Angola Accedes to Arbitration Treaty

On the 12 August 2016, Angola became the 34th African country and the 157th contracting state party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the "New York Convention"). 

What is the New York Convention?

The New York Convention is the fundamental treaty in international arbitration.  It provides common and universal legislative standards for the recognition of arbitration agreements and court recognition and enforcement of international arbitral awards.

One of the key provisions of the New York Convention imposes a general obligation on contracting states to recognise arbitral awards issued in another contracting state. In practice, this ensures that an arbitration award (unlike national court judgments) can be easily enforced around the world.  It also requires the national courts of contracting states to refer disputes to arbitration where a valid arbitration agreement exists between the parties. 

Why is this important?

As Angola is heavily oil-dependent, it has been severely affected by the recent slump in commodity prices. As a result, Angola's government is taking steps to encourage diversification in its economy. As with many countries, becoming a signatory to the New York Convention sends a strong message to foreign investors that Angola is open to investment and has the legal and political structures in place to allow those investments to be protected.  Angola's accession to the New York Convention is one of a number of steps that the country is taking to make it more attractive to foreign investors, include passing a new investment law last year, which allowed for the referral of private investment contracts to arbitration in Angola.

Angola's accession is also another indication of the growing importance – globally and across Africa in particular – of international arbitration as the dispute resolution method of choice for commercial disputes. Some of its advantages as compared to the traditional court route include:

1. The ability for parties to tailor certain aspects of the arbitration to their needs – in particular, parties can choose:


a) their Tribunal - typically, for large international and investment disputes, the Tribunal will consist of three members, with each party having an opportunity to select its own arbitrator and the Chair being selected by the parties' nominated arbitrators or an independent arbitral institution. In most cases, parties will choose institutional rules to govern the arbitration procedure, and there is an increasing number of arbitral institutions both inside and outside Africa for parties to choose from.

b) the seat of the arbitration (which determines the applicable procedural law), which enables them to select a neutral jurisdiction to stop either side from having a "home ground" advantage. 

Beyond the practical implications for the parties, this flexibility gives parties greater autonomy and control over the dispute resolution process, which may lead to a more time-efficient and less costly procedure. 

2. The ability for parties to ensure that the existence of any arbitration and the award given by the tribunal will be confidential.  This provides for a level of privacy that can be particularly attractive for disputes involving sensitive commercial information or other concerns. 

3. The global enforcement mechanism offered by the New York Convention allows the recipient of an arbitral award to enforce that award in almost any country around the world, subject only to limited grounds of challenge – now including Angola.

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