International Arbitration 2021 Comparisons

Arbitration is fast growing in Senegal as an alternative to judicial methods of dispute resolution. There is a trend for Senegalese businesses to choose arbitration to settle their disputes rather than resorting to the national courts.

The principal advantages of arbitration are the freedom parties enjoy to appoint arbitrators and the short time it takes to get an award in comparison with the state justice system where cases can be pending for more than five years. The main disadvantages of arbitration consist of the high costs of proceedings and the tendency of lawyers representing the parties to deal with arbitration cases as they do with judicial proceedings, ie, the judiciarisation of arbitration.

The COVID-19 pandemic has had a great impact on court proceedings, which have been either delayed or suspended for the most part. Due to the absence of electronic means to handle judicial proceedings, business parties are more likely to resort to the domestic arbitration system which offers online means to conduct proceedings.

In most commercial as well as investment contracts, arbitration is provided for as a means to resolve potential disputes. The rationale behind this practice is that, for such parties, arbitration can better facilitate the efficient settlement of their dispute by experts. Therefore, arbitration is often provided for in merger and acquisition agreements in a number of industries, as well as in commercial contracts, in the construction and energy sectors, among others.

Most arbitration proceedings in Senegal are institutional and domestic. In 1998, Senegal created the Arbitration and Mediation Centre at the Dakar Chamber of Commerce. The Rules of the Centre are mandatory for domestic arbitration. International arbitration clauses generally refer to the International Court of Arbitration of the International Chamber of Commerce (ICC) or the Common Court of Justice and Arbitration (CCJA). The latter is the predominant arbitration institution in the OHADA zone. OHADA is the French acronym for the Organisation for the Harmonisation of Business Law in Africa which is a treaty to which 17 West and Central francophone African countries are parties. As Senegal is a member of OHADA, the CCJA Rules apply to arbitration proceedings if the parties so choose. Regarding investment arbitration, it is worth mentioning that Senegal ratified the 1965 Washington Treaty establishing the International Centre for the Settlement of Investment Disputes (ICSID).

As a matter of cardinal principle, the national courts are compelled to relinquish competence to a tribunal in the face of an arbitration clause in a contract. However, the courts can grant provisional relief measures in support of arbitration before the tribunal is constituted on condition that these measures are deemed of paramount importance to protect vital interests related to the dispute. The measures can be kept in force, modified or even terminated by the tribunal when it is in place.

There are internal and international sources of law governing arbitration in Senegal.

The internal sources of arbitration law in Senegal are comprised of the following legal instruments:

• the OHADA Uniform Act on Arbitration, which was revised on 23 November 2017, derives from a 1993 international treaty in force in the 17 countries of OHADA, including Senegal. Article 35 provides that the Uniform Act on Arbitration is considered to be the national law of arbitration of each member state;
• Arbitration Law No 98-30 of 14 April 1998 ("Arbitration Law") defines the specificities of arbitration in Senegal, in accordance with the principles set forth in the OHADA Uniform Act on Arbitration; and
• Decree No 98-492, which replaces Articles 795 to 820 of the Code of Civil Procedure.

Both the Senegalese law on arbitration as well as the OHADA Uniform Act on Arbitration are largely inspired by the UNCITRAL Model Law.

The sources of the rules of international arbitration in Senegal are constituted by:

• the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards;        
• the 1965 Washington International Convention on the Settlement of Investment Disputes, which created the International Centre for the Settlement of Investment Disputes (ICSID); and
• the Hague Convention for the Pacific Settlement of International Disputes, which established the Permanent Court of Arbitration (PCA).

There have been no significant changes to national law in the last year.

Under Senegalese as well as OHADA laws, arbitration agreements must be in writing.

There are two forms of arbitration agreements:

• one that is included in a commercial contract, either directly or by reference (la clause compromissoire); and
• one that is drafted and agreed between the parties after the dispute has arisen (le compromis).

Both forms are enforceable as long as the parties have expressly accepted to be bound by them.

According to the Arbitration Act, disputes arising out of commercial matters can be arbitrated, as well as claims relating to rights that the parties may dispose of. Only the courts may decide whether a matter may be submitted to arbitration. It is worth noting that lack of arbitrability is a matter of jurisdiction rather than of admissibility.

Since Senegal is an arbitration-friendly jurisdiction, the courts generally enforce valid arbitration agreements and strictly interpret clauses limiting arbitrability.

As a matter of legal principle, the arbitration agreement is independent of the main contract in which it is contained. As a result, the validity of the arbitration clause is not affected by the nullity of the main contract and is assessed against the common will of the parties, without any reference to state law being necessary.              

The parties always have the option, by mutual agreement, to resort to arbitration, even when proceedings have already been initiated before a state court.       

The mission of arbitrator can only be entrusted to a natural person.       

According to the parties’ choice, the arbitral tribunal shall consist of either one or three arbitrators. In the absence of an agreement between the parties, the arbitral tribunal shall consist of a sole arbitrator. The arbitrators are appointed, dismissed or replaced in accordance with the agreement of the parties.

Where the parties have provided for the appointment of two arbitrators, notwithstanding the provisions of Article 5 paragraph 2 of the Uniform Act, the arbitral tribunal will be completed by a third arbitrator chosen by mutual agreement of the parties. In the absence of agreement, the arbitral tribunal will be completed by the appointed arbitrators or, in the absence of agreement between them, by the competent court in the state party.The same will apply in the event of an appointment made due to the challenge, incapacity, death, resignation or removal of an arbitrator.       

In any event, the parties’ freedom to choose the member(s) of the tribunal is only limited by the requirement that the arbitrator(s) be independent and impartial, as well as possessing the necessary expertise to settle the dispute.

If the parties fail to agree on the appointment procedure or if their contractual stipulations are insufficient:       

• in the case of a tribunal composed of three arbitrators, each party appoints one arbitrator and the two arbitrators so appointed select the third arbitrator; if a party fails to appoint an arbitrator within 30 days of receipt of a request from the other party to do so, or if the two arbitrators fail to agree on the selection of the third arbitrator within 30 days from the date of their appointment, the appointment will be made, at the request of any party, by the competent court or court in the state party; or       
• in the case of arbitration by a sole arbitrator, if the parties are unable to agree on the choice of arbitrator, the arbitrator will be appointed by the competent court in the state party at the request of any party.

The decision regarding the appointment of an arbitrator by the competent court will be made within 15 days of the date of referral, unless the law of the state party provides for a shorter period of time.This decision is not subject to appeal.       

As noted in 1.5 National Courts, the court will intervene in the granting of provisional relief measures, as well as in the selection of arbitrators, in the event that a party, arbitrator or arbitral institution fails to appoint an arbitrator.

In the event of a dispute, and if the parties have not settled the challenge procedure, the competent court in the state party will rule on the challenge within a period of 30 days at the latest, after hearing the parties and the arbitrator or after having duly called them. If the competent court fails to rule within the above-mentioned time limit, it will be deprived of jurisdiction and the challenge may be brought before the Common Court of Justice and Arbitration by the most diligent party.       

The decision of the competent court to reject the request for challenge will be subject to appeal only to the CCJA.       

Any ground for challenge must be raised within a period not exceeding 30 days from the discovery of the fact that gave rise to the challenge by the party intending to invoke it.       

The challenge of an arbitrator will only be allowed for reasons revealed after the arbitrator's appointment. These reasons may consist of justifiable doubts as to the independence or impartiality of an arbitrator or to the arbitrator's lack of required expertise to handle the case.

When an arbitrator's mandate is terminated or when they leave the arbitration proceedings for any other reason, a replacement arbitrator will be appointed in accordance with the rules applicable to the appointment of the replaced arbitrator, unless otherwise agreed by the parties. The same applies where the mandate is revoked by agreement of the parties and in any other case where the mandate is terminated.

The main and compelling requirements are that arbitrators must be impartial and independent as provided in Article 6 paragraph 2 of the Arbitration Uniform Act. In addition, Article 7 paragraph 2 of the same act requires that any prospective arbitrator must inform the parties of any circumstance likely to create in their minds a legitimate doubt as to the arbitrator's independence and impartiality, and the arbitrator may only accept the mission with their unanimous and written agreement.

The arbitrator undertakes to continue the mission until the end, unless they can justify an impediment or a legitimate cause of abstention or resignation. The arbitrator must have the full exercise of their civil rights and remain independent and impartial towards the parties. From the date of their appointment and throughout the arbitration proceedings, the arbitrator must promptly notify the parties if such circumstances arise.

As stated previously, only the courts may decide whether a matter may be submitted to arbitration.

Arbitrators can decide on their own jurisdiction. Not only does the competence-competence principle apply in Senegal, but Senegalese courts also have no control whatsoever over the arbitral tribunal’s jurisdiction throughout the arbitration proceedings. Arbitral tribunals may thus rule on their own jurisdiction in the event a party raises jurisdictional or admissibility objections, including any objection with respect to the existence or validity of the arbitration agreement.

Jurisdictional or admissibility objections should in principle be raised no later than with the first written submission of the objecting party.

Under the circumstances specified above, a court may intervene to grant interim measures, in both ad hoc and institutional arbitration. The Uniform Act on Arbitration as well as the Rules of the CCJA confirm this assertion.

While the Arbitration Act does not provide a time limit for challenges, jurisdictional objections should be made as early and promptly as possible. If the opposing party participates in the court proceedings by filing a defence, then their right to arbitration is deemed totally waived. A plea that an arbitral tribunal lacks jurisdiction must be raised before any defence on the merits, unless the facts on which it is based have subsequently come to light.       

An arbitral tribunal may rule on its own jurisdiction in the award on the merits or in a partial award subject to annulment.

Where a dispute which is the subject of arbitration proceedings under an arbitration agreement is brought before a state court, the latter will, if one of the parties so requests, declare that it has no jurisdiction. If the arbitral tribunal is not yet constituted or if no request for arbitration has been made, the state court will equally declare that it has no jurisdiction, unless the arbitration agreement is obviously null and void, or manifestly inapplicable to the case. In this case, the competent court will decide on its jurisdiction as a last resort within a maximum period of 15 days. Such a decision can only be appealed to the CCJA under the conditions provided for in its Rules of Procedure. In any event, the state court may not raise its own jurisdictional issues.       

In the absence of an arbitration agreement, an arbitral tribunal will in principle not assume jurisdiction over third parties.

Consistent with the generally accepted legal doctrine, the extension of an arbitration agreement to non-signatories is possible under very stringent conditions, such as consent by conduct, assignment of contract, subrogation or legal succession of parties.

An arbitral tribunal may, at the request of either party, order interim or conservatory measures, provided these measures are deemed necessary to the settlement of the dispute. However, a tribunal cannot issue attachment orders which remain under the jurisdiction of the domestic courts.

Despite the existence of an arbitration agreement, parties can seek relief for interim or conservatory measures pending the constitution of a tribunal. These measures must be deemed necessary for the efficient resolution of the dispute. Emergency arbitration is not provided for in the Arbitration Act.

Provided that they are justified under the circumstances of the case, both the tribunal and the courts may order security for costs at the request of the opposing party or by the tribunal on its own motion.

The parties to the arbitration procedure have the freedom to choose the rules of procedure. Their freedom is only limited by the requirements of a fair trial and the respect of due process. In the absence of a determination of the rules of procedure by the parties, the tribunal may apply the procedural rules it considers appropriate, subject to respect for the cardinal principles of fair trial and due process.

As indicated in 7.1 Governing Rules, the only procedural steps required relate to a fair trial as well as due process, as provided for by the Senegalese Code of Civil Procedure.

Arbitrators must be, and remain, impartial and independent throughout the proceedings and ensure a fair trial and due process. The IBA Guidelines on Conflicts of Interest in International Arbitration are now used more and more as best practice.

Parties have complete discretion as to whom they choose as their legal representative, provided that the arbitral tribunal and the opposing parties are given due notice.

The arbitral tribunal may invite the parties to provide explanations of fact and to present to the tribunal, by any legally admissible means, the evidence that it considers necessary for the resolution of the dispute. The arbitral tribunal may not include in its decision any pleas, explanations or documents put forward or produced by the parties unless they have been given the opportunity to discuss them in adversarial proceedings. The tribunal may not base its decision on pleas in law that it has raised ex officio without first inviting the parties to present their observations.       

If the assistance of the judicial authorities is necessary for the taking of evidence, the arbitral tribunal may, of its own motion or upon request, seek the assistance of the competent court or tribunal in the state party. A party that knowingly refrains from invoking an irregularity without delay and proceeds with the arbitration will be deemed to have waived its right to invoke it. The arbitral tribunal also has the power to decide any incident of verification of documents or forgery, unless the parties agree otherwise.

The IBA Rules on the Taking of Evidence are generally followed in international arbitration cases as best practice.

As a civil law country, Senegal does not use discovery in domestic proceedings. However, in support of their respective positions, parties are allowed to produce documents and other evidence within a limited timeframe. The production of evidence will be conducted by the arbitral tribunal based on the standard legal principles of equal treatment of parties, transparent exchange of evidence, fair hearings, etc.

The arbitral tribunal will limit the nature and form of evidence to be produced by the parties according to what is relevant to the dispute at hand. Documents beyond the scope of disclosure include documents exchanged between a lawyer and their client, documents relating to ongoing negotiations, and documents that parties have agreed not to use in the proceedings. These will be considered as subject to privilege. In a case where parties mediate before arbitrating, the parties are not allowed to produce in the arbitration proceedings points of negotiation that were used in the mediation proceedings, unless all parties consent to do so.

Neither the Senegal Arbitration Act nor the Arbitration Rules of the Dakar Arbitration and Mediation Centre ("Dakar Centre Rules") address electronically stored information. However, Article 34 of Law No 2008-10 dated 25 January 2008, relating to electronic commerce, confirms the admissibility of electronically stored information.

Since the Senegal as well as the OHADA Uniform Act on Arbitration are both inspired by the UNCITRAL Model Law, an arbitral tribunal or a party, with the tribunal’s permission, may request assistance in taking evidence from the appropriate court and that court may execute the request according to its rules of procedure.

Article 9 of the Dakar Centre's rules reaffirms the overriding principle that arbitration is confidential. Therefore, hearings are not public and arbitrators may not disclose to third parties anything concerning the arbitration proceedings. The arbitral award should not be made public without the consent of the parties. Given the confidential nature of the arbitration proceedings, all information submitted or exhibited during the arbitration is protected, including trade secrets and other confidential information.

The arbitral award must be made in accordance with the procedure and form agreed upon by the parties. In the absence of such an agreement, the award will be made by a majority vote when the tribunal is composed of three arbitrators. If the parties reach an agreement during the arbitration proceedings, they may request the arbitral tribunal to record this agreement in the form of an award made by agreement of the parties. This award will have the same status and effect as any other award ending the dispute.

In addition to the operative part, the arbitral award must contain:       

• the full name(s) of the arbitrator(s) who made the award;       
• its date;       
• the seat of the arbitral tribunal;       
• the full names of the parties and their domicile or registered office;       
• where applicable, the full names of counsel or any person who has represented or assisted the parties represented; and       
• a statement of the respective claims of the parties, of their pleas and of the stages of the proceedings.

The arbitral award must state the reasons on which the award is based. If the arbitral tribunal has been empowered by the parties to decide as amiable compositeur, this shall be mentioned in the award.

At the request of a party, arbitrators may award damages (payment to compensate the harm suffered) in cases of gross negligence or gross misconduct, if gross negligence or gross misconduct has been established. The arbitrators may award interest as well as compound interest. The principle interest follows facts applies.

The Dakar Centre’s Rules prescribe that the costs of arbitration are to be apportioned between parties to the dispute. In their submissions, parties can request that the costs of arbitration be borne by the unsuccessful party. When awarding the costs of arbitration, the tribunal takes into account various elements including, but not limited to, the administrative costs of the institution managing the arbitration, the institution’s fees and any other expenses paid by the institution on behalf of the parties to the dispute. In addition, costs may include the costs for legal representation of the successful party. But this latter element should be requested during the submissions of the parties, and the tribunal will determine whether the amount of the successful party’s legal fees is reasonable.

An arbitral award is not subject to opposition, appeal or cassation. It may, however, be the subject of an action for annulment, which must be brought before the competent court in the state party. However, the parties may agree to waive recourse to annulment of the arbitral award provided that it is not contrary to international public policy. The decision of the competent court in the state party on the annulment will only be subject to a recourse for cassation before the CCJA. The arbitral award may be challenged by any person before the court of the state party which would have had jurisdiction in the absence of arbitration, where the award infringes on this person's rights.       

The award may also be the subject of an application for revision before the arbitral tribunal on the ground of discovery of a fact which is of such a nature as to have a decisive influence on the settlement of the dispute and which, before the award was made, was unknown to the arbitral tribunal and to the party requesting the revision. When the arbitral tribunal can no longer be convened, the application for revision will be brought before the court of the state party which would have had jurisdiction in the absence of an arbitration.

Timeframe

An action for annulment is admissible as soon as the award is rendered. It will cease to be admissible if it is not lodged with the exequatur within one month of the service of the award.       

The competent court must rule within three months of the date of referral to it. If the said court does not give a ruling within this time limit, it is deprived of jurisdiction and the appeal may be brought before the CCJA within the following 15 days. The latter must rule within a maximum of six months from the date of referral.

In this case, the time limits provided by the Rules of Procedure of the CCJA will be reduced by half.       

Reasons to Set Aside

An action for annulment will be admissible only if:       

• the arbitral tribunal has ruled without an arbitration agreement or on an invalid or expired agreement;       
• the arbitral tribunal was improperly composed or the sole arbitrator improperly appointed;       
• the arbitral tribunal has ruled without complying with the terms of reference given to it;       
• the principle of adversarial proceedings has not been respected;       
• the arbitral award is contrary to international public policy; and/or       
• the arbitral award is devoid of any motivation.

Unless the arbitral tribunal has ordered the provisional execution of the award, the exercise of the annulment appeal suspends the execution of the arbitral award until the competent court in the state party or the CCJA, as the case may be, has rendered its decision.

The parties may agree to waive recourse to annulment of the arbitral award provided that the award is not contrary to international public policy.

As indicated previously, Senegal is an arbitration-friendly country. Therefore, unless it has been established that the facts of the case are contrary to international public policy, or made in breach of the principle of fair delivery of justice, the Senegalese courts will consider that the findings of fact and law of the arbitral tribunal should be upheld.

Senegal has signed and ratified the 1958 New York Convention, which the local courts apply.

An arbitral award shall be enforceable only by virtue of an enforcement order (exequatur) issued by the competent court in the state party. The recognition and enforcement of the arbitral award requires the party invoking it to establish the existence of the arbitral award. This is established by the production of the original award and the arbitration agreement or copies of such documents which meet the requirements of authenticity.       If these documents are not written in the official language(s) of the state party, the requesting party must produce a translation certified by a translator who is registered on the list of experts established by the competent courts.       

Recognition and enforcement will be refused if the award is manifestly contrary to international public order. The state court to which an application for recognition or enforcement is made will give its decision within a period of time not exceeding 15 days from the date of the application, which shall not exceed 15 days from the date of referral. If at the expiry of this period, the court has not rendered its order, the exequatur is deemed to have been granted.

The grounds to refuse to grant enforcement are strictly limited and narrowly interpreted by the local courts including the notion of public policy.

The court decision that refuses the exequatur is subject only to appeal before the CCJA. The decision granting the exequatur is not subject to appeal. However, an appeal to set aside the award shall, within the limits of the jurisdiction of the state party, automatically entail an appeal against the decision granting the enforcement. The rejection of the appeal to set aside will automatically entail the validity of the arbitral award as well as that of the decision having granted the exequatur.       

Arbitral awards rendered on the basis of rules other than those provided in the Uniform Act will be recognised in the contracting states, under the conditions provided for by any applicable international convention or under the same conditions as those provided by the Uniform Act.

Senegalese law does not address the question of class action in arbitration.

Lawyers are bound by the ethical codes of the bar association to which they belong. The International Bar Association has published guidelines for lawyers participating in international arbitration proceedings. Arbitral institutions generally provide guidelines regarding ethical standards in their arbitration rules. The Senegalese Bar Association also has rules of procedure that apply to all its members.

Senegalese law does not address the delicate question of third-party funding in arbitration.

The Senegalese Arbitration Law does not address the question of separate arbitration proceedings.

As a matter of legal principle, arbitration agreements are only binding on the parties to the agreement. As a general rule, an arbitral award has res judicata solely between the parties to the proceedings, and does not have any binding effect over third parties. See 5.7 Third Parties for limited exceptions to the general rule.