Introduction

This article has the main purpose of giving a general overview of the legal framework for international arbitration in Angola. With this short study, we intend to give a general but precise view of how the international arbitration proceedings work in Angola.

Background

Angola is one of the fastest-growing economies in the world, being now positioned to become an active member of the global economic community, since it has a privileged geographic location on the coast of the Atlantic Ocean, and abundant natural and human resources.  Angola’s economic development policies are focused on private investment, so Angola is perfectly placed to provide interested investors with financial incentives that increase potential for return on capital. According to the World Bank statistics, Angola has made substantial economic and political progress since the end of the war in 2002. . In the last few years, Angola has been undertaking deep legal reforms in order to modernise its legal system so it can foster investment projects in the country. For instance, a reform to the Voluntary Arbitration Law is being studied, and in 2016 Angola ratified the New York Convention.  Given the evolving process of political and economic opening-up of Angola, it has become necessary to provide more security, certainty and juridical predictability in regard to the resolution of eventual conflicts arising from internal and external relations. According to the World Bank, foreign direct investments in Angola reached their peak in 2015 with US$9.2 billion, compared to US$1.7 billion in 2002 when the civil war ended.

Since Angola is experiencing exponential economic growth and an increase in international transactions and foreign direct investments involving Angola and/or Angolan parties, the practice of international arbitration in Angola is also growing.  Given the reforms of the last few years, it is expected that the use of arbitration for domestic cases with a foreign element will increase (i.e., where a party has foreign shareholders).  Also, there are an increasing number of arbitrations relating to Angolan parties where recognition and enforcement in Angola are important issues to consider, while an increasing number of investment arbitration cases relating to Angola or Angolan parties can be seen as well.

Currently, Arbitration in Angola is regulated by Law no. 16/03, of 25 July 2003, the “Voluntary Arbitration Law” (VAL). This law does not strictly follow the UNCITRAL Model Law (Model Law); however, it includes many solutions that are common to the ones found in that Model Law.  In contrast to the Model Law, we can point out the following aspects:

the VAL contains no provision on definitions;

• it does not provide for rules on interpretation;

• it adopts the disposable rights criteria regarding arbitrability;

• it does not address the issue of preliminary decisions;

• it does not distinguish between different types of awards; and

• it permits appeal on the merits in domestic arbitrations, unless the parties have agreed otherwise.

Regarding institutions and centers for arbitration, Decree no. 4/06, of 27 February 2006, has the purpose of promoting institutional arbitration in Angola, and deals with the licensing procedures for the incorporation of arbitration centres.  The Ministry of Justice is the entity empowered to authorise the incorporation of arbitration centres in Angola. To date, the Ministry of Justice has authorised the creation of the following arbitration centres:

• Harmonia – Centro Integrado de Estudos e Resolução de Conflitos;

• Arbitral Juris;

• CAAL – Centro Angolano de Arbitagem de Litígios;

• Centre of Mediation and Arbitration of Angola,

• CEFA’s Arbitration Centre;

• CREL – Centro de Resolução Extrajudicial de Litígios; and

• CAAIA - Centro de Arbitragem da Associação Industrial de Angola.

Arbitration is also foreseen in other legislation, namely the following:

• Private Investment Law (Law no. 14/15, of 11 August 2015);

• the Mobile Values Law (Law no. 22/15, of 31 August 2015);

• the Petroleum Activities Law (Law no. 10/04, of 12 November 2004); and

• the Public Procurement Law (Law no. 20/10, of 7 September 2010).

In 2016, Angola took another major step to improve participation in international arbitration, by signing the New York Convention on the Recognition of Foreign Arbitral Awards (New York Convention).  On 6 March 2017, Angola deposited its instrument of accession to the New York Convention with the UN Secretary General.  Under Article XII (2), the Convention entered into force in Angola on 4 June 2017, 90 days after the deposit of its instrument of accession. 

Presently, the majority of arbitration cases conducted in Angola are ad hoc. Normally, the Angolan state and companies in the public sector accept, without any complaints, the use of arbitration to resolve disputes with foreign investors.

Arbitration Agreement

According to Article 1 of the VAL, parties may opt to use arbitration for disputes regarding disposable rights (that being those rights that the parties can construct and extinguish by act of will and those which parties can renounce).  The VAL generally admits the arbitrability of disputes pertaining to disposable rights, provided that these disputes are not subject, by special law, to the exclusive jurisdiction of judicial courts or to mandatory arbitration. Regarding any disputes involving the state or other legal persons of public law, the VAL establishes that these entities may enter into arbitration agreements when the relevant dispute concerns a private law relationship, in administrative contracts or in other cases specifically provided by law (article 1 of the VAL). Only the disputes reserved by law to the State courts or to some other type of proceedings cannot be submitted to arbitration. Therefore, all commercial disputes can be subject to arbitration.

In order to resort to arbitration, the parties must establish an arbitration clause (in the contract or in the form of a separate agreement for future disputes arising from a defined legal relationship) or an arbitration agreement (signed by the parties to resolve an immediate dispute), which states that any dispute must be resolved using arbitration, instead of seeking judicial courts. To be valid and effective, an arbitration agreement must comply with several requirements.  The arbitration agreement will be void if:

• it is not made in writing;

• it goes against the provisions stated in article 1 of the VAL; or

• the object of the arbitration is not specified and there is no other way to specify it.

The VAL only includes rules on the expiration of the arbitration agreement, and does not include rules on the modification and revocation of the arbitration agreement. Thus, the arbitration agreement and the arbitration clause expire when:

• any of the arbitrators dies, is excused, becomes disabled for the exercise of the arbitration and is not replaced;

• a majority cannot be reached in the deliberations (in cases where the arbitration is collective); and

• the award is not rendered by the established deadlines.

However, according to section 4 of article 2 of the VAL, the arbitral clause or convention is not automatically void when the contract where it is inserted is void, if it is clear that the will of the parties is to have an arbitral clause or convention regardless of the validity of the contract.

Regarding the competence of the arbitral tribunal, article 31 states that the arbitral tribunal may decide on its own jurisdiction (the principle of competence-competence).  This decision can only be syndicated in impugnation or opposition to the execution of the arbitral award. This means that the award of the arbitral tribunal by which it rules on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement can only be appreciated by the judicial court after the arbitral tribunal has rendered the award. This legal provision gives a letter of law to the fundamental principle of arbitration, the principle of competence-competence: that the arbitral tribunal has full competence to resolve all questions raised in the arbitral proceedings relating to it, whether of a substantive nature relating to the merits of the case, or of a procedural nature. The principle of competence-competence preserves the autonomy of the arbitral tribunal in relation to the jurisdiction of the state courts.

Arbitration Procedure

The parties are free to agree on the procedural rules (directly or by reference to an institution). In the absence of agreement, the tribunal will have the power to determine those rules (article 16). The same reasoning applies to the place of arbitration (article 17). Arbitration begins when the request for submission of the dispute to arbitration is received by the Respondent – if nothing otherwise is stipulated by Agreement of the parties. This request for submission of the dispute to arbitration is generally named “notice to arbitration”. The notification can be made by any means, as long as it is possible to prove its receipt by the other party. The notification must contain:

• the identification of the parties;

• the indication that they wish to submit the conflict to arbitration;

• the indication of the Arbitration Agreement; and

• the subject of the conflict, if that isn’t already stated in the Arbitration Agreement.

Also, if the parties are due to nominate the arbitrators, the claimant must indicate the arbitrator chosen by them in the notice to arbitration, and must invite the other party to indicate their arbitrator. If the arbitration procedure is to be commanded by a single arbitrator, the notifying party must suggest an arbitrator, and invite the other party to accept that suggestion. However, the nomination can also be made by a third party. If that happens, the notifying party must also notify that third party to appoint and communicate the appointment of the arbitrator to both parties.

As stated previously, article 16 of the VAL states that the parties can agree about the rules of the arbitration. However, if those rules aren’t defined until the acceptance of the first arbitrator, the arbitrators must define the rules of the arbitration. The seat of the arbitration is also determined by agreement of the parties in the Arbitration Agreement or later. In common with the rules of arbitration, if the parties do not agree on the seat of the arbitration until the acceptance of the first arbitrator, the seat of arbitration must also be chosen by the arbitrators.

According to the VAL, and in line with most arbitration laws, the arbitration proceedings are subject to fundamental principles of due process, including the principle of equality of the parties and the adversarial principle (article 18 of the VAL). Indeed, the arbitration procedure must respect the following principles and rules:

• the principle of equal treatment of the parties;

• the right to response must be granted in all phases of the procedure; and

• both parties must be heard, orally or by writing, before the rendering of the award. 

These are the fundamental principles and rules that must be respected in any procedure.  The breach of these principles and rules may lead to the setting-aside of an award.

The VAL stipulates that parties to an arbitration must be represented by a constituted lawyer (i.e. an Angolan lawyer).  The National Council of the Angolan Bar Association decided on 31 March 2014 that only lawyers with valid registration may intervene as lawyers in arbitration proceedings.

According to article 24 of the VAL, in national arbitration, the arbitral court must decide in accordance with the national law, unless the parties establish that the conflict is to be solved by referring to equity. However, if the parties agree on the decision by the rules of equity, they automatically renounce the ability to appeal the award. On the other hand, in international arbitration, the parties are free to designate the applicable law, and may do so by referring to a specific national law or state legal system.  If the parties do not agree in this matter, the arbitral court must decide what substantive law to apply, resorting to the conflict rule which it considers applicable to the dispute.

Regarding the production of proof, in arbitration all means of proof allowed by law are accepted.  There is no specific rule in Angolan law establishing limits to the permissible scope of disclosure or discovery.  If the proof depends on a third party and that third party refuses to collaborate, the parties or the arbitral court can request the judicial court to carry out the procedure so that proof is produced.

The arbitration procedure ends when the award is deposited or after the award becomes definitive, if a withdrawal happens, since the withdrawal is free at any time of the procedure. If the arbitral award is not rendered within the applicable time limit or if for some reason the tribunal becomes incomplete and a new arbitrator is not appointed, the proceedings will not be dismissed, but the arbitral agreement itself will be deemed to have lost its validity - for that specific dispute - article 5 of the VAL.

The VAL allows the parties to agree on a time limit to render the award, but if nothing is said until the acceptance of the first arbitrator, the said time limit will be of six months and will only be extended by agreement of the parties (article 25 of the VAL).  Instead of agreeing on a specific limit, the parties may refer the dispute to institutional arbitration (providing that the rules of the institution contemplate the extension of the time limit to render the award). After all the diligence on the process is made, the arbitrators must decide and render an award, which is to be notified to the parties and deposited in the secretariat of the Provincial Court of the place of arbitration.

Arbitrators

An arbitral tribunal may be composed by a single arbitrator or several, but there must always be an odd number of arbitrators (article 6, paragraph 1, of the VAL).

Appointment

Arbitrators are appointed by the parties in the arbitration agreement or in posterior writing. However, the VAL establishes supplementary criteria to be used in the cases where the parties have not established the means of designating a single or several arbitrators. Indeed, if the parties do not agree on the designation of the arbitrators, or on the way they are to appoint the arbitrators, each of the parties appoints one arbitrator, and the arbitrators appoint the third arbitrator, which completes the composition of the arbitral court (article 8, paragraph 1 of the VAL). The VAL is silent as to the means of constituting an arbitral tribunal in the case of multiple parties.

Requirements

Arbitrators must be singular persons who have the full enjoyment and exercise of their civil capacity (article 9, paragraph 3 of the VAL). Arbitrators must be independent and impartial. Arbitrators are free to reject their designation but, once accepted, the excuse of functions is only admissible if it is justified by a supervening cause that makes it impossible for the arbitrator to exercise its functions.

Any person invited to exercise the functions of arbitrator has to reveal immediately all circumstances that may cause doubts about their impartiality and independence.  If any circumstance causes a founded doubt of the impartiality and independence of the arbitrator, they may be refused the right to arbitrate.  However, the party that appoints the arbitrator can only refuse the designation if the motive is subsequent to the appointment.

In the case of failure to appoint one arbitrator, and unless the parties have agreed on another appointing authority, the missing arbitrator will be nominated by the president of the local State Court (article 14 of the VAL).

Replacement

An arbitrator can be replaced in case of death, refusal, permanent disability for the performance of its duties, or if the appointment becomes void.  The motives for the replacement are very similar to the ones established by the UNCITRAL Law. They are contemplated in article 10 of the VAL. The VAL addresses the matter of challenging the arbitrator when there is reasonable doubt about his or her impartiality or independence, or when he or she manifestly does not possess the qualifications that were previously agreed upon by the parties (article 10, paragraph 2 of the VAL). If the arbitrators do not step down, the decision on this is made by the Tribunal, with appeal to the State Courts (article 10 of the VAL).

Interim Relief

Interim relief may be granted in arbitration, unless otherwise stated by the parties. Any of the parties may require that the court orders interim measures, related to the object of the conflict, namely the provision of guarantees that it considers necessary. Interim relief is stated in article 22 of the VAL, which is inspired by article 17 of the UNCITRAL Model Law. However, it does not specify what kind of measures are admitted. This does not prevent the parties from requesting from the court, in accordance with the Civil Procedure rules, any procedure they deem necessary to prevent or protect the injury of rights. It is essential that the petitioner alleges and proves two requirements: the periculum in mora and the fumus bonus iuris.

Arbitration Award

The VAL contains a considerable number of provisions regarding the award and its preparation (articles 24 to 33 of the VAL). 

Unless the parties agree otherwise, under article 25 of the VAL, the Arbitration Award must be rendered in the timeline of six months after the acceptance of the last arbitrator. Any extension to that timeline must be agreed by the parties and cannot be decided unilaterally by the arbitrators. There is also the possibility for the parties to agree that, if any instruction measure is necessary, the timeline can be suspended during that period of time for which the instruction is in course. The decision must be rendered with the presence of all of the arbitrators, by simple majority, except if the parties have stipulated a larger majority. The parties can also establish that, if the arbitrators cannot reach an agreement, the decision can be made by the president of the court.

Under article 27 of the VAL, the arbitration award must be made in writing and must contain the following information:

• the identification of the parties;

• reference to the Arbitration Agreement;

• the object of the conflict;

• the seat of arbitration;

• the location and date on which the award was rendered;

• the decision and justification for the decision;

• signature of the arbitrators; and

• indication of the expenses associated with the process and their distribution between the parties.

The statement of a decision given in accordance with the rules of equity is sufficient, with a statement of the facts that are considered proved.  If any arbitrator disagrees with the decision, the reasons for the disagreement must also be stated in the decision.

Under article 23 of the VAL, the fees and costs of the process and their division between the parties must be agreed by the parties, unless this decision results from regulations of arbitration chosen under article 16 of the VAL. The decision is to be notified to the parties, who can ask for the correction of material errors, obscurities or clarification of doubts, within 10 days. The court has 30 days to respond to such requests. Throughout the process, the parties can also reach an agreement regarding the subject of the conflict.  Under article 28 of the VAL, the agreement must be submitted to the court for homologation.

According to paragraph 4 of article 20 of the VAL, in the course of the process, the withdrawal by any of the parties is also admitted, as long as the opposing party agrees with it,.  The withdrawal must be homologated by the court.

Challenge of the Arbitration Award

For domestic arbitrations, the arbitration award can be challenged in two ways: annulment of the award and appeal of the award. Appeal can be waived by the parties, but not their right to request the award to be set aside.  Annulment of an award can occur in the following cases:

• when the conflict is not sought to be solved through arbitration;

• when the court that rendered the award is incompetent;

• when the arbitral agreement has expired;

• when the arbitral court has been irregularly constituted;

• when the decision doesn’t contain the justification;

• when the decision has violated the principles of equality of response and that fact has influenced the resolution of the conflict; when the court has decided on questions that were not to be decided or when it did not decide on questions that it should decide; or

• when the arbitral court, in cases where it decides through equity and custom, did not comply with the public order or with the Angolan legal order.

The arguments of incompetence of the court and irregularity of the constitution of the court can only be invoked if, during the process, the exception of incompetence of the court or irregularity of its constitution have been also invoked and the court declared itself competent to resolve the conflict, or if the irregularity had influence on the final decision.

If an award does not decide on a certain subject that was brought to the court’s attention, the omission can be admitted, if it is demonstrated that the lack of decision on a certain question or issue was determinative of the final decision.       

A request for annulment must be addressed to the Supreme Court and the deadline to submit the annulment is 20 days from the date of notification of the arbitral award.  The right to request the annulment of an award cannot be waived.

An award can be appealed in the same way that a judicial award can be appealed.  Appeal petition must be addressed to the Supreme Court and the deadline to submit the appeal is 15 days from the date of notification of the arbitral award.  There is a slight difference in the law when it comes to international and domestic arbitration. With international arbitration, the non-appeal principle (as stated in article 44 of the VAL) applies, except when the possibility of appeal is expressly agreed by the parties.  With domestic arbitration, the principle is of the admissibility of the appeal, except if the parties expressly renounce that right (as stated in article 36 of the VAL).

Enforcement of the Arbitration Award

National awards

Article 33 of the VAL states that the award has to be fulfilled in 30 days. If this does not happen, the non-lacking party may coercively execute/enforce the award. Awards rendered in Angola (i.e., awards rendered within domestic arbitrations and awards rendered in Angola, within international arbitrations) are enforceable exactly as if they were decisions rendered by a state court (article 37 of the VAL). If the deadline given by the court to voluntarily accomplish the award is over, or if such deadline isn’t fixed by the court, the interested party has 30 days after the notification of the award to enforce it before the Provincial Court, in the terms stated in the Angolan Civil Procedure Code.

The requirement for the enforcement must be accompanied by the arbitral award, its rectification or clarification, and the proof of notification and deposit of the award. The summoned party has the right to  oppose the enforcement of an arbitral award, stating one or more of the grounds mentioned in articles 813 and 814 of the Angolan Civil Procedure Code:[1]

• unenforceability of the award;

• falseness of the process or transfer or infidelity of the latter, when one or the other influences in terms of the enforcement;

• illegality of the claimant;

• illegality of the defendant;

• undue accumulation of executions;

• unlawful coalition of claimants;

• fault or nullity of the first summons to the action, when the defendant has not intervened in the proceedings;

• uncertainty, illiquidity or unenforceability of the obligation;

• res judicata prior to the sentence that is to be enforced;

• any fact that extinguishes or modifies the obligation, provided that it is after the close of the discussion in the declaration process, and is proved by a document.  The prescription of the right or obligation can be proven by any means; or

• any fundament that is sufficient to annul the award.

Opposition to enforcement of an award must be filed within eight days from the date the defendant is notified of the enforcement process.  The decision on the opposition to the enforcement is not appealable.

International awards

Angola has ratified the New York Convention via Resolution no. 38/2016, which was published in the Official Gazette of the State on 12 August 2016.  Angola made a reservation pursuant to which the New York Convention will only apply to the recognition and enforcement of awards issued in the territory of another contracting state.

Since Angola has ratified the New York Convention, article 1096 of the Angolan Civil Procedure Code – which states the requirements necessary to recognize an award in the Angolan judicial system - will no longer be applicable to arbitral awards. When the New York Convention is in force in Angola, its articles IV and V will be applicable.

To provide certainty that foreign arbitral awards are practically enforceable in the country, Angola may need to harmonise both the provisions of the VAL and the Angolan Civil Procedure Code with its obligations under the New York Convention.

Investment Arbitration

Investment arbitration is not specifically regulated under Angolan law. Therefore, unless more favourable rules have been adopted in international instruments, the VAL applies to investment arbitration.

The New Private Investment Law of Angola prescribes, under paragraph 2 of article 15, that conflicts and their interpretation can be resolved by arbitration[2]. This law also has the aim to foresee the main guarantees granted to foreign investors in the scope of public international law or established by the international jurisprudence of the most various arbitration institutions, namely:

• the Angolan State must ensure, irrespective of the origin of capital, fair, non-arbitrarily discriminatory and equitable treatment of incorporated companies and companies and the foreign investor’s assets;

• payment of a fair compensation, prompt and effective in the case of expropriation or requisition for weighty and justified reasons;

• protection of intellectual and industrial property rights;

• protection of acquired rights over possession;

• non-interference in the management of private companies, except in cases expressly provided for by law; and

• non-cancellation of licences without judicial or administrative proceedings.

Additionally, bilateral investment treaties (BITs) provide for the authorisation or consent of the Angolan State to arbitration in terms that allow the foreign investor immediate recourse to international arbitration, without the need to enter into any subsequent arbitration agreement. Some of the BITs involving Angola provide that an arbitral tribunal shall consist of three arbitrators, each party being responsible for choosing one arbitrator and the third arbitrator being the arbitrator-president chosen by agreement between the other two.  In the absence of an agreement for the choice of the third arbitrator, the latter, under the most diverse investment contracts, shall be appointed by one of the following entities:

1. the General Secretariat of the Paris International Chamber of Commerce (ICC);

2. a designation authority appointed by the Secretary General of the Permanent Court of Arbitration at The Hague, under the UNCITRAL Regulation; and

3. the President of the Provincial Court of Luanda, at the request of either party.

Some BITs involving Angola refer to the arbitration of disputes by the International Centre for the Settlement of Investment Disputes (ICSID), the Complementary Mechanism for the Administration of Conciliation, Arbitration and Inquiry Procedures (CIRDI), as well as for the Arbitral Tribunal of the International Chamber of Commerce (ICC), or even for an international arbitrator or tribunal to be designated by special agreement or established in accordance with the UNCITRAL Rules of Arbitration.

In summary, it can be said that Angola does indeed protect foreign investments through arbitration, namely in the private investment sector, and has taken steps to reduce bureaucracy and facilitate international arbitration and investment arbitration; namely and most importantly, by ratifying one of the most important arbitration conventions that was missing from the Angolan legal system, the New York Convention.

Third-party funding

No regulation on third-party funding of arbitration exists in Angola. Given the fact that there is no regulation on third-party funding, it would seem prudent for arbitration agreements to include certain provisions to ensure less uncertainty in potential claims, and in particular:

1)     the obligation to disclose the existence of funding agreements in the event of disputes, and the content to be disclosed; and

2)     acknowledgment by the parties that, as a security measure to avoid a potential annulment of the award or refusal of its recognition and enforcement under the 1958 New York Convention, the funder’s eventual uplift should not comprise any recovery of costs or indemnity due to the prevailing party in the arbitration or litigation.

Conclusion

In conclusion, one can say that Angola has travelled a long path in the arbitration journey, but a lot is yet to be done. We believe that since arbitration has a growing place in alternative dispute resolution, more and more steps will be made in the near future.

_______________________________________________

* Founding Partner, N-Advogados & CM Advogados

** Head and Main Partner, N-Advogados & CM Advogados

*** Attorney, N-Advogados & CM Advogados

[1] Article 813 (reasons for opposition to the execution based on sentence): the opposition to the execution of a sentence can only have the following reasons: a) unenforceability of the title; b) falsity of the process or transfer, whenever it influences the terms of the execution; c) illegitimacy of the applicant or the defendant or tis representation; d) undue cumulation of executions or illegal coalition of applicants; e) fault or nullity of the first notification for the action, when the defendant didn’t intervene in the process; f) uncertainty, illiquidity or unenforceability of the obligation; g) res judicata prior to the sentence that is trying to be enforced; h) any extinctive or modifying fact of the obligation, since it is posterior to the closing of the discussion in  the declarative process and proven by document. The prescription of the right or obligation can be proven by any means.

Article 814 (execution based on an arbitral award): 1. There are reasons for the execution based on an arbitral award, not only the foreseen in the precedent article, but also those in which an annulment of the decision can be based. 2. The court rejects the request for execution when it recognizes that the dispute can’t be put to the arbitrators’ decision, for being submitted to special law, exclusively to judicial courts or to mandatory arbitration, or if the right is indisposable.

[2] Article 15, paragraph 2: Within the scope of the present law, the conflicts that eventually arise regarding disposable rights can be solved throughout the alternative means of dispute resolution, such as negotiation, conciliation and arbitration, since by special law they are not committed to judicial courts or to mandatory arbitration.