usaid's feteh (justice) activity in ethiopia, quarterly

Proprietary Information: Use or disclosure of data contained on this sheet Page i is subject to the restriction on the title page of this document.

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

Page i

TABLE OF CONTENTS

TABLE OF CONTENTS ........................................................................................................................... i

LIST OF ACRONYMS ............................................................................................................................... ii

ABOUT THE ACTIVITY ......................................................................................................................... 1

EXECUTIVE SUMMARY......................................................................................................................... 2

PROGRAMMATIC CONTEXT............................................................................................................... 5

QUARTER ACTIVITIES AND RESULTS ............................................................................................ 6

COMPONENT 1 ....................................................................................................................................... 6

COMPONENT 2 ..................................................................................................................................... 18

COMPONENT 3 ..................................................................................................................................... 22

Windows of Opportunity Activity ..................................................................................................... 34

CHALLENGES AND RESPONSES ..................................................................................................... 35

LESSONS LEARNED ............................................................................................................................. 36

PLANNED ACTIVITIES FOR THE NEXT QUARTER.................................................................. 37

COMPONENT 1 ..................................................................................................................................... 37

COMPONENT 2 ..................................................................................................................................... 37

COMPONENT 3 ..................................................................................................................................... 38

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


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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


Page 17

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


Page 20

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

share experiences. USAID’s Democracy and Governance Office Deputy Chief, Corinne Rothblum,

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


Page 24

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.


Page 27

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


Page 28

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


Page 29

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


Page 31

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


Page 32

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.


Page 33

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.


Page 34

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.


Page 35

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.


Page 36

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.


Page 37

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.


Page 38

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.


Page 39

ANNEX A. FINANCIAL MANAGEMENT

USAID Rule of Law Feteh ActivityTask Order: 72066319F00001February 14, 2019 - December 31, 2019

Line Item Balance

7=1-6

Personnel 1,019,688$ 252,500.87$ 36,879.72$ 40,137.99$ 36,695.87$ 366,214.45$ 653,473.18$

Fringe Benefits & Allowance 545,995 133,981.57 42,629.01 13,768.15 12,854.43 203,233.16 342,761.47

Travel 82,592 64,737.38 998.75 2,450.50 3,134.28 71,320.91 11,270.85

Equipment 99,587 170,705.54 1,101.52 1,279.47 - 173,086.53 (73,499.95)

Supplies 19,392 9,717.88 1,721.91 189.01 1,725.41 13,354.21 6,037.79

Contractual 1,077,769 243,609.15 53,479.76 78,897.50 20,862.69 396,849.10 680,920.01

Other Direct Costs 340,909 140,217.16 19,559.35 14,915.73 9,612.22 184,304.46 156,604.77

Total Direct Costs 3,185,931 1,015,469.55 156,370.02 151,638.35 84,884.90 1,408,362.82 1,777,568.11

Indirect Costs 573,468 127,949.16 19,702.62 19,106.44 10,695.49 177,453.71 396,013.86

Subtotal Contract Cost 3,759,399 1,143,418.71 176,072.64 170,744.79 95,580.39 1,585,816.53 2,173,581.97

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.


Page 42


Annual Target3

Q2 FY19

Q3 FY19

Q4 FY19

Q1 FY20


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.


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Annual Target3

Q2 FY19

Q3 FY19

Q4 FY19

Q1 FY20


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


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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.


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


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

NOVEMBER 2019

Millennium DPI Partners Consulting, LLC – Feteh (Justice) Activity in Ethiopia

Task Order Contract 72066319F00001

3

CONTENTS

I. ACKNOWLEDGEMENTS 3

II. LIST OF ABBREVIATIONS 4

III. INTRODUCTION 5

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.


• 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 Practices, Guidelines, Cases, Instructions, Communication, etc.)

14

4. HUMAN RESOURCES

AGO’s CJAD must address the lack of well-trained specialized staff. To improve the quality of its

personnel, a merit-based hiring process should be instituted. Criteria, which should be published,

should focus on education, professional experience, and language proficiency, which is needed to

contract and negotiate with foreign parties. This report recommends developing specialized staff for

selected fields of the law, supplemented by on-the-job training and regular performance evaluations.

The CJAD also needs to organize its staff internally in terms of specialization, and establish

mechanisms that promote staff coordination with other public institutions.

5. ACTIONS TO ENSURE COMPLIANCE AND SUSTAINABILITY

The following actions need to be taken as soon as possible:

1) AGO’s mandate with respect to civil and commercial matters should be revisited and clearly

defined; its mandate should be limited to selected civil and commercial matters of significant

Figure 2.- Participants at the Bishoftu Workshop

15

importance to the public. The Council of Ministers needs to issue regulations that further

articulate the AGO’s authority over civil matters, with clear guidelines on the relationship

between the AGO and other public institutions, clarifying those areas where the AGO has

authority.

2) Protocols that govern the working relationship between the AGO and other federal

government institutions must be adopted. The protocol can take the form of a regulation

adopted by the Council of Ministers that outlines requirements for government institutions to

seek the AGO’s assistance and involvement in commercial transactions and arbitration, the

manner and time of the request, the mode and time of response by the AGO, the legal weight

of the AGO’s advice for the institutions (i.e. whether it is binding), etc. The AGO’s internal

directives, manuals, or rules on its mandate must be effectively communicated and brought

to the attention of government institutions.

3) AGO’s internal guidelines should be clarified and communicated to its staff and other

government institutions to ensure a more efficient and legally correct process in the

negotiation, drafting and review of civil and commercial contracts. It is reported that some

government institutions are unaware that such guidelines for international contracts exist.

These guidelines would also assist the AGO staff carry out its role of drafting and reviewing

contracts or providing other legal services under the AGO’s civil law mandates. Standardizing

payment conditions and certifying the quality and effectiveness of arbitration clauses are

some of the areas where clear guidelines from the AGO are needed.

4) Building the capacity of the AGO in a manner commensurate with its mandate. The AGO

is constrained by the lack of staff who are trained to handle civil and commercial law matters.

It is understaffed and overwhelmed by a heavy workload and the complexity of the issues it

is required to handle. The CJAD is also under-resourced, and lacks the capacity to formulate

effective budget requests. These constraints have affected the quality of AGO services and its

standing in the eyes of government institutions. The AGO’s lack of expertise to competently

represent the government in international arbitration is a case in point. There should be a

commission drawn from the AGO and the heads of legal services in other government

institutions, which meets monthly to improve coordination on civil and commercial matters.

5) The AGO’s Registry should be launched as soon as possible.

6) AGO public outreach should start as soon as possible. A public relations officer or specialist

should be considered as part of the reorganization of the office.

7) The AGO should disseminate copies of the proposed draft manual for drafting, reviewing

and negotiating contracts and managing disputes to other government entities for comment

and input.

8) Overcoming the negative perception of the AGO due to the AGO’s crackdown on alleged

corruption in government institutions. There should be a clear distinction between the civil

and criminal law mandates of the AGO in order to facilitate compliance with the mandates of

the Proclamation and to reinforce trust in the CJAD as an advisor rather than as a prosecutor

for crimes.

16

9) AGO needs to adopt an evaluation and review system in order to ensure compliance with

its responsibilities, the staff performance and the achievement of its goals regarding civil

justice.

17

VI. ANNEXES

ANNEX I: LIST OF INTERVIEWEES

N Name Institutional

affiliation Position

Contact

Telephone E-mail

1 Mesker

Tariku

Attorney General’s

Office (AGO)

Civil Justice

Administration

Directorate

Director

+251911 570003 [email protected]

2 Henok

Tesfaye AGO

Deputy

Director, Civil

Justice Adm.

Directorate


3 Solomon

Emiru

Prime Minister’s

Office (PMO)

Legal Services

Director +251 914- 701889 [email protected]

4 Abinet

Zerfu PMO

Legal

Operations

Gen. Director

[email protected]

5 Tesfahun

Bekana PMO Legal Expert

[email protected]

7

Yohannes

W. Gebriel

Addis Ababa

Chamber of Com.

and Sectoral Ass.

Arbitration

Institute

(AACCSA AI)

Director +251911 132490 [email protected]

8 Bamlak

Alemayehu

Ministry of Mines

and Petroleum

Acting Legal

Services

Director


9 Bochu

Sintayehu Ministry of Finance

Legal Services

Director +251912 607284

10

Haregewoin

Kebede

Former Director of

the Ethiopian

Arbitration and

Conciliation Center

being reestablished

as Ethiopian

Mediation and

Conciliation Center

Board Chair

+251911 219822

11 Michael

Teshome

Affiliated to

Ethiopian

Mediation and

Conciliation Center

under formation

Private

Attorney +251919 320475

[email protected]

m

mailto:[email protected]

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18

11 Yoseph

Shiferaw

Ministry of

Education

Legal Services

Director +251911 474033

[email protected]

13

Tsewaye

Muluneh

Public Property

Procurement and

Disposal Service

(PPPDS)

Director

General

+251939 858724

[email protected]

14 Abeba

Alemayehu PPPDS

Legal Service

Deputy

Director

+251911 607724

15 Natan Otoro PPPDS Legal Expert +251984 660312 [email protected]

16 Solomon

Fantahun PPPDS

Contract

drafting expert +251939 460655 [email protected]

17 Mahlet

Mamo PPPDS

Contract


18 Getahun

Tufa PPPDS

Contract


19 Solomon

Fantahun PPPDS

Contract


20 Worku

Gezahegn PPPDS

Procurement

Director +251 962 190977 [email protected]

21 Omar

Ahmed

Ethiopian Roads

Authority

Legal Service


22 Merkineh

Yigezu

Ethiopian Electric

Power

Legal Services


23 Reta Melese

Ethiopian Business

Trading

Corporation

(EBTC)

Acting Legal

Services

Director


24 Belay

Mekonnen EBTC

Oilseeds and

Pulses Export

Marketing

Director


m

25 Rebecca

Araya

American Chamber

of Commerce

Ethiopia

General

Manager +251936 641014 [email protected]

26 Addis

Barega

Ethiopian

Investment

Commission

Senior Legal

Advisor-

Independent

Contractor

+251911 487286

[email protected]

28 Abebe G.

Hiwot Ministry of Finance

Public Private

Partnership

Contract

Director

+251944 705811

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19

ANNEX 2: QUESTIONNAIRE AND CHECK LIST

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.


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

3

I. PRESENTATIONS

1. INTRODUCTION TO INTERNATIONAL CONTRACTS

4

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

5

Vinos de España

Quesos de Francia

Why

?

6

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)

7

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

24

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

8

Confirms the terms & conditions of the

agreement (rights & obligations)

stability, transparency)

Confirms the object of agreement

Confirms the parties agreement (predictability, Benefits

Ultimate Goal: Maximized Performance- Minimize Risk

Purpose Contract = Management Tool Where does the Contract fit in the Procurement Process?

(Client & Contractor)

Internal Clearances, Negotiation and Award of Contract

Need Identification/Recognition (Check availability of funds, Sourcing,

preparation of bidding

Procurement Preparation documents/solicitation documents)

(Publication of Notices, Issuance of Solicitation Documents)

Starting Bidding Process

(Bids/Proposals received)

3 UNITED NATIONS CONFERENCE FOR INTERNATIONAL TRADE LAW (UNCITRAL)

10

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

11

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

12

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


• « 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


• 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

13

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.

14

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 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

15

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

16

2. NEGOTIATION SKILLS

17

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

18

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”

19

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

20

« 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?

24

Step 2:

Know Exactly

What They Want

The Negotiation

Process

Step 1:

Know Exactly

What You Want

Triangle Talk

Step 3:

21

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.

22

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


#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

23


#4 Connecting with People

LISTENING!!! Be courteous

Investing in people intentionally


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!


#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


#6 Inventing

• Generate a range of alternative solutions

• Draft and proffer possible agreements that are favorable to both sides


#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


#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

24


#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


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?

25


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


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?

26


If I…

• Don’t want to be around people • Neglect to listen • Don’t offer people help • Ignore people • Am indifferent…


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

27

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,


BATNA

• Best Alternative To a Negotiated Agreement • Defined as the “if the wheels fall off the cart” plan; that is, if


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


RISK TAKING


COMMITMENT

With commitment, it is easier to make an amicable deal.

How?

• Communicate your position point by point

• Obtain commitments on each point


EXPERTISE

Establish expertise with:

3rd party experts

Documentation

How?

Be humble

28

and


INVESTMENT

Invest in the asset you are negotiating. How?

• Acquire knowledge • Commit team resources • Spend money


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


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.”


SILENCE

Can be powerful because it may:

• Keep them talking • Help you learn motives • Help you gain information

knowledge

How?

• Probe and hush

29

ry


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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Where do we meet and why?

• Your office • Neutral place • Lessor’s office • Lessee’s office • Country Club • Favorite Restaurant


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?


Factors to Consider

“He/She who controls the agenda, controls the meeting.”

What is/are the goal(s) for the meeting?


Prepare the Room

• Coffee • Pens • Paper • WiFi • Technology needs


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


LOW- BALLING/ANCHORING


POWER OF PRINT


TIME: LAST MINUTE


GOOD GUY/BAD GUY


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MY MANAGEMENT


LEAVING MONEY ON THE TABLE


FAIT ACCOMPLI


APPEAR UNREASONABLE


CLARIFICATION OF POSITION


LISTING THE PROS AND CONS


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THE POWER OF GUILT


STRAW TIGER ISSUES


RED HERRING


SUMMARIES OF FACTS, STATEMENTS,

AND AGREEMENTS


RECESSES AND ADJOURNMENTS


CHANGING NEGOTIATORS IN MID-DEAL


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CONCILIATORY MOVES

CONCESSIONS

SPICE AND DRAMA


THREATS – ULTIMATUMS AND

INTIMIDATION


BLUFFS


WALKOUTS – DO NOTHING


LEAVING GRACEFULLY IF NO DEAL: BATNA


NEGATIVE SALESMANSHIP


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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


IT’S TOO COMPLICATED – LET’S MAKE IT SIMPLE


• Alternative of Choice Close • Left at the Altar • Making Balloon Futures • Calling in a Higher Authority • Crunch Time • Bring in the Dancer


• Huntley and Brinkley

• Turning Soviet

• Roaring Brains

• Needs vs. Wants Matrix


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?

40

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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Drafting International Contracts: Key legal elements


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

• Inspection of the goods

• Conditions precedent (import and/or export licenses)

• Conditions precedent (supply chain security)

• 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


• 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 multilateral trade agreement (NAFTA, KORUS,

US/Colombia)


• 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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• 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)


• 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


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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• 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



INTRODUCTION TO INTERNATIONAL ARBITRATION


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

53

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

54

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

• Arbitrability • Mitsubishi Motors Corp v Soler Chrysler-Plymouth (USA 1985)

Article II: Writing Requirement

• 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

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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.

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Validity…cont’d

• Draft Arbitration Law: Art. 6: Non-arbitrable disputes: • family issues: marriage, adoption, succession, guardianship,

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


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)


• 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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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.


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!


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


• 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.


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.


• 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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• 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


• 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


• 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

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AGO’S Civil Justice Directorate Protocol for International Contracts

Dr. Jesús Bores, International Expert Ato. Yazachew Belew, Local Expert

AGO’s Practicalities


Expert

International Arbitration, Challenges and Opportunities


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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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

3. PRESENTATION OF CONCLUSIONS

• Minutes delivered by e-mail / written copy to [email protected] and [email protected]

• Group presentation – 5 minutes each



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


Expert

PRACTICAL EXERCISE ON DRAFTING AN ARBITRATION CLAUSE

• PRESENTATION OF CLAUSES • COMMENTS • CONCLUSIONS

71

8. VALIDATION OF PROPOSALS TO THE AGO’S CIVIL JUSTICE ADMINISTRATION DIRECTORATE

72





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

73

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

3. PRESENTATION OF CONCLUSIONS

Minutes delivered by e-mail / written copy to [email protected] and [email protected]

Group presentation – 5 minutes each

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



Expert

74

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.

75

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


• 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


• 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

Practices, Guidelines, Cases, Instructions, Communication, etc.)

76

3. Manual and Contracts Review Process

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


• 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

77

1. PRESENTATION 2. PRELIMINARY VERSION TO BE REVIEWED AND COMPLETED 3. DEVELOPMENT OF MODEL CLAUSES AND INSTRUCTIONS

FOLLOW UP AND OTHER NEEDS


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


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

USAID Contract AID-117-TO-17-00001 Millennium DPI Partners USAID’s Open Justice Project in Moldova, Best Practices for Justice Sector Reforms October 30, 2019

Page i

Table of Contents

ACRONYMS/ABBREVIATIONS..................................................................................... iv

FOREWORD ...................................................................................................................... v

ACKNOWLEDGEMENTS .............................................................................................. vii

EXECUTIVE SUMMARY ............................................................................................... viii

CHAPTER ONE .................................................................................................................1

PRELIMINARY MATTERS ...............................................................................................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


Page ii

3.8. Accelerated Procedures....................................................................................... 28

3.9. Use of Alternative Dispute Resolution Mechanisms ......................................... 29

3.10. Interaction with the Public ............................................................................... 29

3.11. Court Leadership and Management................................................................ 29

3.12. Availability of Court Decisions......................................................................... 30

3.13. The Training of Judges and Other Court Personnel ..................................... 30

3.14. Relationship between the Bar and the Bench (Courts) ................................ 32

3.15. Judges Welfare, Wellness and Work Incentives ............................................ 34

3.16. Case Assignment and Benchmarks ................................................................. 34

3.17. Enforcement of Court Decisions/Orders ........................................................ 34

CHAPTER FOUR ............................................................................................................ 36

GOOD PRACTICES IN COMMERCIAL DISPUTE RESOLUTION ......................... 36

4.1. The Case Studies of Tanzania, Uganda and Ghana .......................................... 36

4.2. Good Practices and Lessons Learned ................................................................. 42

CHAPTER FIVE .............................................................................................................. 44

ASSESSMENT THEMES, KEY FINDINGS AND RECOMMENDATIONS .............. 44

5.1. Introduction........................................................................................................... 44

5.2. Key Findings and Recommendations .................................................................. 44

5.3. CONCLUSION ..................................................................................................... 53

Appendices ...................................................................................................................... 55

A: The Open-ended Interview Questions .................................................................... 55

B. Proceedings of Interviews and Meetings with informants ..................................... 58

C: TNA Questionnaire ................................................................................................... 86

D: Consultants’ TORs ..................................................................................................... 91

E: Names of the Assessment Team .............................................................................. 96


Page iii

F: List of Interviewees, Interviews and Meetings Held ............................................... 97


Page iv

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


Page v

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,

getting electricity, registering property, getting credit, protecting minority investors, paying taxes,

trading across borders, enforcing contracts, and resolving insolvency. The Reports also measure

aspects of employing workers and contracting with the government (public procurement), which are

not included in the ranking.

Of particular importance for the justice systems are the indicators for enforcing contracts, which

measure the time and cost to resolve a commercial dispute and the quality of judicial processes for

men and women, and resolving insolvency; time, cost, outcome, and recovery rate for a commercial

insolvency and the strength of the legal framework for insolvency. In compiling the Doing Business

reports, the World Bank study team examines the civil procedure code, for example, to check the

maximum number of adjournments in a commercial court dispute, and reads the insolvency code to

identify if the debtor can initiate liquidation or reorganization proceedings.

An effective and efficient justice system is essential for sustained economic growth. In a well-

functioning, independent, and efficient justice system, decisions are taken within a reasonable time

and are predictably and effectively enforced, and individual rights, including property rights, are

adequately protected. Among other objectives, the efficiency of the judicial system is important for

creating a good business climate, attracting foreign direct investment, securing tax revenues, and

supporting economic growth.

The Federal Democratic Republic of Ethiopia has embarked on serious economic reforms. In a

Policy document titled A Homegrown Economic Reform Agenda: A Pathway to Prosperity [Office of the

Prime Minister, September, 2019], among the rationales for an economic reform agenda is the need

to upgrade the policy and institutional framework to take the success already registered by the

country to the next level. This includes the need for institutions to be efficient and transparent to

support the modern economy Ethiopia is aspiring to build. Earlier, the Office of the Prime Minister

issued another Policy document titled Improving Ease of Doing Business: Medium-Term Reform Roadmap

1 Doing Business 2020 - Comparing Business Regulation in 190 Economies - available at

https://openknowledge.worldbank.org/bitstream/handle/10986/32436/9781464814402.pdf

https://openknowledge.worldbank.org/bitstream/handle/10986/32436/9781464814402.pdf


Page vi

[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.


Page vii

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


Page viii

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


Page ix

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.


Page x

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.


Page xi

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.


1

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.


2

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


3

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


4

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;


5

• 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.


6

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


7

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-

1997/Proc%20No.%20454-2005%20Federal%20Courts%20Proclamation%20Reamendment%20.pdf

http://www.fsc.gov.et/content/Negarit%20Gazeta/Gazeta-1997/Proc%20No.%20454-2005%20Federal%20Courts%20Proclamation%20Reamendment%20.pdf

http://www.fsc.gov.et/content/Negarit%20Gazeta/Gazeta-1997/Proc%20No.%20454-2005%20Federal%20Courts%20Proclamation%20Reamendment%20.pdf


8

“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-

african-law/article/disputed-constitutionality-of-the-precedential-practice-of-thefederal-supreme-court-and-its-implications-for-

oromia-familylaw-the-case-of-bigamousCC793BDC

https://www.cambridge.org/core/journals/journal-of-african-law/article/disputed-constitutionality-of-the-precedential-practice-of-thefederal-supreme-court-and-its-implications-for-oromia-familylaw-the-case-of-bigamousCC793BDC




9

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


10

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:

http://dx.doi.org/10.4314/mlr.v11i1.10

http://www.ajol.info/index.php/mlr/index

http://dx.doi.org/10.4314/mlr.v11i1.10


11

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

https://www.scirp.org/(S(lz5mqp453edsnp55rrgjct55))/journal/paperinformation.aspx?paperid=67483

https://www.scirp.org/(S(lz5mqp453edsnp55rrgjct55))/journal/paperinformation.aspx?paperid=67483

http://dx.doi.org/10.4236/blr.2016.72015


12

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.


13

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


14

(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


15

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


16

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

http://www.nbe.gov.et/pdf/directives/insurancebusiness/1.pdf

http://www.eaglelook.com/ethiopia/tax/stamp-duty

http://www.mot.gov.et/documents/27281/0/procN0+980-2016+Commercial+Registration+and+business+Licensing+proclaimation.pdf/e42ae582-169d-4eb4-aefc-e5732841f7a4;jsessionid=651FF6B14FD18F0D0CA604478091AB55?version=1.0

http://www.scribd.com/doc/40960837/Income-Tax-Regulation-No-78-2002

http://www.eaglelook.com/ethiopia/tax/stamp-duty

http://www.ifrc.org/docs/idrl/983EN.pdf

http://www.addischamber.com/file/BUSINESSSUPPORT/20131119/Reg%20No.%2079-2002%20Council%20of%20Ministers%20Value%20Added%20Tax.pdf


17

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

http://www.FSCE.gov.et/content/Negarit%20Gazeta/Gazeta-1988/Proc%20No.%2025-

1996%20Federal%20Courts.pdf

.

http://www.fsc.gov.et/content/Negarit%20Gazeta/Gazeta-1988/Proc%20No.%2025-1996%20Federal%20Courts.pdf



18

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.


19

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


20

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.


21

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 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.


22

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.


23

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 @

http://www.FSCE.gov.et/content/Negarit%20Gazeta/Gazeta-1988/Proc%20No.%2025-

1996%20Federal%20Courts.pdf

25 Statement by the Chief Justice the Hon. Lady Justice Ms. Meaza Ashenafi on the 22nd November, 2019 when

being briefed on the Project by the USAID Feteh (Justice) Activity in Ethiopia Team and the Consultants.




24

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.


25

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



26

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.


27

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


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


28

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.


29

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.


30

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


31

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


32

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


33

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.


34

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:


35

“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


36

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

visited on 1/27/2020.

http://digitalcommons.pepperdine.edu/jbel/vol2/iss2/3

https://www.venice.coe.int/SACJF/2010_08_RSA_Johannesburg/Uganda.pdf

https://www.doingbusiness.org/content/dam/doingBusiness/media/Annual-Reports/English/DB09-FullReport.pdf


37

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

decided commercial cases.

https://iliacle.org/opening-of-the-commercial-court-in-lesotho/

https://iliacle.org/opening-of-the-commercial-court-in-lesotho/

https://www.comcourt.go.tz/comcourt/


38

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).


39

“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).


40

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

“Constitutional Commercial Court (practice) Directions 1996” (now Statutory Instrument

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.

52 Ibid.

https://judiciary.go.ug/data/smenu/17/Commercial%20Court%20Division.html


41

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

understandings (including “industry-specific learnings”) court personnel.55

The President of Ghana’s Commercial Court is selected from the most senior judges by the Chief

Justice. That experience is valuable, as the President will be the primary problem solver in

maintaining and managing the court’s administration. In the structure of the Judiciary, the

Commercial Court has the status of a regional unit of the Judicial Service. A Judge from the Court

53 Website of the Standing International Forum of Commercial Courts, Ghana page. Available at

https://www.sifocc.org/countries/ghana/ . Last visited on 1/27/2020.

54 Ibid.

55 Ibid.

https://www.sifocc.org/countries/ghana/


42

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

Resolution (ADR) particularly Court-Annexed Mediation:

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.


43

• 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.


44

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.


45

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.


46

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.


47

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?


48

• 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).

• Negotiable instruments (promissory notes, cheques etc.)

• 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.


50

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


57

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?


58

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


63

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


64

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.


65

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


66

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.


67

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-


68

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


69

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.


70

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



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.


71

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.


72

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


73

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



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.


74

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.


75

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



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.


76

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



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.


77

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 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


78

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.


79

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



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



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


80

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.


81

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:


82

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


83

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



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


84

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.


85

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


86

***

December 10, 2019



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………………………………………………………………………….………………

………………..


87

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

Level of satisfaction*

1

2

3

* ‘A’ Highly satisfactory ‘B’‐Satisfactory ‘C’‐Unsatisfactory

JOB ANALYSIS

Q.1. What are your current duties and responsibilities?


88

………………………………………………………………………………………………………

…………………

……

………………………………………………………………………………………………………

………..…

………………………………………………………………………………………………………

…………………

………………………………………………………………………………………………………

…………….……

………………………………………………………………………………………………………

………………..….

………………………………………………………………………………………………………

……………..……

………………………………………………………………………………………………………

…………….…

Q.2 What are the skills required for your job?

………………………………………………………………………………………………………

…………………

……

………………………………………………………………………………………………………

………….

………………………………………………………………………………………………………

………………..…

………………………………………………………………………………………………………

………………...…

………………………………………………………………………………………………………

………………..…

………………………………………………………………………………………………………

……………….…

………………………………………………………………………………………………………

……………...……


89

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

1.

………………………………………………………………………………………………………

………………...

2.

………………………………………………………………………………………………………

……………..….

3.

………………………………………………………………………………………………………

……….……….

4.

………………………………………………………………………………………………………

……………….


90

5.

………………………………………………………………………………………………………

...………..…….

3. What training do you think would be relevant to help you achieve proficiency in your

future role?

1.

………………………………………………………………………………………………………

……………..….

2.

………………………………………………………………………………………………………

………….…….

3.

………………………………………………………………………………………………………

……….……….

4.

………………………………………………………………………………………………………

…….………….

5.

………………………………………………………………………………………………………

…….………….

4. Appropriate time for training

………………………………………………………………………………………………………

…………….…….

………………………………………………………………………………………………………

……………….….

………………………………………………………………………………………………………

………….……….

Sign ................................................................................

Date ................................................................................


91

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.


92

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


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


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


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


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


Page | 1

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

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

http://www.fsc.gov.et/content/Negarit%20Gazeta/Gazeta-1988/Proc%20No.%2024-1996%20Federal%20Judicial%20Administration%20Commission.pdf

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.


Page | 5

• 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