Sierra Leone adopts New York Convention on enforcement of international arbitration awards


One of the most attractive features of international arbitration, as a dispute resolution mechanism, is that the awards issued by arbitrators are subject to a highly supportive, global system of enforcement, unlike court judgments. This allows a party to take their arbitration award to the courts of a country where the debtor has assets or business interests, secure a judgment from the courts and use the court's powers to secure payment.

The New York Convention, published in 1958, sets out a straightforward process for enforcement of international awards, and provides for only narrow grounds on which enforcement may be refused. Those grounds do not include a review of the merits of the case. This gives arbitrators' decisions a high degree of finality and prevents undue interference from local courts, which might well be the debtor's home court.

The New York Convention is so effective because of the incredible level of acceptance it has achieved around the world. 166 governments have ratified the convention, including the latest, Sierra Leone, whose ratification comes into force on 26 January 2021. This means that there remain only a small number of countries in the world where an international arbitration award cannot be enforced under the supportive New York convention regime.

The wide adoption of the Convention is partly because it is often recognised as a factor which makes a jurisdiction a more attractive and reliable place to do business and to invest. 

Sierra Leone's recent ratification of the Convention was not entirely unqualified: it will only apply to agreements to arbitrate in commercial matters which are made after the ratification comes into force.

There now remain only 11 African countries which have not ratified the New York Convention: Namibia, Gambia, Chad, Somalia, South Sudan, Malawi, Eritrea, Republic of the Congo, Guinea-Bissau, Eswatini and Equatorial Guinea.

As ever, most potential investors in Africa remain concerned about the balance between bankability and risk. However, in assessing the risks, most investors will consider what remedies are available to them and how likely it is that they could enforce their rights, if driven to do so. Sierra Leone's move will boost the perception of potential investors in that regard.

Howard Kennedy has long experience working on African projects and disputes. Contact us for advice on your deals, and for support to resolve disagreements.

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"We in Sierra Leone cannot afford to wait any longer." Honourable Chief Justice of Sierra Leone speaking on the NY Convention in 2018.

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