Given the stifling impact litigation can have on business, as Ethiopia opens up and becomes an increasingly attractive investment market, it is important to handle commercial disputes in an efficient, win-win manner where possible, say Addisu Hailegebriel and Arega Fentahun.
“Going to the courts or tribunals is a last resort,” said Hailegebriel, co-founder and deputy managing partner at DABLO Law Firm LLP in Ethiopia. “Lawsuits are costly and have a significant bearing on businesses and their operations. They carry legal and financial risk, and litigation should be avoided until you’ve exhausted the available avenues for alternative dispute resolution.”
A pioneering firm that has grown rapidly following revolutionary changes to legal practice in Ethiopia in 2021, DABLO Law Firm LLP has developed a very strong, robust commercial disputes practice. It’s led by Fentahun, a former public prosecutor and lawyer at the Ethiopian Customs Commission and the FDRE Trade Competition and Consumer Protection Authority.
Fentahun and Hailegebriel pointed out that arbitration was a preferred means of resolving disputes for multinational companies operating or investing in Ethiopia, even before the recent economic liberalisation and opening up of key sectors.
“From our observation, foreign investors and multinationals tend to trust international arbitration instead of regular courts for many reasons,” Hailegebriel commented. “This includes predictability and quality of judgements, the speed of the process, and a high regard for the ability to enforce contracts and arbitral awards overseas and in cross-border situations.”
Fentahun and Hailegebriel note that the Nairobi Centre for International Arbitration has not yet become a popular forum for resolving Ethiopian disputes, unlike the Paris and London centres. This could shift in future, though, with the potential of greater intra-African investment, such as Kenyan or Egyptian banks looking to engage with Ethiopia’s liberalised banking sector.
Locally, the construction sector and several government institutions are among those which commonly choose alternative dispute resolution (ADR) mechanisms such as arbitration to resolve disputes, explained Fentahun. “In future, I think the use of ADR mechanisms will grow because the economy is growing fast, and our government is also promoting ADR through its proclamations,” he added.
While Fentahun and his litigation and dispute resolution team are experienced at appearing before tribunals and courts, he and Hailegebriel say prevention of disputes is DABLO’s preferred way of rendering legal advice. This includes drafting contracts well, closing loopholes, ensuring transactions are compliant with relevant law and regulations, and that clients are aware of any risk concerns.
“Even if a dispute cannot be prevented, then what we put in the terms and conditions of the contract can help us come to a positive conclusion,” Hailegebriel highlighted. “When disputes arise, DABLO will exert its expertise to try to come up with a win-win arrangement, to try to resolve the matter through settlement or negotiation, even after a case is referred to court.”
DABLO has strong international networks through its membership in Alliott Global Alliance, an elite coalition of 220 leading law and accounting firms in some 100 countries, and the firm’s members expect the global trend towards alternative dispute resolution measures such as arbitration and mediation to become even more cemented in future.