CAJAC: potential new rules for arbitration proceedings between Africa and China

Establishment of CAJAC

Growing trade and investment between China and Africa are just some of the factors that led to the establishment of the Chinese Africa Joint Arbitration Centre (CAJAC) in 2015. Other factors include the diversity of individual legal systems across African countries and the need for neutral and cost-effective mechanisms for resolving commercial disputes between African and Chinese parties.

Members of the CAJAC include the Arbitration Foundation of Southern Africa (AFSA), Shanghai International Arbitration Centre, Beijing International Arbitration Centre, Shenzhen Court of International Arbitration, Nairobi International Arbitration Centre and the Organization for the Harmonization of Business Law in Africa. Reflecting its membership, the CAJAC has the mandate and jurisdiction to administer alternative resolution mechanisms for international trade and commercial disputes arising between China and other African countries, specifically along the African Belt and Road and in the formation of a BRICS countries (Brazil, Russia, India, China and South Africa) arbitral mechanism.

Importantly, the establishment of CAJAC is a departure from the standard African framework adopted for international arbitration, which is based on European and western practices and precedents similar to those of the United Nations Commission on International Trade Law (UNCITRAL) (on which China’s international arbitration legislation is not based).

Potential Changes to CAJAC Rules

In 2021 and 2022, there had been talks on significant reforms to China’s arbitration laws, which include, among others, reforms relating to:

1. foreign arbitral institutions permitted to conduct foreign-related arbitration business in mainland China;
2. arbitration agreements and the kompetenz-kompetenz doctrine that proposes a departure from the requirement that an arbitration agreement contain the essential elements of (a) an intention to arbitrate, (b) matters that are subject to arbitration, and (c) a designated arbitration commission. The proposal only requires the element of an intention to arbitrate in order to validate an arbitration agreement;
3. tribunals empowered to grant interim relief, including Chinese courts, arbitral tribunals and emergency arbitrators;
4. grounds for setting-aside and non-enforcement of arbitral awards whereby the proposed amendment will unify the grounds for setting aside domestic awards and foreign-related awards; and
5. Ad hoc arbitration in that Ad hoc arbitration proceedings will now be permitted for foreign-related commercial disputes.

If adopted, these reforms are expected to impact current CAJAC rules and promote the establishment of new rules that will bridge the gap between China and Africa and support the adoption of an exclusive dispute resolution mechanism, such as CAJAC, between China and the African continent.

Conclusion

The success of CAJAC and the vision it encompasses cannot be understated. It has laid the foundation for much needed discussions among BRICS (Brazil, Russia, India, China and South Africa) countries on the arbitrational mechanisms currently in use and the need for reforming them given the admission of Egypt, Ethiopia, Iran and the United Arab Emirates to BRICS, and the growing need for a uniform dispute resolution mechanism to serve the member states.