Commercial Contracts 2025

Last Updated November 05, 2025

Sierra Leone

Law and Practice

Authors

Centus Macauley
Isatu Jalloh

Macauley, Bangura & Co is a premier boutique law firm set up in May 2002. It is a leading service provider and multi-disciplined firm consisting of barristers, solicitors and in-house consultants all under the same roof, in the telecommunications, energy, oil and gas, fintech, ESG, banking, tourism, immigration, tax, energy, renewable energy, agribusiness, admiralty law and practice, mining and natural resources sectors. Macauley, Bangura & Co advises clients on a full range of corporate transactions including, but not limited to, banking, mergers and acquisitions, project finance, lending and providing security, due diligence, drafting and negotiation of transactions, securitisation, permits, regulatory compliance and dispute resolution. The firm has positioned itself to meet anticipated developmental strides in the expanding legal and private sectors in response to the rapidly changing needs of clients both within and outside the jurisdiction in the new period of “sustained economic growth” and “stability” in Sierra Leone. It has a competitive edge and maintains excellent relations with key players in the public and private sectors.

The general rules for choice of the applicable law of a commercial contract (sometimes also referred to as the proper law of the contract) is well settled: the law which the parties elect to apply shall be applied. This will be discerned or ascertained by the intention expressed in the contract, if any. Where it is expressly stated, it will be conclusive. If it is not expressly stated in the contract, the intention will be inferred by the court based on the terms of the contract and the relevant surrounding circumstances; this includes ascertaining the legal system with which the contract is most closely connected.

This general rule is primarily based on common law principles of conflict of laws (the Courts Act No 31 of 1965 of the laws of Sierra Leone incorporates, among others, the common law of England in force on 1 January 1880 as well as the common law as defined by Section 170 of the Constitution of Sierra Leone). It should be noted that Sierra Leone does not have a statute passed by parliament that specifically provides for this; for example, the Contracts (Applicable Laws Act) 1990 in the United Kingdom, among others, addresses the application of choice of law rules in contract. This rule is subject to a few exceptions, usually based on (i) acting in good faith and (ii) that the choice of law so nominated was for a legal purpose. For example, the courts in Sierra Leone can refuse to apply this rule if it conflicts with Sierra Leone’s public policy or laws against corruption and anti-money laundering.

Sierra Leone does not have any statutory enactment such as the Contracts (Applicable Laws Act) 1990 that stipulates the general rules for the form of a commercial contract. That said, contracts under Sierra Leone law fall into two categories: (i) a contract by deed under seal and (ii) a simple contract. A contract by deed under seal must meet the following criteria:

  • be evidenced in writing;
  • with or without any consideration being provided;
  • be duly executed under the hand and seal of the person signing; and
  • be witnessed.

On the other hand, a simple contract must tick the following boxes:

  • an offer and acceptance;
  • intention to create legal relations;
  • consideration;
  • legality of purpose; and
  • capacity of the parties to enter into the contract.

A simple contract can be oral, written, partly oral and partly written, or by conduct. It should be noted that there are a number of commercial contracts that are required by statutes of specific applications to be in writing or evidenced in writing. For example, transfer of shares of a company are by virtue of Sections (126) and (132) of the Companies Act required to be evidenced by an “instrument of transfer”; contracts for the sale or disposition of land or an interest in land must be evidenced in writing by virtue of the Statute of Frauds 1677 (which is incorporated into the laws of Sierra Leone by virtue of the Courts Act No 31 of 1965).

In Sierra Leone, there is no single or specific legislation that mainly applies to or deals with commercial contracts. There is no “Commercial Contracts Act” that comprehensively governs all commercial agreements.

On the contrary, the legal framework for commercial contracts is a combination of:

  • common law and equitable principles (inherited from England); and
  • a range of local statutes that regulate specific types of contracts or commercial transactions (by way of example, see the following).

The Companies Act 2009 governs the formation and operation of companies. It sets out how companies enter, execute and are bound by contracts (Sections 58–63). It provides rules on:

  • director authority;
  • share transfers; and
  • ultra vires acts.

The Sale of Goods Act (Chapter 225) governs:

  • contracts for the sale of goods;
  • implied terms (fitness, merchantable quality);
  • transfer of property; and
  • remedies for breach.

The Bills of Exchange Act (Chapter 227) governs negotiable instruments:

  • bills of exchange;
  • cheques; and
  • promissory notes.

The Borrowers and Lenders Act 2019 sets out requirements for:

  • loan contracts;
  • registration of security interests; and
  • enforcement of credit agreements.

The Employment Act 2023 governs the terms of employment contracts/contracts of service.

The Sale of Goods Act (Chapter 225) of Sierra Leone, modelled on the English Sale of Goods Act 1893, governs domestic sales and focuses on property transfer, implied terms, and the distinction between conditions and warranties, with remedies rooted in common law principles. In contrast, the United Nations Convention on Contracts for the International Sale of Goods (CISG) applies to international sales between parties in different states and emphasises performance obligations, conformity of goods, and uniform interpretation based on good faith rather than domestic precedent. The CISG dispenses with formalities and the concept of consideration, separates risk from ownership, introduces the notion of fundamental breach, and codifies foreseeability and mitigation of damages. Overall, while Chapter 225 reflects a traditional common law approach to contract formation and title transfer; the CISG adopts a more flexible, internationally harmonised framework aimed at facilitating cross-border trade.

In Sierra Leone, there are no comprehensive or mandatory statutory rules specifically governing particular types of commercial contracts such as franchise, distribution, agency or licensing agreements, unlike in many US states or certain civil law jurisdictions.

Over the past three years, the most significant legal development in Sierra Leone affecting commercial contracts has been the enactment of the Arbitration Act 2022, which modernised dispute resolution by adopting (among others) the UNCITRAL Model Law and implementing the New York Convention, making arbitration more accessible and enforceable. Regionally, the ECOWAS Court’s decision in Algom Resources Ltd v Republic of Sierra Leone highlighted state liability for wrongful interference with contractual and property rights, reinforcing investor protection.

Internationally, the Jenner & Block v Republic of Sierra Leone case in the USA demonstrated that contractual obligations with foreign entities can override claims of sovereign immunity where waiver is implied. Domestically, recent High Court and Court of Appeal cases such as Vitafoam (SL) Ltd v Leone Construction and Dynamic Fuel SI v MC Shin have reaffirmed strict adherence to contract terms, proof of obligations and party identity in enforcement actions.

Collectively, these developments signal a stronger emphasis on contractual certainty, procedural fairness and modern dispute resolution within Sierra Leone’s commercial landscape.

In Sierra Leone, the applicable law of a commercial contract is primarily determined by party autonomy – the express or implied choice of the parties. In the absence of such a choice, courts apply the closest and most real connection test, while preserving public policy and mandatory law exceptions. The framework mirrors English common law conflict rules, ensuring flexibility for international commerce while maintaining domestic legal safeguards.

When a commercial contract has no express choice of law, Sierra Leonean courts apply the law with the closest and most real connection to the agreement. In most cases involving local transactions or performance within Sierra Leone, that will be Sierra Leonean law, unless the circumstances clearly indicate a stronger connection to another jurisdiction and no public policy issue arises.

Sierra Leonean courts will generally respect a foreign choice of law in commercial contracts, but will override it when:

  • the chosen law conflicts with mandatory provisions of Sierra Leonean law;
  • the application of the foreign law would breach public policy; or
  • procedural matters or enforcement require application of Sierra Leonean law or regulations.

If one of the contract parties is from Sierra Leone, a foreign choice of jurisdiction can be chosen if this is what the parties agree to. Likewise, if both parties to the contract are from Sierra Leone, they can both choose a foreign jurisdiction as the seat for resolution of a dispute.

Under Sierra Leone’s Arbitration Act 2022, parties (including where one or both are Sierra Leonean) may validly agree to resolve disputes by arbitration, whether domestic or international. Sierra Leonean courts are required, under Section 4 of the Act and Article II(3) of the New York Convention, to respect such agreements and refer the matter to arbitration if a party brings court proceedings in breach of the clause, unless the agreement is void or inoperative. Likewise, foreign or domestic arbitral awards will generally be recognised and enforced in Sierra Leone in line with Sections 65–66 of the Act and Article V(2) of the Convention, except where the subject matter is non-arbitrable or enforcement would contravene Sierra Leonean public policy. However, mandatory local laws (such as those protecting Sierra Leonean distributors or employees) or other statutory rights may still apply, as these cannot be excluded by contract or arbitration agreement.

A contract in Sierra Leone can be concluded in writing, orally or by conduct, as long as the essential elements of contract formation exist, except where statute expressly requires written form (eg, land, guarantees or regulated contracts). Written form remains the best practice for enforceability and proof.

Sierra Leonean law does not explicitly recognise the doctrine of culpa in contrahendo as such.

However, its effects are achieved through common law principles that protect parties against bad faith or negligent conduct in pre-contractual negotiations:

  • misrepresentation;
  • negligent misstatement;
  • estoppel; and
  • restitution.

Remedies depend on the nature of the conduct and the loss suffered. They include:

  • damages;
  • rescission; and
  • restitution.

Under Sierra Leonean law, a party’s standard terms and conditions become part of a commercial contract only if they are properly incorporated, meaning they were communicated and accepted before or at the time of contracting, either by signature, notice, course of dealing, or reference. Terms introduced afterwards, or not reasonably brought to the other party’s attention, will not be binding.

The law on standard terms in Sierra Leone applies whenever one party seeks to rely on its pre-drafted conditions. Such terms are binding only if they were clearly communicated, reasonably accessible, and accepted before or at the time the contract was made. Terms introduced afterwards or not reasonably brought to attention will not apply.

Standard terms in Sierra Leone can be invalidated or limited if they are:

  • unfair;
  • unconscionable; or
  • contrary to public policy.

Even without specific legislation, the courts can use common law and equitable principles to prevent the abuse of standard-form contracts that impose unreasonable disadvantage on one party.

In Sierra Leone, the result of a battle of forms is that the contract is generally governed by the terms last communicated and accepted without objection before performance (the “last shot” rule) unless no clear acceptance occurred, in which case only mutually agreed or reasonable terms will apply.

There is no specific commercial contract for which Sierra Leone law requires an original signature or notarial deed. However, for the purposes of registration and pursuant to the Registration of Instruments Act, a document executed out of Sierra Leone to be registered in Sierra Leone will require a notarial certificate.

A contract can be effectively concluded via electronic signature pursuant to the Electronic Transactions Act No 11 of 2019.

Official registration of a commercial contract in Sierra Leone is only required for specific contracts, especially those involving:

  • land;
  • charges/mortgages;
  • debentures;
  • certain partnership deeds;
  • bills of sale; and
  • regulated sector agreements.

Most other commercial contracts do not require registration unless specifically mandated by statute.

Under Sierra Leonean law, the mutual consent of parties is fundamental but must be accompanied by:

  • intention to create legal relations;
  • consideration;
  • capacity to contract;
  • lawful object;
  • certainty of terms; and
  • compliance with required formalities (where applicable).

These requirements ensure the contract is not only valid but also enforceable before a court.

The different laws to be obeyed are as follows.

  • B2B contracts in Sierra Leone are governed mainly by common law and commercial statutes with broad contractual freedom.
  • B2C contracts are governed by consumer protection principles, statutory implied terms and sector-specific regulation, which limit contractual freedom in order to protect the weaker party.

The main consumer protection rights to be obeyed in B2C contracts under the Consumer Protection Act of 2020 are:

  • consumer’s right to safe, good quality goods (Section 46);
  • implied warranty of quality (Section 47);
  • warranty on repaired goods (Section 48); and
  • consumer’s right to demand quality service (Section 49).

In Sierra Leone, liability means being legally answerable for a breach of duty that causes harm or loss. It exists in contract, tort and statute, and may be limited by agreement where the law allows – but always subject to fairness, reasonableness and public policy.

Under Sierra Leonean law, there is no general statutory maximum liability for damages. Liability is usually full compensation for proven loss, including loss of profit if foreseeable and proven, unless the parties have agreed otherwise in a contract or unless statutory rules limit liability (especially in B2C cases). Punitive damages are exceptional and rarely awarded.

Under Sierra Leonean law, liability without fault exists but only in specific categories, including:

  • vicarious liability;
  • employer’s liability;
  • product liability;
  • liability for dangerous activities (Rylands v Fletcher); and
  • certain statutory offences.

These rules protect public safety, the environment and weaker parties, and operate alongside the general fault-based liability framework.

A contractual imitation on liability is permissible under Sierra Leonean law. The parties to the agreement can agree to limit liability for a specific named event or scenario. It makes no difference if the respective clause is a standard term provision or individually negotiated.

The concept of force majeure in a contract is applicable and enforceable under Sierra Leonean law. Relief from performance in circumstances outside a party’s control in the absence of specific provision in the commercial contract is also applicable under the doctrine of frustration of contract when the common object of the contract can no longer be achieved, because, in light of the circumstances, a situation fundamentally different from that contemplated when the parties entered into the contract has unexpectedly emerged. There is, however, a duty to notify and to mitigate loss.

In Sierra Leone, including a force majeure clause in commercial contracts is standard practice. Its absence does not automatically prevent a party from claiming relief as relief is still possible under the doctrine of frustration – but this is much more restrictive, uncertain and less flexible than a well-drafted contractual clause.

Under Sierra Leonean law, there is no general principle or statutory rule allowing contract renegotiation for hardship. The only possible relief is under the doctrine of frustration, which terminates (not adjusts) the contract. Therefore, parties must expressly include hardship or renegotiation clauses in their contracts if they want such relief.

While hardship or renegotiation clauses are becoming standard practice in major commercial agreements in Sierra Leone, there is no statutory or common law right to renegotiate in cases of hardship.

Thus, if a contract omits such a clause, the affected party cannot claim any right to renegotiate or amend under Sierra Leonean law. Only frustration may apply, leading to termination rather than adjustment.

Under Sierra Leonean law, the following warranties and remedies are available.

  • Breach of a condition – termination + damages.
  • Breach of a warranty – damages only.
  • Late performance – damages and possible termination if time is essential.
  • Non-fulfilment – damages and possible termination or specific performance.
  • Warranties under statute include:
    1. fitness for purpose;
    2. satisfactory quality;
    3. correspondence with description;
    4. quiet possession; and
    5. right to sell.

Parties to a commercial contract can deviate from the main warranty and remedy provisions, provided that:

  • the deviation is mutually agreed upon;
  • it does not violate any law, public policy or mandatory statutory provisions; and
  • the contract allows for such deviation (either expressly or through a valid amendment or waiver clause).
Macauley, Bangura & Co

4th Floor,
UMC Building
31 Lightfoot Boston Street
Freetown
Sierra Leone

+232 78 533 944

+232 22 224 227

info@mbclegal.org www.mbclegal.org
Author Business Card

Trends and Developments


Authors

Centus Macauley
Isatu Jalloh

Macauley, Bangura & Co is a premier boutique law firm set up in May 2002. It is a leading service provider and multi-disciplined firm consisting of barristers, solicitors and in-house consultants all under the same roof, in the telecommunications, energy, oil and gas, fintech, ESG, banking, tourism, immigration, tax, energy, renewable energy, agribusiness, admiralty law and practice, mining and natural resources sectors. Macauley, Bangura & Co advises clients on a full range of corporate transactions including, but not limited to, banking, mergers and acquisitions, project finance, lending and providing security, due diligence, drafting and negotiation of transactions, securitisation, permits, regulatory compliance and dispute resolution. The firm has positioned itself to meet anticipated developmental strides in the expanding legal and private sectors in response to the rapidly changing needs of clients both within and outside the jurisdiction in the new period of “sustained economic growth” and “stability” in Sierra Leone. It has a competitive edge and maintains excellent relations with key players in the public and private sectors.

Cross-Border Transactions, Fintech, Mines and Mineral Resources, Environment and Social Governance (ESG) and Arbitration

Introduction – a landscape in transition

Sierra Leone’s commercial legal framework has been undergoing substantial and steady reforms. The establishment of the Fast Track Commercial Court of the Commercial and Admiralty Division of the High Court has seen updated and revamped rules with the promulgation of the Commercial and Admiralty Court Rules 2020. These provide for (among others) submission by the parties to the action to a mandatory ADR process at the pre-trial stage to explore the possibility of the matter being resolved without the need for trial, on the one hand; and, on the other hand, evidence by video link, which now makes it possible for oral evidence by a witness and cross-examination to be done in this manner.

Key new statutes like the Arbitration Act No 18 of 2022 and developments such as the proposed Mediation Bill and the Evidence Bill are reshaping how contracts are drafted, enforcement of rights and obligations to a contract, and dispute resolution. At the same time, sectoral reforms in telecommunications, energy, land rights, mineral resources and mining, oil and gas, fintech and dispute resolution, especially with reference to cross-border transactions, now require a more thorough and robust understanding from not only a legal but also a practical perspective. In addition, a hands-on approach is required to navigate the maze of compliance and regulatory requirements and, more so, how they impact the discussions, negotiations or entering into a contract.

Cross-border transactions – predictability and certainty

Growing cross-border activity

The notable uptake in foreign direct investment in the energy, mineral resources, fintech and agribusiness industries, mergers and acquisitions (M&A) deals, e-commerce and payment systems, international trade and the supply of goods and/or services, and a myriad of other cross-border transactions in Sierra Leone has in turn required an upping of the game, so to speak, in terms of predictability and certainty. Providing the required contractual and other forms of comfort to investors and lenders has also had a say in the way financing is structured. Environment, Social and Governance (ESG) compliance is also now of equal importance in the grand scheme of things. It is therefore not uncommon to see agreements entered into that seek to provide predictability and certainty. This has meant very robust and sometimes novel and more sophisticated agreements are being entered into, containing contractual clauses on (among others) choice of law, jurisdiction and enforceability.

Key contractual trends and their practical implications

  • Contract formation – It is important to note that, under Sierra Leone law, a contract can be in writing, oral, as well as partly oral and partly written. It is equally important that parties ensure that their contract is drafted in a language that removes ambiguity and means precisely what was intended. It is also not uncommon for contracts to be inferred from the conduct of the parties. This is, of course, subject to exceptions for certain types of contracts as provided for in the Statute of Frauds 1677 and the Registration of Instruments (Amendment) Act.
  • Exclusion and limitation – Exclusion and limitation (E&L) clauses are no doubt an essential tool in excluding or limiting exposure to financial loss and/or jeopardy. Although, invariably, interpretation or construction of an E&L clause will in most cases require court intervention, well thought out E&L clauses have provided the foundation upon which a case for exclusion and limitation of liability, exposure and jeopardy can be better made.
  • Warranty and indemnity insurance (W&I) – W&I is becoming a recurring feature in M&A deals in Sierra Leone, a necessary tool in mitigating risk as well as providing a much-needed lubricating oil to facilitate or seal the deal. This buffer has been the key to providing protection from financial loss in some cases and, in others, a clean exit.
  • Good faith – Irrespective of the sector and/or nature of the transaction, a requirement to act in good faith is now being expressly provided or implied by the terms and/or conditions of the contract. The default drafting of choice now provides certainty as to what amounts to acting with fidelity, by stipulating the minimum actions that a party must take in order to meet the good faith threshold – rather than limiting it to the usual one or two sentence “good faith” wording in a contract, which opens it to myriad interpretations. Parties to a contract now see it as necessary for good faith obligations to be clothed with some extensive provisions rather than leaving them open to interpretation.
  • Choice of forum and governing law – A very clear and unambiguous provision as to the governing law as well as the forum for the resolution of disputes is enforceable. It has brought a great deal of certainty and predictability in dispute resolutions and is now standard in cross-border transaction agreements. By pre-selecting what law applies and the forum for dispute resolution, parties to the contract substantially take away the ambiguity in terms of costs and convenience (that would otherwise have erupted).
  • Force majeure and other unforeseen events – The advent of COVID-19, Ebola and other unforeseen events have focused light on the absolute necessity for force majeure provisions to be included in agreements. This has become increasingly common, as invoking a force majeure clause requires that such a provision was included from the outset.
  • Financing and lending – The recent increase in cross-border transactions has seen a number of customary and innovative financing models to finance them. For the venture capitalist, with risk there is always an opportunity. Managing the legal issues, in particular lending and its correlation with security, is pivotal in derisking transactions. Taking security and its enforcement, navigating enforcement processes and timelines that give lenders comfort, perfection, priority and remedies, withholding tax and stamp duty obligations, and exchange control (to name a few) all require practical consideration, recommendations and best practices. This is now quite common.
  • Anti-money laundering and other KYC obligations – In the era of doing business in the global business village, where big ticketed transfers can be executed at the touch of a button, where a face-to-face stare down and/or assessment of business counterpart is no longer necessary, and where the conducting of business sometimes comes with some unique security and or other challenges, compliance with the anti-money laundering and combating of financing of terrorism law requires an understanding of this environment: the Anti-Money Laundering and Combating of Financing of Terrorism Act No 2 of 2012 has adopted a risk-based approach in dealing with Know Your Customer (KYC) and Customer Due Diligence (CDD) procedures.
  • Digital execution and execution in counterparts – The use of electronic signatures and execution in counterparts is also being used and/or provided for quite frequently. This has allowed documents to be signed with greater ease and has been taken advantage of. In addition, the Arbitration Act 2022 expressly recognises written and electronic communication for arbitration agreements (Section 5). Signing electronically or in counterparts is now explicitly provided for in agreements.
  • Termination – A plethora of reasons can arise, post execution of a contract, whereby a party may wish to terminate as a result. In theory, exiting a contract should be simple and straightforward. In practice, this can be contentious. It is of the utmost importance that provisions in the contract reserve the right to do so as well as setting down the process. Very clear and unambiguous termination provisions are quite prevalent and necessary exit tools.

Fintech and digital commerce – new regulatory frontier

Ecosystem developments

Fintech in Sierra Leone – whether it be applications for mobile payments, mobile banking apps, online payment systems, digital lending, payment services or e-commerce (among others) – has seen an exponential growth under the watchful oversight by the Bank of Sierra Leone, ie, the Central Bank (the regulator whose supervisory function has been strengthened by a repertoire of statutory instruments and directives), as well as a clearly defined national strategy on digital transformation. These developments have served as a catalyst for change, revolutionising payment options.

While quite substantial progress has been made in this sector in Sierra Leone, there is without a doubt quite a lot more to be done in relation to the application of digital technology to financial services as well as automation of the process. Needless to say, the gap and/or delays in keeping up, when measured against regional or international benchmarks, has also created an opportunity that has served as a beacon or incentive to investors. This space is no longer the reserve of big multinationals and other players prevalent in the west: a number of home-grown companies with a local focus and bias have provided solutions to problems that are unique to Sierra Leone. That said, the sector is still in its embryonic stage and evolving. If done right, it has the potential to radically transform the financial services landscape in Sierra Leone. It also has the potential to build a more inclusive and efficient financial services industry and serve as a catalyst for economic growth. But with this opportunity come a number of easily identifiable risks that will need closer attention:

  • licensing and regulatory compliance;
  • data privacy and cybersecurity;
  • consumer protection;
  • financial and economic stability;
  • interconnection of different systems and platforms; and
  • anti-money laundering.

Extractive industries – mineral resources, mining, and environment and social governance (ESG)

A shelter from stormy waters

With the launch of the National Airborne Geophysical Survey Data in 2021, complemented by reforms in the regulatory and compliance landscape of the mining and mineral resources sector, an enabling environment for not only small, medium and large-scale companies but also indigenous concerns to operate has been created. This sector continues to attract a flurry of foreign direct investments, and has seen a number of M&A deals and ramped up interest judging by the sheer number of baseline inquiries and preliminary information now being sought, followed by requests for due diligence of the target company.

Any form of instability in western financial markets has seen institutional investors looking for safe havens. Gold, critical minerals, rare earth minerals and rutile sands, which are in no short supply in Sierra Leone, top the list and are the traditional bastions that institutional investors run to for shelter in stormy seas. The overabundance of natural resources has served as a magnet to investors. Equally, the increase in mining and mining-related activities has seen the formation of an ecosystem of companies that specialise in a wide array of services ranging from the provision of mining engineering services to mining logistics. The Mines and Minerals Development Act No 16 of 2022 (which replaced the previous 2009 Act) and the Mines and Minerals Development Regulations 2023 have together ushered in some far-reaching reforms in the sector. These include (to name a few):

  • surface rights;
  • compensation for disturbance of rights or damage to land;
  • distribution of surface rent;
  • licensing;
  • protection of the environment;
  • community development;
  • social protection; and
  • health and safety.

While the Ministry of Mines and Mineral Resources continues to provide policy and oversight of the industry, it is the National Minerals Agency established by the National Minerals Agency Act 2012 (now repealed and superseded) that is responsible for regulatory oversight and administration in the mining sector.

On the flip side of the coin, the global economy (and the sector in particular) has rapidly shifted towards sustainability, transparency and social responsibility. ESG is no longer a “nice-to-have” box that is ticked off as routine. It is now central in the decision-making process of FDIs, investors and lenders as to whether an investee or a destination is investable. FDIs and investors now (more than ever before) have dedicated teams that take a deeper look at not only the investees but, more importantly, the ESG ecosystem of the destinations that serve as hosts to investees. ESG is without doubt a global investment benchmark and this is making a big bang in Sierra Leone. Lenders, investors and institutional development finance institutions (DFIs) like the IFC, AFC, the African Development Bank and the European Investment Bank are increasingly requiring ESG compliance as a condition precedent for investment. It is clear that sustainable investment has become too relevant in some cases; in other cases, it is the priority for businesses against the backdrop of increased pressure from consumers, FDIs, investors, lenders and the regulators.

Irrespective of the viewer’s perspective, this is the new norm in Sierra Leone. In a landmark international conference hosted under the theme “Sustainable Futures: ESG as a Catalyst for Resilient Growth”, this was expanded on by panellists and conference participants. Without any doubt, ESG is now a fundamental paradigm shift in the way investment decisions are being made in the boardrooms of FDIs, investors and development partners, and Sierra Leone must pay attention or risk losing out. In short, an ESG compliance ecosystem has helped inform the investment choices of FDIs and institutional investors. ESG compliance ecosystems have been more successful than others in attracting investments. There is a direct correlation between ESG integration and accelerating foreign direct investment. FDIs and high-profile investors are aligning their portfolios towards better ESG performance.

The signal is there for all to see – a different approach to how investment decisions are now being made in the boardroom but whose effect is being felt by companies in developing countries and emerging economies such as Sierra Leone. Investees and ecosystems that fail to see this are being left behind. To change the narrative in Sierra Leone requires an ESG-sensitive private sector that will embrace ESG principles and strategies and, more importantly, integrate them in their operations – and therein lies the opportunity. ESG is no longer just about compliance. It is also about being relevant, competitive, attractive for investment and investor-friendly. Achieving this, however, requires an all-hands-on-deck approach and a repurposed mindset, complemented by a persistent and dedicated drive towards unlocking sustainable investment opportunities.

Alternative dispute resolution – arbitration

Resolution of commercial disputes by an agreement to submit to arbitration is more likely than not the preferred choice in commercial agreements as an alternative dispute resolution mechanism to litigation. It also brings the following advantages (to name a few):

  • predictability and certainty as to the process, in addition to the advantages of client preference;
  • a possibility of a hybrid approach of mediation and arbitration;
  • arbitrator expertise;
  • greater control;
  • lower costs;
  • speed;
  • convenience; and
  • privacy.

It is therefore not uncommon for parties to the agreement to agree to subject themselves to and be bound by the decision of an arbitration tribunal. In Sierra Leone, the march towards this dispensation in the resolution of commercial disputes received a much-needed bump with the passing of the Arbitration Act No 18 of 2022 (which replaced the previous Arbitration Act Cap 25 of the Laws of Sierra Leone 1960). This Act provides for:

  • the settlement of disputes by domestic and international arbitration;
  • the incorporation of the Convention on the Recognition and Enforcement of Arbitral Awards 1958 (the “New York Convention”) in respect of awards made in Sierra Leone or in a contracting state; and
  • the enforcement of an award made by the International Centre for the Settlement of Investment Disputes in Sierra Leone.

Avoiding a defective dispute resolution clause is the bedrock of ensuring a timely and cost-effective resolution of the dispute. Routinely, arbitration clauses in international contracts involving Sierra Leone companies or Sierra Leone assets now clearly provide the following:

  • an unambiguous and unequivocal agreement by the parties to resolve disputes through binding arbitration;
  • the scope of the dispute that will be subject to arbitration;
  • the arbitration institution of choice;
  • the rules that will be applicable;
  • the seat of arbitration;
  • the number of arbitrators;
  • the language;
  • the governing law;
  • the hybrid approach of mediation and, if such should fail, then arbitration; and
  • interim reliefs and other interim measures.

It is safe to say that this trend looks set to continue.

Macauley, Bangura & Co

4th Floor,
UMC Building
31 Lightfoot Boston Street
Freetown
Sierra Leone

+232 78 533 944

+232 22 224 227

info@mbclegal.org www.mbclegal.org
Author Business Card

Law and Practice

Authors

Centus Macauley
Isatu Jalloh

Macauley, Bangura & Co is a premier boutique law firm set up in May 2002. It is a leading service provider and multi-disciplined firm consisting of barristers, solicitors and in-house consultants all under the same roof, in the telecommunications, energy, oil and gas, fintech, ESG, banking, tourism, immigration, tax, energy, renewable energy, agribusiness, admiralty law and practice, mining and natural resources sectors. Macauley, Bangura & Co advises clients on a full range of corporate transactions including, but not limited to, banking, mergers and acquisitions, project finance, lending and providing security, due diligence, drafting and negotiation of transactions, securitisation, permits, regulatory compliance and dispute resolution. The firm has positioned itself to meet anticipated developmental strides in the expanding legal and private sectors in response to the rapidly changing needs of clients both within and outside the jurisdiction in the new period of “sustained economic growth” and “stability” in Sierra Leone. It has a competitive edge and maintains excellent relations with key players in the public and private sectors.

Trends and Developments

Authors

Centus Macauley
Isatu Jalloh

Macauley, Bangura & Co is a premier boutique law firm set up in May 2002. It is a leading service provider and multi-disciplined firm consisting of barristers, solicitors and in-house consultants all under the same roof, in the telecommunications, energy, oil and gas, fintech, ESG, banking, tourism, immigration, tax, energy, renewable energy, agribusiness, admiralty law and practice, mining and natural resources sectors. Macauley, Bangura & Co advises clients on a full range of corporate transactions including, but not limited to, banking, mergers and acquisitions, project finance, lending and providing security, due diligence, drafting and negotiation of transactions, securitisation, permits, regulatory compliance and dispute resolution. The firm has positioned itself to meet anticipated developmental strides in the expanding legal and private sectors in response to the rapidly changing needs of clients both within and outside the jurisdiction in the new period of “sustained economic growth” and “stability” in Sierra Leone. It has a competitive edge and maintains excellent relations with key players in the public and private sectors.

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