbitration in the face of Art. 315(2) of the CPC expressly referred to in the arbitration clause.
• The court neither applied the arbitration clause of the parties nor characterized the contract as not administrative contract; no mention of Art. 315(2) was even made.
• Some govt institutions are allowed to go to arbitration by their establishing legislation even if they engage in administrative contracts, eg. ERA.
tutorship • Administrative disputes within the jurisdiction of administrative
organs of gov’t by virtue of the law • Criminal law • Other matters declared non-arbitrable by the law.
Validity…cont’d
• 4. Capacity of parties
• Arbitration agreement being a contact is subject to rules governing capacity to act.
• Art.3326(1) CC requires capacity to dispose of a right without consideration (for free) to submit to arbitration; cf to Art. 315(3), CPC that requires capacity to dispose of a right, but no requirement of freely disposing such right.
• For juridical persons: the authority to consent to arbitration arising from constitutive documents (eg companies) and establishment law for state entities, eg those which are exceptions to Art.315(2) of the CPC.
3. Analysis of arbitration agreement: scope & basic elements
1. Scope of arbitration agreement
• The mandate of the tribunal arises from the arbitration agreement • The tribunal should not go beyond its mandate for it lacks
jurisdiction • Award granted beyond mandate may not be recognized and
enforced; • Article 356, CPC: grounds of setting aside an award: arbitrator
decided matters not referred to him, or made award based on invalid or lapsed arbitration agreement
Scope …. cont’d
• Drafting: Use words which are adequate enough to convey the intention of parties to settle all and any dispute that fall under the ambit of their contract;
• Adopt broad and inclusive terms rather than referring only certain categories of dispute to arbitration and leaving the rest to courts.
• Terms such as “in connection with”, “in relation to”, “in respect of”, “with regard to”, “under”, “arising out of” are important tools
Scope…cont’d
• Model arbitration clauses are also helpful: • E.g. .“Any dispute, controversy or claim arising out of or relating to
this contract, the breach, termination, or invalidity thereof, shall be settled by arbitration in accordance with the UNCITRAL Rules as at present in force
• This could cover: contractual claims and those incidental to the contract (quantum meriut), claims in tort, claims arising form the law
Scope and basic elements…cont’d
• BUT when an issue arises as to the scope of the tribunal’s jurisdiction the rule of interpretation:
• Article 3329, CC: “provisions of the arbitral submission relating to the jurisdiction of the arbitrators shall be shall be interpreted restrictively”
• No express power given to tribunal to rule on the issue of scope: Art. 3330 (1) “…arbitral submission may authorize the arbitrator to decide difficulties arising out of the interpretation of the submission agreement …”
• Art. 3330(2) “It may in particular authorize the arbitrator to decide disputes relating to his own jurisdiction
• Thus, unless expressly authorized by parties in the arbitration agreement arbitrator may neither interpret nor rule on issues of scope.
• Drafting an effective arbitration agreement must address this problem.
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2. Basic elements of an effective arbitration agreement
1. Constitution of the arbitral tribunal
• Number and method of appointment of arbitrator(s) is usually fixed by the parties in the agreement to arbitrate
• Odd number of arbitrators is preferred to avoid deadlock • Relevant factors: Cost, speed, expertise, consistency and legal
background of arbitrators • Appointment can be made by: parties, arbitrators, court arbitrators, or an
appointing authority agreed upon: Articles, 3331-3333, CC. • Do not name a specific person as arbitrator in future dispute • Equality of parties: Arbitration agreement is invalid if one party is
privileged in the appointment of arbitrators; Article 3335, CC`
Basic elements…cont’d
2.Ad hoc or institutional
• Parties must make a decision as to what type of arbitration they need • Ad hoc arbitration is conducted by rules agreed by the parties themselves or laid
down by the arbitral tribunal • Parties are free to work and establish detailed rules that govern arbitration • Usually arbitration agreements adopt by reference the rules of certain
arbitration institution: e.g. Addis Ababa chamber of commerce arbitration rules or UNCITRAL Rules.
• Advantage: tailor-made; can be shaped to meet the distinct wishes of the parties and the particular circumstances of their case
• Disadvantage: its effectiveness depends on the good faith and cooperation b/n parties and their lawyers.
Basic elements…. cont’d
2. Institutional arbitration
• Administered by a specialist arbitral institution under its own rules of arbitration
• AACCSA AI (Addis Ababa Chamber of Commerce and Sectoral Association Arbitration Institutions) is the only arbitral institution legally operating
• Other examples: ICC, LCIA, ICSID, WIPO, etc. plus regional arbitration centers
• Advantage: degree of permanence, modern rules, qualified staff, reasonable charges
• Disadvantage: delay
Basic elements…. cont’d
4. Filling vacancies in the tribunal
• Vacancy may be created in the course of arbitration for various reasons: death, incapacity, resignation, or successful challenge and removal of arbitrator; Arts.3336, 3340, 3343, CC.
• Replacement procedure depends on the reason for vacancy: a) defaulting arbitrator (death, incapacity, resignation) is replaced by the
same method in which he/she was appointed unless parties agree otherwise; Art.3336(1), CC
b) Disqualified, or removed arbitrator is replaced by a new arbitrator appointed by the court unless agreed otherwise by the parties: Art.3336(2)
Basic elements…cont’d
• Defaulted arbitrator is one who died, became incapable or resigned having accepted his/her appointment: Art.3336(1)
• Disqualified arbitrator: unable to discharge function properly or within a reasonable period because he/she is not of age, convicted, mentally unsound, ill, absent, not independent, not impartial. Art.3340
• Application to disqualify arbitrator shall be made to the tribunal itself unless agreed otherwise: Art.3342(1&2), CC
• Application to remove arbitrator shall be made to the appointing authority or court unless agreed otherwise: Art.3343, CC
• Parties who want to avoid these default provisions of the law have to exercise their freedom of contract while drafting their arbitration clause.
Basic elements …. cont’d
5. Place of arbitration
• A decision of major importance in international arbitration, if not for domestic arbitration
• Constitutes the seat of arbitration and the law of that place governs the arbitral proceedings
• Parties have to choose a suitable place taking into account such factors as distance, cost, the support of local courts before, during and after proceeding, especially enforcement of award (eg New York Convention state)
• Arbitration agreement (parties) must carefully provide for place of arbitration instead of leaving the decision to be taken by others.
• Draft Arbitration Law: Art. 61, parties’ choice or place stated on the award; no comparable provision in the CC and CPC
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Basic elements…. cont’d
6. Governing law
• Another decision of major importance for international arbitration • Arbitration agreement needs to clearly state the law that governs the
substance of the dispute and the arbitration process. • Ethiopia has no private international law formally adopted. • Draft Arbitration Law: Art.7: parties can choose the law applicable to
arbitration; Article 48: applicable substantive law is the law chosen by parties or in their default by the tribunal if one of the parties is a foreign national and the case involves international element; Ethiopian law applies governs where parties fail to choose and they are all Ethiopian nationals.
• Party autonomy is subject to mandatory provisions of the law, though.
Basic elements…cont’d
7. Language of arbitration
• Customary and logical that the language of the contract is the language of arbitration, but it is possible to stipulate a different language, or submission of documents in their original language and avoid translation
• The Draft Arbitration Law, Art.39(1&2): parties are free to choose language of arbitration; in their default the tribunal shall choose one. Note: No comparable provision in the CC and CPC!
Basic elements…cont’d
8. Separability
• Arbitration clause in a contract is considered to be separate from the main contract of which it forms part, and as such survives the termination of that contract.
• It refers to the “autonomy of the arbitration clause” ie the arbitration clause exists independently of the main contract
• Has practical advantage of preventing a party (respondent) who wishes to repudiate arbitration agreement by questioning in court the existence or validity of arbitration agreement.
• Arbitrators will retain power to hear and decide issues of jurisdiction including objections to validity of the main contract
Basic elements…cont’d
• Principle of separability is not recognized under the CC & CPC; • Art.3330(3) denies arbitrators the competence to decide on issues of
validity of arbitration agreement; principle of “competenz- competenz” (competence-competence) is not fully recognized under the CC.
• Daft Arbitration Law: Art.9(1&2): arbitration clause is independent of the main contract; unless agreed otherwise, it is not affected by amendment, termination, variation, revocation of contact.
Basic elements…cont’d
9. Finality of award
Award is binding but not final under Ethiopian law: Articles 350(1) & 319(2), CPC. Art. 351 CPC: “No appeal shall lie from an award except where…” suggesting that appeal is not a rule but an exception; that finality is the principle. The exceptional cases where award is appealable, however, tells that appeal is possible almost on any ground:
Award is inconsistent, uncertain, ambiguous, wrong in matters of law or fact on its face Arbitrator omitted to decide matters referred to him Procedural irregularities, in particular: failure to inform party of place and time of hearing, or failure to comply with agreement of parties on admission of evidence; refusal to hear material witness, took evidence in the absence of a party arbitrator is guilty of misconduct, in particular: head one party, not the other; unduly influenced by a party (bribed or otherwise); or acquired an interest in the matter No such elaborate list of grounds of appeal for civil court judgment.
Basic elements…cont’d
• Compare with apparently limited grounds to set aside an award (Art. 356, CPC):
a) Arbitrator decided matters not referred to him, or based on invalid or lapsed arbitration agreement
b) Members of tribunal did not act together c) Arbitrator delegated his duty to others
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Basic elements…cont’d
• Right of appeal is waivable. • Art. 350(2) CPC: The parties may waive their right of appeal but any
such waiver is shall be of no effect unless made with “full knowledge of the circumstances”
• The Dragados case in arbitration under AACCSA AI
Basic elements…. cont’d
• The Draft Arbitration Law: Art. 55 • Right to appeal is automatic unless the arbitration is international or
parties agree otherwise, or the arbitrator acted as traditional mediator (Shimgilina) or authorized by parties to decide based on equity and there is no otherwise agreement
Basic elements…cont’d
• Review by cassation • Cassation bench of the Federal Supreme Court insists that it has
jurisdiction to review award to correct fundamental error of law despite clear stipulation for finality and waiver of right of appeal in arbitral clause.
• No express authority of the law • National Mines vs Dany Drilling Case • Draft Arbitration Law: Review by cassation seems to be dropped!
5. Defective arbitration clause
• Defective or pathological arbitration clauses give rise to uncertainty and different views as to the meaning of the clause
• Defective clauses can be sources of dispute or litigation between parties. A respondent may challenge the jurisdiction of a court seized of a case based on a contract that contains arbitration clause; eg.Art.244(2(g), CPC.
• Arbitration clause may use permissive language, or it may not be conclusive from the arbitration clause whether the parties actually agreed to arbitration or some other form of dispute resolution, such as expert determination, or the clause contains conflicting dispute resolution mechanism
Defective…. cont’d
• Common defects affecting arbitration clause are: a) Inconsistency: clause contains contradictory terms b) Uncertainty: vague and imprecise reference c) Inoperability: clause ceased to have effect as a result for
example of failure of parties to comply with a time-limit, or they impliedly revoked the arbitration agreement. But see Art. 3344(2): applying to court to preserve right from extinction shall not entail lapse of arbitration agreement
• Defective clauses can be cured by submission agreement
Defective …. cont’d
• Discussion on sample arbitration clauses and cases • ZemZem PLC vs Ilubabor Edu.Bureau: Cassation Case No:16896 • Mukmil Mohammed vs Miftah Kedir: Cassation Case No: 38794 • Mereid Tadesse vs Oxford Amalgated: Cassation Case No: 97021 • Dragados vs Saba Construction: Cassation Case No: 37678 • National Mines vs Dany Driling: Cassation Case No: 42239
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7. FACT FINDING ON GAPS AND DEMANDS AT THE AGO’S CIVIL JUSTICE ADMINISTRATION DIRECTORATE
3/10/19
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Workshop of International Contract and Arbitration
CHALLENGES FOR THE AGO’s DIRECTORATE FOR CIVIL JUSTICE ADMINISTRATION
AGO’S Civil Justice Directorate Protocol for International Contracts
Dr. Jesús Bores, International Expert Ato. Yazachew Belew, Local Expert
AGO’s Practicalities
Dr. Jesús Bores, International Expert Ato. Yazachew Belew, Local
Expert
International Arbitration, Challenges and Opportunities
Dr. Jesús Bores, International Expert Ato. Yazachew Belew, Local
Expert
METHODOLOGY
WORK IN GROUPS (4-5 members)
1. GROUP 1.- Leader Primer Minister`s Office 2. GROUP 2.- Leader Ministry of Foreign Affairs 3. GROUP 3.- Leader Mining and Petroleum 4. GROUP 4.- Leader PPPDS 5. GROUP 5.- Leader Roads Authority
GROUPS TASKS
• Appoint a Group Secretary to make the minutes of the group discussions (to be provided) – preferible computer
• Initiate the minute with full data of the members of the Group (Name, Position and e-mail)
• Draft Complete information and facts, and do not hesitate to add examples, documents, model contracts and other if needed (if not available establish the compromise to send it by mail tomorrow)
• Appoint a spoke-person to present the conclusions of the group with good English and Outspoken (preferebly the leader)
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AGO’S Civil Justice Directorate Protocol for International Contracts
Dr. Jesús Bores, International Expert Ato Yazachew Belew, Local Expert
1. PRESENTATION BY AGO’s OFFICIALS
1. BRIEF DESCRIPTON OFTHE CURRENT PROTOCOL AND PRACTICES OFTHE AGO
2. PRESENTATION OFTHE NEEDS OFTHE AGO AND EXAMPLES OF EXISTING GAPS AND DIFFICULTIES
2. GROUPS WORK
• 1. GENERAL ASSESSMENT FROM ITS OWN PERSPECTIVE OFTHE AGO OFFICE AND ITS CURRENT PROTOCOL AND PRACTICES
• 2. TWO COLUMN ANALYSIS: GAPS FOUND • 1.- HOW IT IS NOW? • 2.- HOW IT SHOULD BE?
• Examples. - Capacity of AGO personal, Deadlines to reply, request forms, deepness of legal analysis provided, sharing information, etc.
• The analyses have to address both the AGO and each one of the governmental institutions in the group
Dr. Jesús Bores, International Expert Ato. Yazachew Belew, Local
Expert
PRACTICAL DISCCUSSION ON THE PREVIOUS CONCLUSIONS AND DEMANDS
• 1. REACTION FROM AGO’S OFFICIALSTOTHE ISSUED REFERRED BY THE WORKING GROUP
• 2. INDIVIDUAL ANALISIS ON - INTERNATIONAL CONTRACTS - ARBITRATION
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INTERNATIONAL CONTRACTS
• EXISTING MODELS • GAPS ON EXISTING MODELS AND NEEDS • BEST WORKING METHODOLOGY FORTHE AGO AND EACH OF
THE PARTICIPATING MINISTRIES, AGENCIES OR AUTHORITIES • PROPOSALS
CONSIDERATIONS ON NATIONAL AND INTERNATIONAL ARBITRATION
• EXISTING PRACTICES • WHAT AREYOUR VIEWS ONTHE
• NEWYORK CONVENTION • DRAFT PROCLAMATION • AGO ACTING AS INSTITUTIONAL ARBITRATOR
International Arbitration, Challenges and Opportunities
Dr. Jesús Bores, International Expert Ato. Yazachew Belew, Local
Expert
PRACTICAL EXERCISE ON DRAFTING AN ARBITRATION CLAUSE
• PRESENTATION OF CLAUSES • COMMENTS • CONCLUSIONS
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8. VALIDATION OF PROPOSALS TO THE AGO’S CIVIL JUSTICE ADMINISTRATION DIRECTORATE
72
Workshop of International Contract and Arbitration
CHALLENGES FOR THE AGO’s DIRECTORATE FOR CIVIL JUSTICE ADMINISTRATION
AGO’S Civil Justice Directorate Protocol for International Contracts
Dr. Jesús Bores, International Expert Ato. Yazachew Belew, Local
Expert
METHODOLOGY WORK IN GROUPS (4-5
members)
GROUP 1.- Leader PPPDS
GROUP 2.- Leader Ministry of Foreign Affairs
GROUPS TASKS
• Appoint a Group Secretary to make the minutes of the group discussions (to be provided) – preferable computer
• Initiate the minute with full data of the members of the Group (Name, Position and e-mail)
• Draft Complete information and facts, and do not hesitate to add examples, documents, model contracts and other if needed (if not available establish the compromise to send it by mail tomorrow)
• Appoint a spoke-person to present the conclusions of the group with good English and Outspoken (preferably the leader)
1. PRESENTATION BY AGO’s OFFICIALS
1. BRIEF DESCRIPTON OFTHE CURRENT PROTOCOL AND PRACTICES OFTHE AGO
2. PRESENTATION OFTHE NEEDS OFTHE AGO AND EXAMPLES OF EXISTING GAPS AND DIFFICULTIES
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2. GROUPS WORK
• 1. GENERAL ASSESSMENT FROM ITS OWN PERSPECTIVE OFTHE AGO OFFICE AND ITS CURRENT PROTOCOL AND PRACTICES
• 2. TWO COLUMN ANALYSIS: VALIDATION AND COMMENTS • 1.- HOW IT IS NOW? • 2.- HOW IT SHOULD BE?
• Examples. - Capacity of AGO personal, Deadlines to reply, request forms, deepness of legal analysis provided, sharing information, etc
• The analysis have to address both the AGO and each one of the governmental institutions in the group
INTERNATIONAL CONTRACTS: NEGOTIATION AND DRAFTING GAPS
1. Relevant and competent professional do not participate in the process. 2. Participating without proficiency in foreign language of negotiation. 3. Pursuing unreasonable terms of negotiation. 4. Repeated use of same model contracts without the necessary updating. 5. Failure to provide definitions for potentially controversial terms, words, concepts, etc.. 6. Failure to incorporate negotiated terms in the draft contract. 7. Failure to clearly provide for appropriate dispute settlement mechanism. 8. Stipulating foreign law as the governing law of the contract. 9. Choosing foreign jurisdiction as a place for settlement of dispute. 10. Failure to provide for mechanism of enforcement of award/judgment. 11. Failure to identify and stipulate force majure . 12. Failure to identify and provide for specific grounds of termination or cancelation of contacts.
INTERNATIONAL CONTRACTS: SIGNING AND ADMINISTERING GAPS
1. Failure to effect advance payment after contract is duly signed 2. Signing contract without authority 3. Extending contracts without proper extension rules 4. Failure to request or file claims in due time for non-performance 5. Lack of proper documentation of contract and related documents 6. Failure to designate appropriate professional for contract administration 7. Lack of proper follow up and monitoring contract performance by officials
PRACTICAL DISCCUSSION ON THE PREVIOUS CONCLUSIONS AND DEMANDS
• 1. REACTION FROM AGO’S OFFICIALSTOTHE ISSUED REFERRED BY THE WORKING GROUP
• 2. INDIVIDUAL ANALISIS ON - INTERNATIONAL CONTRACTS - ARBITRATION
AGO’s Practicalities
Dr. Jesús Bores, International Expert Ato. Yazachew Belew, Local
Expert
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MAIN CHALLENGES FACED BY THE AGO’S CIVIL JUSTICE ADMINISTRATION DIRECTORATE
1. Gov’t institutions normally do not ask for the service of AGO, or they seek opinion only on frivolous cases ( of no national significance) or cases in which they fear risk of losing to other parties. 2. Failure to take appropriate action on cases they negotiated without AGO’s knowledge and concealing such cases from AGO/failing to send them to the AGO when requested. 3. Disregarding legal opinion given by the AGO. 4. Reporting to the AGO after losing cases at court or arbitration. 5. Filing weak responses to cases pending in foreign jurisdiction without consulting the AGO. 6. No sufficient budget is allocated to AGO for handling cases on international forum. 7. AGO is not involved in national committees drawn from different institutions to seek solution for cases seriously affecting national interests.
1. Lack of adequate and prompt cooperation from other gov’t institutions to AGO in its effort to protect national interest. 2. Courts do not give much attention to gov’t interests: they delay or block execution of judgments without sufficient cause, give long and undue adjournments. 3. Gov’t institutions object to our service to help them settle disputes between them out of court; some even appeal our decision. 4. Failure to notify the AGO cases filed in foreign jurisdictions; nor do they respond to such cases on their own. 5. AGO does not participate in the negotiation of BITs signed by Ethiopia; these makes it difficult for the AGO to prepare response to cases filed by investors on the basis of BITs. 6. Institutions which sign contracts are different from those which administer them, this creates problems of enforcement of contract. 7. Government attorneys lack professional competence and ethics; some attorneys dismissed for ethical reasons are retained elsewhere by other public institutions. 8. Negative attitude towards AGO: Viewed not as a supporter but an unnecessary intervener meddling into their affairs, thus no effective cooperation with AGO.
• RECOMMENDATIONS AND ROADMAP
• AGO’S MANUAL REVIEW AND SPECIFIC MANUAL FOR CONTRACT REVIEW AND THE CIVIL JUSTICE ADM. DIR.
• GUIDELINES FOR OTHER GOVERNMENTAL INSTITUTIONS
AND INSTRUCTIONS FOR CONTRACT DRAFTING
• FOLLOW UP AND OTHER NEEDS
• REINFORCETHE ROLE OF AGO’S CIVIL JUSTICE ADMINISTRATION DIRECTOR ROLE AS ATTORNEY OF THE GENERAL INTEREST IN CIVIL MATTERS
• ESTABLISH CLEAR GUIDELINES AND A MANUAL FOR CONTRACT NEGOTIATION, REVIEW AND DRAFTING
• PROVIDE MODEL CLAUSES AND INFORMATION TO PROTECT THE ETHIOPIAN’S INTERST IN INTERNATIONAL CONTRACTS
OBJECTIVES
RECOMMENDATIONS AND ROADMAP
MAIN CAUSES OF PROBLEMS 1. Absence of mandatory laws 2. Involvement of different organs in contracts and contracting 3. Attitude towards in-house lawyers: viewed as instruments of litigation rather than as advisors 4. Avoiding responsibility 5. Pursing personal interests in governments’ contracts 6. Lack of competent man power for legal departments and lack of ethics 7. Lack of accountability 8. Lack of coordination between AGO and public institutions
AGO’S RECOMMENDATIONS
• 1. Public institutions need to involve the AGO in contracts affecting public interest.
• 2. Public institutions should settle their disputes through ADR services provided by the AGO.
• 3. Public institutions need to refer cases to the AGO so that the latter determines which cases it handles, and which cases should be left to the institutions themselves, depending on the nature of the cases.
• 4. Building the capacity of government attorneys and dismiss those who are incompetent and corrupt.
• 5. Ensuring accountability at all levels.
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Grant the protection of the General Interest in all civil matters
the Ethiopian Government and Federal Public bodies are involved through the improvement of internal and external coordination, sharing of information and the provision of qualified legal services
To see the Federal Attorney General Institution that ensures
respect of rule of law and win public and state beliefs with participation of the people in 2024/25
AGO’S CJAD AGO
MISSION
Working as principal advisor and representative of the AGO’s CJAD will be the leader in the federal government regarding law; undertake legal development of a modernized justice reform studies, drafting laws, disseminations and framework which engenders trust and
enforcing criminal law; ensuring the implementation confidence in civil matters duly protecting the of federal laws enacted by the federal government general and public interest in Ethiopia ensuring and the consistency of their implementations; the provision of quality and effective legal Performing as central authority of international services
relations regarding law, follow up implementation of national human rights action plan; offering the relevant legal aid for citizens who do not have financial capacity and needs special attention; enforcing civil interest of the federal government and
AGO’S CJAD AGO
VISION
RECOMMENTATIONS AND ACTIONS
1. Mandate and AGO’s Priorities 2. Perception and Communication 3. Manual and Contracts Review Process 4. Human Resources
1. Organigram 2. Capacity and Specialization 3. Others
5. Actions to ensure compliance and sustainability
• Definition of Mega Project and affection of pub. and Gov. Interest.
• Information and Coordination on Int. Litigation
• Establishment of rules for Settlement of Dispute
• Manual and General Instructions to protect the public and Gov interest
a) c) e) f) Litigation and Enforcement (agent of the General and Government Interest) b) Advise on Mega Projects and public or Gov. Interest affected d) Settlement Disputes and Execution between Fed. Gob. Off.
g) International Representation of the Gov. (litigation and Negot.)
1. Mandate and AGO’s Priorities
• Definition of Mega Project and affection of pub. And gov. Interest. • Definition of Mega Projec
Value 100 Mill US$ - 3000 Mil ETB? International Participation / Investment Especially Relevant to the Ethiopian Goverrnment or General Interest
• Goverment Interest High – AGO intervention required Low .- Not Intervention, Faculty to review
• Information and Coordination on Int. Litigation – AGO Register
• Establishment of rules for Settlement of Dispute • Before Arb. Procl. and NY Conv.- Internal Rules • After Arb. Procl. And NY Conv.- Review and adapt
• General Instructions to protect the public and Gov interest - Manual
2. Perception and Communication
• Change Name of Civil Justice Adm. Dir – • Public Prosecutores - Attorneys / Counselors / Counselors Attorneys
• Clear Distinction between Criminal and Civil matters • Internal Organization, Changes and development of Manual,
Guidelines and Instructions • Presentation and Communication Strategy • Web, Contact and Periodical Publication (Good
Draft to be reviewed internally and by the main stakeholders Content
Clear Scope and Procedures to provide legal advice and contracts review Guidelines and Instrucction to draft Contracts Review system
AGO Register Accountability, Liability and Sanctions
4. Human Resources
• Selection Process: ensuring Independence and service quality • Education • Professional Experience • Languages and other specific requirements • Selection Process
• CJAD Internal Organization and coordination with other public bodies • Specialization • Trainning • Evaluation
5. Actions to ensure compliance and sustainability
• Council of Minister Decision or AGO Directive containing Manual, Guidelines, Instruction – AGO as Arbitrator
• Intergovernmental Commission (monthly meetings)
• AGO, PPPDS, Min. Finance., Min. Mines, Roads Authority, and other main public contractors.
• AGO Registry • AGO Publications • Evaluation and review system
AGO’S MANUAL REVIEW AND SPECIFIC MANUAL FOR CONTRACT DRAFTING
1. PREFACE (AGO’s Mandate, vision, mission, objectives and structure) 2. PURPOSE AND SCOPE. DEFINITIONS 3. AGO’S CIVIL JUSTICE ADMINISTRATION DIRECTORATE
ORGANIZATION AND MANUAL FOR THE PROVISION OF SERVICES
GUIDELINES FOR OTHER
GOVERNMENTAL INSTITUTIONS AND INSTRUCTIONS FOR
CONTRACT DRAFTING
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1. PRESENTATION 2. PRELIMINARY VERSION TO BE REVIEWED AND COMPLETED 3. DEVELOPMENT OF MODEL CLAUSES AND INSTRUCTIONS
FOLLOW UP AND OTHER NEEDS
Task Order 72066319F00001 Millennium DPI Partners USAID’s Feteh (Justice) Activity, Quarterly Report January 30, 2020
Assessment Report on the Current Practices and Needs of Commercial Benches in the Federal Courts
Component 3 (Activity 3.2 - Year 1 Work Plan)
ASSESSMENT REPORT
STRENGTHENING COMMERCIAL BENCHES IN
ETHIOPIAN FEDERAL COURTS
USAID’S FETEH (JUSTICE) ACTIVITY
IN ETHIOPIA
January 30, 2020
DISCLAIMER
This document was produced for review by the United States Agency for International Development. It was
prepared by Millennium DPI Partners, LLC. The views expressed in this publication do not necessarily reflect the
views of the United States Agency for International Development or the United States Government.
STRENGTHENING COMMERCIAL BENCHES IN
ETHIOPIAN FEDERAL COURTS
ASSESSMENT REPORT
Prepared
for
USAID Feteh (Justice) Activity in Ethiopia
by
The Honorable Robert Vincent Makaramba, ret.
and
Dr. Muradu Abdo
Addis Ababa, Ethiopia
January, 2020
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Table of Contents
ACRONYMS/ABBREVIATIONS..................................................................................... iv
FOREWORD ...................................................................................................................... v
ACKNOWLEDGEMENTS .............................................................................................. vii
EXECUTIVE SUMMARY ............................................................................................... viii
CHAPTER ONE .................................................................................................................1
1.1. The Assessment Report ..........................................................................................1
1.2. The Assessment Methodology ...............................................................................1
1.3. Limitations of the Assessment ...............................................................................2
1.4. The USAID Feteh (Justice) Activity in Ethiopia ...................................................2
CHAPTER TWO ...............................................................................................................6
ACCESS TO COMMERCIAL JUSTICE IN ETHIOPIA: AN OVERVIEW ...................6
2.1. The Ethiopian Socio-Geographical Context .........................................................6
2.2. The Ethiopian Judicial Landscape ..........................................................................6
2.3. The Legal Framework for Commercial Justice in Ethiopia ............................. 10
CHAPTER THREE .......................................................................................................... 20
ANALYSIS OF STAKEHOLDERS’ VIEWS ................................................................. 20
3.1. The “Commercial” and “Construction” Benches Dichotomy ........................... 20
3.2. The Pecuniary Jurisdiction of Federal Courts Commercial Benches ............. 23
3.3. FHC Original and Appellate Jurisdiction and FFIC Original Jurisdiction ....... 24
3.4. Subject Matter Jurisdiction of the Commercial Benches ................................. 24
3.5. The Composition of and Selection of Judges of the Commercial Benches .... 24
3.6. The Physical Infrastructure of the Commercial Benches ................................ 26
3.7. IT Infrastructure ................................................................................................... 26
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E: Names of the Assessment Team .............................................................................. 96
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F: List of Interviewees, Interviews and Meetings Held ............................................... 97
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LIST OF ACRONYMS
AGO: Attorney General’s Office
CISG: United Nations Convention on Contracts for the International Sale of Goods
CLE: Continuing Legal Education
COP: Chief of Party
CSO: Civil Society Organization
DCOP: Deputy Chief of Party
EC: Ethiopian Calendar
FFIC: Federal First Instance Court
FHC: Federal High Court
FIDIC: Fédération Internationale des Ingénieurs-Conseils (International Federation of Consulting
Engineers)
FJLRTI: Federal Justice and Legal Research and Training Institute
FSCE: Federal Supreme Court of Ethiopia
HoPR: House of People’s Representatives
JLRTI: Justice Legal Research and Training Institute
MoU: Memorandum of Understanding
PECL: Principles of European Contract Law
The Constitution: The Constitution of the Federal Democratic Republic of Ethiopia
TOT: Training of Trainers
UCC: Uniform Commercial Code
UPICC: UNIDROIT (United Nations Institute for the Unification of Private Law) Principles of
International Commercial Contracts
UNECA: United Nations Economic Commission for Africa
USAID: U.S. Agency for International Development
WB: World Bank
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FOREWORD
Ethiopia is moving toward an open-market and industrialization. This calls for a more predictable
and transparent system of dispute resolution be it from the formal judicial system or through
alternative dispute resolution mechanisms, such as mediation and arbitration. The unofficial World
Bank Doing Business 2020 study1 shows that developing economies are catching up with developed
economies in ease of doing business, but still, the gap remains wide. The study shows that Ethiopia
ranks 159 among the 190 economies compared, with a World Bank score of 48.0.
The World Bank Doing Business reports, which have been issued consistently since 2007, capture
several important dimensions of the regulatory environment affecting domestic firms. They provide
quantitative indicators on regulation for starting a business, dealing with construction permits,
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[July 23, 2019], in which improving the ease of doing business was recognized as an integral part of
the national economic competitiveness and job creation agenda. Among the short-term reform
achievements in the area of enforcing contracts was the establishment of two (2) additional benches
at Federal First Instance Court (FFIC) and the enactment of the commercial bench procedure code
setting time standards for court events and introducing new case management systems.
The judicial sector reform initiatives adopted by the Federal Supreme Court of Ethiopia (FSCE)
being supported by the USAID Feteh (Justice) Activity in Ethiopia, aim to ensure that the Federal
Courts’ Commercial Benches established at FFIC and Federal High Court (FHC) progressively
deliver commercial justice to the business community. This can only be achieved if the Federal
Courts Commercial Benches have the requisite capacity in terms of knowledge and skills to resolve
commercial disputes timely, efficiently and adequately. As the Chief Justice of the FSCE eloquently
put it:
“We take the outcomes of this project very seriously; it is useful for other benches or entire justice system. We
do not just look at current capacity and we also look at the future to come and for very serious cases which
may crop up.”2
One of the Chief Justice’s top priorities is to improve case management in Ethiopian courts. The
FSCE intends to strengthen the commercial benches established at the Federal First Instance Court
and Federal High Court level with the objective of speeding up the processing of commercial
dispute resolution and increase business confidence in the judicial system.
It is within this context that the USAID funded Feteh (Justice) Activity in Ethiopia was conceived
with the view to enhance the case management, among other means of strengthening commercial
benches established at the FFIC and FHC level to speed up the processing of commercial disputes
resolution.
David de Giles,
Chief of Party,
Feteh (Justice) Activity in Ethiopia
2 Statement by the Chief Justice of the Federal Supreme Court of Ethiopia, The Hon. Lady Justice M/s Meaza
Ashenafi on 22nd day of November, 2019 when speaking with the USADI Feteh (Justice) Activity in Ethiopia and
the Consultants.
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ACKNOWLEDGEMENTS
We are particularly grateful to the Feteh (Justice) Activity in Ethiopia Team led by Mr. David de
Giles, Chief of Party; Mr. Mandefrot Belay, Deputy Chief of Party; M/s. Maereg G. Gidey,
Justice Reform Specialist, and all the supporting staff for their untiring support throughout the
Assessment.
We also wish to convey our sincere gratitude to the Presidents and Deputy Presidents of the Federal
First Instance Court (FFIC) and the Federal High Court (FHC), and to all the Judges, for their
readiness and willingness to offer us their valuable time, comments and participation in the Training
Needs Assessment exercise as well as in the Training of Trainers Workshop conducted at the
beautiful and scenic town of Bishoftu. The Workshop which comprised of some judicial staff of the
Federal Supreme Court of Ethiopia (FSCE), FHC and FFIC provided some quite useful insights
from the participants in the various areas covered during the three-day training.
We wish to particularly extend our sincere gratitude to the Chief Justice of the Federal Supreme
Court of Ethiopia, The Hon. Justice Meaza Ashenafi for her valuable input and for according to
us the rare privilege of presenting the Report’s preliminary findings and recommendations at the
auspicious gathering of judicial officers at the First State of the Judiciary Conference held at the United
Nations Economic Commission for Africa (UNECA) Conference Center on the 21st of December,
2019. We are immensely grateful to the members of the judiciary that participated for their
comments and views. They have in great measure improved our Report.
We wish also to extend our deepest appreciation to all the interviewees for their readiness to
participate in our interviews and focus group discussions which provided us with invaluable
information.
It is not easy to thank each and every individual who in one way or another contributed ideas that
have enriched this report. Due to lack of space, suffice it to say, thank you to all who offered their
moral and physical support during the Assignment, without forgetting our dedicated drivers, Michael
and Yonas.
The Honorable Justice (Ret) Robert V. Makaramba, International Consultant
Dr. Muradu Abdo, National Consultant
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EXECUTIVE SUMMARY
One of the terms of reference for the Consultants was the preparation of an Assessment Report
containing recommendations for strengthening the Federal Courts’ Commercial Benches with a view
to speeding the processing of commercial dispute resolution and thus increasing the confidence of
the business community in the judicial system. This Report contains such recommendations.
Overall, the judges interviewed during the assessment raised concerns over the lack of
institutionalized commercial benches in the sense of separate and specialized commercial benches
and specialized judges. They also pointed out the absence of any structured and sustainable
continuing judicial training programme. Some of the interviewees felt very strongly about the need
for training on specialized areas of commercial law so as to enhance their knowledge base and
improve their job skills.
The following are the key findings and recommendations in this Report:
Key Findings:
Lack of proper legal structure for Federal Courts Commercial Benches – they are not
separate courts/divisions and/or “specialized.”
Lack of specialized knowledge and skills in commercial matters among Judges.
Weak support and poor court room facilities: inadequate courtrooms for Commercial
Benches.
Lack of special procedures for Commercial Benches – extant FFIC Commercial Bench book
inadequate.
Lack of dedicated Registry, Registrar and support staff for Commercial Benches.
Limited understanding of practicing lawyers of commercial issues and nature of accelerated
procedure.
Judges overburdened with caseload
Lack of known criteria for case assignment and scientifically determined benchmark.
Lack of Performance Standards for Individual Judges
Lack of framework with known criteria for the selection, appointment and assignment of
Judges to the Federal Courts Commercial Benches.
Poor pay and incentive packages for Judges and other fringe benefits such as government
housing, transport allowance and medical insurance coverage.
Lack of mechanism for complaint handling – there is no Court Inspection and Supervision
Department.
Lack of regular continuing legal education (CLE) and training for judges and for support
staff.
Poor professional conduct and court decorum among practicing lawyers.
Lack of judicial dress code
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Poor cooperation between strategic stakeholders (strategic ministries, e.g., Ministry of Trade
and Industry and some Commercial Banks).
Poor enforcement of court decisions/orders.
Court annexed mediation in place; not mandatory and not fully utilized.
Lack of Information Technology (IT) equipment such as audio-video recording systems or
electronic systems.
Lack of reliable Internet connectivity.
Lack of Strategic Plan for the Commercial Benches
Lack of a structured law reporting system and Law Reports.
Lack of capacity of Registrars in handling technical matters and in opening new case files.
Lack of adequate number of Assistant Judges.
Poor gender sensitivity in the appointment of judges (out of the existing 108 Federal High
Court judges, only 22 are women – 20%).
Key Recommendations for Immediate Remedial Action
i) Existing Commercial Benches should deal with matters under the Commercial Code (as it will be
revised) and other commercial matters falling outside the Code.
ii) The FSCE to issue a Directive as a Guideline for the selection, appointment and assignment of
Judges to the Commercial Benches.
iii) Judges assigned to the Commercial Benches to undergo induction/orientation programme in
matters of practice and procedure in handling commercial cases; judicial ethics and conduct; and
judge craft and judgment writing before assuming their responsibilities.
iv) The induction/orientation programme should be conducted by the most senior judges of the
FSCE, the FHC and FFIC and trained facilitators/trainers.
v) The FSCE Justice should issue a Directive on appropriate court attire for judges, and for
practicing lawyers.
vi) There should be established a Training Unit within the FSCE, which among other things should
develop and adopt a Judiciary Training Policy, Plan and Strategy.
vii) The Judiciary Training Policy should state very clearly that training should not only be for Judges
but also for Registrars and other supporting Staff, as per training needs to be developed through a
participatory Judiciary-wide Training Needs Assessment (TNAs) process.
viii) Pending a review of the Proclamation establishing the Federal Justice, Legal Systems Research
and Training Institute, the proposed Training Unit within the Federal Supreme Court should
develop short-term training curriculum in the critical areas identified in this Report.
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ix) The Research Department of the FSCE in collaboration with Law Schools should prepare and
publish Law Reports.
x) The FSCE should create a Project to translate decisions of the Federal Supreme Court and its
Cassation Division in English and publish them as Case Digests and also upload them onto the
Judiciary website.
xi) Current efforts (with World Bank support) to improve the Commercial Benches IT
infrastructure, particularly the automation of the Commercial Benches including the e-payment
system and e-litigation should be speeded up.
xii) Efforts to update and improve the case management system at the FHC and the FFIC (with
USAID support) should be speeded up.
xiii) The process of creating a Mediation Center should be finalized.
xiv) The preparation of the list of potential mediators (from within and outside the Judiciary) in
company law and construction law should be finalized.
xv) There should be a focal person to facilitate court-led mediation.
General Long-Term Recommendations:
1) The FSCE should commission a study to evaluate the established Federal Courts Commercial
Benches and the performance of the Judges assigned thereto, with a view to determine whether
there is need to establish separate and specialized Commercial Divisions or Courts and at which
level of the Courts should they be established.
2) The FSCE should initiate an amendment to Proclamation No.1071/2018 with view to strengthen
the Judicial and Training and Research Institute’s (JLRTI) legal framework to enable it to deliver
more focused judiciary-based training.
3) The FSCE (through the FSCE Training Unit) in collaboration with the Judicial and Training and
Research Institute (as restructured) should propose and develop appropriate long-term curriculum
for the training of Judges and Court Staff.
4) The Judiciary should review its current Three-Year Strategic Plan and put in place a five-year plan
instead. Since the purpose of a Strategic Plan is to help the Judiciary do a better job, to focus its
goals and to work together towards those goals, we think three years is too short a period for the
Judiciary to realize its short and long-term goals. The reviewed Plan should be developed through a
participatory process with technical assistance of experts in the field of strategic planning.
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5) The Judiciary should put in place a Staff (Judges) Exchange Programme with other Commercial
Courts/Divisions within and outside Africa, and should involve Commercial Bench Judges and
other Judges in Study Visits within and outside Africa to learn and acquire experience and good
practices in dealing with commercial cases.
6) The FSCE should conclude a Memorandum of Understanding (MoU) with International
Organizations in the area of training and other matters such as the International Organization of
Judicial Training Institutes with the purpose of fostering collaboration and sharing experience with
other judiciaries in the world dealing with commercial and other matters.
7) The FSCE should stay engaged in a constructive dialogue with the Executive and Legislative
Branches of Government, with a view to garner their support and political will so as to secure
favorable conditions of service for all the Judiciary employees and in particular Judicial officers, in
terms of special allowances, housing and transport facilities, medical insurance and other related
social, wellness and welfare matters.
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CHAPTER ONE
PRELIMINARY MATTERS
1.1. The Assessment Report
This Assessment Report contains recommendations for strengthening the Federal Commercial
Benches. It is in five Chapters.
Chapter one provides a brief background of the USAID Feteh (Justice) Activity in Ethiopia.
Chapter two is an overview of Access to Commercial Justice in Ethiopia, basically a review of the
legal framework for commercial justice in Ethiopia.
Chapter three is a summary of the assessment of the views of the key stakeholders interviewed
during the Assessment based on the essential elements of the assessment of the judicial system in
general and on the commercial dispute resolution mechanisms in particular.
Chapter four is brief discussion of good practices from select jurisdictions on commercial dispute
resolution, basically examining the nature and mode of operation of separate specialized commercial
courts.
Chapter five are findings and sets of recommendations, both for immediate remedial action and
general recommendations, followed with a conclusion.
1.2. The Assessment Methodology
In conducting the Assessment, the Feteh (Justice) Activity in Ethiopia Team prepared some letters
requesting for meetings with the various stakeholders (the list of whom is attached to this Report)
with whom the Consultants met and conducted oral interviews and also held group discussion
sessions. The respondents in the interviews and group discussions included judges of the FHC and
FFIC, other Judicial Officers and Court Users comprising of individuals and representative of key
judicial sector institutions (their names appear on the attached list). Data was captured through
structured open-ended questions. Additionally, a Training Needs Assessment questionnaire was
prepared and distributed to judges (a sample questionnaire is attached). The Consultants also
conducted an observation of court proceedings at the Federal First Instance Court.
The main purpose of the interviews and group discussions was to identify gaps/bottlenecks in the
handling of commercial cases so as to determine areas for improvement. The main purpose of the
Court proceedings observation was to enable the Consultants to see the practice and procedure in
dealing with commercial cases so as to point out areas of possible intervention for improving the
performance of the Commercial Benches.
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The data collected from the interviews, group discussions and the court proceedings observation,
assisted in determining if the subjective and anecdotal comments received from the interviews,
group discussion and the observation reflected the reality on the ground.
Furthermore, the Consultants engaged in an Internet search of the relevant literature and also
conducted a review of relevant laws and documents collected from the Commercial Benches visited.
Finally, at a Training of Trainers (ToT) workshop conducted among some Judges of the FSCE,
FHC and FFIC trainees provided some insights on the nature of practice and procedural challenges
Judges face in court and case management.
1.3. Limitations in the Assessment
The main difficulty or limitation in conducting the Assessment was the unavailability of English
translations of court decisions, since the judges use Amharic in conducting their proceedings and in
writing their judgments. Due to lack of electronic judgments, the Consultants had to rely on physical
copies of the Judgments from the Courts.
The two Consultants’ mutual working relationship enabled them to work on text in the Amharic
language, which the National Consultant, Dr. Muradu Abdo and M/s Maereg Gidey, the Justice
Reform Specialist, so graciously translated. This alleviated the burden of working with a foreign
language.
Essentially, the assessment focused on the performance and the impact the Federal Courts
Commercial Benches have had on the business community while resolving commercial disputes.
However, given the time at the Consultants’ disposal we could not carry out an in-depth Survey of
some of the people or organization who have benefited from the services rendered by the
Commercial Benches so as to garner and measure their levels of satisfaction with those services.
1.4. The USAID Feteh (Justice) Activity in Ethiopia
1.4.1. Introduction
Ethiopia is now embarking on reforms to improve its legal enabling environment and increase
participation by civil society and human rights organizations in the implementation of legal and
judicial reform. The Feteh Activity is designed to build the capacity of the FSCE, AGO and other
rule of law actors to adopt and implement these reforms in compliance with international standards
and the aspirations of the Ethiopian people.
As part of the national justice reform agenda, the FSCE has identified the revision of various
framework laws; including the law on judicial administration and the law on federal courts,
regulations on judicial code of conduct and introduce judicial performance standards and evaluation
mechanisms as priority areas. In this regard, one of the Chief Justice’s top priorities is to improve
case management in Ethiopian courts through targeted efficiency enhancement. For this purpose,
the FSCE intends to strengthen the specialized commercial benches at the Federal First Instance
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Court and Federal High Court level with the objective of speeding up the processing of commercial
dispute resolution and increasing business confidence in the judicial system.
Feteh is a two-year activity funded by the United States Agency for International Development
(USAID) to provide flexible, rapid response technical assistance to the Attorney General’s Office
(AGO), the FSCE, appropriate committees in Parliament, and other Ethiopian institutions in the
process of legal and judicial reform. This assistance includes making grants to civil society
organizations (CSOs) to ensure public input to the proposed changes to Ethiopia’s legal and judicial
framework.
Feteh’s main objectives are to:
1. Build the capacity of the AGO, its Advisory Council and legal drafting working groups, the
FSCE, and other rule of law actors to adopt and implement legal and judicial reforms
consistent with the needs and aspirations of the Ethiopian people;
2. Support the appropriate committees in Parliament to ensure they garner sufficient capacity
and know-how to approve the adoption of the legal reforms;
3. Support the FSCE to improve Ethiopia’s court management system, justice sector
transparency and judicial independence; and
4. Support the ability of CSOs and the media to engage the AGO and FSCE on legal and
judicial reforms.
The USAID Feteh (Justice) Activity in Ethiopia Project includes the following components:
Activity 3.2 of Feteh’s Year 1 Work Plan
• To enhance case management by strengthening commercial benches to speed up the
processing of commercial dispute resolution
• To strengthen commercial benches established at the Federal First Instance Court and
Federal High Court level
• Review the current court structure, administrative systems, and legislative and regulatory acts
relating to commercial benches and current practices of handling commercial cases to
determine the required assistance
• Develop technical (TOT) course and training material/modules for judges who will serve as
trainers in the area of commercial law and commercial dispute resolution
• Provide training to judges selected to sit on commercial benches on specific commercial law
areas to be identified through assessment
Activity 3.2 Strengthen Commercial Benches
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3.2.1 Assist the FSCE in strengthening Commercial Benches
• Assess existing practice in strengthening commercial benches.
• As requested by FSCE, assist in developing framework and content for the selection and
training of commercial bench judges.
3.2.2 Provide training to judges selected to sit on the commercial bench
• In liaison with the JLRTI, develop training materials and modules for commercial bench
judges considering final revisions to commercial code.
• Assist the FSCE and the JLRTI in developing and conducting a technical training of trainers
(TOT) course for Judges who will serve as commercial law trainers.
The Scope of Work for which this Assessment Report is concerned relates to activity 3.2 of Feteh’s
Year 1 Work Plan, pursuant to which Feteh is supporting FSCE efforts to enhance case management
by strengthening commercial benches to speed up the processing of commercial dispute resolution.
1.4.2. Consultants’ Tasks
To assist with the FSCE in the realization of the above-mentioned objective, Feteh (Justice) Activity
in Ethiopia engaged two Consultants, Mr. Justice (Rtd) Robert Vincent Makaramba (a retired
High Court Judge from Tanzania) and Dr. Muradu Abdo (an Associate Professor of Law from the
School of Law of Addis Ababa University) as International and National Consultants respectively, to
undertake an assessment of the Commercial Benches established at Federal First Instance Court and
Federal High Court.
Specifically, the International Consultant was required to perform the following activities:
• To review the current court structure, administrative systems, and legislative and regulatory
acts relating to commercial benches and current practices of handling commercial cases to
determine the required assistance;
• To conduct interviews with commercial bench judges and other stakeholders to identify
gaps/bottlenecks and determine areas of improvement;
• To conduct observation of the specialized commercial benches;
• To prepare an assessment report, with recommendations to strengthen the commercial
benches;
• To develop framework and criteria for the selection and training of commercial bench
judges;
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• To develop technical training-of-trainers (TOT) course and training material/modules for
judges who will serve as trainers in the area of commercial law and commercial dispute
resolution;
• To provide training to judges selected to sit on commercial benches on specific commercial
law areas to be identified through assessment;
• To prepare a final report summarizing mission results and suggestions for continued work;
and
• To perform other related tasks as requested by Feteh’s Chief of Party (COP) and/or Deputy
Chief of Party (DCOP) during the assignment.
A summary of the mission results and suggestions for continued work are contained in a separate
Final Report. This Assessment Report is concerned only with recommendations to strengthen the
commercial benches.
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CHAPTER TWO
ACCESS TO COMMERCIAL JUSTICE IN ETHIOPIA: AN OVERVIEW
2.1. The Ethiopian Socio-Geographical Context
Ethiopia, officially the Federal Democratic Republic of Ethiopia (FDRE), is a country in the
northeastern part of Africa, in the sub-region known as the Horn of Africa. It is the oldest state in
sub-Saharan Africa. It covers an area of about 1.2 million square kilometers (420,000 sq. mi.) with a
population of over 100 million inhabitants, thus making it the most populous landlocked country in
the world and the second-most populous nation on the African continent after Nigeria.
Ethiopia shares borders with Eritrea to the north, Djibouti to the northeast, the de-facto state of
Somaliland and Somalia to the east, Kenya to the south, South Sudan to the west and Sudan to the
northwest. Its capital and largest city is Addis Ababa, which lies a few miles west of the East African
Rift.
2.2. The Ethiopian Judicial Landscape
The Federal Democratic Republic of Ethiopia Constitution (FDRE) (“the Constitution”) provides
for an independent judiciary. The Constitution, which is the supreme law of the land, has primacy
over all Federal as well as State laws. Article 9(1) of the FDRE Constitution proclaims that any law,
customary practice or a decision of an organ of state or public official, which contravenes the
Constitution, shall be of no effect.
At the federal level, international agreements and proclamations have the same status as they are
issued by the Federal legislature. These are followed by Decrees, Regulations and Directives
respectively. When Decrees are adopted by the House of People’s Representatives (HPR), it
becomes a proclamation. The same order applies to State laws.
2.2.1 Federal Courts
Ethiopia has a dual judicial system with two parallel court structures: the federal courts and the state
courts, with their own independent structures and administrations. Judicial powers, both at Federal
and State levels, are vested in the courts. The FDRE Constitution states that supreme federal judicial
authority is vested in the Federal Supreme Court (FSCE) and empowers the House of Peoples’
Representatives (HoPR) to decide by a two-thirds majority vote to establish subordinate federal
courts, as it deems necessary, nationwide or in some parts of the country.
The Federal Supreme Court of Ethiopia, which has national jurisdiction, sits in Addis Ababa. The
Federal Supreme Court (FSCE) and the Federal High Court (FHC) have jurisdiction over cases
involving federal laws, transregional issues, and issues of national import. Until recently, the Federal
High Court and Federal First Instance Courts (FFIC) were confined to the federal cities of Addis
Ababa and Dire Dawa – the two Cities administered by the federal government and subjected to
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federal jurisdiction. Other federal matters which should normally have been considered by federal
courts are tried by Regional States courts through delegation. More recently, Federal High Courts
have been established in five of the nine Regional States. The material and territorial jurisdiction of
the Federal Courts is determined by the Federal Courts Proclamation No.25/1996 (as amended
by Proclamations including Proclamation No. 138/98 and Proclamation 321/2003 respectively.
Federal courts at any level may hold circuit hearings at any place within the State or “area designated for
its jurisdiction” if deemed “necessary for the efficient rendering of justice.” Each court has a civil, criminal, and
labor division with a presiding judge, President of the Court and two Vice Presidents of the Court
and other judges in each division.
2.2.1.1 The Federal Supreme Court Cassation Division Powers to Interpret Law
The Federal Supreme Court includes a Cassation Division with the power to review and overturn
decisions issued by lower federal courts and State Supreme Courts containing “fundamental errors of
law.” The Cassation Division of the Federal Supreme Court (as opposed to its Ordinary Division
which reviews cases by appeal) has the power to examine final decisions given by all courts including
the final decisions of the highest judicial organs of National Regional States - where it believes that
the decisions may “contain fundamental error of law.” Judicial decisions of the Cassation Division of the
Federal Supreme Court on the interpretation of laws are binding on Federal as well as all Regional
State courts.
The Federal Courts Proclamation No 25/1996 (as amended) empowers the Plenum of the
Federal Supreme Court of Ethiopia to issue directives and approve decisions to improve the
judicial practices of the Federal Courts (Art. 33(2)). The FSCE has the power to issue procedural
directives (Art. 2(4) of Proclamation 454/2005).
The Federal Courts Proclamation allocates subject-matter jurisdiction to federal courts on the
basis of three principles: laws, parties and places. It stipulates that federal courts shall have jurisdiction
over, first, “cases arising under the Constitution, federal laws and international treaties,’ second,
“over parties specified in federal laws.” Article 3(3) of the Federal Courts Proclamation states that federal
courts shall have judicial power in places specified in the FDRE Constitution or in federal laws.
It seems clearly that although the legal system in Ethiopia is essentially of civil law origins
(inquisitorial), recently, a partial application of the common law doctrine of precedent (stare decisis)
has officially been recognized in Ethiopia, through Art.2(1) of the Federal Courts Proclamation
No. 25/1996 (as amended by the Federal Courts Proclamation Re-amendment Proclamation
No. 454/2005).3 Sub-article 4 and 5 of Article 10 of the Proclamation provides as follows:
3 For a copy of the amended Proclamation see it at: http://www.FSCE.gov.et/content/Negarit%20Gazeta/Gazeta-
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“4. Interpretation of a low [law!] by the Federal Supreme Court rendered by the cassation division with not
less than five Judges shall be binding on federal as well as regional council [courts!]. The Cassation Division
may however render a different legal interpretation some other time.
“5. The Federal Supreme Court shall publish and distribute decisions of the cassation division that contain
binding interpretation of laws to all levels of courts and other relevant bodies.”
Emanating from the above provisions, clearly the power of interpretation of law is limited to the
Cassation Division of the Federal Supreme Court (not even the ordinary divisions of the Federal
Supreme Court). For Judges and practicing lawyers in Ethiopia this particular change has some far-
reaching implications. In Ethiopia the teaching of law and legal analysis at the University level
(where most of the Judges and lawyers are produced), has focused only on Codes/statutes. When
judicial decisions are consulted, it is mostly to look at the disparity between the law and the practice.
This might also explain the absence of a law reporting system and Law Reports in Ethiopian on
landmark decisions of the Federal Supreme Court.
But now with the adoption of Federal Courts Proclamation No. 25/1996 (as amended by the
Federal Courts Proclamation Re-amendment Proclamation No. 454/2005, law students and
legal practitioners (including Judges) might be expected to search for “interpretative” judgments of
the Cassation Division of the Federal Supreme Court to make their researches (law students),
submissions (legal practitioners) and decisions (judges/judicial officers). Law students, legal
practitioners and Judges now have to dig for judicial decisions of the Cassation Division of the
Federal Supreme Court to identify interpretative rules that bind all courts and other relevant bodies
including quasi-judicial bodies such as the Labour Relations Board, Tax Appeals Tribunal, Fair
Competition Tribunal etc. and other administrative bodies tribunals established under the law.
Ethiopia adopted the continental legal system in the 1950’s and 1960’s, whereby Codes issued by
legislature and not judge-made law were sources of law.4 The introduction of partial application of
precedent has had far reaching implication to this framework. Among the practical implications of
implementing Proclamation 454/2005 is that, now, binding decisions of the Cassation Division of
the Federal Supreme Court on interpretation of law are also among the sources of law in Ethiopia
and thus have to be compiled and published in Law Reports.
Currently, the practice has been for the Federal Supreme Court to compile those decisions (they are
rendered in Amharic) and sell them. Some of these decisions are available on the Internet but not on
the Federal Supreme Court website. However, given the international posture of higher learning
institutions in Ethiopia, there will be a need for these decisions to be translated into English for
wider access by, and readership for, non-Amharic speakers.
4 See Sileshi Bedase Hirko (2019) “The Disputed Constitutionality of the Precedential Practice of the Federal
Supreme Court and Its Implication for Oromia Family Law: The Case of Bigamous Marriage in Ethiopia” Journal of
African Law Volume 63, Issue 2, June 2019, pp.193-223 available at https://www.cambridge.org/core/journals/journal-of-
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2.2.1.2 The Practice of “Cassation over Cassation”
The judicial powers of the Cassation Division of the Federal Supreme Court (as opposed to its
Ordinary Division) to examine final decisions given by all courts including the final decisions of the
highest judicial organs of National Regional States — where it believes that the decisions “contain
fundamental error of law”, has created what has come to be known among legal practitioners and
academicians as “cassation over cassation”5 with some far reaching legal implications. There has
been some outcry by legal experts and practitioners on the survival of the practice of “Cassation
over Cassation”, which they argue is contrary to Ethiopian federal constitutional arrangement,
which stipulates a dual system of governance in Ethiopia, both federal and regional governments
having their own functioning judicial systems.
Although this particular issue does not fall within the mandate of the Consultants, we feel very
strongly that there is need for a thorough study to be undertaken under the auspices of the Federal
Supreme Court on the implications of the practice of “Cassation over Cassation” and what should
be done to improve the functioning of the judicial system in this particular regard. This kind of
study is particularly crucial given the current hierarchy of the judicial system of Ethiopia, with the
Federal Supreme Court at the helm, which has powers to review decisions of lower courts in every
case on matters of fact, and its Cassation Division with powers to reverse decisions of lower court
on the ground of error of law. In a country with resource constraints, such as Ethiopia,
consideration should be given to streamlining the judicial system as a contribution not only to its
reform and modernization but also to the economic growth of the country.
5 See Abdurazake Rushad (2008) “The Civil Jurisdiction of Federal Courts in Ethiopia; Comparative Analysis”, LL.B Thesis submitted to St. Mary’s University College, Faculty of Law, August, 2008; See the article by Sileshi
Bedase Hirko (2019) at fn. 5 above where he argues that the “practice of cassation over cassation and its consequent rule of precedent have resulted in a legal quagmire.” See also an article by Dashura Abdissa, “Implication of Cassation
Over Cassation
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2.2.2 Regional State Courts
The FDRE Constitution provides for the establishment of three levels of State courts: The Regional
State Supreme Court (which also incorporates a cassation bench to review fundamental errors of
state law), High Courts, and First-Instance Courts. State Supreme Courts sit in the capital cities of
the respective States and have final judicial authority over matters of State law and jurisdiction. State
High Courts sit in the zonal regions of States while State First Instance Courts sit at the lowest
administrative levels of States.
The FDRE Constitution delegates to State Supreme Courts and State High Courts the jurisdictions
of the Federal High Court and Federal First Instance Courts respectively. In order to guarantee the
right of appeal of the parties to a case, decisions rendered by a State High Court exercising the
jurisdiction of the Federal First Instance Court are appealable to the State Supreme Court while
decisions rendered by a State Supreme Court on federal matters are appealable to the Federal
Supreme Court.
2.3. The Legal Framework for Commercial Justice in Ethiopia
There is no separate commercial justice system in Ethiopia. The adjudication of commercial disputes
falls within “commercial benches” established at the generalist Federal High Court and Federal First
Instance Court.
As legal history will tell, during the period between 1957 and 1965, six comprehensive legal codes
were enacted in Ethiopia including the Civil, Commercial and Maritime Codes in 1960, followed by
the Criminal Procedure Code in 1961, and finally, the Civil Procedure Code in 1965. The Codes
were promulgated in the form of proclamations as extraordinary issues in the Negarit Gazetta, the
official legal gazette in place for the publication of Ethiopian laws since 1942.
Of particular interest to this Assessment are the Civil, Commercial, Maritime and Civil Procedure
Code. However, the Criminal Code has a provision on prohibition of usury6 (exorbitant interest
6 Art. 712. See Case Comment on the Cassation Division’s Decision in File No.80119 (Amharic) by
Gebreyesus Abegaz Yimer, Mizan Law Review, Vol. 11, No. 1, September 2017 pp.248-254 published by St. Mary’s University College (20187). In this Comment, the author gives a summary of the Decision of the Cassation Bench of the Supreme Court in File No. 80119, where the Cassation Division decided that, a contract of loan with 10%
interest rate per month establishes a crime of usury as provided under Article 712 of the Criminal Code.
Note: The Author notes that interest rates are provided under Art.2479 of the Civil Code. However, there is
Proclamation No. 591/2008 (based on which the National Bank of Ethiopia issues directives on interest rates. Article 5(4) of the Proclamation empowers the National Bank of Ethiopia to determine official interest rates, including the power to determine interest rates that are applicable in private loan agreements. Directive
NBE/INT/11/2010 has given financial institutions the authority to determine interest rates freely. The author sets out the issue whether the interest rate provided under Article 2479 of the Civil Code overrides Proclamation No. 591/2008. The Author argues that Proclamation No. 591/2008 has repealed Article 2479 of the Civil Code and
the silence of the Directive with regard to private loans does not imply the revival of Article 2479 of the Civil Code. This Article is available at http://www.ajol.info/index.php/mlr/index DOI:
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rate), which has some implications for business especially commercial banks and other financial
institutions engaged in the business of selling money and issuing loans.
In summary, commercial law in Ethiopia has passed through different periods: (a) the period of
piece-meal legislation (prior to 1960); (b) the period of a comprehensive and systematic commercial
law (1960 & 1974); (c) the period of anti-western commercial law (between 1975-1990); and (d) the
period of the revival of the spirit and letter of western-based commercial code – modelled on the
French Commercial Code.
2.3.1 The Civil Code of the Empire of Ethiopia Proclamation No.165 of 1960
The Civil Code survived the Marxist revolutionary regime of 1974-1991. Even if the Code has
undergone several amendments it has remained in force to this date.7 One of the critical
amendments to the Code was the addition of a new sub-article (3) under Article 1723 of the Code,
which reads as follows:
"3) Notwithstanding the provisions of sub-article (1) of this Article, a contract of mortgage concluded to provide
security to a loan extended by a bank or a micro-financing institution may not require to be registered by a court
or a notary."
The most relevant Titles in the Code for our purposes are the following: Title XII: Contracts in
General; Title XIII: Extra-Contractual Liability and Unlawful Enrichment; and Title XIV: Agency
One author, Mamenie Endale Messelu8, has written a fairly comprehensive paper critically analyzing
the Civil Code governing sales of goods in the context of international conventions and principles.
The author argues in his paper that, the Ethiopian Civil Code governing sale of goods is not
compatible with the main provisions of international conventions and principles. In his paper, the
author examines the main provisions of the international conventions and principles i.e. CISG,
UPICC, PECL and UCC and related this to the Ethiopian civil code governing sale of goods.
The analysis in the paper by Mamenie Endale Messeluis appears quite useful as it may help: 1)
potential contracting parties to choose the best and most suitable governing laws or provisions of a
given law; and 2) the Ethiopian government to understand which international convention and
principles should be adopted by the country and in which provisions of a given law should the
government put its reservation.
7 The Code has actually gone through several amendments, tacit and explicit. These include: provisions relating to
foreclosure, urban and rural land, copyrights, labor, family, persons, urban property registration, etc. I have footnoted
this.
8 See “Critical Analysis of Ethiopian Civil Code Governing Sale of Goods in the Light of International Convention and
Principles” by Mamenie Endale Messelu, DOI: 10.4236/blr.2016.72015, Pub. Date: June 20, 2016
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In his paper Messeluis found that the Ethiopian Civil Code governing sales of goods is incompatible
with the aforementioned international conventions and principles on the areas of scope of
applicability, interpretation, formation of the contract, obligation of the parties, risk of loss, breach
of contract and remedies.
2.3.2 The Commercial Code of the Empire of Ethiopia, Proclamation No. 166 of 1960
The Commercial Code is now nearly 60 years old. During many of those years, the Code was largely
dormant suspended between 1975 and 1991 during the nationalization of the Ethiopian economy. It
is a document of 255 pages, six main titles, and 1,182 articles and many thousands of sub-articles. It
appears that it was prepared meticulously in 1960 long before many of the financial innovations and
technologies, to create a solid foundation for conducting modern business. By the virtue of its age, it
has many limitations to govern the 21st century commercial transactions through the real and virtual
world. The Commercial Code is now being revised. In the following section we present the salient
features of the Draft Revised Commercial Code.
2.3.2.1 The Draft Revised Commercial Code
The Commercial Code consists of the following: Book I: Traders and Businesses, Art. 1-209, Book
II: Business Organizations, Art. 210-560, Book III: Carriage and Insurance, Art. 561-714, Book IV:
Negotiable Instruments and Banking Transactions, Art. 715-967 and Book V: Bankruptcy and
Schemes of Arrangement, Art. 968-1182.
The Code has been in the process of revision since 2005. The revision appears to be partly
complete. Out of the five books mentioned above, only the first, second and fifth books have now
been finalized. The part on traders and businesses has undergone minor changes while the parts on
business organizations and insolvency have been substantially revised. The drafting of the other two
books has been commissioned and is still underway.
2.3.3 The Civil Procedure Code
The Civil Procedure Code contains detailed procedural rules for all types of civil suits. The Code
also has provisions on the conduct of arbitration and enforcement of foreign judgements and
arbitral awards.
2.3.3.1 e-filing and e-litigation
The Civil Procedure Code does not provide expressly for e-filing or e-litigation. In our interviews
with the Judges of the Federal First Instance Court, they pointed out the need for the Civil
Procedure Code to be amended to cater for e-filing and/or e-litigation. They added that the rules in
the Code, which was enacted in 1965, presuppose paper filing and face-to-face litigation in a physical
setting. Consequently, the country`s court system lags behind many countries in the use of
information technology. The interviewees insisted that much as revision of the Civil Procedure Code
is necessary, extensive use of information technology requires capacity building.
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2.3.3.2 Provisions on Arbitration
As we pointed out above, the Civil Procedure Code has some provisions on Arbitration and the
Enforcement of Arbitral Awards and Foreign Awards. However, these provisions are fairly
outmoded. They do not take on board the provisions of the UNCITRAL Model Law of 1996 as
amended in 2006. The Model Law as the name suggests is a model law for guiding countries seeking
to reform their arbitration law. Currently, the AGO is in the process of preparing a new Arbitration
Law. We therefore must await the outcome of the process to see if the proposed new law takes on
board principles governing the conduct of arbitration and the enforcement of arbitral awards by
courts.
The Model Law provides a harmonized system of national legislation to regulate private arbitration
processes. The Model Law reflects worldwide consensus on key aspects of international arbitration
practice having been accepted by States across regions having different legal and economic systems.
The UNCITAL Model Law has harmonized the common law and the civil law concept on
arbitration. The Model Law covers all stages of the arbitral process: formation of arbitration
agreement, the composition and jurisdiction of the arbitral tribunal and the extent of court
intervention in the recognition and enforcement of the arbitral award.
The Model Law is designed to assist States such as Ethiopia in reforming and modernizing their laws
on arbitral procedure. Legislation based on the UNCITRAL Model Law on International
Commercial Arbitration (1985), with amendments as adopted in 2006 has been adopted in 74 States
in a total of 104 jurisdictions. Ethiopia may consider adapting the UNCITRAL Model Law with the
necessary modifications to suit the particular circumstances and conditions of the country. Ethiopia
may also consider in the proposed new arbitration law, whether it will cover the enforcement of
domestic and foreign arbitral awards or whether there should be separate laws, one for domestic and
another for foreign arbitral awards
2.3.3.3 Non-Arbitrability of Administrative Contracts
In our review of the Civil Procedure Code we came across a provision, which provides for non-
arbitrability of administrative contracts. Art. 315(2) of the Civil Procedure Code categorically
stipulates thus:
“No arbitration may take place in relation to administrative contracts as defined in Art. 3132 of the Civil
Code or in any other cause where it is prohibited by law.”
Article 3132 of the Civil Code defines administrative contract as follows:
“A contract shall be deemed to be an administrative contract where:
(a) it is expressly qualified as such by the law or by the parties; or
(b) it is connected with an activity of the public service and implies a permanent participation of the party contracting
with the administrative authorities in the execution of such service; or
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(c) it contains one or more provisions which could only have been inspired by urgent considerations of general interest
extraneous to relations between private individuals.”
During our Interview with Ms. Mistir Mohammed, Chief Registrar of the Addis Ababa
Chamber of Commerce Arbitration Institute, 9she pointed out the problem associated with the
provision in the Civil Procedure Code on non-arbitrability of administrative contracts saying that
parties to arbitration tend to act opportunistically especially when it comes to government entities.
When government entities are the respondent, they tend to resort to the article arguing that they are
exempted as their contracts are administrative contracts. However, when they are the applicants,
they tend to argue in favor of arbitration taking place.
In view of the proposed new law on arbitration being prepared, we feel constrained into proposing
any recommendations with regard to this particular area of the law and the practice of courts in
enforcing arbitration agreements or arbitral awards.
2.3.3.4 Construction Contracts
In the area of handling disputes arising from construction contracts, most of the judges we
interviewed raised concerns over their lack of expertise in dealing with cases involving construction
contracts and requested that they be provided with an in-depth training particularly in handling
FIDC forms. According to Mr. Aschalew Assefaw, Legal Advisor to the Director General of
the Federal Roads Authority, 10the Addis Ababa Chamber of Commerce Arbitration Institute has
qualified personnel; the Federal Roads Authority has signed an MoU with the Chamber’s Institute;
all construction cases involving the Ethiopian Roads Authority (ERA) go the Chamber. He was
of the strong view that the involvement of the courts in the functioning of the arbitral tribunal
should be minimal and very restricted; in particular the court`s role should be confined only to that
of setting aside arbitral awards.
Mr. Aschalew Assefaw pointed out that he was involved in three construction cases to which ERA
was a party arbitrated outside Ethiopia. Currently, there are four international arbitration cases being
handled by the Legal Service Directorate. International arbitration has the positive element of
getting expertise, yet it is inconvenient for them and entails huge costs. He insisted that there is need
to build domestic capacity to deal with international arbitration cases. He also pointed to the need to
have specialization in construction law, ADR generally and specifically in adjudication and
arbitration.
Mr. Aschalew Assefaw posited that construction contracts not involving ERA go to the regular
courts and thus specialization in handling construction disputes is essential. This entails training for
the judges which may focus on construction law generally; but special attention should be paid to
9 Interview held in her Office on 14th of November, 2019
10 Interview held on 22nd November, 2019
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issues of special features, special nature of claims and disputes and ways of handling and resolving
such disputes.
2.3.4 Legal Impact of the Non-Ratification by Ethiopia of the New York Convention
The New York Convention on the Recognition and Enforcement of Arbitral Awards (NYC) is the
primary tool for recognition and enforcement of foreign arbitral awards. Article I (1) of the
Convention defines a foreign arbitral award as an award made in a territory of a State other than the
state where the recognition and enforcement of such awards are sought. As of November 2019, 161
States have ratified/acceded to the NYC. Ethiopia has yet to become a State Party to the New York
Convention. We have been reliably informed that Ethiopia has already started the process of
acceding (ratifying) to the NYC.
In our Interview with Ms. Rebecca Araya, the General Manager of American Chamber of
Commerce Ethiopia, she informed us that the Chamber was pushing for the ratification of the
NYC.11She also pointed out that as a consequence of the non-ratification of the Convention, by
Ethiopia, Members of the Chamber do not engage in manufacturing; they would rather limit
themselves to serving their clients in other areas.
Mr. Aschalew Assefaw added his voice on the need for Ethiopia to ratify the New York
Convention by saying that:
“The New York Convention on the Recognition and Enforcement of Arbitral Awards should be ratified by
Ethiopia. Ethiopia should do the same with regard to the Convention on the Settlement of Investment
Disputes between States and Foreign Nationals. But care should be taken to avoid the danger of attaching
assets of the government, for example, Ethiopian Airlines.”12
By ratifying the NYC, a Contracting State agrees that it will recognise an “agreement in writing”
between parties (physical or legal persons) who have undertaken to submit to arbitration all or any
differences which have arisen in respect of a defined legal relationship, whether contractual or not.
A ratifying (acceding) State also has to affirm that it will recognise arbitration awards as binding, and
that it will enforce them in accordance with the procedural rules of the territory where the award is
to be enforced. It also agrees that it will not impose substantially more onerous conditions or higher
fees or charges on the recognition and enforcement of foreign awards than are imposed on the
recognition or enforcement of domestic awards. In the event of acceding to the NYC, Ethiopia
could take advantage of Article I (3) of the NYC to declare that it will apply the Convention:(a) to
the recognition and enforcement of awards made only in the territory of another Contracting state
(reciprocity), or (b) only to differences arising out of legal relationships, whether contractual or not,
which are considered as “commercial” under the national law of the State making such declaration.
11 Interview held on 20th November, 2019
12 Interview held with Mr. Aschalew Assefaw, Legal Advisor to the Director General of the Federal
Roads Authority held on the 22nd November, 2019
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2.3.5 Other Relevant Commercial Laws
There are a number of other commercial related laws on matters not specifically covered under the
Commercial Code, which may also fall within the consideration of the Commercial Benches. They
include the following laws/directives:
i) Banking and Credit Laws
• Directives on Licensing and Supervision on Banking Business
• Directives on Licensing and Supervision on Insurance Business
• Directives on Licensing and Supervision on Micro-Financing Institutions
ii) Bankruptcy and Collateral Laws
• Ethiopian Commercial Code, 1960 amended by Proclamation No. 6/1991
iii) Commercial and Company Laws
• Schedule of Stamp Duty Rates
• Commercial Registration and Business Licensing Proclamation No. 980/2016
• Commercial Registration and Business Licensing Regulations No 392/2016
iv) Federal Tax Laws
• Income Tax Proclamation No 979/2016
• Income Tax Regulation No. 410/2017
• Schedule of Stamp Duty Rates
• Value Added Tax Proclamation No. 285/2002 (as amended in 2008)
• Value Added Tax Regulations No. 79/2002
2.4 . Commercial Dispute Resolution Mechanisms in Ethiopia
2.4.1 Federal Courts Commercial Benches
In this section, we give a brief overview of the commercial dispute resolution mechanisms in
Ethiopia.
As we pointed out earlier in this Report, Ethiopia has a federal form of government as clearly
stipulated in the Constitution of the Federal Democratic Republic of Ethiopia (the Federal
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Constitution). The power of the courts therefore emanates from the Federal Constitution. Federal
courts have judicial power over federal matters while state courts have power over state matters.
The Constitution of the Federal Democratic Republic of Ethiopia provides for only three layers of
courts, the Federal Supreme Court (FSCE), the Federal High Court (FHC) and the Federal First
Instance Court (FFIC). The FFC operates in 10 localities in Addis Ababa and another in Dire Dawa.
The Federal First Instance Court is a trial court. The Federal High Court enjoys both original and
appellate jurisdiction.
In mid-2013, one Commercial and one Construction bench were established at the FFIC and FHC
respectively but now there are five commercial benches at the FFIC and six commercial benches,
three for “commercial cases” and three for “construction cases” at the FHC,13 The established
Commercial Benches enjoy the same pecuniary jurisdiction as the FFIC and FHC in proceedings of
civil nature, which in the case of FFIC the claim value should not be in excess of Birr five hundred
thousand (500,000) and for the FHC, civil cases involving a claim value amount in excess of Birr
five hundred thousand (500,000).14
13 Interview with Ms. Hiwot Mamushet, Chief Registrar of the Federal High Court on 18th November, 2019
14 See Federal Courts' Proclamation, Proclamation No. 25/1996, Section 11(1) and 14(1) respectively, available at
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Key Challenges to Commercial Dispute Resolution in Ethiopia
On the basis of the interviews we conducted with several key stakeholders, 15the following are the
key challenges facing commercial dispute resolution by commercial benches:
1) Lack of specialized knowledge and skills in commercial matters on the part of judges.
2) Weak support and poor court room facilities: lack of adequate courtrooms dedicated to
commercial benches.
3) Lack of special procedures for the commercial benches.
4) Lack of dedicated support staff to handle matters related to commercial benches and lack of
dedicated support by law clerks.
5) Stakeholders, especially lawyers, have limited understanding of commercial issues as well as the
nature of accelerated procedure.
6) Work burden: Judges are overburdened with caseload.
7) Despite having five commercial benches at the FFIC and six commercial benches, three for
“commercial cases” and three for “construction cases” at the FHC, such benches exist in name
only; they are not commercial benches proper (what makes a proper commercial bench).
8) Assignment of judges is not based on defined criteria known well in advance such that only a
judge possessing such qualifications and skills should be assigned to the commercial benches.
9) Poor incentive packages for Judges: low salary, lack of housing and transportation services; non
assignment to appropriate law clerks; and overburdening with assignment of cases.
10) Lack of mechanism for handling complaints.
11) Lack of regular training: there is no specialized training. Judges, registrars and even secretaries
working in commercial benches should be trained in various commercial law areas, especially
those areas identified in the TNA and on ethical standards, among other topics.
12) Lack of ethical and professional conduct among practicing lawyers; they also need training on
such issues.
15 We are particularly indebted to Mr. Sintayehu Zeleke, Former commercial bench judge and currently attorney-at-law and consultant, who succinctly stated the challenges. Additionally, Judges of the Federal High Court and
Federal First Instance Court as well as other key stakeholders also pointed out at some of the challenges.
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13) Lack of cooperation with stakeholders: particularly with strategic ministries such as the Ministry
of Trade and Industry and commercial banks.
14) Poor enforcement of court decisions/order.
15) Court annexed mediation has not been fully utilized; it is in place but not mandatory.
Ms. Rebecca Araya, General Manager of American Chamber of Commerce Ethiopia, added
her voice on the challenges by stating that:
“…language is one issue; if you are aspiring for international investment, decisions should be made available
in English. Another issue is the existence of a robust laws including modern arbitration law; enforcement of
contract is another; transparency and accountability and clear legal guidelines. There is a need to train lawyers
with good knowledge of relevant sector, for example, those with sound familiarity with the energy and
manufacturing knowledge in line with government priority areas. The courts have to work with relevant
institutions without compromising their independence.”16
Meeting with the President and Judges of the FHC
16 Interview held on 20th November, 2019
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CHAPTER THREE
ANALYSIS OF STAKEHOLDERS’ VIEWS
3.1. The “Commercial” and “Construction” Benches Dichotomy
On the basis of the interviews we conducted with the various stakeholders, it became very clear that
the Commercial and Construction Benches that are established at the FHC and FFIC are merely
“benches” but not separate “divisions” or “courts” in the strict sense of separate and specialized
commercial courts or divisions.
In our Interview with Ms. Hiwot Mamushet, Chief Registrar of the Federal High Court,17 she
pointed out that currently there are six benches on commercial matters, three of them are dedicated
to construction cases and the remaining three are dedicated to commercial matters. However, only
three judges handle commercial matters and each judge deals with more than 200 commercial case
files per month, although some judges may exceed that number. The rate of case disposition
depends on the complexity of cases and the work habit of each judge, for some work faster than
others. If a case involves a long and protracted litigation, it may take two years to finalize.18The two
tables below show the total number of cases disposed by the Commercial and Construction Benches
of the FHC since their establishment in mid-2013.
Table I: Commercial Cases Disposed by the 9th and the 15th Commercial Bench (es) of the
FHC of Ethiopia (July 2013 to November 18, 2019)19
Year Cases disposed by the 9th Commercial Bench
Cases disposed by the 15th Commercial Bench
Total number of cases disposed in the two benches
July 2013 - October 2014 230 2 232
July 2014 - October 2015 172 80 252
July 2015 - October 2016 320 157 477
July 2016 - October 2017 438 281 719
July 2017 - October 2018 450 367 817
July 2018 - October 2019 516 297 813
17 Interview held in her Office at the FHC on 18th November, 2019
18 The data on cases filed and disposed by the Commercial Benches (Construction and Commercial Cases) for the
period July, 2013 to November, 2019 is attached to this Report. 19 Judicial calendar year in Ethiopia runs from October to July. The table included data up to November 18th 2019,
the date this data was generated, and on which we had an interview with the IT Director.
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July 2019 - November 18, 2019
156 70 226
Sub-Total 2,282 1,254
Grand Total 3,536
Table II: Construction Cases Disposed by the 21st Construction Cases Bench of the FHC in
Ethiopia (July 2013 to November 18, 2019)
Year Number of cases disposed
July 2013 - October 2014 0
July 2014 - October 2015 0
July 2015 - October 2016 0
July 2016 - October 2017 0
July 2017 - October 2018 0
July 2018 - October 2019 38
July 2019 - November 18, 2019 27
Grand Total 65
Notes: The total number of pending cases as of November 18, 2019 in the 9 th Commercial Bench of the
FHC was 413 cases; 15thCommercial Bench of the FHC was 281cases and 21st Civil Division of the FHC
(which is dedicated to handle construction disputes) was 76 cases.
Given that the existing established “Commercial Benches” are not separate and specialized
“courts”,20 the judges of the FFIC we interviewed pointed out that the said “Commercial Benches”
do not have specially assigned support staff including a registrar, and therefore they share court
support personnel with the other Benches; civil, labor and criminal. Ms. Mamushet, confirmed this
position by saying that there is no Registrar or Secretary dedicated to the “Commercial Benches and
there is no separate support staff for the “Commercial Benches.” She also informed us that apart
from a lack of an electronic filing system for the FHC, there is no modern archiving system, which
sometimes results in loss of files.
20 The “benches” are a judicial method of organization of some of the Judges of the FHC and FFIC, who are selected by the Chief Justice to hear commercial cases. The “benches” established at the FHC and FFIC are
commonly referred as “commercial benches.” They are not separate and specialized divisions of the FHC or FFIC.
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Meeting with some of the Judges of the Federal First Instance Court
The Judges also proposed that the assignment to the Commercial Benches of ethically and
knowledgeable support personnel was a matter of necessity given the sensitivity of some of the cases
these Benches deal with. However, due to lack of capacity in the support staff, one may find a non-
commercial or purely civil case being directed to the “Commercial Benches.” More generally, cases
are sometimes assigned where documents that should have been attached to the pleadings are
missing. Consequently, a lot of time and energy may be wasted in sorting out files that should have
reached a judge on the Commercial Bench.
The judges insisted that having specialization in the Commercial benches by assigning specific cases
regularly to judges could be a welcome idea. This is particularly critical so that a judge in the
Commercial Benches may focus, for example, on commercial papers or bankruptcy or companies
particularly on dissolution and liquidation of business organizations.
According to the Chief Register Mamuset21, having separate commercial benches is necessary
because the country is changing and its needs are greater. She reasoned that if commercial cases are
put in the civil cases track, it will take from two to five years to be finalized, and since there is so
21 In Interview conducted with Ms. Hiwot Mamushet, Chief Registrar of the Federal High Court on 18th November
2019.
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much money involved, there is a need for speedy trial and prompt decisions. The logic for the
establishment of dedicated commercial benches as separate courts enjoys the following rationale:
When the number of cases is increasing while the number of benches is constant, there will be considerable
delay in settlement of cases; so from time to time, there is a need to increase the number of benches with an
increase in cases.”22 “
The need to increase the number of benches with an increase in cases may not be the only
justification for the creation of commercial benches as separate courts. The high collective monetary
value of this pool of litigation may also provide justification for the separate resourcing of
commercial benches. The total amount of money involved in the cases disposed by 9th Commercial
Bench between July 2013 and October 2019 was 17,938,638,202.91 Ethiopian Birr, which at present
dollar value it is equivalent to 600 million USD. For the 15th Commercial Bench, between July 2013
and October 2019, 41,531,618 Ethiopian Birr, currently estimated to be 1.4 million USD and for the
21stConstruction Bench between July 2013 and October 2019, 35,952,807,946.09 Ethiopian Birr,
which at the current dollar value it will about 1.2 billion USD.23 In this Report we have
recommended for an in-depth study on the need to create commercial benches as separate
specialized courts or divisions and at which level of courts they are to be established.
3.2. The Pecuniary Jurisdiction of Federal Courts Commercial Benches
The material jurisdiction of the FFIC emanates from the Federal Courts Proclamation No 25/1996.
According to this Proclamation, the claim value should not be in excess of Birr five hundred
thousand (500,000).24 The issue of the pecuniary jurisdiction may now be moot. In the words of the
Chief Justice of the Federal Supreme Court:
“We have made a final decision on the draft Revised Federal Courts Proclamation; we have decided that the
FFIC should handle cases whose monetary value is less than 10,000,000 birr and the FHC should handle
cases with value above that figure.”25
22 A remark by Mr. Solomon, the IT Director at the Federal High Court during the Interview with the Consultants in his Office on the 18th November, 2019.
23 Data supplied to the Consultants by the Office of the Chief Registrar of the Federal High Court on 18th
November, 2019. The data on the amount tied up in the commercial benches since their inception in mid 2013 was generated and supplied to the Consultants byMr. Solomon, the IT Department Director at the Federal High
Court.
24 See Section 14(1) of the Proclamation No.25/1996 available @
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3.3. FHC Original and Appellate Jurisdiction and FFIC Original Jurisdiction
The Federal Courts Proclamation is under review. The revision, however, has raised a number of
debatable issues, one of which is whether the FFIC should be made exclusively a court of original
jurisdiction and the FHC exclusively an appellate court. This debate however, should be seen in light
of the right of appeal and the availability of experience and expertise among the Judges. The plan is
for the revised proclamation, which was drafted by the Judicial Affairs Council and submitted to the
FSCE, to be submitted to the Parliament in the next three months.
On the different proposals to the draft revised Federal Courts Proclamation No 25/1996, the judges
of the FHC opined that one option is to make the FFIC trial court and the FHC exclusively an
appellate court. But they think that the FHC should have original jurisdiction in certain complex
matters as expertise and experience may be called for in dealing with such cases.
A former judge who served for more than 18 years on the bench, four years of which he sat at the
FSCE and the Cassation Division, Mr. Taffesse Yirga, now an Attorney and Consultant, informed
the Consultants during an Interview in his Office Chambers26 that, he was a member of Judicial
Affairs Advisory Council and participated in the drafting of the revised Federal Courts
Proclamation. He advised that they have proposed that there should be judicial specialization, and
that the FHC should be an appellate court only, and the FFIC a trial court.
3.4. Subject Matter Jurisdiction of the Commercial Benches
The meaning of a “commercial dispute/case” or what is a “commercial law” is still unsettled. The
issue whether or not the Commercial Benches should be exclusively tied to matters arising from the
Commercial Code or should also deal with other commercial matters not dealt with in the
Commercial Code is still debatable. There is some consideration currently of establishing a
Bankruptcy Bench.
3.5. The Composition of and Selection of Judges of the Commercial Benches
The selection and appointment of judges to the Commercial Bench is a matter which needs to be
taken more seriously. The assignment is based on their preferences and capability. There are no
special guidelines and pre-requisites for assigned judges to the commercial benches.
In the selection and appointment of candidates for Commercial Bench Judges, the knowledge and
skills in the commercial area of the candidate are taken into account. In their assignment to the
Commercial Benches, their educational background in the commercial law field, their performance
as a judge, their relations with litigants and their integrity are taken into account. The assignment was
made just a couple of months ago and some of the judges, who are fairly young on the bench, seems
to have been interested and enthusiastic to be assigned to the Commercial Benches since they regard
such assignment as an opportunity for them to develop their professional career.
26 Interview conducted on 13th of November, 2019.
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The assignment of judges to the Commercial Bench is done by the Court leadership with the
approval of the FSCE. However, it is not expected that the assignment will change in the next two
years, but this is subject to periodic evaluation of the performance of the assigned Judges.
In our Interview with Mr. Taffesse Yirga, a former judge who serves on the Judicial Affairs Advisory
Council, he pointed out that there are vague criteria with regard to appointment of Federal Court
Judges. He gave as an example the criterion of “being loyal to the constitution”, which they have
proposed dropping for being unduly vague. He also informed us that they have proposed in the
Draft Revised Proclamation regarding the Federal Judicial Administration Commission, the
retirement age for the judges to be 65 but they may, if they wish to retire at age 60 and also they
have proposed the parameters for promotion of judges. He confided to us that currently there are
50 judges at the FSCE compared to only 19 judges back in 2013. However, in his considered view,
the appointment of judges every year due to the high turnover rate of judges, is not good for the
stability and efficiency of the judiciary.
According to Mr. Sintayehu Zeleke, former commercial bench judge and currently attorney-at-law
and consultant,27 he was assigned to a commercial bench on the basis of his diligence and ability to
understand commercial issues as demonstrated in his prior performance. He worked in commercial
benches both in the FFIC and FHC.
In addition to the proposal by Mr. Sintayehu Zeleke on the criterion for the selection, appointment
and assignment to the commercial benches, we are enthused by the wise advice by Mr. Tekalign
Kedir, Director, Legal Service Directorate, Ministry of Trade and Industry which is food for
thought, thus:
“There are some lawyers working in my department who really understand commercial and investment issues
including their policy dimensions. They could be appointed with some training to the commercial benches. But when
they advertise judicial positions, it is for candidates who have worked as a judge or public prosecutor.”28
27 Interview conducted on 13th November, 2019
28 Interview conducted on 19th November, 2019
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Meeting with Mr. Taffesse Yirga, former Judge who now serves on the Judicial Affairs Advisory Council
3.6. The Physical Infrastructure of the Commercial Benches
The FHC faces unique challenges with regard to the lack of physical infrastructure. It is operating in
a fifty-year-old building which is not suited to a modern court and has no other building of its own.
The FHC has rented a building a few kilometers away from the old building and is moving out of
the old building. In the process of moving, the FHC has created great inconvenience for the judges
and support staff and court users.
The FFIC, on the other hand, has five new buildings in Addis Ababa. We were informed by the
President of the FHC that the Federal Government has allocated about 80 million Birr to the Court
to build a state-of-the-art court building in Addis Ababa on a 2-hectares piece of land, which has
already been allocated to the Court for that purpose.
The President of the FHC further confided to the Consultants that the Court Administration is now
in the process of securing the services of a construction consultant, but cautioned that the
construction process, given experience with the government in handling such projects, will take at
least five years to completion.
3.7. IT Infrastructure
In terms of technology, there is a computer database, but it requires upgrading. The case
management database is set up for both federal and regional courts. Some of the features are not
appropriate for our purpose. The FSCE has advertised a bid document to upgrade the courts’ data
management system.
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According to Mr. Solomon, the IT Director at the Federal High Court,29 the computer data base
system currently in use was developed in 2002 (1995 EC) for federal and regional courts; it has been
updated and was upgraded in 2017. It was developed by a local company. At that time training was
given to the IT staff. The limitation is that it is not web-based; customers cannot get service via the
internet.
Lack of IT equipment such as audio-video recording systems or electronic systems, make the
conduct of court hearings extremely difficult since recording has to be done manually. This not only
contributes to delays in disposal of cases, but also endangers the personal health of the judges, who
have to endure long hours sitting in court and manually recording the proceedings.
Judges of the FHC30 pointed at the problem associated with lack of internet connection and
computers, which they could use to research and explore the challenging issues that they face in
dealing with the commercial cases on a daily basis. They specified that they have to use their mobile
phones or go to an Internet cafe to browse for information and search for reading materials. Due to
the large volume of cases that are assigned to them, they also face challenges in finding time for
further research and study.
The President of the FHC pointed out that lack of technology and modern facilities may have
contributed to erosion of public confidence in the operations of the Court. The President proposed
that as a short-term measure perhaps the existing data management system could be upgraded to a
web-based data management system. This may cost 300,000.00 Birr; an amount which they cannot
raise due to budgetary constraints. He pleaded for some assistance from development partners
particularly USAID in tackling this critical problem.
We were informed by the Vice President of FFIC that the World Bank is considering support to the
courts with developing modern IT infrastructure, particularly the automation of the Commercial
Benches including e-payment system and e-litigation.31At the FSCE cases are assigned to judges
randomly and proportionately via a software system.
In trying to infuse a culture disposed to the use of ICT in the operations of court and other
government institutions, the observation by Mr. Tekalign Kedir, Director, Legal Service
Directorate, Ministry of Trade and Industry during our Interview is quite telling. He noted thus:
“The correspondence our Ministry has with the courts should be through electronic means; but that is not
happening; the issue is neither the non-availability of information technology nor lack of human resource skilled in
information technology; the main impediment to electronic communication is the long standing habit of paper based
29 Interview conducted on 18th November, 2019
30 Interview conducted on 13th November, 2019 with Judge Zelalem Tesfaye, Judge Nekir Sufa, Judge Abera Amare and Judge Yacob Mekuria of the Federal High Court who deal with commercial and construction contracts cases.
31 Judge Tesfaye Neway, Vice-President of the Federal First Instance Court during the Interview on 11th November,
2019
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communication; if someone tries to respond to e-requests, people would ask them for the original document in hard
copy. Old habits die hard.”
3.8. Accelerated Procedures
There are no special rules of procedure for the Commercial Benches. As such the Commercial
Benches rely on the provisions in the Civil Procedure Code particularly those for accelerated and
summary procedures, which are nonetheless not fully utilized. A Commercial Bench book which
deals with among other things, an adjournment policy has been prepared and is being used by the
Commercial Benches. The Bench book was developed in consultation with the judges themselves
and based on their own practices. The Bench book was launched by publishing it on the Facebook
page of the FSCE, and on the website of the Federal Courts.
There is some concern however, that the provisions of the Civil Procedure Code have not been fully
utilized; if properly utilized, they provide for timely disposition of cases. And the Code’s provisions
are inadequate, for example, the implementation of e-filing will be impossible without amending the
Civil Procedure Code as it presupposes submission of hardcopies.
During our interview with judges of the FHC, they pointed out that there are controversial decisions
of the Cassation Division of the FSCE addressing the exception to arbitration of administrative
contracts under Art.315(2) of the Civil Procedure Code. This particular provision bars administrative
contracts from being subject to arbitration proceedings thus making government units not liable to
punishment if they do not abide with arbitral awards. With the exception of some institutions which
are allowed to arbitrate either through a proclamation, regulation or a directive, the entire
administrative contract provision needs to be reconsidered.
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3.9. Use of Alternative Dispute Resolution Mechanisms
It is now a common practice for courts of law to rely on alternative dispute resolution mechanisms,
particularly mediation and arbitration, as a means of curbing the ever-growing problem of court case
congestion. In recognition of the role of mediation in resolving commercial disputes, there is an
initiative for the creation of a Mediation Center, currently in its preparatory stage. There is also a list
of potential mediators in relation to company law and construction law that is being prepared. Some
of these mediators are within the courts and others from outside the courts. There is some thinking
of having a focal person facilitate the proposed court-led mediation. Assistant judges may serve as
mediators as well.
The judges of the FHC also pointed out that they want to have ADR attached to the court, which
presently has no separate ADR department. As a matter of priority for this year, there are plans to
organize such a department and build its capacity with the focus being court-led mediation.
During the interview with the Judges of the Federal High Court, they stated clearly that mediation
should be mandated by the law, which it is not currently. They also suggested that the court should
have a list of potential arbitrators/mediators, and that court annexed mediators should be paid by
the case settled, rather than per cases assigned. They also pointed out that the Civil Procedure Code
(e.g., Art 275) encourages parties to compromise even if they gravitate towards litigation. But it
seems that parties tend to prefer litigation, and that lawyers are reluctant to go the mediation way.
3.10. Interaction with the Public
Court leadership is using various means to communicate new developments and reforms to the
public and the litigants. One way is through regular discussion platforms and another is by creating
specialized dialogues. Hopefully, this will help the courts to minimize the public confidence deficit.
The main aim is to expedite the delivery of judicial services and to communicate reform measures
and make public improvements generated by reform initiatives.
The President of the Ethiopia Bar Association proposed that a Court Users’ Committee could be
helpful as that may constitute stakeholders of the courts. He complained that the Bar Association is
still not invited to the annually celebrated Justice Day and they feel excluded since they are key
stakeholders. It seems that even the new court leadership tends to be reluctant to engage them more.
3.11. Court Leadership and Management
There is a Strategic Plan for the whole court, not specifically dedicated to the commercial benches;
as well as an action plan to guide the vision, mission and actions of the Courts.
The court leadership strives to do their best; while struggling to improve the laws as well judicial
culture. They are taking measures to improve the courts, particularly gearing up for the State of the
Judiciary event where the Chief Justice addresses the public. All these efforts will go to ensure that
the Judiciary is not seen as an annex to the executive; but a co-equal organ of the State.
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3.12. Availability of Court Decisions
We were informed by the President of the FHC that there are plans to summarize the decisions of
the Commercial Benches in English, some of which are published on a website called
Abyssinia.com. As we pointed out earlier in this Report, due to the inquisitorial nature of the
Ethiopian legal system, until 2005, decisions of superior courts were not considered as forming a
source of law, and thus the absence of a law reporting system. The Commercial Bench may however
consider having their decisions published as manuals for easy reference not only by the Judges but
also legal practitioners and academics.
According to the President of the Ethiopian Bar Association, court decisions lack analysis including
cassation decisions. Law reports should be published; if so, lawyers would love to buy them. He was
particularly concerned that court decisions are not readily accessible. As we pointed out earlier in
this Report, the decisions of the FSCE are not readily available on the Court’s website.
3.13. The Training of Judges and Other Court Personnel
The training of judges is critical if their capabilities and competencies are to be improved.. During
our interviews with the judges both at the FHC and FFIC they informed us that in the past they
have attended trainings, but these involved too many judges in a single training session, noting that a
smaller number of judges is more appropriate to the training formats. In any event, they added that
after delivery of training, the usefulness of such trainings to their court work has not been assessed
and/or evaluated.
In the interviews with the judges of the Federal Commercial Benches, they insisted on the need for
having sustainable judicial training programmes. On the basis of the Training Needs Assessment
(TNA) questionnaires, judges of the FHC proposed the following areas for the training: company
formation; dissolution of companies; construction law, insurance issues and demurrage; execution of
foreign judgments and arbitral awards.
One judge32 insisted that not only judges should receive training but the support staff as well. He
amplified that for the Commercial Bench judges, in relation to construction contracts/law, training
should address issues of who should be held liable: the contractor, the consulting firm, or the client,
or the carrier; as construction contracts may involve carriage of goods. These areas should be
encompassed in the training, including, in addition, cheques, insurance, and e-sales.
The judge also admitted that as judges they lack a deeper knowledge of the nature of construction
contracts which are based on the International Federation of Consulting Engineers contracts
(FDIC). There are other possible issues that could be tackled in the training.
32 Judge Jacob of the FHC during Interview conducted with the Judges of the Federal High Court on 12th
November, 2019
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During our interview session with the judges of the FFIC,33 they proposed that training for judges
should center on the dissolution and liquidation of companies, focusing on analyses of cases
disposed so far by Ethiopian courts, evaluation of audit reports, assignment, qualification and fees of
company liquidators, the experiences of other countries and the basics of Ethiopian law on
liquidation of companies. They added that training may also be needed on bankruptcy issues even if
such cases are rare in the courts. They also noted that an experience sharing scheme including study
tours abroad could be developed to expose them to different ways of tackling problems they
encounter in their work.
Judges of the FHC pointed to a shortage of courtrooms and stenographers as contributing factors to
their heavy case load and frequent adjournment of cases. They also highlighted the importance of
training in the areas of interstate commerce contracts, regional and international model laws,
insurance law, cheques, formation and dissolution of companies, and construction related cases.
As regards construction related cases, they specified that they are dealing with challenging technical
issues. They stated that even though they use expert witnesses often, that in itself does not eliminate
the difficulties they have in understanding the technical matters involved in such cases. In addition,
they mentioned challenges in understanding the FIDIC terminology. These are the international
standards relating to construction contracts, and how they interact with relevant national laws, such
as regulations on the public procurement, urban infrastructure, and directives on custom duties.
The observations by Mr. Aschalew Assefaw, Legal Advisor to the Director General of the
Federal Roads Authority34on the key challenges for the regular courts in handling construction
dispute are quite informative. He pointed them out as being the following:
a) lack of specialization; failure to understand the terms and transactions involved in the
contract
b) delays in decision making and poor-quality decisions that are not satisfactory to the parties
c) the substantive law itself is a problem; there are few provisions in the Civil Code dealing
with construction contracts; such provisions have in mind only minor construction
contracts; not the big and mega ones. For example, at the ERA, they have every year more
than 100 projects valued at about 125 billion Birr
d) the dispute settlement system requires revision; there is no adjudicator system
e) there are no standard bidding documents in the law except in the case of government
procurement documents
33 Interview conducted with three Judges Haddis Nekatibeb, Yohannes Afework and Meka Nesru on 12th
November, 2019
34 Interview conducted on the 22nd November, 2019
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In our Interview with the Chief Registrar of the Federal High Court, she indicated that
customers used to complain about the speed with which the Registrars handle cases, but with the
appointment of 25 registrars, the issue is no longer being raised. However, customers still raise the
issue of lack of capacity of the Registrars in handling technical matters; at times the Registrars
commit errors in opening new case files. Court users also raise the issue of bribery. Similarly, the
Judges also complain about Registrars on the questions of misdirection of files, the way the case file
is opened; the order of presentation of documents; missing copies, etc.
The Chief Registrar of the FHC pointed out that only judges receive trainings. The Registers also
need training especially on Civil Procedure Code and Criminal Procedure Code. Further, much as
the main preoccupation of Registrars is case file opening and managing case files and records;
managers among them need some training in leadership and management skills as well as in
customer care.
3.14. Relationship between the Bar and the Bench (Courts)
The Ethiopian Bar Association, which comprises of about 700 members, out of whom less than 100
members are active, is one of the oldest civil society associations in Ethiopia.35 According to Mr.
Debebe H/Gebriel, the President of the Ethiopian Lawyers Association, the courts are a
training ground for lawyers. However, the courts are unable to retain the best judges for a number
of reasons: one is the lack of judicial independence and another is poor incentive packages for the
judges. Consequently, experienced judges do not want to continue on the bench. This makes it
difficult for the judiciary to have career judges.
Furthermore, the legal education that lawyers acquire at universities is too general, and there is no
opportunity to specialize. Therefore, specialization for the lawyers may be beneficial in the following
areas: Foreign Direct investment (FDI), company laws and international trade laws to enable them
represent the country.
Although the Bar Association does not have working relations with the commercial benches directly,
it may provide continuing legal education to the lawyers in strategic commercial law themes. Also,
some members of the Bar can assist with research orientation by undertaking research studies on
strategic legal issues of interest to the Commercial Benches. Furthermore, the Bar Law Journal can
also be brought to focus on some commercial bench related disputes and case commentaries.
There was concern by the Bar Association that they are not invited to the judiciary’s Justice Day
celebrations, which is an important occasion for them and they feel that as key stakeholders in the
justice system, they are being excluded.
35 Interview with Mr. Debebe H/Gebriel, the President of the Ethiopian Lawyers Association on 11th November,
2019
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The Bar Association raised some concerns on the proposed law on law firms, but insisted that in the
event such law comes out, it may help them as well as the Commercial Benches because law firms
can gravitate towards specialization in specific areas of the law especially investment and commercial
matters.
During our Interviews with the judges of the FFIC, they pointed out that lawyers representing
clients in the Commercial Benches do not select cases; they tend to handle any type of case; as such
there is no specialization. They added that the lawyers tend to use dilatory tactics. This is
compounded by their taking several overlapping appointments which may conflict with the court’s
diary. The Judges also hinted that the ethical behavior of some lawyers leaves much to be desired.
During our observation of court proceedings at the FFIC on the 11th of December, 2019, we saw an
advocate who came to court rather late (more than ten minutes after the case in which he was
representing a client had been called), but the Presiding Judge, who in our considered view acted
fairly, having issued a stern warning to the advocate, who had apologized to the Judge, entered the
errant advocate on record and proceeded with the case.
On the very day of the observation, almost all of the advocates who appeared in court were not
properly dressed, since they only put on their robes without wearing a tie, and they never bowed
before the Presiding Judge when entering or leaving the courtroom. Evidently, this behavior much
as it may indicates poor professional conduct and court decorum does not reflect the standard of
behavior of the whole legal fraternity in Ethiopia. However, there is a need to inculcate professional
conduct and ethics in the minds of the practicing lawyers. This could be done through CLE
programs by the Ethiopian Lawyers and Bar Association.
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3.15. Judges Welfare, Wellness and Work Incentives
The Judges were concerned that they work during their summer vacation to clear backlog for which
they are paid. They have some assistant judges, although not of a one-to-one basis, since they are
three and there are only two court clerks who assist them in summarizing cases and researching on
specifically assigned issues. They hinted that there are no guidelines for the Assistant Judges and
there is no job description for them.
Each Judge has to come up with backlog clearance modalities. There are 108 judges, out of whom
only 22 are women. Currently, 25 judges are attending business law classes at the Masters level at
Addis Ababa University. At the time of the interviews we were informed that 30 more Judges have
been appointed.
During the interviews, the judges insisted that the issue of incentives for the judges needs to be
seriously considered, given their meagre salaries and absence of other fringe benefits such as
government housing, transport allowance and medical insurance cover.
The Judges also insisted that there is a need to come up with performance standards for the
Commercial Benches and judges in general. Thy also pointed out that there is a need to have a Court
Inspection and Supervision Department, particularly given that the Courts are flooded with
complaints from litigants. These complaints are being handled by the Court President`s Office as a
matter of routine business thus distracting him from more strategic issues.
3.16. Case Assignment and Benchmarks
During our interview session with the judges of the FFIC, they stated that cases are assigned to
judges online randomly but proportionately. They added that the number of cases per judge in the
Commercial Benches so far is good and there is no backlog. They pointed out that, for example,
each one of them has been handling the following number of cases: 132, 131 and 122. They
warned however, that these figures are understated, since in the Commercial Benches each file
is bulky and complicated as execution proceedings are also handled in the same file rather than
in a separate file.
3.17. Enforcement of Court Decisions/Orders
In our interview with Mr. Taffesse Yirga, a former Judge who serves on the Judicial Affairs
Advisory Council, he pointed out that there is a big problem with respect to enforcement of
judgments. He noted that the Civil Procedure Code defines execution of judgments very well and
the courts give orders to the relevant government institutions. But in practice those orders are not
adhered to. The law envisages sanctions for defying court orders, but the courts do not push for it.
Consequently, judicial independence is endangered. The failure of the courts to exercise sanction
authority for noncompliance reflects badly on judicial independence, according to Mr. Yirga.
During our Interview with Mr. Tekalign Kedir, Director, Legal Service Directorate, Ministry
of Trade and Industry, he confidently stated as follows:
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“All court requests which are directed to the Ministry eventually come to this Legal Service. But the requests
may initially be sent to other departments of the Ministry. Court orders are respected and feared, so we observe
court orders/requests.”36
Mr. Tekalign Kedir pointed out that the Ministry handles cases related to trade names, and court
orders related to commercial registration and licensing. Giving an example, he stated that they may
be asked by the courts about the appropriateness of the cancellation of a registration or business
license or whether there the registration of a given company in exists the database, to which queries
they often provide written replies.
Mr. Tekalign Kedir conceded that, at times they may be unable to respond to requests coming
from the courts timely, particularly when the request is directed first to other relevant departments,
which sometimes happens by mistake by the concerned party. In other cases there may be exchange
of opinions or evidence required from many sections or even other institutions accountable to the
Ministry; in that case there may be delays. He pointed out that since court requests are time bound,
if they cannot meet the deadline, they usually request the court to extend the time by offering a
reasonable explanation.
36 Interview conducted at his Office on 19th November, 2019
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CHAPTER FOUR
GOOD PRACTICES IN COMMERCIAL DISPUTE RESOLUTION
4.1. The Case Studies of Tanzania, Uganda and Ghana
The idea of a Commercial Court that gives focused attention to, and brings specialized legal acumen
to bear on, such cases is not new. England’s Commercial Court can be traced back to February
1895, when a notice was issued to Judges of the Queen’s Bench division creating a distinct
commercial list for cases of a commercial business nature.37 But this Commercial Court was not
established as a separate institution, but rather through the assignment of a particular judge to
handle commercial cases on an ongoing basis.
The purpose of the commercial list was to provide speedy resolution of such cases. Under Lord
Justice Matthew, the Commercial List became known as the Commercial Court, and established a
reputation for the prompt and proper resolution of commercial cases without waste of the parties’
time or funds.”38 One might say that it was known for getting down to business.
The approach adopted by Ethiopia of assigning some Judges to the Commercial Benches in the
Federal High Court and the Federal First Instance Court to handle “commercial cases” is
consistent with the previous English practice.
As was observed by Ugandan Chef Justice B. J. Odoki in a 2010 paper, the World Bank/IFC
publication, “Doing Business 2009,” which compared the ease of doing business in 181 countries
worldwide, noted that the most popular business reform in Africa over the previous five years had
been the “introduction of specialized commercial courts or commercial sections within the existing
courts.39 Doing Business 2009 cited, at pages 51-52, Uganda, Tanzania, Kenya, Madagascar and
Zambia as African countries that have had such courts for a longer time.
Since then a number of additional African countries have gotten on the Commercial Court
“bandwagon.” Beginning in 2010, with funding from the Millennium Challenge Corporation,
Lesotho launched a program targeting specialized resources to commercial cases. This began with
37 See Geoffrey Kiryabwire, The Development of the Commercial Judicial System in Uganda: A Study of the Commercial Court Division, High Court of Uganda, 2 J. Bus. Entrepreneurship & L. Iss.2 (2009) Available at:
http://digitalcommons.pepperdine.edu/jbel/vol2/iss2/3. Last visited on 12/10/2019 at 23:38 Hrs.
38 See Geoffrey Kiryabwire, loc. cit. Note 1 above
39 See Hon. B.J. Odoki, Former Chief Justice of Uganda Paper titled “The Relevance of a Commercial Court to the
Modern Judiciary: A Case Study from Uganda.” Presented at the Southern African Chief Justices’ Forum Conference, 13th – 14th August 2010. Johannesburg, South Africa. Available at: https://www.venice.coe.int/SACJF/2010_08_RSA_Johannesburg/Uganda.pdf. Last visited on 12/11/2019 at 00:36
Hrs. See also the 2009 Doing Business Report, available at https://www.doingbusiness.org/content/dam/doingBusiness/media/Annual-Reports/English/DB09-FullReport.pdf; last
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cases being referred to several judges who were specifically designated to hear commercial cases. In
early 2013, the Commercial Court Division was officially inaugurated. 40
The creation of specialized Commercial Courts in these African countries and elsewhere has clearly
been driven by a desire to provide faster, more efficient resolution of business and other commercial
litigation so that economic growth is sustained and accelerated. The same dynamics may encourage
policy makers in Ethiopia to take a similar tack. We could not agree more with the view expressed
by the Vice President of the Federal First Instance Court that:
“The commercial benches are established, not just for the sake of increasing Ethiopia`s ranking in the Doing
Business measurement of the World Bank; we would like to deliver fast quality justice to the business
community.”41
In the following section we look at some features in specialized commercial courts that have been
established in other countries in the region, so as to gain some insight into their operation and
identify good practices and lessons, which may inform the strengthening of the Ethiopian
Commercial Benches.
4.1.1 The Commercial Division of the High Court of Tanzania
The Commercial Division of the High Court of Tanzania, commonly known as the “Commercial
Court”, was established under Rule 5A of the High Court Registries Rules, 198442 as amended by High
Court Registries (Amendment) Rules, 199943and by subsequent rule changes. It is worth noting here that
although the Commercial Court of Tanzania was officially established in 1984, it only became
operational on the 15th of September, 1999.
The prevailing economic situation of the time, ushered in by the economic liberalization policies of
the Government of the day, and the growing frustration among the business community with the
slow-pace of the civil justice machinery, characterized by case delays and ever growing case-backlog,
provided the impetus for the establishment of the Commercial Court.44
In principle, the Commercial Court was established as a “specialized court”, meaning that it was to
be served with judges and lawyers specialized in commercial laws, the legal field within the province
of the Court.
40 Quoting “Opening of the Commercial Court In Lesotho” Available at: https://iliacle.org/opening-of-the-
commercial-court-in-lesotho/
41Interview with Judge Tesfaye Neway, Vice-President of the Federal First Instance Court on 11th November, 2019
42 G.N. No.23/1984
43G.N. No.141/1999
44 Visit the Court’s website at: https://www.comcourt.go.tz/comcourt/ for more information and to get a list of
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The expectations of the business community was/is that the Commercial Court would resolve
commercial disputes expeditiously, efficiently and effectively. In the more than twenty years of its
existence, the Court has strived to live up to this challenge by fulfilling its strategic vision as outlined
in its Five-Year Strategic Plan 2010/11-2014/15 of becoming “a dynamic, technology-oriented and
professionally competent commercial court, able to handle specialized commercial cases.”
The Court has its own Rules of Procedure and Fees separate from the mainstream procedure rules
and court fees, which aim at “just, expeditious and economical disposal of civil suits in
commercial cases.” This is in line with the Court’s mission as set out in the Court’s Five Year
Strategic Plan 2010/11-2014/15, of providing “just, efficient, effective and speedy disposal of commercial cases
through modern systems and practices” as well as the overall Policy of the legal sector, which is “Timely and
accessible quality justice for all.”
The Commercial Court is headed by a Judge-in-Charge appointed by the Chief Justice from among
Judges of the High Court. It has two other Judges also appointed by the Chief Justice. The Court
has two sub-registries one in Arusha and another in Mwanza. Judges of the Court go on circuit to
hear and dispose of matters in the two sub-registries.
The Court has a Court Users’ Committee comprised of the Judges of the Court, one
representative each of public and private bar, one representative from the Chamber of Commerce
and one representative of the private business community. The Committee advises the Management
of the Court on various matters relating to the Court’s operations. The Court has an Administrative
Officer and two Deputy Registrars. The Deputy Registrar in Charge and the Administrative Officer
both sit on the Committee.
The Commercial Court Rules of Procedure as amended have the following key features:
Overall objective of the Court “to achieve substantial justice” when administering the Rules
incorporated therein.45
Additional mode of instituting suits by originating summons introduced.
Pre-action protocols (PAP) procedure introduced.
Use of ICT particularly in recording evidence of witness who is not present in courtroom via
video link recognized.
45 Art.107A of the Constitution of the United Republic of Tanzania states: “(1) The Judiciary shall be the authority with final decision in dispensation of justice in the United Republic of Tanzania. (2) In delivering decisions in matters of civil and
criminal matters in accordance with the laws, the court shall observe the following principles, that is to say – (a) impartiality to all without due regard to ones social or economic status; (b) not to delay dispensation of justice without reasonable ground; (c) to award reasonable compensation to victims of wrong doings committed by other persons, and in accordance
with the relevant law enacted by the Parliament; (d) to promote and enhance dispute resolution among persons involved in the disputes; (e) to dispense justice without being tied up with technicalities provisions which may obstruct dispensation of
justice.” (Emphasis supplied).
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“Speed Tracks” in Order VIIIA and Order VIIIB of CPC done away with and new fixed case
life span of a commercial case of between 10 – 12 months period introduced.
Idea of “Court appointed mediators” to conduct “court annexed mediation” incorporated.
Dismissal of a suit at mediation stage made a legal possibility.
Time limit for conduct of mediation sessions set.
The practice of advocates “to hold briefs” nipped at the bud by introducing stringent
adjournment conditions.
The idea of “request for time to pay” by defendant admitting to a claim incorporated.
“Opening statement” by plaintiff/claimant and defendant/respondent or their advocates at
the trial introduced.
Strict conditions for adjournment of hearing incorporated.
“Witness statement” (in case of a suit) and evidence affidavit (in case of originating summons
and chamber applications) introduced.
Additional powers for Registrar of the Court stated.
Put a “capping” on filing fees
Rates of various court fees enhanced.
The idea of refund of part of court filing fees incorporated.
4.1.2 The Commercial Court of Uganda
The Commercial Court was established in 1996 as a division of the High Court of Uganda devoted
to hearing and determining commercial disputes with current jurisdiction (as established under
Legal Notice No.4 of 1996 and Instruction Circular No.1 of 1996).46
“The establishment of the Commercial Court in Uganda as a division of the High Court was a direct
recommendation of the 1995 Justice Platt Commission of Inquiry Report on ‘Delays in the Judicial
System’”.47 Business community representatives complained to the Commission that the courts lacked
capacity – on multiple dimensions – to properly dispose of commercial cases; that they could not
46 The Constitution (Commercial Court) (Practice) Directions (Under article 133(1)(b) of the Constitution.)
47 Geoffrey Kiryabwire loc. Cit. at p. 352 (footnote omitted).
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fully comprehend (“appreciate”) complex commercial disputes, and that they could not dispose of
these in a timely and efficient manner.48
“On June 20, 1996, then Chief Justice S.W.W. Wambuzi issued Legal Notice No. 5 of 1996, entitled
Constitution No. 6), creating the Commercial Division of the High Court as a Commercial Court.”49
The Commercial Court got its distinct character in January, 1999 when it moved to premises
separate from the High Court and began entering cases its own independent registry.
As is declared on the website of the Uganda Judiciary, the mission of the Commercial Court, “is to
deliver to the commercial community an efficient, expeditious and cost-effective mode of
adjudicating disputes that affect directly and significantly the economic, commercial and financial life
of Uganda.”50
In order to achieve its mission, the Court has a number of Objectives namely:51
• To make litigation faster, cheaper, fairer and more accessible to Commercial community.
• To help attract foreign investment in Uganda through improving investor confidence in
Uganda's legal system.
• To develop and introduce commercial-friendly rules of Court and encourage the use of
Settlement methods including negotiation and mediation.
• To improve the Court's performance through applying modern Case management and
modern Technology such as court recording.
• To create an effective institution with clear Managerial and Administrative structures run by
honest, competent, motivated well-trained staff, supported by good facilities and equipment.
• To effectively supervise and monitor Bailiffs and all those involved in the obtaining money
or property owed under a court judgment.
The day to day management of the court is in the hands of the head of the court, assisted in this regard by a
management committee composed of all the Judges of the court and the registrars, two working groups on Practices, and
Procedures of the court and Information Technology and Training, and the Registrar of the Court.52
48 Ibid.
49 Odoki, loc. cit. (supra note __), at p. 5.
50Website of the Uganda Judiciary, section describing the Commercial Court. Available at https://judiciary.go.ug/data/smenu/17/Commercial%20Court%20Division.html. Last visited 1/27/2020.
51 Ibid. Text of Objectives adopted from the Uganda Judiciary’s website.
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4.1.3 The Commercial Division of the High Court of Ghana
The Commercial Division of the High Court of Ghana was established on March 4, 2005. It is a
special division of the High Court which was set up as part of judicial reforms that started in 2001.
“The purpose of the court is to refine the responsiveness and efficiency of the Judicial Service to
business disputes. It is currently operative in seven out of the ten regions of the country…. Judges
of the High Court are appointed by the President on the recommendation of the Council of State.
Appeals from the Commercial Court are heard by the Court of Appeal.”53
Order 58 of the High Court (Civil Procedure) Rules 2004, CI 47 sets out the court’s special
jurisdiction. This includes any claim arising out of trade or commerce and relating to categories of
commercial matters that are specified in the Rules. “The High Court (Civil Procedure) Rules
2004, CI 47 have been designed to encourage active case management from both the court and
parties. The several special rules in Order 58 for commercial disputes include a mandatory direction
to the parties to engage in a pre-trial settlement conference (PTSC) at which various models of
Alternate Dispute Resolution may be employed within 30 days of close of pleadings. The parties
may opt for arbitration before an external arbitrator or mediation presided over by a Judge. This is
to achieve early but final resolutions of disputes.”54
When a Judge handles the PTSC, and settlement fails fully or partially, s/he closes the conference by
settling the issues for trial. The issues are referred to a trial judge who presides over the discovery of
documents and conducts the case management conference to review all witness statements with
attached exhibits and other pre-trial processes before trial commences.
Structures
The Commercial Court has an administrator and a registrar, unlike other divisions of the High Court
that are managed by registrars.
Ghana’s judiciary also makes use of a Court Users Committee (CUC), that serves as a stakeholder
platform where representatives of commerce and industry can exchange their views and
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of Appeal supervises the Commercial Court; s/he chairs the Court Users Committee described
above and has a role managing the court’s reform initiatives.
4.2. Good Practices and Lessons Learned
From the case studies of the commercial courts in the countries under study; namely; Tanzania,
Uganda and Ghana, the following can be identified as among the best practices and lessons:
• The Commercial Courts/Divisions have been established through a special legal instrument
as “specialized divisions” of the High Court with a dedicated courthouse, separate Registry,
distinct administration and dedicated specialized Judges and support Staff.
• The Commercial Courts/Divisions are vested with distinct though not exclusive Jurisdiction
in complex “commercial cases”, with a specific threshold pecuniary limitation.
• In the peculiar case of the Commercial Division of the High Court of Tanzania, it has its
own Rules of Procedure and Fees, and in the event of a conflict between the Rules and the
Civil Procedure Code or in the absence of specific provisions in the Rules, the Civil
Procedure Code prevails.
• The Commercial Courts/Divisions make full use of mandatory Alternative Dispute
o In the case of the Commercial Division of the High Court of Tanzania, some
amendments in the Civil Procedure Code effected in 1994, introduced a mandatory
“Court Annexed Mediation” procedure for all civil cases; together with pre-trial Case
Conference Scheduling.
o In the case of the Commercial Court of Uganda, an amendment of the Uganda
Civil Procedure Rule introduced a new order 10B (now Order 12 of the Civil
Procedure Rules) that requires all cases to be scheduled and to take account of the
possibility of using Alternative Dispute Resolution (ADR).
• The Commercial Courts/Divisions make full use of ICT in their various court operations
including:
o Audio/Video Recording of Court Proceedings
o Electronic Case Management Systems
• The Commercial Division/Court in Tanzania and Uganda respectively published their own
decisions in Law Reports/Case Digest/Manuals and also make them available electronically
on their own dedicated websites.
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• The Commercial Courts/Divisions have put in place Court Users Committees as advisory
bodies to the Courts on the conduct of court business. They also evaluate the work of the
courts and make recommendations to the Management of the Courts on performance
improvement of the courts, the Judges and supporting staff.
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CHAPTER FIVE
ASSESSMENT THEMES, KEY FINDINGS AND RECOMMENDATIONS
5.1. Introduction
For ease of making the recommendations we devised essential areas of interventions on the basis of
the analysis of the stakeholders’ views and challenges the established Commercial Benches face in
handling commercial and construction disputes. During our briefing meeting with the Chief Justice
of the Federal Supreme Court, she specifically directed that in addition to making recommendations,
the Consultants should also focus on the following areas:
• To identify actions to be taken immediately and those that are to be taken on a long-term
basis;
• To organize a workshop with Judges where the Consultants will present their preliminary
findings and recommendations;
• To advise whether more commercial benches should be established and at what level of the
Federal Courts or whether this should be on a pilot basis and later scale up the initiative; and
• To recommend how the Cassation Bench may expedite the hearing of commercial cases.
In view of the above we have clustered the recommendations along five main themes, namely:
1) The Nature and Status of the Commercial Benches
2) Judicial Training and Education
3) Resources and Infrastructure: Human, Physical, Financial and IT
4) Court Governance, Leadership and Management
5) Cross-Cutting and General Issues
5.2. Key Findings and Recommendations
THREME ONE: THE NATURE AND STATUS OF THE COMMERCIAL BENCHES
Key Challenges:
Currently there are six Commercial Benches established at the Federal First Instance Court (FFIC)
and Federal High Court (FHC) - three for commercial cases and three for construction cases. These
Benches are not separate “courts” in terms of jurisdiction, procedures, premises and staff. They do
not have specially assigned support staff nor dedicated registry/registrar. They share court premises
and support personnel with the other Benches; civil, labor and criminal. They enjoy the same
pecuniary jurisdiction as the FHC and FFIC. There are no guidelines, and the criteria for the
selection, appointment and assignment of Judges to the Commercial Benches is unclear.
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Key Findings:
Lack of proper legal structure for Federal Courts Commercial Benches – they are not
separate courts/divisions and/or “specialized.”
Lack of specialized knowledge and skills in commercial matters among Judges sitting in the
Commercial Benches.
Weak support and poor court room facilities: inadequate courtrooms for Commercial
Benches.
Lack of special procedures for Commercial Benches – extant FFIC Commercial Bench book
inadequate.
Lack of dedicated Registry, Registrar and support staff for Commercial Benches.
Limited understanding of practicing lawyers of commercial issues and nature of accelerated
procedure.
Judges are overburdened with caseload
Lack of known criteria for case assignment and scientifically determined benchmark.
Lack of Performance Standards for Individual Judges
Lack of framework with known criteria for the selection, appointment and assignment of
Judges to the Federal Courts Commercial Benches.
Poor pay and incentive packages for Judges and other fringe benefits such as government
housing, transport allowance and medical insurance coverage.
Lack of mechanism for complaint handling – there is no Court Inspection and Supervision
Department.
Lack of regular continuing education and training for judges, and also for support staff.
Poor professional conduct and court decorum among practicing lawyers.
Lack of Judicial dress code
Poor cooperation between strategic stakeholders (strategic ministries e.g., Ministry of Trade
and Industry and some Commercial Banks).
Poor enforcement of court decisions/orders.
Court annexed mediation in place not mandatory and not fully utilized.
Lack of IT equipment such as audio-video recording systems or electronic systems.
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Lack of reliable Internet connectivity.
Lack of Strategic Plan for the Commercial Benches
Lack of a structured law reporting system and Law Reports.
Lack of capacity of Registrars in handling technical matters and in opening new case files.
Lack of adequate number of Assistant Judges.
Poor gender sensitivity in the appointment of Judges (out of the existing 108 Federal High
Court judges, only 22 are women – 20%).
Issues:
• At which level of courts should the Commercial Benches be established?
• Whether or not the Commercial Benches should be exclusively tied to matters arising from the Commercial
Code or should also deal with other commercial matters not dealt with in the Commercial Code.
• Whether the Commercial Benches should be separate and specialized benches.
• Whether the Commercial Benches should have specialized Judges.
• What should be the criteria for the selection, and appointment of the Judges to be assigned to the Commercial
Benches?
• Whether Commercial Benches should enjoy exclusive jurisdiction in commercial cases.
• Whether there should be separate Registry & Registrar and dedicated Staff for the Commercial Benches.
• Whether there should be special rules of procedure for the Commercial Benches.
RECOMMENDATIONS ON THE NATURE AND STATUS OF THE COMMERCIAL
BENCHES
A: Short-Term Recommendations:
On the issues whether or not the established Commercial Benches should be exclusively tied to matters arising from the
Commercial Code or should also deal with other commercial matters not dealt with in the Commercial Code.
5.1.1 We recommend that the existing Commercial Benches, apart from dealing with matters
arising from the Commercial Code as revised, they should also deal with other commercial
matters not specifically dealt with in the Commercial Code.
On the issue of determining the criteria for the selection, appointment and assignment of Judges to the Commercial
Benches:
5.1.2 We recommend that, the FSCE, exercising its legislative powers of making directives for the
betterment of the Judiciary administration, should issue a Directive to serve as a Guideline
for the selection, appointment and assignment of Judges to the Commercial Benches.
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5.1.3 We propose that the Directive should state the following as the criteria for the selection,
appointment and assignment of Judges to the Commercial Benches:
o Educational background especially in the commercial law field; a postgraduate
training in relevant commercial areas will be an added advantage;
o High standards of moral integrity, diligence, uprightness and ability to understand
commercial issues;
o Demonstrated knowledge and skills in commercial matters in prior
practice/performance of not less than three years in relevant legal field;
o Performance as a judge, interpersonal relationship skills with colleagues and litigants
and their integrity;
o Lawyers working in other government departments and private practice, who have
demonstrated capacity to understand commercial and investment issues including
their policy dimensions should also be considered for appointment as Judges.
o Written and oral examination exam in commercial areas and in judgment writing.
B: General Recommendations:
5.1.4 Given our assessment of the existing workload of the two benches (commercial and
construction) we recommend that no more commercial benches should be stablished until
after a comprehensive study has been undertaken to evaluate the performance of the
established Commercial Benches.
5.1.5 The proposed study should examine whether the existing Commercial Benches have
managed to serve the purpose for which they were established and based on this to make a
case as to whether there is need to establish separate and specialized Commercial Benches or
Courts with specialized Judges.
THEME TWO: JUDICIAL TRAINING AND EDUCATION
Challenges:
Judges of the established Commercial Benches have received some training, but which was not
structured and did not meet their knowledge, skills and attitudes requirement so as to enable them to
discharge their tasks and obligations efficiently. Registrars and support staff have also not received
any kind of training. The existing FJLSR&TI has not been able to adequately provide for the training
needs of Judges.
Issues:
• What kind of training the Judges assigned to the Commercial Benches should receive?
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• In which areas the training should focus?
• Whether the Judiciary should establish its own Judicial Training College?
RECOMMENDATIONS ON JUDICIAL TRAINING AND EDUCATION
A: Short-term recommendations
On the issues what kind of training Judges assigned to the Commercial Benches should receive? And which areas
should the training focus?
5.1.6 Judges assigned to the Commercial Benches should undergo an induction/orientation
programme in matters of (i) practice and procedure in handling commercial cases; (ii) judicial
ethics and conduct; and (iii) judge craft and judgment writing, before they assume their
judicial responsibilities.
5.1.7 We recommend further that such induction/orientation programme should be conducted by
the most Senior Judges of the FSCE, the FHC and FFIC and trained facilitators.
5.1.8 The FSCE should establish an Advisory Training and Research Committee composed of
both Federal Supreme Court and Federal High Court and FFIC Judges, which should among
other things perform the following functions:
i) Develop and adopt a Judiciary Training Policy, Plan and Strategy.
ii) The Training Policy should state very clearly that training should not only be for
Judges but also for Registrars and other Supporting Staff, as per a training needs to
be developed through a participatory Judiciary-wide Training Needs Assessment
(TNAs) process.
iii) To identify and create a data base of possible trainers and resource persons.
iv) To advise on how a Training of Trainers (ToT) of the identified trainers and
resource should be conducted.
v) To identify qualified and competent resource persons who are to be engaged to
develop training materials in specified areas of the law and to conduct training in
those areas, including but not limited to the following.
• The formation and dissolution of companies;
• Construction law/contracts;
• Insurance areas/law and demurrage;
• Execution of foreign judgments and arbitral awards.
• Carriage of goods (by sea, by land (road), by air and by train).
• Electronic transactions (e-sales, e-commerce – for goods and services)
• Bankruptcy and insolvency issues
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• Interstate commercial contracts;
• Regional and international model laws
• And any other areas of training as should be identified in the TNAs.
On the issue whether the Judiciary should establish its own Judicial Training College:
Challenges:
The FSCE is considering establishing its own Judicial Training College. The main argument
advanced to support such initiative is that, the existing Federal Justice and Legal Systems Research
and Training Institute (FJLSR&TI) which is under the Office of Attorney General (AGO) has not
been able to adequately provide for the special training needs of the FSCE. However, given the need
to maximize meagre resources allocated to the justice sector for training, the FSCE should be
advised to seriously reconsider its resolve to have its own institute for training judicial officers.
Cognizant of the fact that, the judicial system, even if it moves in the right direction, may not be able
to deliver justice to affected citizens efficiently if the judges, judicial officers and prosecutors do not
have the requisite operational skills or they are not trained to deliver substantial justice to the
litigants, we make the following recommendations:
B: General Recommendation
5.1.9 The proposed FSCE Advisory Training and Research Committee should work very closely
with the Office of Attorney General and other key justice stakeholders and development
partners to do the following:
i) To revisit Proclamation No.1071/2018 which establishes the Federal Justice and
Legal Systems Research and Training Institute (FJLSR&TI) with a view to make
proposals to strengthen the legal framework so as to enable the Institute to deliver a
more focused judiciary-based training needs?
ii) To remove the legal, procedural, and institutional obstacles that may impede the
smooth operation of the FJLSR&TI and particularly to widen the definition of the
term “justice sector stakeholders” and include a broad definition of “judicial and
non-judicial officers.”
iii) To reconsider the management structure of the FJLSR&TI with a view to have a
more visible presence of the Judiciary in the operations and decision-making
structures of the FJLSR&TI.
iv) To ensure that the organization of training and capacity-building programs of the
FJLSR&TI promote the development and maintenance of ethical standards and
values among judicial and non-judicial officers as widely as possible.
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v) To ensure that there is adequate resource mobilization, which is critical for the
success of the FJLSR&TI and the programs they conduct.
vi) To propose for the restructuring of the management and institution framework of
the Institute by ensuring that it offers professional training for the Judiciary.
Alternative option
• Judicial training should be organized, systematic and ongoing and should be provided under
the control of an adequately funded dedicated Judicial Training Centre.
• Judicial training should include the teaching of the law, judicial skills and the social context,
including ethnic and gender issues.
• The curriculum should be controlled by judicial officers who should have assistance of
specialists/experts in judicial education and adult learning.
• Meanwhile access to facilities in other jurisdictions with Judicial Training Institutes should be
explored and utilized.
• Courses in judicial education should be offered to practicing lawyers as part of their ongoing
professional development training.
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THEME THREE: RESOURCES AND INFRASTRUCTURE
Challenges:
Both the physical and IT infrastructure particularly the Federal High Court does most meet the
standards of a modern courthouse. There is lack of IT equipment such as computers, lap-tops,
audio-video recording systems or electronic systems and Internet connection.
RECOMMENDATIONS ON RESOURCES AND INFRASTRUCTURE
A: Short-term Recommendations
5.1.10 We recognize and appreciate the efforts by the World Bank to support the Commercial
Benches in improving the IT infrastructure, particularly the automation of the Commercial
Benches including the e-payment system and e-litigation and highly commend and encourage
it,
5.1.11 We recognize and appreciate efforts by USAID to support in updating and improving the
case management system currently in use at the Federal High Court and the Federal First
Instance Court and highly commend it.
B: General Recommendations
5.1.12 We recognize and commend efforts by the Federal Democratic Republic Government to
have offered a piece of land for the construction of a new courthouse to house the Federal
High Court building and a promise to release some funds for the construction. We strongly
urge the leadership of the Court to ensure that the construction project becomes a success.
5.1.13 The Judiciary should overhaul the existing Court Case Management System and should
engage local experts to develop a “Homegrown” Case Management System. Although this
might take some time to develop; it will be worth the effort for in terms of cost saving, job
creation and local technical capacity building to minimize dependency on foreign experts and
licensed products.
THEME FOUR: GOVERNANCE AND MANAGEMENT
Challenges:
Court-led or annexed mediation has been adopted, but has not been fully utilized. There is no
separate ADR department at the court for dealing with mediation. There is no list of professional
mediators. There is no focal person to facilitate court-annexed mediation. The Judges have not been
trained on mediation and there is no training programme for mediation.
Issues:
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Whether court-annexed mediation should be made mandatory in civil/commercial matters; and whether mediation
should be handled by the Judges or specially trained mediators.
This issue has not been dealt with in this Report. It has deliberately been left out for future
consideration in the process of reviewing the Civil Procedure Code, which may also include such
other issues as e-filing and e-litigation.
RECOMMENDATIONS FOR GOVERNANCE AND MANAGEMENT
A: Recommendations for immediate action:
5.1.14 The creation of the proposed Mediation Center; currently at its preparatory stage should be
carried through and finalized.
5.1.15 The list of potential mediators in relation to company law and construction law which is
being prepared should be finalized. It would also be beneficial for the Court leadership to
consider having mediators both from within the courts and from the outside the court
system including from the ranks of Assistant Judges.
5.1.16 The idea of having a focal person to facilitate the proposed court-led mediation is highly
encouraged and should be pursued to its finalization.
B: General Recommendations
5.1.17 The FSCE in collaboration with the FJLSR&TI should propose and develop the appropriate
curriculum for the training of the Commercial Bench Judges and the support staff on
mediation.
THEME FIVE: CROSS-CUTTING AND GENERAL ISSUES
Challenges:
The general working environment and conditions of service and particularly pay package for Judges
at all levels of Court are not satisfactory. There is a general perception among Judges that this could
be a potential breeding ground for unethical behavior among judicial and non-judicial staff. Personal
security of judicial officers is not ensured; Judges do not have state protection while at work and at
their homes. There are no Government assisted transport services for Judges. Considering their
working environment and the possible risks to which Judges are exposed on a daily basis, the need
for personal protection and other fringe benefits cannot be overstated.
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GENERAL RECOMMENDATIONS ON CROSS-CUTTING AND GENERAL ISSUES
5.1.18 The Judiciary should review its current Three-Year Strategic Plan and put in place a five-year
plan instead. Since the purpose of a Strategic Plan is to help the Judiciary do a better job, to
focus its goals and to work together towards those goals, we think three years is too short a
period for the Judiciary to realize its short and long-term goals. The Plan should be
developed through a participatory process with technical assistance of experts in the field of
strategic planning.
5.1.19 The Judiciary should put in place a Staff (Judges) Exchange Programmes with other
Commercial Courts/Divisions within and outside Africa and should involve Commercial
Bench Judges and other Judges in Study Visits within and outside Africa lo learn and acquire
experience and best practices in dealing with commercial cases.
5.1.20 The FSCE should conclude Memorandum of Understanding with International
Organizations in the area of training and other matters such as the International
Organization of Judicial Training Institutes with the purpose of fostering collaboration and
sharing experience with other Judiciaries in the world dealing with commercial and other
matters.
5.1.21 The FSCE should engage in a constructive dialogue with the Executive Branch with a view
to garner the support and political will of securing favorable conditions of service for
employees of the Judiciary as a whole and specifically for Judicial officers, in terms of
allowances, housing, transport, medical insurance and other related welfare matters.
5.3. Conclusion
In this Report, we have broadly sketched up some recommendations, both immediate and long-
term, for strengthening the Federal Courts Commercial Benches. The recommendations are based
on analysis of the views expressed by the various key justice stakeholders that were interviewed in
the course of undertaking the assessment.
As it was noted during the presentation of the preliminary findings and recommendations of the
Assessment Report at the “State of the Judiciary” Colloquium, Judiciaries all over the world face
more or similar challenges – ever growing case-backlog, case delays, poor salaries and working
conditions for Judges and staff, lack of incentives etc., and Ethiopia is no exception. These are
challenges, however, which may very easily be turned into opportunities, and thus a search for
meaningful and durable solutions, both on short-term and long term can be found within the
existing economic means. However, in coming up with possible durable solutions, we should not
lose sight of the fact that there is no one-fit-all solution; it depends on the country context, its socio-
economic plans, strategies, available resources and development priorities. In this context the FSCE
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may piggy-backy on good practices in judicial reforms and modernization across the Continent; as
such there is no need to re-event the wheel.
It may be quite relieving that, if others have managed to come up with meaningful solutions to their
socio-economic problems, Ethiopia also can. In view of the political will already existing among the
three Branches of the Government of the Federal Democratic Republic under the able leadership of
the Prime Minister, the dream and resolve by the FSCE to strengthening Commercial Benches in
Ethiopian Federal Courts will be realized.
Hopefully, the recommendations contained in this Assessment Report will be worked on by all
responsible authorities so as to achieve the short-term target of having an efficient and transparent
institutions to support the modern economy Ethiopia is aspiring to build as outlined in the Policy
document, “Improving Ease of Doing Business: Medium-Term Reform Roadmap”, and also
to realize the vision and mission of the Policy Document, “A Homegrown Economic Reform
Agenda: A Pathway to Prosperity.”
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Appendices
A: The Open-ended Interview Questions
Interview Guide for Needs Assessment Research to Strengthen Commercial Benches of
Federal Courts in Ethiopia
1. On the commercial divisions?
a. When was the division set up? When did it start operation? Clean slate or inherited cases?
b. Establishment: by law or what; in some or all parts of the territory?
c. Objectives
d. Jurisdiction
i. Approaches: In terms of amount of money; Complex commercial cases/a case having
commercial significance; limiting jurisdiction to specific subjects by law
ii. Concurrent or exclusive
e. Special procedures
i. Strict deadlines?
ii. Proactive use of case management (Mandatory court annexed mediation or arbitration?
/mandatory pre-trial conference)?
iii. Costs
f. Are lay people allowed to assist the division?
g. Existence of rules permitting recording of proceedings?
h. Rule for drafting electronic judgment?
i. Any vision, mission and value statements explicitly stated and adopted?
j. Is there backlog of cases: cases pending from the previous year, cases filed, cases disposed and
total pending cases?
k. How long a disposition of a case takes?
l. Is there government interference in the proceedings? In which types of cases?
m. Are there legal rules which hamper the operation of the division? What about the quality of
cassation division decisions regarding commercial disputes? Any legal or practical constraints in
the enforcement of decisions?
n. What is the rate of appeal?
o. Stakeholder or public awareness of the existence and operation of the divisions?
p. Is there a system of users` committee as well as management committee?
q. Any system of measuring the divisions` efficiency/ in terms of disposition time?
r. Any difference between the commercial divisions and other divisions of the court? (Amount of
filing fee structure? Retention of the filing fees paid by the litigants for the division or remits
the fees to the treasury?)
s. Commitment of the leadership of the court?
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2. Judges of the commercial divisions
a. Number of judges handling commercial cases? Is that sufficient? Do they have the required
expertise?
b. Criteria for selection, appointment, rotation, education and training?
c. Tailored-made trainings offered to the commercial bench judges?
d. Do the judges need exposure tour?
e. Is there frequent transfer and turnover of judges?
3. Support personnel
a. Availability of sufficient number of skilled transcribers and stenographers?
b. Availability in sufficient number of ICT professionals?
c. Its own registry?
4. Use of information communication technology
a. Dedicated website or section thereto
b. E-library
c. Online availability of the judgments of the divisions for the public?
d. Mobile phone application to update the parties
e. Use of video conferencing?
f. Electronic applications?
g. Use of audio records?
h. Sufficient budget for ICT
i. Existence of rules for maintenance and disposal of ICT equipment?
5. Existence and adequacy of courthouse
a. Hearing rooms
b. Offices for judges and support personnel
6. Availability of viable alternative commercial dispute resolution methods?
a. Arbitration (judicial inexperience of law arbitrators, their lack of coercive power, cost and delay,
appealable irregularities as well as appeals on the main judgment); Arbitrability of cases
involving government entities, Art. 316 (2) of CPC and Art. 3132 of CC?
b. Mediation?
7. Lawyers` associations/practicing lawyers/business community/chambers of
commerce/EIC
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a. Awareness of the existence of commercial divisions?
b. In relation to which cases, they are frequently interacting with the commercial divisions? Their
views on those relations?
c. Do they think that the divisions/courts are handling commercial cases efficiently/timely and
fairly?
d. How should the commercial divisions be strengthened?
e. How can they support the efficient operation of commercial divisions?
i. Any tendency on the part of practicing lawyers to specialize in a particular area of law?
f. How does effective commercial division contribute to Ethiopia`s rank in doing business?
Questions for American Chamber of Commerce
1. Do you think that there is an intervention required to strengthen commercial benches of the
Federal Courts in Ethiopia?
2. How should arbitration laws of Ethiopia be reformed?
3. How should Ethiopia strengthen institutional arbitration?
4. Do you think that there are benefits in ratifying the New York Convention on the Recognition
and Enforcement of Arbitral Awards?
5. Is there any link between investment attraction and adoption of the Convention on the
Settlement of Disputes ICSID?
6. Any other remarks would you like to make with regard to strengthening commercial benches in
Ethiopia?
Questions to put to Legal Service Directorate Director of the Ministry of Trade and Industry
1. Is your Ministry aware of the establishment and expansion of commercial benches at the Federal
Courts of Ethiopia?
2. What kind of requests/orders do often come from the courts?
3. Is the relationship between the Ministry and the commercial benches smooth?
4. How can your Ministry support the commercial benches?
5. Do you have any improvements to suggest regarding the commercial benches of the Federal
Courts?
Questions to Chief Registrar of the Federal High Court
1. Do you think that there is a need to have a special registry dedicated to commercial and
construction benches?
2. Can you provide us with the number of cases, amount involved, types of cases, etc directed to
commercial benches at your court?
3. Have the registrars under your leadership received special training? What type of training do you
think registrars and other support staff of the Court should be given?
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4. What is the role of a court manager?
5. What are the most frequently filed complaints? Against registrars by litigants or judges or against
judges by registrars or litigants?
6. What is the state of record keeping at the FHC?
7. What do you think is the wisdom of having commercial benches? Construction benches?
Questions put to IT Director of the Federal High Court
1. Would you describe the state of IT services in the FHC? Any special IT service provided to
commercial benches?
2. Can you give us data on flow commercial cases?
3. Do you think that the existing IT capacity is utilized fully? How can the existing IT capacity be
fully utilized?
4. Has the existing IT capacity been upgraded?
5. What type of IT capacity building interventions is required for the FHC and other federal
courts?
***
B. Proceedings of Interviews and Meetings with informants
Proceedings of Interviews Conducted and Meetings Held on Strengthening Commercial
Benches of Ethiopian Federal Courts (7November – 10 December, 2019)
November 7, 2019
Preparatory Skype meeting
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1. Mr. David de Giles, Chief of Party
2. Mr. Mandefrot Belay, Deputy Chief of Party
3. Justice Robert V. Makaramba, International Consultant
4. Ms Maereg G. Gidey, Justice Reform Specialist
5. Dr. Muradu Abdo, National Consultant
Mr. David: Introduced the participants and talked about Justice Makaramba`s visa
issue.
Mr. Mandefrot briefed that there are commercial benches at the Federal First Instance Court (FFIC)
and Federal High Court (FHC). They are new. The intention is to strengthen these benches and to
make them better. This consulting mission needs to find out whether they are any different from
other civil benches in conducting proceedings, use of procedures etc. There is a need to explore best
practices to draw relevant lessons for Ethiopia. Identification of points of interventions such as
trainings, criteria for the selection and assignment of the judges at the commercial benches should
be explored.
Dr. Muradu emphasized the need to find out the real problems, causes and corresponding areas of
interventions. There is also the need to create consensus on the problems and solutions with judges
and other stakeholders. It is necessary to find out all the critical stakeholders in the process of the
needs assessment and their views taken into account. He thought that their active participation is
central for the success of the project of enhancing the commercial benches.
Justice Makaramba raised the need for sharing relevant documents for review. Keeping in mind
anticipated new changes in the ongoing draft Commercial Code of Ethiopia should be given thought
in the possible training for the commercial division judges. He asked if there is a separate law for the
commercial benches as well as if there is a bench book for these divisions. He raised the question of
logistics for his mission here in Addis.
Ms. Maereg explained the tentative activity schedule, which involves needs assessment through
interviews and observations to be followed by training.
****
November 11, 2019
Introductory meeting
Mr. Mandefrot Belay, Deputy Chief of Party
Justice Robert Makaramba (RtD), International Consultant
Ms. Maereg G. Gidey, Justice Reform Specialist
Dr. Muradu Abdo, National Consultant
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Mr. Mandefrot explained the main aims and activities of the Feteh (Justice) Activity in Ethiopia-
to work primarily with the Federal Attorney General and the Federal Supreme Court. With the latter,
it is to strengthen the courts including strengthening of the four commercial benches operating; two
of them in the Federal First Instance Court and the other two at the Federal High Court. The
commercial benches are meant to deal exclusively with commercial matters. This mission is
supposed to find out whether these commercial benches are different from the civil benches,
whether they do have bench books; find out how they are functioning. There is a need to observe
court proceedings in these benches and recommend as to what do the Federal Courts need to have
strong commercial benches by finding out, for instance, whether they need trainings and issuance of
directives and revision of the Civil Procedure Code. This need assessment aspect of the mission is to
be based, in addition to bench observation and review of documents and legislation, on discussions
with the leadership of these courts and the judges themselves individually as well as in group. The
assessment will inform the Feteh (Justice) Activity in Ethiopia to identify intervention areas for
the months to come, not just in the court of this project mission. Especially you need to talk to
Judge Solomon, the Vice-President of the Federal Supreme Court; it seems that they have already
identified some gaps in the commercial benches, for example construction disputes (there are several
such cases pending before the commercial benches as well as with arbitral tribunals) are considered
to be priority training area. You may need to talk to other institutions including the Ethiopian Roads
Authority and the Ministry of Trade and Industry. The latter seems to have an interest in having
robust commercial benches tied to the country`s performance in Doing Business ranking.
You are expected to find out whether there are guidelines regarding the selection, assignment and
transfer of commercial benches judges. This might be interesting in light of the advertisement of
about 30 posts for judges by the Federal Judicial Administration Commission.
All in all, you are expected to come up with a report that clearly identifies the gaps and intervention
areas for the commercial benches of the Federal Courts.
Justice Makaramba raised the following questions which are supposed to be put to officials and
informants to be interviewed.
1. Why do they have commercial benches?
2. How do they define a commercial case?
3. Are there special arbitration laws? What about with regard to enforcement of arbitration awards?
4. What is the pecuniary jurisdiction of the commercial benches? Commercial benches tend to be
empowered more with regard to jurisdictions elsewhere.
5. To what extent ADR is used in the commercial benches? Arbitration? Mandatory court annexed
mediation? Here training on the basics of mediation may matter. That we shall find out. Whether
judges are aware of the ABC of arbitration.
6. How are judges appointed?
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7. Are there special procedures for the commercial benches?
8. Is exposure tour important?
9. To what extent appropriate technology is put in place and being used?
10. How are the court fees being charged and whether the courts can utilize such fee for their own end?
11. Whether there are users` committees?
12. It might to be good to talk to one or two clients of the commercial benches.
13. It might be sound to find out the amount of money tied up in the commercial benches. The amount
of time the commercial benches take to dispose cases as well.
14. Is there a sustainable training for the judiciary? If there such type of program, sometimes, trainings
can be offered using internal resources/funding.
15. Is there a gap with regard to training on judge craft and judgment writing?
16. Whether judgments of the commercial benches appear only in Amharic or in English as well. This is
important as commercial benches are in the lime light internationally.
Dr. Muradu, on his part, said that he has prepared interview questions. The questions are pretty
much similar to the questions raised by Justice Makaramba as listed down hereinabove. The
questions developed by Dr. Muradu are reproduced as follows:
1. On the commercial divisions?
a. When was the division set up? When did it start operation? Clean slate or inherited cases?
b. Establishment: by law or what; in some or all parts of the territory?
c. Objectives: speed, efficiency, predictability, consistency, creating expertise among judges (by
combining the authority and experience of an able judge with an elastic procedure adapted to the
prompt settlement of commercial disputes)
d. Jurisdiction
i. Approaches: In terms of amount of money; Complex commercial cases/a case having commercial
significance; limiting jurisdiction to specific subjects by law
ii. Concurrent or exclusive
e. Special procedures
i. Strict deadlines?
ii. Proactive use of case management (Mandatory court annexed mediation or arbitration? /mandatory
pre-trial conference)?
iii. Costs
f. Are lay people allowed to assist the division?
g. Existence of rules permitting recording of proceedings?
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h. Rule for drafting electronic judgment?
i. Any vision, mission and value statements explicitly stated and adopted?
j. Is there backlog of cases: cases pending from the previous year, cases filed, cases disposed and total
pending cases?
k. How long a disposition of a case takes?
l. Is there government interference in the proceedings? In which types of cases?
m. Are there legal rules which hamper the operation of the division? What about the quality of
cassation division decisions regarding commercial disputes? Any legal or practical constraints in the
enforcement of decisions?
n. What is the rate of appeal?
o. Stakeholder or public awareness of the existence and operation of the divisions?
p. Is there a system of users` committee as well as management committee?
q. Any system of measuring the divisions` efficiency/ in terms of disposition time? (Delay in case
administration may result in loss of significant economic productivity and loss of jobs: simple or
complex cases.)
r. Any difference between the commercial divisions and other divisions of the court? (Amount of
filing fee structure? Retention of the filing fees paid by the litigants for the division or remits the fees
to the treasury?)
s. Commitment of the leadership of the court?
2. Judges of the commercial divisions
a. Number of judges handling commercial cases? Is that sufficient? Do they have the required
expertise?
b. Criteria for selection, appointment, rotation, education and training?
c. Tailored-made trainings offered to the commercial bench judges?
d. Do the judges need exposure tour?
e. Is there frequent transfer and turnover of judges?
3. Support personnel
a. Availability of sufficient number of skilled transcribers and stenographers?
b. Availability in sufficient number of ICT professionals?
c. Its own registry?
4. Use of information communication technology
a. Dedicated website or section thereto
b. E-library
c. Online availability of the judgments of the divisions for the public?
d. Mobile phone application to update the parties
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e. Use of video conferencing?
f. Electronic applications?
g. Use of audio records?
h. Sufficient budget for ICT
i. Existence of rules for maintenance and disposal of ICT equipment?
5. Existence and adequacy of courthouse
a. Hearing rooms
b. Offices for judges and support personnel
6. Availability of viable alternative commercial dispute resolution methods?
a. Arbitration (judicial inexperience of law arbitrators, their lack of coercive power, cost and delay,
appealable irregularities as well as appeals on the main judgment); Arbitrability of cases involving
government entities, Art. 316 (2) of CPC and Art. 3132 of CC?
b. Mediation?
7. Lawyers` associations/practicing lawyers/business community/chambers of
commerce/EIC
a. Awareness of the existence of commercial divisions?
b. In relation to which cases, they are frequently interacting with the commercial divisions? Their views
on those relations?
c. Do they think that the divisions/courts are handling commercial cases efficiently/timely and fairly?
d. How should the commercial divisions be strengthened?
e. How can they support the efficient operation of commercial divisions?
i. Any tendency on the part of practicing lawyers to specialize in a particular area of law?
f. How does effective commercial division contribute to Ethiopia`s rank in doing business?
****
November 11, 2019
The needs assessment team consisting of Justice Makaramba, International Consultant, Dr.
Muradu Abdo, National Consultant and Ms. Maereg G. Gidey, Justice Reform Specialist
held a discussion with:
Judge Tesfaye Neway, Vice-President of the Federal First Instance Court
Judge Tesfaye: The country follows a federal form of government. The power of the courts
emanates from the Federal Constitution. Federal courts have judicial power over federal matters
while state courts have power over state matters. The federal court jurisdiction is related to the
creation and maintenance of one economic community. There are three layers of courts at the
federal level: Federal First Instance, Federal High and Federal Supreme courts. Federal First
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Instance Court is a trial court. There are 190 judges and 150 benches. There are five commercial
benches each presided by one judge. There are commercial benches which are new.
Material jurisdiction of the Federal First Instance Court comes from the Federal Courts Proc No
25/1996, which is being amended. Currently the pecuniary jurisdiction of the FFC is less than
500,000.00 ETB. The revision of this proclamation has raised a number of debatable issues; one of
which is whether the FFC should be made exclusively a court of original jurisdiction and the FHC
exclusively an appellate court. This debate should be seen in light of the right of appeal and the
availability of experience and expertise. This revised proclamation is to be submitted to the federal
parliament in the next three months; it was drafted by the Judicial Affairs Council and submitted to
the Federal Supreme Court.
The question of the meaning of commercial dispute is being considered-whether or not the benches
should be exclusively tied to matters arising from the Commercial Code. We are considering the
establishment of a bankruptcy bench.
In the selection and appointment of judges to the commercial bench, the knowledge and skills in the
commercial area of the candidate are being taken into account. Their educational background in the
commercial law field, their performance as a judge, their relations with litigants and their integrity are
being taken into account in their assignment to commercial benches. The assignment was made a
couple of months ago. Many judges are interested to be assigned to the commercial benches as they
regard such assignment as an opportunity to establish good relations the business community. The
assignment has been made by the leadership of my court with the approval of the Federal Supreme
Court. The assignment will not change in the next two years subject to periodic evaluation of their
performance.
The commercial benches are established, not just for the sake of increasing Ethiopia`s ranking in the
Doing Business measurement of the World Bank; we would like to deliver fast quality justice to the
business community.
The FFC operates in 10 localities in Addis Ababa and another in Dire Dawa. Each commercial
bench judge is supposed to decide a certain number of cases per month; some judges exceed that
number. You will be provided with data generated from the data management system.
The commercial benches are not separate courts; the Constitution provides for only three layers of
courts. The current number of judges in the commercial benches is not sufficient; we are
considering appointment of additional judges.
The World Bank is thinking of supporting as with IT infrastructure particularly automation of the
commercial benches including e-payment system and e-litigation. Our court is not fully automated.
Cases at the Federal Supreme Court are assigned to judges randomly and proportionately via
software system. This helps curb improper behaviors.
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We use accelerated and summary procedures. We have commercial bench book dealing, among
others, adjournment policy. The bench book was developed in consultation with the judges
themselves and based on our own practices. We announced the commencement of the commercial
benches in the face-book of the Federal Supreme Court as well as in the website of the Federal
Courts. We have not fully utilized the provisions of the Civil Procedure Code; if properly utilized, it
allows timely disposition of cases.
We are trying to communicate new developments and reforms to the public and litigants in various
ways; one is creating regular discussion platforms and the other is creating specialized dialogues.
This may help us minimize the existing public confidence deficit in our courts. Our aim is to take
measure to expedite judicial service and communicate as well as evaluate reform measures and again
announce to the public improvements generated as a result of the reform initiatives.
Capacity building trainings should be provided in the area of bankruptcy, dissolution of companies
and arbitration or generally ADR.
There is a need to make court annexed mediation mandatory with regard to labour, commercial and
family cases. This may require law amendment. Arbitration law is being drafted.
There are initiatives regarding mediation center; at its preparatory stage; we are preparing a list of
potential mediators in relation to company law and construction law; some of them are within the
courts and others outside the courts. We will have a focal person to facilitate this court led
mediation. Assistant judges may serve as mediators as well.
We have a strategic plan for the whole court, not specifically dedicated to the commercial benches;
we have also an action plan; both will be provided to you.
We would like the training not take more than three days as we are having tight court schedules. We
are planning to have summaries of commercial court decisions in English. Some of the commercial
bench decisions are published in a website called Abyssinia.com. We do not have law reporting for
commercial bench decisions. It is good to have one.
We as a court leadership are new; we are trying our best; the struggle is improving the laws and well
as judicial culture. We are trying to take more measures to improve our courts. We are preparing the
state of the judiciary event where the Chief Justice is addressing the public. We do not want the
judiciary to be annex to the executive; we are committed in this regard.
****
November 11, 2019
The needs assessment team consisting of Justice Makaramba, International Consultant, Dr. Muradu Abdo, National Consultant and Ms. Maereg G. Gidey, Justice Reform Specialist met with:
Mr. Debebe H/Gebriel, the President of the Ethiopian Lawyers Association
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One of the oldest civil associations in Ethiopia. We have about 700 members. The active members
are less than 100. We have a general assembly consisting of all the members. We have an executive
committee composed of 9 members. We have also other structures provided in our statute: seven
different committees including Continuing Education Committee and Human Rights Committee.
We rely on external funding from donors. We are able to raise limited annual contributions. During
critical times, some dedicated members come to financial rescue, though.
Our relations with the government have not always been good; it got worse in the aftermath of the
2005 elections. The government created another bar association which is pro-government; it took
our name gave it to this new bar, even it is not active. The government persuaded donors to
discontinue funding us or not to fund us at all. The EU civil society fund helped us become resilient
in this critical period, though. The government tried to put our bar in their armpit. We have been
struggling to maintain our independence.
Presently, there is an attempt to establish statutory bar association. This is based on a draft law
proposed by the Legal and Justice Affairs Advisory Council set up under the auspices of the
Attorney General. We have participated in this venture. We visited Germany to this end. There is a
contending issue here; we want this law to allow us to certify admission to the bar; at least we want
to go-regulate practicing lawyers with the government. But the government wants to continue
regulating-issue of license and discipline-lawyers. We would like to license and discipline our
members.
Private investment activity is a recent development in Ethiopia. It was not allowed during the Derg
period-every commercial activity was under government control. Now very strong lawyers are
emerging even if their number is not that big. Some of whom are dealing with foreign clients.
The courts are training place for lawyers; they are unable to retain best judges for a number of
reasons; one is lack of independence of the judiciary and the other is poor incentive package for the
judges. Experienced judges dot not want to continue to stay in the bench. It is difficult for the
judiciary to have career judges. Legal education is generic; it is not specialized.
Specialization may be good in the following areas: FDI, company laws and international trade laws
to enable them represent the country.
The Federal Attorney General does not have strong department to advise the government in
complex cases involving international issues.
My Bar Association does not have working relations with the commercial benches directly; the
relationship we have with the Attorney General`s Office and the Federal Supreme Court. Most of
the members of the justice and legal advisory councils are our members.
Court users` committee can be helpful; as that may constitute stakeholders of the courts. My Bar is
not still invited to the annually celebrated Justice Day. We feel excluded. We are key stakeholders.
Even the new court leadership tends to be reluctant to engage us more.
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Lawyers can train judges; there are some of our members who do not go to the courts; they merely
engage is consultancy and research activities; they can be helpful in this regard.
The commercial benches can be improved as follows: measures should be taken to address capacity
limitations tied to appointment of judges based on extraneous factors such as political affiliations
and economic and political affiliations with higher officials; as result, the judges tend to act partially
in cases involving government interests.
Court decisions lack analysis including cassation decisions. Law report should be published; if so, he
would love to buy those publications. Court decisions are not accessible.
The Bar can the commercial benches as follows: provide continuing education to the judges on
timely and selected themes; some members of the Bar with research orientation can undertake
studies for the benches; the Bar Law Journal can be made to focus on commercial bench related
disputes and case commentaries.
If the law on law firm comes out, which is long overdue, can help us a lot; it can help the
commercial benches a lot; because law firms can gravitate towards specialization in specific areas of
law especially investment and commercial matters and commercial benches can afford to be strict
when it comes to request for adjournment. Law practice will obtain institutional face rather than the
current personal nature of it.
****
November 12, 2019
Members composed of Justice Makaramba, International Consultant, Dr. Muradu Abdo,
National Consultant and Ms. Maereg G. Gidey, Justice Reform Specialist met with the
following:
Judge Berhanmeskel Wagari, President of the Federal High Court,
Judge Tenagne Tilahnu, Vice-President of the Federal High Court,
Judge Teklit Yimsel, Vice-President of the Federal High Court,
Judge Tarekegn Amare, Commercial Bench Judge at the FHC,
Judge Yaekob Mekuria Commercial Bench Judge at the FHC and
Judge Muluken Teshale, Judge and Court Manager at the FHC.
The President: The Federal courts are trying to reform contract enforcement in collaboration with
Doing Business at the World Bank. There are common problems and opportunities. The FHC
faces unique challenges with regard to lack of physical infrastructure. We are operating in a fifty-
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year-old building not suited to a modern court. It has no other building of its own. The FFC, on the
other hand, has five new buildings of its own in Addis Ababa. We have rented a building a few
kilometers away from this old building; but we are moving out; in the process of moving out we are
creating great incontinences for the judges and support staff and our clients. We are vacating
because, this building is not suited to our operations. The good thing is that the government has
allocated 80,000,000.00 Birr to build a state of the arts court here in Addis on 2 hectares of land
already granted for the purpose. We are looking for a construction consultant. But on the basis of
government experience in having a new building built, this project may take at least five years to
complete.
In terms of technology, we have a data base. But it requires upgrading. It is set up for both federal
and regional courts. Some of the features are not appropriate for our purpose. The Federal Supreme
Court has advertised a bid document to upgrade the data management system of our courts.
We have commercial benches. We exercise both original and appellate jurisdictions. We have
assigned judges to the commercial benches. The assignment is based on their preferences and
capability. We do not have special guidelines and pre-requisites to assigned judges to the commercial
benches.
Areas of training should focus on: company formation; dissolution of companies; construction law,
insurance areas and demurrage; execution of foreign judgments and arbitration awards. These areas
have been identified on the basis of needs assessment forms distributed to the judges by the FHC.
Judge Yakob: Support staffs also need to have training, not to the judges only. For the commercial
bench judges, in relation to contraction contracts/law, issues such as who should be liable: the
contractor, consulting firm or the client or the carrier as construction contracts may involve carriage
of goods should be encompassed. We judges lack deeper knowledge of the nature of contraction
contracts which are based on FIDIC contracts. Rental of materials for construction may be
imported duty free and there may be an attempt to sell them out; there are issues here.
There are cassation decisions on arbitration; they are controversial. There is an exception to
arbitration of administrative contracts under Art. 315 (2) of the Civil Procedure Code. As a result,
government units cannot be pushed to arbitration. There may be a need to revisit this. Of course,
there are some institutions which are allowed to arbitrate either through a proclamation or a
regulation or a directive. But the entire administrative contract thing needs to be reconsidered.
Trainings should also focus on cheques, insurance, e-sales.
We can implement e-filing without amending the Civil Procedure Code which presupposes
submission of hardcopies.
We are losing flies/data base due to lack of own working space.
The President: we are experiencing loss of public confidence in our operations due, among other, to
lack of technology and building. These are critical problems. In the short-term, we have proposed to
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upgrade the existing data management system-to upgrade to web-based data management system.
We can raise 300,000.00 Birr for this due to budgetary constraints. Please help us on this.
We are about to appoint about 30 judges within the coming three months. They all need training.
The training should be structured as short-term and long-term.
We want to have ADR attached to the court. But presently we lack a separate ADR department here
at the court. We are planning to organize that department. The focus would be court-led mediation.
People now focus on ligations. We have to organize the department and build its capacity. This is
our priority area for this year.
When we say the costs of litigation, it means corruption, mal-practice and backlog.
Judges work during their summer vacation to clear backlog for which they are paid. We have some
assistant judges. We need to come up with backlog clearance modalities. We have 108 judges; 22 of
whom are lady justices.
Allocation of cases to the commercial bench judges is not standardized; it is not acceptable to the
judges.
Some occasional cases land to our benches-particularly cases related to riots; they are numerous in
number; handling of these cases disrupts our regular operations.
We need to address the issue of incentives for the judges. Currently, we have 25 judges attending
business law class at the Masters level at Addis Ababa University.
Parties to the case are encouraged by our judges to settle their cases out of the court. This can be
done at any stage of court proceedings but prior to judgments. Mediation should be made
mandatory by the law; now it is not. Parties tend to prefer to litigation, especially the lawyers are
reluctant. We as a court have a list of potential arbitrators. Court annexed mediators are to be paid
by the court per settlement of cases not per assignment of cases. The Civil Procedure Code (e.g. Art
275) encourages parties to compromise even if parties gravitate towards litigation.
We need to come up with performance standards for the benches and judges. We lack inspection
department. We are flooded with complaints from litigants. They are being handled by the court
president`s office. These routine businesses distract us away from strategic issues.
There are no guidelines for assistant judges, no job description.
Experience sharing scheme including exposure tour elsewhere (outside Ethiopia) would be fine.
There different proposals in the draft revised Federal Courts Proc No 25/1996. One option is to
make FFIC trial court and the FHC exclusively an appellate court. But we think that the FHC
should have original jurisdiction on certain complex matters as expertise and experience may matter.
Training on the art of judgment writing can be useful.
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The President, finally, pleaded for ideas and options to reform the court from different people
especially from academicians. Even if the implementer fails to accept those options the academicians
should keep on providing those: let the people implementing fail, go ahead to suggest ideas.
****
November 12, 2019
The needs assessment team consisting of Justice Makaramba, International Consultant, Dr.
Muradu Abdo, National Consultant and Ms. Maereg G. Gidey, Justice Reform Specialist
met with the following Federal First Instance Court Commercial Bench Judges:
1. Judge Haddis Nekatibeb
2. Judge Yohannes Afework
3. Judge Meka Nesru
The main aim of the establishment of commercial benches is to have speedy disposition of
commercial cases. There is lack of adequate case hearing room. As a result, we are operating below
our existing capacity. There is lack of device to record proceedings. We operate manually to take
down witness testimonies.
Training for judges should focus on dissolution and liquidation of companies focusing on analyses
of cases disposed so far by Ethiopian courts, evaluation of audit reports, assignment, qualification
and fees of company liquidators, the experiences of other countries and the basics of Ethiopian law
on liquidation of companies. Training may also be needed on bankruptcy issues even if such kinds
of cases are rare in our courts.
Court annexed mediation is planned in our courts but not made operational. It is a good thing that
should happen during pre-trail stage of commercial proceedings.
There is no frequent transfer of judges assigned to commercial benches; the assignment of judges in
these benches tended to be stable. The court leadership is giving high attention to commercial
benches. But there is no manual regarding assignment of judges in our courts. It is being done on
the basis of the good will of the court leadership.
The main thing is to build the capacity of the judges already assigned to commercial benches rather
than increasing the number of commercial benches. Capacity means provision of special training as
well as having adequate hearing space equipped with the required facility-technology.
Cases are assigned to judges online randomly but proportionately. The number of cases per judge in
the commercial benches is good; there is no backlog; for example, for the three of us each handling
currently the following number of cases: 132, 131 and 122. But these figures should be taken with a
pinch of salt. Each file is bulky and complicated in the commercial benches as execution
proceedings are also handled in the same file rather than in a separate file. We have two court clerks
(assistant judges) who assist us in summarizing cases and researching on specifically assigned issues.
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Commercial benches do not have specially assigned support staff including a registrar. We share
such personnel with other benches-civil, labour and criminal benches. Assignment of ethically and
knowledge wise better support personnel for the commercial benches is needed given the sensitivity
of cases involved in these benches. They lack capacity as a result one may find non-commercial or
purely civil cases may be directed to a commercial bench or documents that should have been
attached to the pleadings may be missing. Due to this, a lot of time and energy is wasted. The
capacity of support personnel including the registrar should be developed.
It is good to have sub-specialization in the commercial benches by assigning specific cases regularly
to judges. For example, a judge in such benches may be made to focus on commercial papers or
bankruptcy or companies particularly on dissolution and liquidation of business organizations.
There is a need to amend the Civil Procedure Code to cater for e-filing or e-litigation. The rules in
this Code, being enacted back in 1965, presuppose paper filing and face-to-face litigation in a
physical setting. The country`s court system lags behind many countries in use of information
technology. Extensive use of information technology requires capacity building as well as revision of
the Civil Procedure Code.
Judges have been trained in the past. But the trainings are given in mass-involving many judges in a
single training session; not to small number of judges appropriate for training formats. Once
offered, the usefulness of such trainings to the working of the court has not been assessed.
Lawyers representing clients in the commercial benches do not select cases; they tend to handle any
type of case; there is no specialization. The lawyers tend to use dilatory tactics. They take several
overlapping and conflicting court appointments. Their ethical behavior is much to be desired.
****
November 13, 2019
The needs assessment team consisting of Justice Makaramba, international consultant, Dr.
Muradu Abdo, national consultant and Ms. Maereg G. Gidey, Justice Reform Specialist met
with:
Mr. Sintayehu Zeleke, Former commercial bench judge and currently attorney-at-law and
consultant;
He said he was assigned to a commercial bench on the basis of his diligence and ability to
understand commercial issues as demonstrated in his prior performance. He worked in commercial
benches both in the Federal First Instance Court and Federal High Court.
In his view, the key challenges facing commercial benches today are:
1) Lack of specialized knowledge and skill in commercial matters on the part of judges. This should
be given due emphasis as commercial cases are sensitive and impacts financial flows and companies.
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2) Weak support and court room facilities: there is no courtroom dedicated to commercial benches;
there are no special procedures for the benches; no support staff who would handle matters related
to commercial benches. The same is true for law clerks.
3) Stakeholders: Lawyers have limited understanding of commercial issues as well as the nature of
accelerated procedure.
4) Work burden: During my tenure as a judge I was burdened with too much workload as there was
only one bench handling commercial cases. Now, there are three commercial benches in Federal
First Instance Court. Such commercial benches exist in name; they are not commercial benches
proper.
5) Assignment of judges and incentives: should be based on criteria defined in advance stating that a
judge who fulfils such and such qualifications and skills will be assigned to the commercial benches.
Incentive packages are needed: salary increment, housing and transportation services; assignment to
appropriate law clerks; allocation of cases in manner that does not overburden judges. The court
leadership should as much as possible handle complaints it receives using its own mechanisms
instead of directing it to the judges unless the judges are alleged to have involved in unethical
relations. The court leadership tends to flood the judges with complaints.
6) Lack of regular training: Specialized training should be offered regularly; the training should be
given to the right judge. Judges, registrars and even secretaries working in commercial benches need
training on ethical standards. Once trainings are given follow up is necessary as well. The practicing
lawyers also need training on ethical issues. Commercial bench judges should take training on the
following thematic areas: company governance, dissolution and winding-up of companies, core
principles of bankruptcy, negotiable instruments focusing on cheques, accelerated procedure and
judgment writing with guidelines.
7) Cooperation of stakeholders: There is absence of sufficient cooperation from stakeholders such
as the Ministry of Trade and Industry, for example, with regard to matters related to registration of
companies. When the benches direct certain inquiries to these stakeholders they either become
reluctant or do not respond at all. The same is true for commercial banks.
8) Enforcement of decisions: The Civil Procedure Code allows the handling of judgment execution
matters by the same judge who has delivered the judgment. This is being applied in the commercial
benches. This is good as it contributed to prevention of delay even if it has the effect of making the
file bulky and complicated for the judges. As I mentioned above, the tardiness or lack of
cooperation of stakeholders such as banks however contributes to delay in the enforcement of
judgments.
9) Mediation: Court annexed mediation was put in place some years, but was interrupted. Litigants
were aware of its existence. Judges obtained training at that time. It was useful in easing the burden
of courts. In the absence of legal mandate to require parties to use this method, courts used to
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merely encourage them to make use of this alternative method of resolution of their cases. But still
now there is no legal ground to make it mandatory.
10): Investors especially the Diasporas and some government officials attempt to put pressures on
the commercial bench judges. Lawyers say that judges do not listen and lack the ability to
understand commercial issues.
****
November 13, 2019
The needs assessment team consisting of Justice Makaramba, international consultant, Dr.
Muradu Abdo, national consultant and Ms. Maereg G. Gidey, Justice Reform Specialist met
with:
Mr. Taffesse Yirga, Attorney and Consultant
I served 18 years as a judge, of which 4 years at the FSP including the cassation bench. There is no
judicial specialization which would help in speedy adjudication of cases. No judges specialized in
specific areas of law. Business cases affect the interest of third parties including employees. If not
disposed quickly, items may perish. People with political affiliations used to be appointed. This is the
key problem. There is no merit-based appointment of judges. I am a member of Judicial Affairs
Advisory Council. We have drafted revised Federal Courts Proclamation. We have suggested in
there judicial specialization; the FHC to be an appellate court only and the FFIC a trial court.
There are vague criteria with regard to appointment of federal court judges. For example, the
criterion of being loyal to the constitution is vague. We have proposed this to be dropped. We have
proposed in the draft revised Proclamation regarding the Federal Judicial Administration
Commission, retirement age for the judges to be 65 but they may, if they wish to retire at age 60. We
have also proposed parameters for promotion of judges.
The major problem of judges as I said previously is lack of specialized knowledge and skills. JAC
membership should be reconstituted; there only 3 members from outside, most of the members are
judges; but the former are quite dominant.
The incentive issue for the judges should be tackled immediately and meaningfully.
Every year there is an appointment of judges; this is not healthy; there is high turnover of judges.
Judgment writing skill is inadequate even if training on this is given at the Judicial Training Center.
Some of the cassation decisions are good; some others are not. The goal of the cassation is not
achieved. The not good ones have introduced inconsistency and lack of predictability. Cassation
bench does use ordinary procedural rules. Currently there are 50 judges at the FSCE; back in 2013
there were only 19 judges.
Commercial cases need to be expedited at the FSCE, both appellate and cassation benches.
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There is a big problem in respect of enforcement of judgment. The Civil Procedure Code defines
execution of judgments very well. The courts give order to the relevant government institutions; but
those orders are not adhered to. The law envisages sanction for defying court orders; but the courts
do not push for it; consequently, the entire judicial independence is endangered; it reflects badly on
judicial independence.
Court personnel are not skilled, not ethical and not friendly. The Bangalore Declarations should be
kept in mind.
Appointment of judges is easy as it is easy to remove them.
We do have judicial code of conduct; but it is not well defined; we at the Judicial Affairs Advisory
Council have revised this. It has to be yet approved.
***
November 13, 2019
The needs assessment team consisting of Justice Makaramba, international consultant and
Ms. Maereg G. Gidey, Justice Reform Specialist met with the following Commercial and
Construction Bench Judges of the Federal High Court (Tor Hailoch);
1. Judge Zelalem Tesfaye
2. Judge Nekir Sufa
3. Judge Abera Amare
4. Judge Yacob Mekuria
The judges mentioned that they have never received on job training or attended any other capacity
building short term courses with regards to commercial and construction cases that they handle in
courts. The judges mentioned some of the major problems that hinder them from performing their
responsibilities, among which are lack of relevant knowledge and skill that the work requires. They
stated that, among the judges that are working on the commercial benches, only few have a master’s
degree in business law, while the rest are working with a first or LL. B degree that they acquired
years back.
They stated that these problems are exacerbated by the fact that there is no internet connection and
computers they could use to read and explore the challenging issues that they face in dealing with
the commercial cases on a daily basis. They specified that they have to use their mobile phones or go
to an internet cafe to browse for information and search for reading materials. Due to the large
volume of cases that each of them is assigned to work on, they also face challenges in finding time
for further research and study. The judges stated that problems relating to shortage of enough court
rooms and stenographers also contribute to the work burden and frequent adjournment of cases.
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The judges highlighted the importance of training in the areas of interstate commercial contracts,
regional and international model laws, insurance law, cheques, formation and dissolution of
companies, and construction related matters.
Regarding construction related cases, the commercial bench judges specified that they are dealing
with very technical issues that are very challenging to comprehend for a lawyer. They stated that,
even though they use expert witnesses often, that by itself couldn’t help them from struggling to deal
with the technical matters. In addition, they mentioned challenges in having a clear understanding of
how the FIDIC (International Federation of Consulting Engineers) terms, which are the
international standards relating to construction contracts, interact with relevant national laws, such
as regulations on the public procurement, urban city and infrastructure, and directives on customs
duty.
They also underlined the need to have a clear understanding of meaning and extent of property
rights as recognized under the Constitution and how some FIDIC terms are to be interpreted with
regards to the guiding principles of FDI related policy, for e.g. Engaging in real estate development.
The judges also highlighted that future trainings in this area is important not only for judges but also
for the key stakeholders that the court interacts with on a regular basis.
***
November 14, 2019
The needs assessment team consisting of Justice Makaramba, international consultant, Dr.
Muradu Abdo, national consultant and Ms. Maereg G. Gidey, Justice Reform Specialist met
with:
Ms. Mistir Mohammed, Chief Registrar of the Addis Ababa Chamber of Commerce
Arbitration Institute.
There are two arbitration related decisions rendered by the Cassation Bench of the Federal Supreme
Court troubling us. Our Institute has memorandum of understanding with the Federal Roads
Authority. Parties to arbitration tend to act opportunistically especially when it comes to
government entities. When the latter are respondents, they argue that the Civil Procedure Code
exempts administrative contracts from arbitration even if the contract contains an arbitration clause.
But when they become applicants, they argue in favor of arbitration.
We interact with the courts in relation to injunctions and enforcement of decisions. They help us
well and quick.
We have our own arbitration rules which apply both in the case where our Institute is referred
specifically or generically in the contract as an arbitration facilitator.
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We have a roster of arbitrators; some are lawyers and others are expertise in other fields. We have
our own requirements to be included in the roster. There are 95 judges on our roster. We update it
every year.
Our process is simple: we ascertain jurisdiction, then notice, payment, exchange of replies, we check
the existence of counter claims and then charge fee. We give parties three choices in the course of
appointment of arbitrators. If the parties are not satisfied with the given choice, they can have their
say.
We handle all types of cases involving the business community including a case with a foreign
element provided the parties consent to our services.
We pushed for the ratification of the New York Convention on the Recognition and Enforcement
of Arbitral Awards. It becomes a political thing for the government.
We need to have special rules on arbitration.
People do not prefer ad hoc arbitration as there is partisanship and no fixed venue. Institutional
arbitration is not expensive.
In the past, we provided extensive training to judges.
During the year 2018/2019, we handled 65 and 6 arbitration and adjudication, respectively, cases. In
this year, as of September 2019, we have disposed 11 cases and there are 20 pending cases.
***
November 18, 2019
The needs assessment team consisting of Justice Makaramba, international consultant, Dr.
Muradu Abdo, national consultant and Ms. Maereg G. Gidey, Justice Reform Specialist met
with:
Ms. Hiwot Mamushet, Chief Registrar of the Federal High Court
How many cases have been settled since the establishment of commercial benches at the FHC?
How many are pending? How much money is tied up in the files? Following these questions, this
informant provided the team with computer generated data with the cooperation of the Court`s IT
Department, which is presented and analyzed by Dr. Muradu as follows:
Commercial Cases Disposed by the 9th and the 15th Commercial Bench (es) of the FHC of Ethiopia
(July 2013 to November 18, 2019)56
56 Judicial calendar year in Ethiopia runs from July to October.
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Year Cases disposed by the 9th Commercial Bench
Cases disposed by the 15th Commercial
Bench
Total number of cases disposed in the two benches
July 2013 - October 2014 230 2 232
July 2014 - October 2015 172 80 252
July 2015 - October 2016 320 157 477
July 2016 - October 2017 438 281 719
July 2017 - October 2018 450 367 817
July 2018 – June 2019 516 297 813
July 2019- November 18 2019
156 70 226
Sub-total: 2,282 Sub-total: 1,254 Grand total: 3,536
Construction Cases Disposed by the 21st Construction Bench of the FHC in Ethiopia (July 2013 to
November 18, 2019)
Year Number of cases disposed
July 2013 - October 2014 0
July 2014 - October 2015 0
July 2015 - October 2016 0
July 2016 - October 2017 0
July 2017 - October 2018 0
July 2018 – June 2019 38
July 2019- November 18 2019 27
Grand total: 65
Notes:
1. The total number of pending cases as of November 18, 2019 in the:
a. 9th Commercial Bench of the FHC is 413;
b. 15th Commercial Bench of the FHC is 281 and
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c. 21st Civil Division of the FHC (which is dedicated to handle construction disputes) is 76.
2. The total amount of money involved in the cases disposed by:
a. the 9th Commercial Bench between July 2013 and October 2019: 17,938,638,202.91 Ethiopian
Birr. This present dollar value of this is equivalent to 600 million USD.
b. the 15th Commercial Bench between July 2013 and October 2019: 41,531,618 Ethiopian Birr.
This is currently estimated to be 1.4 million USD.
c. the 21th Construction Bench between July 2013 and October 2019: 35,952,807,946.09 Ethiopian
Birr. The current dollar value of this is about 1.2 billion USD.
Ms. Hiwot: there are six benches on commercial matters, three of them dedicated to
construction and the remaining three to commercial matters. But there are only three judges for
the commercial issues. Each judge handles more than 200 files. Rate of case disposition depends
on the complexity of cases and the work habit of each judge. Some judges work faster than
others. If a case involves a lot of litigation, it may take 2 years. We had established one
commercial bench back in 2013 and same to construction bench. After 2009/2010 EC, 49
judges were appointed. We do not have electronic filing system. There is no modern archiving
system; we may occasionally face loss of files. There is no registrar or secretary dedicated to
commercial benches. There is no separate support staff for the commercial benches. The
registrar checks technical matters of a newly opened case. Then the file is referred to file opener,
then to data encoder then to the file opener again and the court clerk takes the case to the judge.
The president of the court or any other judge is not involved in the assignment of a case. Unless
there is a contrary instruction, cases are assigned to the three judges equally. There is no digital
case allocation system; the FSCE has this type of allocation. Once allocated a case stays with the
judge until disposed or recusal.
Requirements to be a registrar are: law degree or diploma in law plus some years of experience.
Registrars are appointed by the Judicial Administration Commission on the recommendation of
the leadership of the court.
Trainings are given only to judges; this is not right. Registers need training especially on Civil
Procedure Code and Criminal Procedure Code. We are preoccupied with file opening and
managing; those of us in leadership position, training on leadership is needed; so is on customer
care.
Customers used to complain about our speed before the appointment of 25 registrars. Now the
question of speed is not raised. Yet, customers raise the issue of lack of capacity of registrars in
handling technical matters; the registrars at times commit errors in opening files with regard to
new cases; clients also raise the issue of bribery. They system is open to this kind of things.
Judges complain about registrars on the questions of misdirection of files, the way the file is
opened; the order of presentation of documents; missing copies, etc.
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Separate commercial bench is good; the country is changing. If put commercial cases in the civil
cases track, it will take from 2 to 5 years. Much money is involved. They need the decisions
immediately.
***
November 18, 2019
The needs assessment team consisting of Justice Makaramba, International Consultant, Dr.
Muradu Abdo, National Consultant and Ms. Maereg G. Gidey, Justice Reform Specialist
met with:
Mr. Solomon Worku, IT Department Director, the Federal High Court
Mr. Solomon provided the team with the amount of money tied up in the commercial benches since
their inception in mid-2013. (For this, please see the foregoing proceedings of the meeting with the
Chief Registrar of the FHC). Mr. Solomon remarked that when the number of cases is increasing
while the number of benches is constant, then there will be considerably delay in settlement of cases;
so from time to time, there is a need to increase the number of benches with an increase in cases.
We have SMS service; information desk with touch screen. We also post information on board just
by printing out case updates. We are trying to develop website for the FHC. We would like to use e-
filing with through licensed internet cafes. The FSP use video conferencing. We have five mobile
courts; we need to use information technology to enhance their operations.
The computer data base currently in use was developed in 1995 EC for federal and regional courts
with government budget; it has been updated. It was developed by a local company. At that time
training was given to the IT staff here. The limitation is that it is not web-based. The customer
cannot get service via the internet. It was upgraded last in 2017.
***
November 19, 2019
The needs assessment team consisting of Justice Makaramba, International Consultant, Dr.
Muradu Abdo, National Consultant and Ms. Maereg G. Gidey, Justice Reform Specialist
met with:
Mr. Tekalign Kedir, Director, Legal Service Directorate, Ministry of Trade and Industry
All court requests which are directed to the Ministry eventually come to this Legal Service. But the
requests may initially be sent to other departments of the Ministry. Court orders are respected and
feared; so we observe court orders/requests. I wish my colleagues from other concerned
departments were here in the discussion to respond to your queries. Most of the cases we handle are
cases in which the Ministry is involved either as an applicant or a respondent. In the past, trademark
issues used to come to the Ministry; but now they go to the IP Office, which is a separate institution.
We handle cases related to trade names, court orders related to commercial registration and
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licensing. For example, we may be asked by the courts about the appropriateness of cancellation of
registration or business license or whether there exists the registration of a given company in the
data base. We often provide written replies.
We have not thought about supporting the commercial benches, honestly speaking. We are
immersed in our own routine tasks. It would be good on our part to identify issues and provide the
same to the commercial benches for research undertaking.
The correspondences our Ministry has with the courts should be through electronic; but that is not
happening; the issue is neither the non-availability of information technology nor lack of human
resource skilled in information technology; the main impediment to electronic communication is the
long standing habit of paper based communication; if someone tries to respond to e-requests,
people would ask them the original document in hard copy. Old habits die hard.
There is no cooperation between my legal service and the commercial benches. I do not go to the
courts these days.
There are some lawyers working in my department who really understand commercial and
investment issues including their policy dimensions. They could be appointed with some training to
the commercial benches. But when they advertise judicial positions, they say candidates who have
worked as a judge or public prosecutor.
We may at times be unable to respond to requests coming from the courts timely. This may be the
case when the request is directed first to other relevant departments; sometimes by mistake by the
concerned party; some other times rightly; there may be exchange of opinions or evidence required
from many sections of or even other institutions accountable to the Ministry; in that case there may
be delays. Court requests are time bound; if we cannot meet the deadline, we request the court to
extend the timeline by offering reasonable explanation.
There is a big capacity gap in handling international disputes involving Ethiopian businesses or the
government of Ethiopia. Our people suffer.
***
November 20, 2019
Members composed of Mr. David de Giles, Chief of Party, Justice Robert V. Makaramba,
International Consultant, Ms. Maereg G. Gidey, Justice Reform Specialist, Court Specialist
and Dr. Muradu Abdo, National Consultant met with:
Ms. Rebecca Araya, General Manager of American Chamber of Commerce Ethiopia
Mr. David: There are commercial benches in the Federal Courts of Ethiopia; they are starting their
operations; we intend to strengthen them to support the business community by pairing the
experience and expertise of local and international consultants.
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Mr. Rebecca: The Chamber is an association of American investors in Ethiopia; some are Diaspora;
it is intended to promote trade and investment between Ethiopia and USA. There are not too many
American investors in Ethiopia. The Chamber was registered with the Ethiopian Investment
Commission in 2016.
We face some difficulties in the course of registration of businesses. We try to resolve them
administratively through dialogue. Because we think that those issues arise from communication
problem. We are working with the Addis Ababa Chamber of Commerce on the issue of anti-
corruption. We engage in public-private sector dialogue with the Ethiopian Investment Commission
directly. We see some issues of tax and land, disparity between regional laws and federal laws. We
witness a lot of our issues resolved administratively without getting to the courts. We have also
issues of foreign exchange, labor and environmental impact.
The ratification of the New York Convention on the Recognition and Enforcement of Arbitral
Awards by Ethiopia is long overdue. Because of non-ratification of this Convention, our members
do not engage in manufacturing; they rather limit themselves to serving their clients.
Our clients use two law firms to handle their legal issues. We have contributed to the draft revised
Investment Proclamation.
On the ideal commercial benches, for the commercial benches, Ms. Rebecca thought that language
is one issue; if you are aspiring for international investment, decisions should be made available in
English. Another issue is the existence of a robust laws including modern arbitration law;
enforcement of contract is another; transparency and accountability and clear legal guidelines. There
is a need to train lawyers with good knowledge of relevant sector, for example, those with sound
familiarity with the energy and manufacturing knowledge in line with government priority areas. The
courts have to work with relevant institutions without compromising their independence.
Justice Makaramba pleaded Ms. Rebecca to visit to have a feel of the state of the commercial
benches for her to judge; these benches are constrained in terms of capacity, building facility and
technical issues. There are difficulties concerning ethical, lack of specialized knowledge and skills
and law reporting.
Mr. David thought that the federal judiciary is in the right direction as they are emphasizing
independence and professionalism.
Views were exchanged on issues of the contribution of law schools to the ongoing national reform
initiatives and student externship. ***
November 22, 2019
Members consisting of Mr. David de Giles, Chief of Party, Mr. Mandefrot Belay, Deputy
Chief of Party, Justice Robert V. Makaramba, International Consultant, Ms. Maereg G.
Gidey, Justice Reform Specialist and Dr. Muradu Abdo, National Consultant met with:
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Ms. Meaza Ashenafi, Chief Justice of the Federal Supreme Court
Mr. David introduced to the Chief Justice the team and the main aim of the project-strengthening
the capacity of the commercial benches at the Federal Courts based on sound needs assessment.
Justice Makaramba briefed the participants on the preliminary findings of the needs assessment leg
of the mission as follows focusing on the problems faced by the commercial benches.
1. Structural issues
2. Budgetary matters
3. Composition to the benches – need for specialized training to the judges, no induction given
to them; continuing judicial education; where to place the judicial training center
4. Specialized procedures
5. Incentive package for the judges which is a general problem faced by the entire judiciary
6. Ethical issues
7. Small but important matters such as appropriate attire
8. Infrastructure including space availability, poor technology (provision of computers
preferably laptops to the judges) and home grown IT data base
9. Customer care with regard to the support staff
10. Poor state of the arbitration law
The tentative recommendations are: introduction of law reporting system, provision of training
on amendments to the Commercial Code; use of precedent and statutory interpretation,
administration of commercial justice focusing on the salient features, challenges and prospects;
judge craft and art of judgment writing and training of trainers-training skills.
Dr. Muradu expressed appreciation of the starting of specialized commercial benches with
articulate objectives and proceedings codes both at the FFIC and FHC with adjournment
policies covered. He raised the issue of whether the Federal Supreme Court intends to
implement commercial benches at all levels of just limited to the two levels of lower courts.
The Chief Justice: we take the outcomes of this project very seriously; it is useful for other
benches or entire justice system. We do not just look at current capacity and we also look at the
future to come and for very serious cases which may crop up. We have a focal person for
commercial benches. The Federal Courts team including myself recently visited the Commercial
Court in the UK. It is a high tech court. It handles 60 percent of international commercial cases.
It is professional service; they are ready to support us in terms of coaching and mentoring. All
the points you have raised are important; judges are overwhelmed in handling cases involving
high amount of money. Please identify actions to be taken immediately and long term ones. It
may be a good idea to organize a workshop to present the findings and recommendations of the
needs assessment project; that may be beneficial for the courts as whole. You may advise
whether commercial benches should be established in all levels of the Federal Courts or pilot the
initiative and then later scale it up; the cassation bench does not delay cases; it takes one year for
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a case to be disposed in this bench; we may look at the regular bench of the FSCE. We have
made a final decision on the draft Revised Federal Courts Proclamation; we have decided that
the FFIC should handle cases whose monetary value is less than 10,000.000 birr and the FHC
should handle cases with value above that figure. The World Bank has shown interest to support
the commercial benches. Judges need to be assertive and empowered; on a small issue such as
lack of cause of action may cause considerable delay. Lawyers may make removal of judges as a
delay tactic. We are building pillar activities, which are practical and produce large impacts. We
are in the process of doing that. The details of the workshop and training can be handled in due
course.
Mr. David: Feteh (Justice) Activity in Ethiopia may support the Federal Courts with
automation of case management. We have experience and expertise in this regard. There is
experience in Ivory Coast and Moldova. Relevant people may visit these systems.
The idea of enticing the World Bank to support commercial benches in terms of physical
infrastructure building should be considered seriously.
The idea of taking care administratively of commercial cases at the Federal Supreme Court level
should be considered as one option. This means giving priority to such kind of cases filed for
appeal and cassation. The other option is to come up with a separate commercial bench at the
Supreme Court level. These are options to think about.
***
November 22, 2019
The needs assessment team consisting of Justice Makaramba, International Consultant, Dr.
Muradu Abdo, National Consultant and Ms. Maereg G. Gidey, Justice Reform Specialist
met with:
Mr. Aschalew Assefaw, Legal Advisor to the Director General of the Federal Roads
Authority
Mr. Aschalew Assefaw: Construction contracts involve so many parties: the client and the
consultant. It also involves several transactions in one contract. Such contracts come from either the
old or new FIDIC standard documents. They are massive in volume. This entails special way of
addressing contraction disputes. Disputes emanating from construction contracts involve consulting
engineer, dispute review board/committee/adjudicator and arbitration.
The dispute resolution regarding construction contracts here at the Ethiopian Roads Authority
(ERA) is as follows. First, when the construction dispute is between ERA and a foreign national or
company, then the disputes goes to the ICC, which is based in Paris. But the dispute venue can be in
London if the arbitrators chosen are from there. Even the adjudicators would be foreign
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professionals. Here we need to build capacity nationally; we do not have one here. We simply
facilitate the dispute settlement as one of the parties on the side of the ERA. We always hire lawyers
to represent us and pay heavily for their service in foreign currency. There is transportation cost for
the local team and witnesses.
Where the construction dispute is between ERA and a local party, then we use the facility of the
Addis Ababa Chamber of Commerce Arbitration Institute. We go to the courts very rarely, only to
enforce the arbitral awards if the losing party is unwilling to implement the award. The Director
General of ERA is granted the power to settle disputes involving the ERA via ADR; this is done
under Regulations No 247/2011.
Construction contracts not involving ERA go to the regular courts. That is a normal process.
Specialization is construction dispute is essential. The arbitrators in construction dispute are
mostly non-lawyers; often only one of them is a lawyer.
The key challenges for the regular courts in handling construction dispute are:
a) lack of specialization; failure to understand the terms and transactions involved in the
contract;
b) there are delays in decision making and even the decision they provide is not satisfactory to
the parties;
c) the substantive law itself has a problem; there are few provisions in the Civil Code dealing
with construction contracts; such provisions have in mind only minor construction
contracts; not the big and mega ones. For example, at the ERA, we have every year more
than 100 projects involving the value of about 125 billion Birr;
d) the dispute settlement system requires revision; there is no adjudicator system
e) there are no standard bidding documents in the law except in the case of government
procurement documents
The Addis Ababa Chamber of Commerce Arbitration Institute has qualified personnel; we have
signed MoU with them; all construction cases involving the ERA go the Chamber; the way they
handle cases is good.
The involvement of the courts in the functioning of the arbitral tribunal should be minimal and very
restricted; in particular the court`s role should be confined to the issue of setting aside of arbitral
award.
I was involved in three construction cases to which ERA was a party arbitrated outside Ethiopia.
Currently, there are four international arbitration cases being handled by the Legal Service
Directorate. International arbitration has the positive element of getting expertise, yet as I
mentioned earlier, it is inconvenient for us and entails huge cost.
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We need to build domestic capacity to deal with international arbitration cases. The Addis Ababa
Chamber of Commerce Arbitration Institute is trying to handle international cases. We need to have
specialization in construction law, ADR generally and specifically in adjudication and arbitration.
Training for the judges may focus on construction law generally; but special attention should be paid
to issues of special features, special nature of claims and disputes and way of handling and resolving
disputes.
In relation to the quality of cassation decisions, I cannot say much; but the point that should be
reiterated is that the courts should be given a limited way of intervening in the operations of arbitral
proceedings. The courts should be given the power to review decisions of arbitral tribunal, though.
The New York Convention on the Recognition and Enforcement of Arbitral Awards should be
ratified by Ethiopia. Ethiopia should do the same with regard to the Convention on the Settlement
of Investment Disputes between States and Foreign Nationals. But care should be taken to avoid the
danger of attaching assets of the government, for example, Ethiopian Airlines.
Judges should not like or dislike arbitration. They need to see arbitration as one method of
settlement of disputes. It has merits in relation to certain cases.
***
November 22, 2019
Final meeting marking the end of the first leg of the mission held between Justice
Makaramba and Dr. Muradu on tasks to be accomplished
1. Drafting the proceedings of meetings held and interviews conducted and sent to Justice
Makaramba on 26th of November – By Dr. Muradu Abdo.
2. Preparation of a draft needs assessment report and to be transmitted to Dr. Muradu Abdo on
29th of November – By Justice Makaramba.
3. Facilitation of duplication of training materials and collection of pending data and documents to
strengthen the needs assessment report
4. Preparation of training materials on administration of commercial justice (paying attention to the
salient features of proposed amendments to the Commercial Code, challenges and opportunities
attended thereto); this involves in developing notes and reference materials – By Dr. Muradu
Abdo.
5. Developing training materials on judge craft, judgment writing and Trainers of Trainees – Justice
Makaramba
6. Provision of summary translations on relevant materials to Justice Makaramba – Dr. Muradu
Abdo
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***
December 10, 2019
The needs assessment team consisting of Justice Makaramba, International Consultant, Dr.
Muradu Abdo, National Consultant and Ms. Maereg G. Gidey, Justice Reform Specialist
observed
The Federal First Instance Court 5th Commercial Bench, Judge Haddis Nekatebeb, presiding.
The team observed the judge entertaining 11 different cases within a span of one hour and half. The
Judged looked confident in handling the cases. He was flexible in accepting some of the request of
the lawyers especially in relation to appointment time. He started the session right at the pointed
time. There was no police officer in the court room providing security. The lawyers and litigants had
their phone rang several times, to which the judge was quite tolerant. The court room was noisy,
sounds coming from the lobby and corridors of the building. It was not suitable to follow up the
exchanges between the Judge and the litigants. There was not system of recording; the Judge was
taking down notes. Many of the cases were adjourned; the adjournments were relatively for a short
period of time. It appeared that the files lacked completeness, some of them missing out translated
documents; verification of whether payment was not made within the time ordered by the Judge. In
one case, the Judge tried to encourage the litigants to reconcile saying that they were family members
and there could be elders within the family, but the parties did not budge. Many of the lawyers who
appeared before the Judge did not bow to the court; their business attire was much to be desired.
The observation confirmed the essential importance of putting procedural rules on the tip of the
fingers of judges and lawyers in the course of court proceedings.
***
C: TNA Questionnaire
Training Needs Assessment (TNA)
Questionnaire
Personal data
1. Full name
(Hon./Ms./Mr.):………………………………………………….………………………………
……
2. Current position:
………………………………………………………………..……….………………………
3.
Institution………………………………………………………………………….………………
………………..
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4.
Country…………………………………………………………………………….……………..
…………………
5. Mobile #……………………………....………. E-mail:
……………………………………..……………………
7. Age group:
30-40 40-50 50-60
8. Education (Please specify)
University:
……………………………………………………….……………………………………………
……….
Faculty:
………………………………………..……………………………………………………………
………….
Degree obtained:
……………………………………………………………………………………………………
9. How many years of working experience?
___________________________ Years __________________ Months
10. Details of training Undergone (last three you attended):
S/N Area of training undergone
Duration of the training
Year Institution which Imparted the training
Effectiveness of the training in Enhancing your competencies
Q.1. What are your current duties and responsibilities?
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Q.2 What are the skills required for your job?
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1. Please indicate your training needs preference (s) in the context of job responsibilities on
a scale of 1‐5 (1‐ least preferred, 5 ‐ Most preferred)
No Topic Scale
1 2 3 4 5
1 The formation or governance of a business or commercial organization and the winding up or bankruptcy of a Commercial or business or commercial organization or corporate person
2 Commercial insurance contracts, including coverage disputes
3 Construction and infrastructure contracts, including tenders
5 Intellectual property rights, including patents, copyrights, and trademarks.
6 Insurance and re-insurance
7 Disputes involving Commercial Arbitration and other settlements awards.
8 Recognition and Enforcement of Foreign Judgments
9 ADR and Court Annexed Mediation
10 Technology development agreements and subscription and investment agreements pertaining to the services industry including outsourcing services and financial services
2. Your suggestion for additional training course to perform your current job completely so
as to bring excellence in your organization
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5.
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3. What training do you think would be relevant to help you achieve proficiency in your
Date ................................................................................
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D: Consultants’ TORs
1. National Consultant
SCOPE OF WORK
COURT ADMINISTRATION EXPERT
Feteh is a two-year activity funded by USAID/Ethiopia to provide flexible, rapid response technical
assistance to the Attorney General’s Office (AGO), relevant sub-committees within the AGO, the
Federal Supreme Court of Ethiopia (FSCE), appropriate committees in Parliament, and/or other
related government ministries in the process of legal and judicial reform. This includes making
grants/sub-contracts to civil society organizations to ensure public input to the proposed changes to
Ethiopia’s legal and judicial framework.
Feteh’s primary objectives are to:
1. Build the capacity of the AGO, its 14-person Council, its legal drafting sub-committees, the FSCE, and other rule of law actors to adopt and implement legal and judicial reform consistent with international human rights norms, with the AGO’s and FSCE’s concurrence and buy-in;
2. Support the ability of civil society organizations (CSOs) and the media to engage the AGO and the legal drafting sub-committees on legal and judicial reforms;
3. Support the appropriate committees in parliament to ensure they garner sufficient capacity and know-how to approve the adoption of the legal reforms; and
4. Support the FSCE to improve Ethiopia’s court management system. Work Plan Reference(s)
This Scope of Work relates to activity 3.2 of Feteh’s proposed Year 1 Work Plan, pursuant to which
Feteh is supporting FSCE efforts to enhance case management by strengthening commercial benches
to speed the processing of commercial cases.
Background Emerging from a history of civil unrest and years of top-down bureaucracy, Ethiopia is now
embarking on reforms to improve its legal enabling environment and increase participation by civil
society and human rights organizations in the implementation of legal and judicial reform. The Feteh
Activity is designed to build the capacity of the AGO, FSCE, and other rule of law actors to adopt
and implement these reforms in conformance with international standards and the aspirations of the
Ethiopian people. Activities will also support CSOs and the media to engage with the AGO and
drafting entities on these reforms, and support parliamentary committees to ensure sufficient
capacity and ability to adopt the reforms.
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One of FSCE President Meaza Ashenafi’s top priorities is to improve case management in
Ethiopia’s courts through targeted efficiency interventions. For this purpose, the FSCE, among
others, intends to strengthen the specialized commercial benches established to exclusively hear and
handle commercial litigations at the Federal First Instance and Federal High Court level, with a view
to speed up the processing of commercial cases.
Assignment Feteh intends to engage a Court Administration Expert to help the FSCE strengthen commercial
benches established at the Federal First Instance and Federal High Court level.
Tasks The Court Administration Expert will perform the following tasks:
• Review the current court structure, administrative systems, and legislative and regulatory acts relating to commercial benches and current practices of handling commercial cases to determine the required assistance;
• Arrange meetings with judges, court administrators and other stakeholders;
• Conduct interviews with commercial bench judges, court administrators and other stakeholders to identify gaps/bottlenecks and determine areas of improvement;
• Conduct observation of the specialized commercial divisions/benches;
• Translate certain documents to facilitate review by the international consultant;
• Prepare an assessment report, with recommendation to strengthen the commercial benches;
• Develop framework and criteria for the selection and training of commercial bench judges;
• Develop technical training-of-trainers (TOT) course and training material/modules for judges who will serve as trainers in the area of commercial law and commercial dispute resolution;
• Provide training to judge selected to sit on commercial benches on specific commercial law areas to be identified through assessment;
• Preparing a final report summarizing results of assignment and suggestions for continued work, in Amharic; and
• Any other related tasks as requested by Feteh’s Chief of Party and/or Deputy Chief of Party during this assignment.
Deliverables The Court Administration Expert will provide the following deliverables:
• Assessment report with recommendations to strengthen commercial benches, in Amharic;
• Framework and criteria for the selection and training of commercial bench judges;
• Technical training-of-trainers (TOT) course/modules and materials;
• At least two TOT sessions for judges selected to sit on commercial benches;
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• Training report of judges selected to sit on commercial benches;
• Final report summarizing results of assignment and suggestions for continued work in Amharic.
Supervision
The Court Administration Expert will be under the supervision of and report to Feteh’s Chief of Party and Deputy Chief of Party during this assignment. Level of Effort
The proposed Level of Effort for this assignment is up to 30 days. The authorized work week is five (5) days per week and eight (8) hours a day.
Task Authorized Work Days Preparation and document review Conducting assessment, meetings and report preparation Preparing guidelines, training courses and training material Conduct two training sessions for commercial bench judges
4 day 10 days 10 days 5 days
Report preparation 1 days Total 30 Days
Location and Period of Assignment
The expert will be based in Addis Ababa, Ethiopia. The estimated period of assignment is _November 6_, 2019 to _January 15_, 2020. Minimum Qualifications
• Advanced law degree
• At least 10 years of experience in teaching, researching and/or reform of commercial law areas.
• Significant experience in preparing training materials and conducting tailored trainings for the judiciary.
• Fluency in written and spoken English.
• Fluency in written and spoken Amharic and English.
2. International Consultant
SCOPE OF WORK
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INTERNATIONAL EXPERT ON STRENGTHENING COMMERCIAL BENCHES OF
ETHIOPIAN FEDERAL COURTS Feteh is a two-year activity funded by the United States Agency for International Development (USAID) to provide flexible, rapid response technical assistance to the Attorney General’s Office (AGO), the FSCE, appropriate committees in Parliament, and other Ethiopian institutions in the process of legal and judicial reform. This assistance includes making grants to civil society organizations (CSOs) to ensure public input to the proposed changes to Ethiopia’s legal and judicial framework. Feteh’s main objectives are to:
5. Build the capacity of the AGO, its Advisory Council and legal drafting working groups, the FSCE, and other rule of law actors to adopt and implement legal and judicial reforms consistent with the needs and aspirations of the Ethiopian people;
6. Support the appropriate committees in Parliament to ensure they garner sufficient capacity and know-how to approve the adoption of the legal reforms;
7. Support the FSCE to improve Ethiopia’s court management system, justice sector transparency and judicial independence; and
8. Support the ability of CSOs and the media to engage the AGO and FSCE on legal and judicial reforms.
Work Plan Reference(s)
This Scope of Work relates to activity 3.2 of Feteh’s Year 1 Work Plan, pursuant to which Feteh is supporting FSCE efforts to enhance case management by strengthening commercial benches to speed up the processing of commercial dispute resolution. Background Emerging from a history of civil unrest and years of top-down bureaucracy, Ethiopia is now embarking on reforms to improve its legal enabling environment and increase participation by civil society and human rights organizations in the implementation of legal and judicial reform. The Feteh Activity is designed to build the capacity of the FSCE, AGO and other rule of law actors to adopt and implement these reforms in compliance with international standards and the aspirations of the Ethiopian people. As part of the national justice reform agenda, the FSCE has identified the revision of various framework laws; including the law on judicial administration and the law on federal courts, regulations on judicial code of conduct and introducing judicial performance standards and evaluation mechanisms as priority areas. In this regard, one of the Chief Justice’s top priorities is to improve case management in Ethiopian courts through targeted efficiency assistance. For this purpose, the FSCE intend to strengthen the specialized commercial benches at the Federal First Instance Court and Federal High Court level with the objective of speeding up the processing of commercial dispute resolution and increase business confidence in the judicial system.
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Assignment To assist with the FSCE in the realization of the above-mentioned objective, Feteh intends to engage an International Expert to strengthen commercial benches established at the Federal First Instance Court and Federal High Court level. Tasks The International Expert will perform the following tasks:
• Review the current court structure, administrative systems, and legislative and regulatory acts relating to commercial benches and current practices of handling commercial cases to determine the required assistance;
• Conduct interviews with commercial bench judges and other stakeholders to identify gaps/bottlenecks and determine areas of improvement;
• Conduct observation of the specialized commercial benches;
• Prepare an assessment report, with recommendations to strengthen the commercial benches;
• Develop framework and criteria for the selection and training of commercial bench judges;
• Develop technical training-of-trainers (TOT) course and training material/modules for judges who will serve as trainers in the area of commercial law and commercial dispute resolution;
• Provide training to judges selected to sit on commercial benches on specific commercial law areas to be identified through assessment;
• Preparing a final report summarizing mission results and suggestions for continued work; and
• Any other related tasks as requested by Feteh’s Chief of Party (COP) and/or Deputy Chief of Party (DCOP) during this assignment.
Deliverables The International Expert will provide the following deliverables:
• Assessment report with recommendations to strengthen commercial benches;
• Framework and criteria for the selection and training of commercial bench judges;
• TOT course/module and materials;
• TOT sessions of judges selected to sit on commercial benches;
• Final report summarizing mission results and suggestions for continued work.
Supervision
The International Expert will be under the supervision of and report to Feteh’s COP and DCOP during this assignment. Level of Effort
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The proposed Level of Effort for this assignment is up to 22 days. The authorized work week is six (6) days per week and eight (8) hours a day. The International Expert is entitled to claim 8 hours of travel time for travel to/from Ethiopia to his home.
Task Authorized Work Days Preparation and document review (remote) Travel to and from Ethiopia Conducting assessment, meetings and report preparation Preparing training courses and training material Conducting training for commercial bench judges
1 day 2 days 7 days 10 days 4 days
Mission report preparation 1 day
Total 25 Days Location and Period of Assignment
The expert will be based in Addis Ababa, Ethiopia. The estimated period of assignment is from November 6, 2019 to January 15, 2020. Minimum Qualifications
• Advanced law degree
• At least 15 years of experience in judicial work including adjudication of commercial disputes.
• Significant experience in preparing training materials and conducting tailored trainings for the judiciary.
• Fluency in written and spoken English.
E: Names of the Assessment Team
1) Mr. Justice (Rtd.) Robert Vincent Makaramba, International Consultant
2) Dr. Muradu Abdo, National Consultant
3) M/s. Maereg G. Gidey, Justice Reform Specialist
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F: List of Interviewees, Interviews and Meetings Held
November 11, 2019
The needs assessment team consisting of Justice Makaramba, International Consultant, Dr. Muradu
Abdo, National Consultant and M/s. Maereg G. Gidey, Justice Reform Specialist held a discussion
with the following individuals:
1) Judge Tesfaye Neway, Vice-President of the Federal First Instance Court
2) Mr. Debebe H/Gebriel, the President of the Ethiopian Lawyers Association
November 12, 2019
3) Judge Berhanmeskel Wagari, President of the Federal High Court -President of the Federal
High Court,
4) Judge Tenagne Tilahnu, Vice-President of the Federal High Court - Vice-President of the
Federal High Court,
5) Judge Teklit Yimsel, Vice-President of the Federal High Court - Vice-President of the
Federal High Court,
6) Judge Tarekegn Amare, Commercial Bench Judge at the FHC,
7) Judge Yaekob Mekuria Commercial Bench Judge at the FHC and
8) Judge Muluken Teshale, Judge and Court Manager at the FHC
9) Judge Haddis Nekatibeb - Federal First Instance Court Commercial Bench Judge
10) Judge Yohannes Afework - Federal First Instance Court Commercial Bench Judge
11) Judge Meka Nesru - Federal First Instance Court Commercial Bench Judge
November 13, 2019
12) Mr. Sintayehu Zeleke, Former commercial bench judge and currently attorney-at-law and
consultant
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13) Mr. Taffesse Yirga, Attorney and Consultant
14) Judge Zelalem Tesfaye - Commercial and Construction Bench Judge of the Federal High
Court (Tor Hailoch)
15) Judge Nekir Sufa - Commercial and Construction Bench Judge of the Federal High Court
(Tor Hailoch)
16) Judge Abera Amare - Commercial and Construction Bench Judge of the Federal High Court
(Tor Hailoch)
17) Judge Yacob Mekuria - Commercial and Construction Bench Judge of the Federal High
Court (Tor Hailoch)
November 14, 2019
18) Ms. Mistir Mohammed, Chief Registrar of the Addis Ababa Chamber of Commerce
Arbitration Institute
November 18, 2019
19) Ms. Hiwot Mamushet, Chief Registrar of the Federal High Court
20) Mr. Solomon Worku, IT Department Director, the Federal High Court
November 19, 2019
21) Mr. Tekalign Kedir, Director, Legal Service Directorate, Ministry of Trade and Industry
November 20, 2019
Members composed of Mr. David de Giles, Chief of Party, Justice Robert V. Makaramba,
International Consultant, Ms. Maereg G. Gidey, Justice Reform Specialist, Court Specialist and Dr.
Muradu Abdo, National Consultant met with:
22) Ms. Rebecca Araya, General Manager of American Chamber of Commerce Ethiopia
November 22, 2019
Members consisting of Mr. David de Giles, Chief of Party, Mr. Mandefrot Belay, Deputy Chief of
Party, Justice Robert V. Makaramba, International Consultant, Ms. Maereg G. Gidey, Justice Reform
Specialist and Dr. Muradu Abdo, National Consultant met with:
23) The Hon. Lady Justice Meaza Ashenafi, Chief Justice of the Federal Supreme Court
The needs assessment team consisting of Justice Makaramba, International Consultant, Dr. Muradu
Abdo, National Consultant and M/s. Maereg G. Gidey, Justice Reform Specialist met with:
24) Mr. Aschalew Assefaw, Legal Advisor to the Director General of the Federal Roads
Authority
November 22, 2019
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Final meeting marking the end of the first leg of the mission held between Justice Makaramba and
Dr. Muradu on tasks to be accomplished.
December 10, 2019
The needs assessment team consisting of Justice Makaramba, International Consultant, Dr. Muradu
Abdo, National Consultant and Ms. Maereg G. Gidey, Justice Reform Specialist conducted an
Observation of Court Proceedings at the Federal First Instance Court before:
25) The Presiding Judge Haddis Nekatibeb
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Framework for the Selection and Appointment of Judges to the Federal Courts’ Commercial Benches
Component 3 (Activity 3.2 - Year 1 Work Plan)
FRAMEWORK
FOR THE SELECTION AND APPOINTMENT
OF JUDGES OF THE FEDERAL COURTS’
COMMERCIAL BENCHES
USAID’S FETEH (JUSTICE) ACTIVITY
IN ETHIOPIA
January 30, 2020
DISCLAIMER
This document was produced for review by the United States Agency for International Development. It was prepared
by Millennium DPI Partners, LLC. The views expressed in this publication do not necessarily reflect the views of the
United States Agency for International Development or the United States Government.
FRAMEWORK FOR THE SELECTION AND
APPOINTMENT OF JUDGES OF THE
FEDERAL COURTS’ COMMERCIAL
BENCHES IN ETHIOPIA
Report Prepared for Millennium DPI, LLC
By
The Hon. Robert Makaramba, (ret.)
Dr. Muradu Abdo
Task Order No. 72066319F00001
Implemented by:
Millennium DPI Partners, LLC
Two Boars Head Place, Suite 130
Charlottesville, Virginia 22903-4678
Project Address:
Intercontinental Addis Building, 6th Floor
P. O. Box 62114
ADDIS ABABA, ETHIOPIA
JANUARY 30, 2020
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FRAMEWORK FOR THE SELECTION AND APPOINTMENT
OF JUDGES OF THE FEDERAL COURTS’ COMMERCIAL
BENCHES
Introduction
The Feteh (Justice) Activity in Ethiopia is a USAID funded activity being implemented by Millennium
DPI Partners. The objective of Feteh is to provide flexible, rapid response technical assistance to the
Federal Supreme Court of Ethiopia (FSCE), the Attorney General’s Office (AGO) and/or other
related government ministries in the process of reform. One of the priorities of the FSCE is to
strengthen the specialized commercial benches established to exclusively hear and handle commercial
litigation at the Federal First Instance and Federal High Court levels, in order to speed up the
processing and resolution of commercial cases. In this regard, Feteh is providing technical assistance
to assess gaps in commercial bench practices and provide an action plan to enable the courts to provide
speedy, reliable, and predictable resolution of commercial cases.
To carry out the assessment and make recommendations, Feteh engaged Judge Robert Vincent
Makaramba, a retired judge of the commercial division of the High Court of Tanzania, and a national
consultant STTA Dr. Muradu Abdo to collaborate with the international consultant.
One of the key findings of the USAID/Ethiopia’s Feteh’s Assessment Report on the Commercial
Benches of the Federal Courts of Ethiopia was the lack of a clear framework with stated criteria for
the selection, appointment and assignment of judges to the Federal Courts’ Commercial Benches. This
report provides a recommended framework for strengthening the criteria used in the process of
selecting and appointing judges to Ethiopia’s Federal Courts’ Commerical Benches.
Background
The terms of reference for the assessment of the Commercial Benches referenced above called for,
among other things, the Feteh International Consultant to recommend criteria for the selection,
appointment and assignment of judges to the Federal Courts’ Commercial Benches. The relevant
recommendations are provided in the Assessment Report and are re-stated here as follows:
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5.1.1 The Federal Supreme Court of Ethiopia (FSCE) should, in exercising its legislative powers of
making directives for the betterment of Judicial administration, issue a Directive to serve as a
Guideline for the selection, appointment and assignment of judges to the Commercial
Benches.
5.1.2 The Directive should state the following as the criteria for the selection, appointment and
assignment of judges to the Commercial Benches:
o Educational background, especially in the commercial law field; with a postgraduate
training in relevant commercial areas being an added advantage
o High standards of moral integrity, diligence and uprightness
o Demonstrated knowledge and skills in commercial matters in prior practice/performance
of not less than three years in relevant legal field, and the ability to understand commercial
issues;
o Performance as a judge (or lawyer), and interpersonal relationship skills with colleagues
and litigants;
o Lawyers working in government departments and private practice, who have
demonstrated capacity to understand commercial and investment issues, including their
policy dimensions, should also be considered for appointment as Judges.
o Capacity demonstrated through written and oral examinations in commercial areas and
in judgment writing. The results of review of prior written judgments, for competence,
completeness and consistency (where these exist) should also be considered.
The Existing Legal Framework for the Selection of Judges in Ethiopia
The legal framework for the appointment of judges of federal courts is found in the Constitution of
the Federal Democratic Republic of Ethiopia (the Constitution). The Constitution establishes
federal courts and provides for the appointment of Federal Judges.1 The Constitution neither specifies
the criteria for the selection of federal judges, nor their minimum qualifications. The criteria for the
selection of “those who qualify for judgeship” are stated in the Federal Judicial Administration
1 See Article 81 sub-articles (1) to (5) of the Constitution of The Federal Democratic Republic of Ethiopia available
at http://www.parliament.am/library/sahmanadrutyunner2019/etovpia.pdf
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Commission Establishment Proclamation, No.24/19962 (the Proclamation). Article 8 of the
Proclamation provides as follows:
“Criteria for Election (sic)(selection) for Judgeship”
I) Any Ethiopian who:
(a) is loyal to the Constitution;
(b) has legal training or acquired adequate legal skill through experience;
(c) has a good reputation for his diligence, sense of justice and good conduct;
(d) consents to assuming judgeship; and
(e) is not under 25 years of age
2) No person may simultaneously assume judgeship while serving in the legislative or executive
branches of government or while a member of any political organization.
The above mentioned criteria apply generally for the selection of “those who qualify for judgeship”
but not specifically for those who will be posted to serve in the Federal Courts’ Commercial Benches.
Furthermore, there is no clearly specified method and procedure for the judges’ selection process.
Under the existing institutional arrangement, the Federal Judicial Administration Commission
(the Commission) is the institution vested with powers and duties in the judges’ selection process.
Under Article 5(1) of the Proclamation, the Commission has powers “to select those who qualify for judgeship
in accordance with Article 8 of this Proclamation from among candidates nominated by members of the Commission”
and “to forward opinion on the list of Regional Supreme and High Court candidate-judges, submitted to it by a Regional
Judicial Administration Commission pursuant to article 81 (4) of the Constitution.”
The method of operation of the Federal Judicial Administration Commission in the judges’
selection process is not provided for in the Proclamation.
We are of the considered view that, the Commission, which is headed by the President of the Federal
Supreme Court, may select from among “candidates nominated by members of the Commission” and from
“the list of Regional Supreme and High Court candidate-judges” and recommend them for appointment to the
Federal Courts’ Commercial Benches.
2 Proclamation to provide for the Federal Judicial Administration Commission available at http://www.fsc.gov.et/content/Negarit%20Gazeta/Gazeta-1988/Proc%20No.%2024-1996%20Federal%20Judicial%20Administration%20Commission.pdf
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The Criteria for the Selection and Appointment of Federal Courts’ Commercial Benches
Judges
Based on the general judges’ selection criteria in the Federal Judicial Administration Commission
Establishment Proclamation, we propose the following to be the criteria for the selection and
appointment of Judges of the Federal Courts’ Commercial Benches:
1. Educational background
• Relevant legal training or acquisition of adequate legal skill through experience in the
commercial law field. An undergraduate law degree from a recognized University should be
the minimum entry qualification. A postgraduate degree in Business Law from a recognized
University would be an added advantage.
2. High standards of moral integrity
• A good reputation for his/her diligence, sense of justice and good conduct.
3. Prior demonstrated knowledge and skill in commercial matters (we propose should be of not less
than three years).
4. Interpersonal skills, i.e., should demonstrate the ability to work with others, and, for those having
served as a judge, respect for all lawyers and litigants.
5. Demonstrated capacity to understand and appreciate complex commercial matters/issues.
6. Prior good performance as a Judge, or private or public attorney.
7. Mastery of the language of the court (Amharic). A good command of English would be an added
advantage.
The Selection Process: Mode of Operation
• The FSC should issue a Directive which will serve as a Guideline on how the recommended
criteria should be incorporated into the selection process.
• The Directive should include the method of administering the written and oral examination
in commercial areas and in judgment writing, to persons selected for appointment to the
Federal Courts Commercial Benches.
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• Judgeship positions should be publicly advertised and prospective candidates should apply for
such positions. Only shortlisted candidates should appear for the written test and oral
interview.
• The advertisement should encourage female candidates to apply. The selection process should
be competitive and based on merits.
• The written examination, oral interviews and judgment writing should be administered and
supervised by the Federal Judicial Administration Commission. Prospective candidates
should produce a recent sample of written work.
• Based on their application of specialized knowledge and the value of training that appointees
may receive, they should be willing to serve on the Commercial Benches for an indefinite
period, without being considered for transfer to other benches.
• The performance of judges of the Federal Courts Commercial Benches should be subjected
to annual evaluation.
The Honorable Justice Robert V. Makaramba (Retired)
29th January 2020
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USAID’S FETEH (JUSTICE) ACTIVITY IN ETHIOPIA Intercontinental Addis Building, 7th Floor P. O. Box 62114 Phone: +251 11 588 382 Addis Ababa, Ethiopia