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Joint China-South Africa arbitration centre set up to resolve commercial disputes

A new arbitration centre will open in Johannesburg specifically to resolve commercial disputes between Chinese and African parties.02 Sep 2015

The China-Africa Joint Arbitration Centre (CAJAC) will be led by Michael Kuper, the current chair of the Arbitration Foundation of South Africa (AFSA), according to Global Arbitration Review (GAR). Kuper told the industry publication that the new centre would be ready to accept cases from October.

CAJAC is a joint initiative of AFSA; its international arm, Africa ADR; the Association of Arbitrators of Southern Africa and the Shanghai International Trade Arbitration Centre (SHIAC). It also has the support of the China Law Society, which intends to promote the new centre as “the approved forum for the resolution of commercial disputes between China and Africa”.

A ‘consensus’ agreement, signed by 37 legal and arbitral organisations based in both China and South Africa, commits CAJAC to opening a centre in Shanghai as well as Johannesburg, according to an announcement by the China Law Society.

China is now one of the largest sources of investment into Africa, as well as one of South Africa’s main trading partners. However, there is currently no specialised forum for handling China-Africa disputes. According to GAR, Chinese contractors traditionally insist on the use of China-based arbitral institutions for dispute resolution, such as the China International Economic and Trade Arbitration Commission (CIETAC).

Last month, China’s finance ministry announced that it was to set up an “infrastructure-focused” trust fund which would offer “strong support to African countries”, to be hosted by the World Bank. The ministry, World Bank and China Development Bank are also setting up an ‘Investing in Africa Think Tank Alliance’ which aims to support industrialisation on the continent.

Speaking at the launch event, South Africa deputy justice minister John Jeffery said that the two countries had “forged a unique partnership” since publishing formal plans in 2010.

“In view of increasing trade and investment a joint dispute resolution mechanism will be advantageous,” he said.

The government of South Africa is currently preparing an International Arbitration Bill which will, among other things, incorporate the United Nations Commission on International Trade Law (UNCITRAL) Model Law into South Africa’s international arbitration regime. The legislation will be introduced to the South African parliament during its 2015 session, and should be finalised early next year, Jeffery said.

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