Arbitration by Addis Abeba Chamber

In a dispute with the Amhara Water Resources Bureau, Nib asked the Court to reject AACCSA’s arbitrator role.

A civil litigation between Nib Insurance Company and two other companies pulled in the Addis Abeba Chamber of Commerce and Sectoral Association (ACCSA) into a dispute. Related to its former case with the companies but in a separate suit, Nib lodged a petition against the Chamber on September 18, 2014.

Nib Insurance was involved in the case as a performance guarantor, up to 2.3 million Br, for a construction contract the Amhara Water Resources Bureau gave to Yabnol Construction plc. There is a pending case which the Water Resources Bureau filed with Yabnol as first and Nib as second defendants. The order of the court was for the parties to settle their dispute amicably and appointed them for November 4, 2014.

The Amhara Bureau asked the Addis Abeba Chamber of Commerce & Sectoral Associations (AACCSA) to serve as arbitrator. Nib Insurance, which did not like that, lodged a petition against the Chamber on September 18, 2014, challenging its role as the arbitrator and the way it calculated the fee that it would be paid for its role. Nib argued that the cover it provided was only for 2.3 million Br, but AACCSA made its calculations based on a much higher number of 11.2 million Br.

Nib claimed that the arbitration clause of the disputing parties provided that in case of disagreement, an arbitrator elected by both parties should reconcile the dispute between the plaintiff and the guarantor; and the other party should agree in writing if only one of them selects an arbitrator.

However, the Chamber set aside the objection of Nib Insurance and wrote a letter to it on July 7, 2014, stating that it did not accept the insurer’s argument and asked that it come up with a statement of defense for the claim instituted against it.

Nib has asked the court to order AACCSA’s arbitrator role void as its interference in the case is improper while the issue is still pending in court. Moreover, it asked the court to declare the Chamber’s arbitrator role illegal noting that as one of the parties, the plaintiff, is an administrative office and the law prohibits the case to be seen by arbitration, raising Article 315 of the civil procedure code, which states that a case involving a government administrative office should not be adjudicated by arbitration. In addition, the insurance company argued that the elected arbitrators did not fulfill the educational requirement stated under the arbitration clause.

Lideta Federal High Court, which entertained the petition, had appointed the applicant, Nib and ACCSA for a hearing of the petition on February 6, 2015 but it adjourned it again to March 3, 2015 due to the judges’ trip to the Great Ethiopian Renaissance Dam (GERD).


Published on March 02, 2015 [ Vol 15 ,No 774]



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