International Arbitration 2021 Comparisons

Last Updated August 17, 2021

Contributed By Omer Ali Law Firm

Law and Practice

Author



Omer Ali Law Firm provides legal consultancy services in Sudan to international, multinational and local clients in areas including corporate and commercial, foreign investments, arbitration, banking and financial services, employment, intellectual property, mergers and acquisitions, real estate, construction, oil and gas, mining and telecommunications. The firm is the Sudan member of the Africa Legal Network (ALN), an alliance of leading corporate law firms currently in 15 key African jurisdictions. In the field of international arbitration, Dr Omer Ali (i) acted as co-counsel in an arbitration between oil companies and a governmental agency under the UNCITRAL Arbitration Rules, conducted in London, and in an arbitration on a real estate development project at Dubai International Arbitration Centre; (ii) acted as expert witness in an arbitration before the Court of Arbitration, ICC, London; (iii) acted as co-arbitrator in an arbitration between a Gulf-based company and a governmental agency, ICC International Court of Arbitration, Paris; and (iv) acted in an arbitration between a Sudanese company and an Indian company on an energy project, ICC International Court of Arbitration, London; besides acting as chair or co-arbitrator in domestic arbitrations.

The Sudanese Arbitration Act 2016 (the “Arbitration Act”) is applicable to both international and domestic arbitration. Generally speaking, international arbitration is prevalent when one party or both parties to the arbitration are foreigners. The main business areas where international arbitration is prevalent are oil, infrastructure, mining and construction.

However, it should be noted that Sudan was subject to USA and other sanctions from 1993, as a result of which there was a sharp drop in the number of foreign investors investing in the country, with the exception of the above industries, and hence there was a limited number of international arbitration cases. These sanctions were lifted recently, and there is potential for an increased number of foreign investors coming to the country.

Domestic parties prefer litigation as method of dispute resolution; however, arbitration is chosen for dispute resolution in contracts between sophisticated local businesses when the contract value is relatively high. An area where there is significant referral to domestic arbitration is banking, due to the fact that there is legislation which makes it mandatory to refer disputes regarding assets mortgaged to banks to arbitration (The Sale of Assets Mortgaged to Banks Act 1990).   

International arbitration is used mainly as the chosen means of dispute resolution by the parties in their contracts, when referred to arbitration by a court upon agreement of the parties to a dispute, as well as the method of dispute resolution or for enforcement of foreign arbitral awards.

Due to restrictions associated with the COVID-19 pandemic, especially travel restrictions, there was drop in arbitration-related activities. Also there was a change in communications regarding arbitration as there was more resort to virtual communication.

As already mentioned, the industries which witness international arbitration cases more than others are oil, infrastructure, mining and construction. The reason is that the contracts in these industries are mainly with foreign companies which prefer to resort to international arbitration for dispute resolution. The majority of these contracts being with the government, foreign companies prefer international arbitration for reasons such as the negative perception by multinationals towards local courts in developing countries including delays in dispute resolution, the perception that international arbitrations are conducted in an impartial and neutral manner, and the fact that foreign arbitration awards are enforceable by Sudanese courts.

It would not be easy to detect whether there has been an increase or decrease of international arbitration cases in 2020–21 as a result of the COVID-19 pandemic, due to the limited number of international arbitration cases and the relatively long time the parties take before reaching the point of resorting to arbitration.

The arbitral institutions most used for international arbitration in Sudan are the International Chamber of Commerce (ICC), the London Court of International Arbitration (LCIA) and UNCITRAL. Recently, the Dubai International Arbitration Centre has been used, though in a limited manner.

In Sudan there are no recognised institutions for international arbitration, and only a few small centres for domestic arbitration.

However, theoretically a window for a wider range of international arbitration institutions is available for foreign investors in Sudan whether under various investment protection treaties to which Sudan is party, or under the Investment Act 2021, which gives the foreign investor the option to refer any dispute regarding its investment in Sudan to a specialised court or to resort to whichever is applicable from the following investment agreements (to all of which Sudan is party): (i) the Unified Agreement for the Investment of Arab Capital in Arab States 1980; (ii) the Agreement for Settlement of Investment Disputes among Arab States 1974; (iii) the Convention on the Settlement of Investment Disputes between States and Nationals of Other States 1965; (iv) the General Agreement for Economic, Technical and Commercial Co-operation among Member States of the Organization of the Islamic Conference 1977; or indeed to any other relevant agreement to which Sudan is party.

For international arbitrations the court designated to hear disputes related to arbitration is the Khartoum General Court unless the parties agree on another General Court in Sudan as the court to hear the dispute, and for domestic arbitrations it is the competent court (which is the court which would have jurisdiction over the dispute if it had not been referred to arbitration). However, for a dispute regarding the annulment (setting aside) of an arbitration award, the Court of Appeal is designated to hear the case.

Law Governing Arbitration

The national legislation which governs international arbitration is the Arbitration Act 2016. The same legislation governs domestic arbitration as well. Section 7 of the Arbitration Act provides that an arbitration is categorised as “international” if: (i) the main centres of the businesses of the parties to the arbitration are in two different countries; and(ii) the subject matter of the arbitration is related to more than one country.

Divergence from UNCITRAL Model Law

Broadly speaking, it can be said that there are several areas where the Arbitration Act diverges from the UNCITRAL Model Law. The main areas of divergence are as follows.

  • The rules regarding interim measures are relatively restricted under the Arbitration Act compared with those under the UNCITRAL Model Law. The Arbitration Act simply refers to the domestic rules under the Civil Procedures Act 1983 without any elaboration. The domestic rules are narrower compared with the rules under the Model Law. Also, the Model Law sets rules for recognition and enforcement of interim measures; there are no similar rules under the Arbitration Act.
  • (The definition of “international arbitration” is much narrower under the Arbitration Act (section 7) compared with the Model Law (Article 1 (3)).
  • The Model Law limits the applicability of the Law only if the place of arbitration is in the territory of the enacting State with specific exceptions, which is not the case in the Arbitration Act.
  • The Model Law provides a high level of guarantee against intervention by local courts in the arbitration proceedings by limiting court intervention to cases provided by the Law. There is no similar provision in the Arbitration Act.
  • In case there is a challenge to an arbitrator, the Model Law provides that, pending the court ruling, the arbitral tribunal (including the challenged arbitrator) may continue the arbitral proceedings and make an award, whereas the Arbitration Act provides that the arbitration proceedings shall be suspended.
  • Under the Model Law, if there is a plea by a party that the arbitral tribunal does not have jurisdiction, the tribunal may rule on the plea either as a preliminary question or in an award on the merits, whereas the Arbitration Act directs the tribunal to make its ruling before hearing the case.
  • The Model Law gives the arbitral tribunal the power to decide on the language to be used in the arbitration proceedings if the parties fail to agree, whereas the Arbitration Law makes the Arabic language the default language.
  • As regards the rules governing the substance of the dispute if such rules were not designated by the parties, the Model Law empowers the arbitral tribunal to apply the law determined by the conflict of laws rules which it considers applicable; the Arbitration Act provides for the application of the rules the arbitral tribunal deems appropriate in the law most related to the subject matter of the dispute. In a related matter, the Sudanese law does not give the arbitral tribunal the power to decide the dispute ex aequo et bono or as amiable compositeur (the tribunal to consider the dispute according to what is fair and just under the particular circumstances of the case, rather than strictly according to the rule of law), if so authorised by the parties, as the case is under the Model Law. Under the Sudanese law, this rule can be applied only if the parties authorise the arbitral tribunal to conciliate.
  • A condition for recognition and enforcement of an arbitral award under the Sudanese law is reciprocity, which is not a condition under the Model Law. 

There have been no significant changes to the national arbitration law in the past year. From our private contacts, we learned that there are ongoing discussions over changes to the law such that the arbitration law would be more in line with the UNCITRAL Model Law.

For any arbitration agreement to be enforceable in Sudan, it must satisfy the basic requirements for enforceability of contracts, which are provided for in the Civil Transactions Act 1984, namely capacity of the parties to contract, validity of the contract, and compliance with any form required by law.

Under Section 42 of the Arbitration Act, causes for annulment of an arbitration award include, inter alia, if the arbitration agreement was (i) non-existent, (ii) void, or (iii) voidable, (iv) its term has expired, or (v) a party was under incapacity under the law governing such party’s capacity. 

Section 8 of the Arbitration Act requires that an arbitration agreement must be in writing, otherwise it will be considered void. Correspondence between the parties through various communication means would be considered as writing. Under Section 10 (1) agreement among parties to a dispute before a court to refer their dispute to arbitration would be considered as an agreement made in writing.

In Mohamed Abdalla Mohamed Effendi v Terhaga Engineering Trading Limited, SC/CA/5/2003, the Supreme Court ruled that an agreement to arbitrate must be clear and unambiguous, and may not be inferred from reading between the lines; accordingly, an agreement to appoint an expert to examine accounts would not be considered an agreement to refer to arbitration.

The Arbitration Act limits arbitration to civil transactions, whether contractual or otherwise; however, it excludes any matter regarding which no conciliation (sulh) can be made. In Sudanese law (the Civil Transactions Act 1984), conciliation is defined as a contract whereby a dispute is resolved and litigation ceases between the contracting parties in a mutual manner. Under Islamic Shari’a, which must be respected in all legal aspects, there are certain matters which cannot be the subject of conciliation, such as personal status matters.

Another matter which the Supreme Court (in Flatco International Engineering v Amer Mohamed Ibrahim, SC/CA/645/2009) ruled as not referable to arbitration is a dispute regarding an employment contract between an employer and an individual employee, as distinct from a collective agreement, which the Sudanese labour law has permitted to be referred to arbitration.

Sudanese courts respect the law governing the arbitration agreement. The courts enforce arbitration agreements, which are usually enforced once an application for enforcement has been made and the court is satisfied that there was ground for enforcement.

In Sas Building and Construction Company v Abdelfatah Abdelmo’ati Mohamed, SC/CA/1053/2008, the court referred the parties to arbitration because there was an arbitration clause in the contract between the parties. An arbitration agreement was prepared by the arbitrators; however, it was not signed by one of the parties. The award was challenged on the basis, inter alia, that it was not made within three months as stipulated in the arbitration agreement. The court took the view that even if an arbitration agreement becomes void due to the tribunal’s failure to deliver an award within the agreed time frame, non-validity would not extend to the arbitration clause which did not fix a time frame for delivery of award, and hence the six months’ term in the law would prevail, and as the award was delivered within the term fixed by law, the award shall stand. On the same basis, if an arbitration clause under a contract is invalid because it did not set out the matters which would be the subject of arbitration, such matters can be determined later by the parties’ agreement.

An arbitration clause will be considered valid even if the rest of the contract in which it is contained is invalid. The courts apply the rule of separability to arbitration clauses contained in invalid agreements.

Section 6 (2) of the Arbitration Act provides that an arbitration clause shall be considered an agreement independent from the other terms of the contract, and the invalidity or termination of the contract shall not have any effect on the arbitration clause in the contract.

The parties are free to appoint the arbitrators. However, under Section 12 of the Arbitration Act, the number of arbitrators shall be either one or a higher odd number; if the parties fail to agree, their number shall be three.

If the parties’ chosen method of selecting arbitrators fails, Section 14 of the Arbitration Act provides that in the case of an arbitration with more than one arbitrator each party shall appoint a similar number of arbitrators, and the arbitrators shall agree on the chairman or on how to appoint the chairman. If a party refuses or fails to appoint, or if the arbitrators fail to agree on a chairman, such appointment shall be made by the competent court at the request of a party, and its decision shall be final. In the case of an arbitration with one arbitrator, the parties shall choose him or agree on the mechanism for his appointment, otherwise the competent court shall appoint him at the request of a party.

Section 14 (2) of the Arbitration Act provides that if a party fails to appoint an arbitrator, or if the arbitrators appointed by the parties fail to appoint a chairman, such appointment shall be made by the competent court upon the application of a party, and the court’s decision shall be final. There are no limitations on the competent court’s power to appoint.

Under Section 16 of the Arbitration Act, a party may challenge an arbitrator if: (i) there arise circumstances which give rise to serious doubts regarding his impartiality or independence; (ii) the arbitrator becomes incapable of conducting arbitration proceedings, or he refrains from or discontinues from conducting the proceedings in such a manner as to cause unjustifiable delay in the proceedings and the parties cannot agree on removing him. Subject to the above, a party may not challenge an arbitrator appointed by it or in whose appointment it has participated, except for reasons it becomes aware of after the appointment was made.

Section 15 of the Arbitration Act requires an arbitrator: (i) to agree to act as arbitrator in writing; (ii) to disclose, in writing, any interest he may have or any circumstance which may raise doubts as to his impartiality and independence, such disclosure to be made at the time of appointment or at any later time.

In Sudan Cotton Company v Metcot International Trade Limited 674/2014, one of the reasons why the arbitration award was set aside was the fact that one of the arbitrators had acted as lawyer of a party and as such had given advice on the subject matter of the dispute.

As discussed in 3.2 Arbitrability, any matter regarding which no conciliation (sulh) can be made is excluded from arbitration. Based on court precedents, an employment contract (as distinct from a collective labour agreement) may not be referred to arbitration.

Section 6 (1) (b) of the Arbitration Act provides that the arbitral tribunal shall rule on any challenge as regards the tribunal’s jurisdiction; hence, Sudanese law recognises the principle of competence-competence.

The Arbitration Act is silent regarding any reference to courts on the decision of an arbitral tribunal under Section 6, which provides that in case a party challenges the tribunal’s jurisdiction on the basis that the arbitration agreement does not exist, is void or does not cover the subject of the dispute, the arbitral tribunal shall make a ruling on jurisdiction before hearing the case. 

The author is not aware of any case where Sudanese courts have reviewed a negative ruling on jurisdiction by an arbitral tribunal. 

As explained, because the parties may not challenge the decision of an arbitral tribunal on its jurisdiction before the courts, there is no time limit for such action.

Generally speaking, it can be said that the standard of judicial review is deferential. Sudanese courts generally support arbitration proceedings; only in the case of setting aside an arbitration award may a party refer the dispute to the competent court.

Sudanese courts are directed to suspend proceedings if brought in breach of an arbitration agreement. Section 9 of the Arbitration Act provides that the court before which a dispute has been brought regarding which there is an arbitration agreement must dismiss the case for lack of jurisdiction if the respondent challenges the court's jurisdiction before or at the time of making its response to the statement of claim, otherwise the respondent shall be considered as having waived its right to challenge based on the arbitration clause.

There is no express provision in Sudanese law which allows an arbitral tribunal to assume jurisdiction over individuals or entities that are neither party to an arbitration agreement nor signatories to a contract containing an arbitration agreement.

An arbitral tribunal is permitted to award preliminary or interim relief, and such relief is binding. If the relief is required prior to the arbitrators’ appointment, it can be sought from the competent court. Section 11 of the Arbitration Act provides that any of the parties may request interim relief from the competent court before the tribunal is formed or from the tribunal after its formation. The competent court or the arbitral tribunal, as the case may be, shall make its orders pursuant to the interim relief provisions in the Civil Procedures Act 1983, and its decision shall be final. Such orders shall be enforced by the competent court pursuant to the provisions of the Civil Procedures Act 1983, and its enforcement order shall be final.

The types of preliminary measures which a court, or an arbitral tribunal, can grant are as outlined in the Civil Procedures Act 1983, Sections 139 to 156 (inclusive). These measures include: (i) power to arrest the respondent if there are grounds to suspect that he is about to leave Sudan, or dispose of or remove his property, pending his provision of a deposit or guarantee; (ii) power to attach property; (iii) injunction against waste, damage or alienation of property in dispute; (iv) injunction against breach of contract or cause of injury; and (v) appointment of receiver for the property in dispute.

An injunction directed against a company shall be binding also on all its members and officials for whose personal acts the injunction is intended.

Relief in Aid of Foreign Arbitration

As regards whether the courts in Sudan can grant interim relief in aid of foreign-seated arbitrations, there is at least one precedent, albeit before the current Arbitration Act and its predecessor the Arbitration Act 2005, where the Court of Appeal ordered the freezing of certain payments due to a foreign entity with no domicile or residence in Sudan, pending the outcome of a foreign-seated arbitration (Mo Myson Group of Companies v Domen Anderman Reven, CA/CA/276/1981). In this case the court both exercised jurisdiction and referred the case to international arbitration despite the objection of the respondent that the court lacked jurisdiction in light of the governing law clause which provided for a foreign law as the governing law, and took the interim measure of freezing money.     

There are no rules regarding emergency arbitrators in Sudanese law. 

The law allows the courts and/or the arbitral tribunal to order security for costs. Section 155 of the Civil Procedures Act 1983 provides that the court may prescribe not to issue the warrant/order requested unless the claimant pays into court such amount of money as the court may deem sufficient to cover the cost.

Under Section 21 of the Arbitration Act, the arbitral tribunal is directed to apply the substantive and procedural laws as agreed by the parties in the arbitration agreement or arbitration clause. In the absence of such agreement, the arbitral tribunal shall apply the procedural and substantial rules which it deems suitable in the law which is most related to the subject matter of the arbitration, provided the parties are treated on an equal footing.

Certain procedural steps are required by law under the Arbitration Act. 

  • Arbitration proceedings are deemed to commence on the date when the respondent receives the statement of claim, unless the parties agree on another date.
  • The place of arbitration shall be determined by the arbitral tribunal unless the parties have already agreed on such place.
  • Arabic shall be the language of arbitration unless the parties shall agree on another language; however, there could be translations into other languages as requested by the parties.
  • The contents of the statement of claim shall be: (a) the name, capacity, nationality and address of the claimant; (b) the name, capacity, nationality and address of the respondent; (c) a description of the dispute and facts; (d) the claimant’s claims.
  • The statement of claim shall be presented in writing to the respondent and the arbitral tribunal, enclosing a copy of the contract and the arbitration agreement if not part of the contract.
  • The respondent shall present its defences and claims for the claimant to make response.
  • The arbitral tribunal shall arrange for hearing sessions in order to enable each party to explain the subject matter of the arbitration and present its arguments and evidence; however, the arbitral tribunal may limit the proceedings to exchange of written submissions and documents if the parties shall so agree.
  • If a party shall abstain despite being notified without an acceptable reason, the arbitral tribunal may carry on with the proceedings at the request of the other party; however, such abstention shall not be taken as admission by the abstaining party.
  • A party may request the arbitral tribunal to summon a witness to appear or a third party to produce evidence. The arbitral tribunal may refer such request to the competent court for action.
  • The arbitral tribunal may appoint experts, in which case the parties are required to provide each expert with all information regarding the arbitration. A copy of the expert’s report shall be sent by the arbitral tribunal to each party.

The powers and duties which the Sudanese law imposes upon arbitrators are as follows.

  • To decide on any challenge by a party to the arbitrator’s own jurisdiction.
  • To decide on any application for interim relief.
  • To determine the applicable procedural and substantive law in case it is not agreed by the parties.
  • To determine the place of arbitration in case it is not agreed by the parties.
  • To seek the assistance of experts.
  • To seek the assistance of the competent court regarding summoning of witnesses or provision of evidence.
  • In the event of a challenge that a matter is outside the scope of its jurisdiction, or an allegation that a certain document presented is forged, the arbitral tribunal may decide either to continue proceedings if the alleged matter or document would not have substantial impact on the proceedings, or to suspend proceedings pending the ruling of the competent court on the disputed matter or document.

There are no specific qualifications or other requirements in order for a legal representative to appear in arbitral proceedings.

Legal representation before courts is regulated by the Advocacy Act 1983. The law requires certain qualifications including a degree in law and undergoing professional training for the granting of an advocacy licence. A licensed advocate must be Sudanese; exceptionally, a foreign lawyer may be licensed on the basis of reciprocity and he can appear with a domestic advocate. These rules are applicable to domestic court proceedings.

There are no specific rules regarding collection and submission of evidence at the pleading stage and at the hearing, such as discovery, disclosure, privilege, use of witness statements and cross-examination. However, in theory all these evidential approaches may be used.

The main legislation regarding rules of evidence applicable in Sudan is the Evidence Act 1994. However, this Act expressly provides that it is not applicable in cases of arbitration or conciliation unless the parties agree for it to be applicable.

There are no specific legislative provisions regarding rules of evidence applicable to arbitral proceedings in the absence of the parties’ agreement to apply the Sudanese domestic evidence rules. This is left to the arbitral tribunal under Section 21 of the Arbitration Act, which provides that in case the parties have not agreed on the substantial or procedural laws governing the arbitration, the arbitral tribunal shall determine such laws.

Section 28 of the Arbitration Act provides that a party may request the arbitral tribunal to summon any witness to be heard or any third party to present evidence. The arbitral tribunal, if it considers it necessary, shall refer such request to the competent court, which shall enforce such request within the limits of its own jurisdiction.

The law is silent regarding whether the arbitral tribunal can take such action on its own motion without the request of a party.

There are no specific rules regarding confidentiality of arbitral proceedings or their constituent parts. However, in practice, the arbitral proceedings and their constituent parts, such as pleadings, documents and the award, are usually kept confidential. A case where parts of such proceedings may become public is where a challenge arises before the courts regarding any aspect of the arbitration, and the ruling of the court is published.

Legal Requirements for an Award

Section 34 of the Arbitration Act provides the requirements for an arbitral award. The arbitral award must be (i) in writing, (ii) reasoned, (iii) dated, and (iv) signed by the arbitrators or the majority of the arbitral tribunal, and (v) the dissenting opinion, if any, shall be recorded in a separate document.

Time Limits

Under Section 33 of the Arbitration Act, the award shall be delivered during the time frame agreed by the parties, and within six months if no such agreement exists. However, if no award is delivered within the time frames stated above, the parties may agree on a time extension, and in the case of disagreement between the parties the extension can be determined by the arbitral tribunal, which decision shall be final. Section 35 (d) of the Arbitration Act provides that arbitration proceedings terminate, inter alia, upon the expiry of the time fixed for the arbitration.

In Sudan Cotton Company v Metcot International Trade Company Limited 674/2014, the Supreme Court decided to set aside the arbitration award for several reasons including, inter alia, that the award was delivered after the expiry of the time fixed by law (six months) in the absence of parties’ agreement on a time frame for the proceedings.

Generally speaking, there are no legal provisions limiting the types of remedies an arbitral tribunal may award. Under Section 31 of the Arbitration Act, the arbitral tribunal shall take into consideration the terms of the contract, the subject of the dispute and the customs prevailing in the relevant industry. A reason for which an arbitral award may be set aside in Section 42 is if the award disregards the applicable law under the arbitration agreement or if it includes points not within the arbitration agreement. We have already seen that Section 25 of the Arbitration Act requires that the parties’ submissions shall include their respective claims. Accordingly, it may be said that the remedies awarded should fall within one or more of the following: (i) the parties’ claims; (ii) the contract, the subject of the arbitration and the arbitration agreement; (iii) the law applicable to the arbitration; (iv) the customs prevailing in the relevant industry.

Recovering Interest

In Sudan, interest would be considered illegal and unenforceable, because Section 110 of the Civil Procedures Act 1983 provides that a court in Sudan shall under no circumstance whatsoever make a decree ordering payment of interest on the principal sum adjudged, and also because the dominant view in Islamic legal literature is that any interest would be considered as usury (riba) disallowed under Islamic Shari'a rules, and it is our view that a Sudanese court would follow such view because Sudanese courts are directed to follow Islamic Shari'a. Further, there is at least one Sudanese precedent where the Supreme Court rejected a claim for payment of interest due to late payment under a contract, holding that pursuant to Section 110 of the Civil Procedures Act 1983 payment of interest shall not be made under any circumstance whatsoever, and that this rule is a matter of public order. Invalidity would be limited to the interest only, and would not extend to the principal debt. A recent legislation introduced in May 2021 has excluded “financial and banking business adopting the conventional system” from this ban. Accordingly, if an award contains payment of interest, Sudanese courts would not enforce the part of the award on interest, except if the underlying transaction that is the subject of arbitration is regarding financial or banking business adopting the conventional, as opposed to Islamic, system of finance.

Legal Costs

As regards legal costs, the general rule under the Civil Procedures Act 1983 is that the cost shall be borne by the party against whom the judgment is made, unless the court decides otherwise. In practice, in arbitration cases a “costs follow the event” approach is followed.

An arbitration award is final, binding and shall be executed automatically or upon written application to the competent court (Section 41 of the Arbitration Act).

The only ground to appeal an arbitration award to courts is under Section 42 of the Arbitration Act and only on the ground of annulment (setting aside) of the award for one of the following reasons, namely:

  • if the arbitration agreement is non-existent, void or voidable or its term has expired;
  • if, at the time of making the arbitration agreement, a party was under incapacity according to the law governing such party’s capacity;
  • if a party could not present its case due to lack of proper notice as regards appointment of arbitrators, the arbitration proceedings or for any other reason beyond the party’s control;
  • if the award excludes application of the applicable law as agreed by the parties;
  • if the arbitrators were appointed in a manner contrary to law or the parties’ agreement;
  • if the award contains matters not within the scope of the arbitration agreement; however, if it is possible to separate the parts of the award within the scope of the arbitration agreement from those which are not within such scope, nullity can be as regards the parts not within the scope of the agreement; or
  • if the award or the proceedings were induced by nullity in a manner affecting the award.

Application for nullity shall be made to the court of appeal, which may annul an award on its own motion if the award is contrary to public order in Sudan. Application shall be made within two weeks from the date when the applicant became aware of the award, or the date when the award was declared if the applicant was given proper notice but failed to appear.

The general rule followed by Sudanese courts is that the parties cannot bar a court from exercising its jurisdiction, such exercise being a matter of public policy. Accordingly, despite the fact that the law is silent as regards whether the parties can agree to exclude or expand the scope of appeal or challenge an award, in light of the above general rule, the courts would not allow such exclusion or expansion.

If an arbitration award is set aside, the dispute may be referred to the competent court at the request of a party (Section 45 of the Arbitration Act).

In 2018, Sudan acceded to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and thus became the 159th Contracting State to this Convention. On 26 March 2018, Sudan deposited its instrument of accession to the Convention with the UN Secretary General, and in accordance with Article XII (2) of the Convention, the Convention entered into force in Sudan on 24 June 2018.

Under Section 41 of the Arbitration Act, an arbitration award shall be enforced by the competent court if not complied with voluntarily.

Section 47 of the Arbitration Act sets out the requirements for enforcing an arbitration award as follows.

  • A copy of the award is enclosed with the application for enforcement.
  • The time during which an annulment application may be made (two weeks from the date on the applicant became aware of the award, or from the date when the award is declared if the applicant has been properly given notice) has expired.
  • The other party has been properly notified.
  • The award, or any part of the award, does not contain a matter contravening public order in Sudan; the court shall enforce the part of the award in compliance with public order and abstain from enforcement of the part in contravention of public order.

If an award has been set aside by the courts in the seat of arbitration, it cannot be enforced in the courts of Sudan, because one of the conditions for enforcement of foreign arbitration awards under Section 48 of the Arbitration Act is that the award must become final in accordance with the laws of the seat of arbitration. No application for enforcement would be accepted by the court pending a resolution of the proceedings at the seat of arbitration.

Enforcement against the Government

The Civil Procedures Act 1983 provides that no court proceedings against any governmental agency may commence except after giving two months’ notice to the Minister of Justice, unless the Minister of Justice gives permission to start proceedings before the expiry of the two-month period. In Sudanese Telecommunications Company v The Postal and Telegram Public Corporation, SC/CA/382/2002, the Supreme Court held that no arbitration award against a government agency may be filed with a court for enforcement except after complying with the above requirement of giving notice to the Minister of Justice.

Sovereign Immunity

Sovereign immunity is regulated under the Privileges and Immunities Act 1956, which provides for privileges and immunities of diplomatic missions and members thereof, including immunity against civil and criminal cases. Sudan is a signatory to the Vienna Convention on Diplomatic Relations, and generally speaking the Sudanese courts would recognise the doctrine of sovereign and diplomatic immunity as a principle of public international law. However, as international arbitration normally regards commercial matters, which are not included within the scope of immunities in international law, there would be no room for a state or state entity to successfully raise a defence of sovereign immunity at the enforcement stage, unless the award is against a diplomatic mission based in Sudan and not the state itself.     

Generally speaking, the general approach of the Sudanese courts towards the recognition and enforcement of arbitration awards is positive. A main ground for refusing enforcement is the public policy ground. As we have already seen in 12.2 Enforcement Procedure, under Section 47 of the Arbitration Act, one of the conditions for enforcement of an international arbitration award in Sudan is that the award shall not contain any matter which is contrary to public order in Sudan. The standard applied as regards refusing enforcement of an award is domestic public policy.

In Sudan Cotton Company v Metcot International Trade Company Limited 674/2014, the court decided to set aside the arbitration award for several reasons including that the subject matter of the arbitration was at the time of the proceedings under criminal investigation, and as such the arbitration proceedings were in violation of public order, because the criminal law system is designed for the purpose of protecting the interests of society at large, whereas civil proceedings are for the protection of the private interests of individuals.

Section 49 of the Arbitration Act provides that an order by the competent court for enforcement of an arbitration award is not appealable. However, the Supreme Court did allow an appeal because the competent court interfered in the arbitral award by deducting tax from the amount awarded (Sas Building and Construction Limited v Zhang Construction Limited, SC/CA/2032/2016).   

The Arbitration Act does not provide for class-action arbitration or group arbitration.

Under the Sudanese Labour Act 1997, a dispute between an employer and all or a group of its employees (ie, collective agreement) shall be referred to arbitration if such dispute could not be resolved through negotiation or conciliation. This is a special arbitration regime for which the Labour Act 1997 sets specific rules.

There are no specific ethical codes or other professional standards applicable to arbitrators, other than the general rules in the Arbitration Act regarding impartiality, independence and duty of disclosure of interest. As regards counsel, the Advocacy Act 1983 sets certain rules including: to exert maximum effort for the client’s interest; to be bound by the rule of confidentiality; not to provide legal service to the client’s opponent; not to buy the disputed rights directly or indirectly; the fees not to be a percentage or part of the disputed right or the outcome of the case; and return of documents, files and property to the client upon termination of the engagement.

In Sudan, there are no specific rules or restrictions on third-party funding. As regards counsel, we have seen that the Advocacy Act 1983 prohibits that the legal fee be agreed as a percentage or part of the disputed right or related to the outcome of the case.

The Arbitration Act is silent regarding consolidation of separate arbitration proceedings. However, in theory, it can be argued that consolidation should be possible if the parties so agree and no third party’s interest is affected as a result.

There is no provision in Sudan law as to third parties being bound by an arbitration agreement or award, or for the courts to bind foreign third parties.

Omer Ali Law Firm

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Law and Practice in Sudan

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Omer Ali Law Firm provides legal consultancy services in Sudan to international, multinational and local clients in areas including corporate and commercial, foreign investments, arbitration, banking and financial services, employment, intellectual property, mergers and acquisitions, real estate, construction, oil and gas, mining and telecommunications. The firm is the Sudan member of the Africa Legal Network (ALN), an alliance of leading corporate law firms currently in 15 key African jurisdictions. In the field of international arbitration, Dr Omer Ali (i) acted as co-counsel in an arbitration between oil companies and a governmental agency under the UNCITRAL Arbitration Rules, conducted in London, and in an arbitration on a real estate development project at Dubai International Arbitration Centre; (ii) acted as expert witness in an arbitration before the Court of Arbitration, ICC, London; (iii) acted as co-arbitrator in an arbitration between a Gulf-based company and a governmental agency, ICC International Court of Arbitration, Paris; and (iv) acted in an arbitration between a Sudanese company and an Indian company on an energy project, ICC International Court of Arbitration, London; besides acting as chair or co-arbitrator in domestic arbitrations.