An arbitration clause usable in a contract with a partner from French speaking Africa answers five questions without needing interpretation: which institution or appointment mechanism, which seat, which language, how many arbitrators, and which law on the merits. Two further stipulations make the difference in practice, extension of the six month arbitration period the Uniform Act lays down, and, where the counterparty is public, an express and specific waiver of immunity from execution. Those seven decisions take an hour at signature. They decide recovery ten years later.
The standard contract of a French exporter carries a three line dispute resolution clause, drafted at the end of the negotiation, often copied from an earlier contract concerning another country. It provides for arbitration, sometimes for a prior amicable attempt, and refers to the law of the customer’s country. It says neither where, nor before whom, nor under what rules. On the day of the dispute that clause saves no time, it costs time, and that time is paid for in interest that never ran and assets that moved.
This page sets out the seven decisions the clause must settle, in the order in which they arise, and what remains possible when the contract is already signed with a defective clause.
1. What the clause decides, and for how long
An arbitration clause does not merely organise a method of dispute resolution. It determines the law of the procedure, the court that will hear any challenge to the award, the speed with which the tribunal is constituted, the cost of the proceedings and, indirectly, the value of the title obtained in the countries where the debtor holds assets. It takes effect for the whole life of the contract and well beyond, since disputes often surface after the relationship has ended.
Its robustness is moreover remarkable. The arbitration agreement is independent of the main contract and its validity is not affected by the nullity of that contract (Uniform Act on Arbitration, article 4). A national court seised of a dispute it covers must decline jurisdiction (article 13). And where the counterparty is a legal person governed by public law, it cannot contest the arbitrability of the dispute or the validity of the clause by invoking its own law (article 2). In other words, the clause will hold: it still has to say something.
The first decision is to choose between the two systems OHADA organises, general law arbitration governed by the Uniform Act and arbitration administered by the Common Court of Justice and Arbitration. Everything else follows from it.
2. Institution or ad hoc arbitration
Designating an institution settles in one line what the clause would otherwise have to provide itself: appointment of the arbitrators, their replacement on challenge or incapacity, the timetable, the fee scale and the secretariat of the proceedings. Designating none means the clause must organise those mechanisms, which it almost never does, and therefore sends the parties to the supporting judge of the State of the seat at the first difficulty.
In the OHADA area, the Common Court of Justice and Arbitration is the natural choice where the contract is performed in the area, and it becomes almost obvious where the counterparty is a public entity. The International Chamber of Commerce and the regional centres remain defensible options, in particular where the contract carries international financing that imposes its own standard.
Ad hoc arbitration under the Uniform Act keeps its place on modest amounts and between experienced parties, provided the clause names an appointing authority. That is the only configuration in which the absence of an institution does not cost several months.
3. The seat, which is not the hearing venue
The seat is the legal connection of the proceedings. It determines the law applicable to the procedure and the court competent to hear an application to set aside, and it in no way requires hearings to be held there, a point the clause may usefully state to avoid misunderstanding.
Fixing the seat in a member State triggers application of the Uniform Act (article 1) and entrusts annulment to the competent court of that State, with its own timelines and practices. Fixing the seat in Paris places the arbitration under the French regime, where review is confined to the five complaints of article 1520 of the code of civil procedure and where failure to give reasons is not a ground of annulment. Both choices are defensible, but one of them must be made.
That negotiation is less difficult than imagined when it is presented as a technical question and not as distrust of the courts of the customer’s country. A neutral seat, in a third State with an established arbitration practice, is often the easiest compromise to obtain.
One drafting point avoids many misunderstandings with a client who fears travel. The seat being a legal connection and not a physical place, the clause may expressly state that hearings will be held at the place the tribunal determines after consulting the parties, including by video link, without affecting the seat. That sentence, which costs one line, defuses the budget objection almost always raised against a distant seat, and deprives the opponent of a delaying argument based on travel costs.
4. The law applicable to the merits
The law applicable to the merits is a stipulation distinct from the law of the arbitration, and contracts regularly confuse the two. OHADA business law presents a real advantage here for an exporter: it is unified, written and predictable on commercial sale, security interests and companies, and it is identical in the seventeen member States. Choosing it is not a commercial concession, it is often the safest solution for a contract performed in the area.
The wording deserves care. A clause designating the law of a member State without stating whether the reference includes the uniform acts opens a pointless debate, when those acts form an integral part of that law. A clause designating French law for a contract performed in Douala creates, conversely, a gap between the law of the contract and the law of the security actually taken on site, a gap that will be paid for when the security is enforced.
A word on the international sale of goods. Where both parties are established in States party to the Vienna Convention, it applies automatically unless expressly excluded, and the clause must say whether it intends to exclude it. That point is settled in one sentence and avoids months of argument about conformity and notification periods.
5. The arbitrators, their number and their appointment
A three member tribunal costs more, takes longer and secures technical or high value cases better. A sole arbitrator suits supply contracts of limited value, provided the clause states who appoints in the absence of agreement. A clause silent on that point sends the claimant to the supporting judge of the State of the seat, which adds several months before the first hearing.
Drafting gains from providing a switching threshold, a sole arbitrator below a specified amount in dispute and three arbitrators above, with the institution as appointing authority in both cases. That mechanism avoids the classic debate in which a party demands three arbitrators for the sole purpose of increasing cost and discouraging its opponent.
The qualities required of the arbitrators can also be stipulated. Imposing a precise technical competence, a working language or experience of the area narrows the pool and can backfire, but a reasonable requirement, for instance command of legal French, avoids later difficulties in an arbitration whose documents are mostly French.
6. Language, time limit and confidentiality
The language of the arbitration is stipulated, failing which it is argued. In a French African contract French is usually the obvious choice, but Anglo Saxon financing, technical annexes in English and an English speaking expert are enough to open the debate. A clause that fixes the language of the proceedings and allows documents to be produced in their original language without systematic translation saves tens of thousands of euros on a technical case.
The time limit is the most distinctive point of OHADA law. The Uniform Act sets it at six months from acceptance by the last arbitrator, extendable by agreement of the parties or by decision of the competent judge (article 12). That period is shorter than international practice, and extensions are therefore the rule. Providing in the clause that they will result from a written agreement of counsel avoids having to apply to a court for what everyone wants, and deprives the loser of an annulment argument based on the overrun.
Confidentiality, finally, is not so presumed as to dispense with stipulating it. Its scope gains from covering the submissions, the documents, the expert reports and the award itself. One reservation should be known to the client: that confidentiality does not survive post award litigation intact, since both the application to set aside and the enforcement procedure take place before national courts whose publicity follows their own law.
7. Waiver of immunity from execution
Where the counterparty is a State, a local authority, a public body or a national company, a further stipulation is required. It characterises the contract and the operations it provides for as acts of a commercial nature, states an irrevocable, express and specific waiver of any immunity from jurisdiction and from execution, and designates so far as possible the property and accounts the waiver covers.
The requirement of specificity is not rhetorical. In French law, a waiver concerning the property of diplomatic and consular missions must be express and specific (code of civil enforcement procedures, article L. 111-1-3), and designating the assets considerably assists the demonstration of use required for other property of a foreign State (article L. 111-1-2). A general waiver slipped into standard terms performs neither function.
That clause is negotiated while the contract is unsigned, and never afterwards. It combines usefully with a bank guarantee issued by an establishment outside the area, which offers a parallel enforcement route free of any argument about immunity.
8. What to do with a clause already signed and defective
Most files arrive with an imperfect clause and a contract in the course of performance. Three levers remain. The first is an amendment: a renewal, an extension of scope or a price revision are all opportunities to complete the clause without reopening the whole negotiation, and that is the moment when the other side needs something again.
The second is a submission agreement. Once the dispute has arisen, the parties may agree the terms the clause did not provide, seat, institution, number of arbitrators, language. That agreement is more frequent than supposed, because bogged down proceedings serve nobody, but it is negotiated from a position of weakness and is best not counted on.
The third is anticipating enforcement, independently of the clause. Locating assets, documenting the characterisation of the debtor and preparing an application for a conservatory measure produce an immediate effect in negotiation, before any award.
Three defects recur often enough to deserve naming. The first is the clause that combines arbitration with a grant of jurisdiction to a national court, the legacy of two merged contract templates, which opens a debate about the parties’ real intention. The second is the clause designating a non existent or misnamed institution, an arbitration centre whose name has changed or which does not administer that type of dispute, requiring an application to a court to reconstruct the mechanism. The third is the clause imposing a prior amicable negotiation without fixing its duration or its arrangements, which hands the debtor a ground of inadmissibility at the threshold of the arbitration. Each of those defects is corrected in one sentence at signature, and argued for months afterwards.
Frequently asked questions
Is a clause providing for both arbitration and a court valid
It is above all dangerous. That combination, frequent where two contract templates have been merged, opens a preliminary debate about the parties’ real intention, which the tribunal and the national court may resolve differently. A court seised of a dispute covered by an arbitration agreement must indeed decline jurisdiction (Uniform Act on Arbitration, article 13), provided it holds that the arbitration clause prevails. Better to delete one of the two stipulations than to let an arbitrator and a judge decide.
Can the clause be amended after the dispute has arisen
Yes, by a submission agreement, but from a position of weakness. The parties remain free to agree the seat, the institution, the number of arbitrators or the language once the dispute exists, and that agreement is more common than supposed, because bogged down proceedings serve nobody. It nonetheless requires the opponent to see an interest in it, which is rarely the case for the party that imprecision favours. The practical rule remains to complete the clause on an amendment, while the relationship is alive.
Should OHADA law be chosen as the law of the merits
It is often the safest choice for a contract performed in the area, because that law is unified, written and identical in the seventeen member States, notably on commercial sale and security interests. The stipulation must state that the reference to the law of a member State includes the uniform acts, which form an integral part of it. Choosing French law for a contract performed on site, by contrast, creates a gap with the law of the security actually taken, a gap that is paid for when the security is enforced.
What happens if the clause names nobody to appoint the arbitrator
The claimant must apply to the supporting judge of the State of the seat, which adds several months before the first hearing and requires knowledge of local practice. That is why a clause without an institution must at the very least name an appointing authority. The problem is compounded where the seat is not stipulated, since one must then begin by determining which court has jurisdiction, the law of the procedure itself depending on the seat (Uniform Act on Arbitration, article 1).
Does the arbitration clause survive the nullity of the contract
Yes. The arbitration agreement is independent of the main contract and its validity is not affected by the nullity of that contract (Uniform Act on Arbitration, article 4). That autonomy deprives of effect the classic strategy of a debtor attacking the contract in order to escape the arbitrator, and it is worth recalling in the first submission. It does not dispense with checking that the clause itself covers the dispute, a distinct question that arises in particular for orders placed outside the framework contract.