International Arbitration 2023 Comparisons

The business and commercial landscape in Zambia is characterised by commercial activity with international players in the mining and extractive sector, energy, petroleum, construction and general procurement related to these industries, and other general needs. The international parties in this commercial activity and the contracts that bind the transactions have characteristically been framed so that arbitration has been the favoured form of dispute resolution.

In view of the international nature of the transactions, international arbitration has been the favoured option for the resolution of disputes. The predominant basis for the application of international arbitration has been that the parties have chosen that mode of dispute resolution in their contracts, rather than for the enforcement of foreign awards or because Zambia has been appointed as the seat for the arbitration.

Domestic parties, on the other hand, have a preference for litigation for disputes for low-value transactions, although there is a growing trend towards arbitration where the subject matter of the dispute is of higher value.

Several industries have experienced significant international arbitration activity in recent years, particularly mining and infrastructure industries, owing to the heavy investment in these industries by international companies.

Another reason for increased international arbitration activity is legislative changes in the procurement sector which now require disputes in the supply chain management process and public procurement to be resolved by arbitration. Zambia is a net importer of goods and more so in the public sector. This reliance on imported goods implies that disputes in this sector are now commonly resolved by arbitration.

Although it is not possible to identify one particular arbitral institution as being the main contender for international arbitration activity in Zambia, some institutions are dominant. The ICC and the London Court of International Arbitration lead as institutions of choice. The International Centre for the Settlement of Investment Disputes (ICSID) has not seen much activity, even though the extractive industry is the mainstay of the Zambian economy. The records show that Zambia has not featured prominently at ICSID.

There is growing activity in the region with the emergence of the SADC Division of the Arbitration Foundation for Southern Africa and the recent announcement about the establishment of the Lusaka Centre for International Arbitration. Neither has been officially set up in Zambia, nor formally recognised, as required by law, but there are expectations that these institutions will be established soon.

Matters related to arbitration generally fall under the jurisdiction of the High Court and this court is singled out for the executory and supervisory assistance which is provided for under the Act. The Commercial Division of the High Court has a specialised section dealing with all arbitration-related matters, and specialised judges are similarly assigned to these matters. International and domestic arbitration are treated in much the same manner and there are as yet no legislative provisions that segregate the two.

The Industrial Relations Division of the High Court also has specified jurisdiction in mediation matters related to employer and employee relations.

International arbitration in Zambia is governed by the Arbitration Act, the drafting of which is based, to a large extent, on the UNCITRAL Model Law. In fact, Section 8 of the Act specifically incorporates the Model Law, indicating that its provisions generally apply in Zambia.

The Model Law is adopted subject to slight modifications relating to definitions, communications, the form of arbitration agreements, the nature of interim measures, the appointment of arbitrators and their substitutes, the treatment of defaulting parties, the form and content of awards, and recourse against awards and matters related to enforcement.

The modifications are not substantive and do not make a material departure from the Model Law. They merely align the content to local needs.

No changes have been recorded in the past year to the body of arbitration legislation in Zambia. There are however ongoing consultations with stakeholders, both in the private and public sectors, to overhaul the Arbitration Act and align its content and application to international standards and trends.

This review process is informed by the fact that the UNCITRAL Model Law, which forms the basis for the present Act, was superseded by a revised version in 2006.

There are further indications that any review of arbitration law in Zambia would reflect developments since the enactment of the present legislation in 2000. It is not anticipated that any legislative changes will materially affect the arbitration landscape but that they will achieve the purpose of aligning the present law to enhance arbitration practice in Zambia.

The law follows the requirements under Article 35 and 36 of the Model Law on recognition and enforcement of awards. The Act provides that an arbitral award will be recognised and enforced in Zambia even if it was made outside Zambia. The formal application must be made to the High Court attaching:

• the original award or a certified copy; and
• the arbitration agreement or a certified copy.

A party that complies will have fulfilled the recognition and enforcement requirements, subject to the exceptions that an award will not be recognised or enforced if:

• one of the parties lacks legal capacity;
• the agreement is invalid under the law of the country where the award was made;
• there was lack of notice of the appointment of the arbitrator and proceedings;
• the award deals with matters outside the arbitration agreement;
• the tribunal was wrongly composed;
• the award has not become binding or it has been set aside or suspended; and/or
• recognition of the award would be against public policy.

Parties can agree to refer disputes to arbitration subject to the exception that the following matters cannot be settled by arbitration under Zambian law:

• matters contrary to public policy;
• criminal matters, unless referred to arbitration by a court;
• matrimonial or incidental matters, unless a court grants permission;
• matters related to the determination of paternity, maternity or parentage; and/or
• matters affecting the interests of minors or persons under legal incapacity, unless represented by a competent person.

A challenge on the grounds of the “arbitrability” of a matter can be raised within the arbitration proceedings at the earliest possible time after the submission. A party can challenge the proceedings and raise jurisdictional issues, which the tribunal can determine by testing whether a dispute is arbitrable or not.

A fair number of cases have been brought before the courts where questions surrounding matters of governing law, enforcement of arbitration agreements and such related issues have been determined. The attitude of the courts has been supportive and the courts have respected agreements that deferred disputes to arbitration and have tended not to interfere in the resolution of those disputes.

The attitude is generally positive and supportive of agreements to arbitrate and the courts have readily recognised arbitral awards and rendered assistance in their enforcement.

The courts have pronounced rules which are designed to prescribe the procedure to employ where parties are seeking supervisory or executory assistance. The Arbitration (Court Proceedings) Rules 2001 deal with the staying of proceedings, requests for interim measures of protection, the appointment of arbitrators and their challenge, the enforcement of awards and their challenge, and the confidentiality of the arbitration process.

The principle of separability of the arbitration agreement in invalid contracts is applicable in Zambia and is entrenched in the Arbitration Act.

There are no limits or restrictions on the parties’ autonomy to select and appoint arbitrators of their choosing.

The Arbitration Act provides a well laid-out procedure for dealing with the default of the parties in appointing a tribunal. This procedure does not extend, however, to multiparty arbitrations because the scope of the act does not encompass multiparty disputes.

A court’s power to intervene with regard to appointed arbitrators is limited to the stipulations in Article 14 of the Model Law, where there is failure to act without undue delay and the party is aggrieved by the arbitrators’ conduct.

The courts can be called upon to terminate an appointment.

There is no provision which invites the involvement of the courts at this stage of selection, save for the default powers that the court acquires if the parties cannot agree on the selection.

An arbitrator’s appointment can be challenged under Zambian law in terms of Article 12(2) of the UNCITRAL Model Law (which Zambia has adopted)if circumstances exist that give rise to doubts as to the arbitrator’s impartiality or independence.

A further ground for challenge would be if it transpires that the arbitrator does not possess the qualifications the parties had previously agreed on for the person to be appointed to resolve their dispute.

There are no specific and listed requirements for independence, impartiality and/or disclosure of potential conflict of interest beyond the general reference under Article 12(2) of the Model Law, and where necessary, those requirements are considered and dealt with on a case-by-case basis. 

The Arbitration Act lists the types of disputes that are non-arbitrable in Zambia as:

• an agreement that is contrary to public policy;
• a dispute which in terms of any law may not be determined by arbitration;
• a criminal matter or proceeding, except if permitted by law or the court grants leave for arbitration to take place;
• a matrimonial cause;
• a matter incidental to a matrimonial cause, unless the court grants leave for arbitration to take place;
• a matter involving the determination of paternity, maternity or parentage of a person; and
• a matter involving the interests of a minor or other person under legal incapacity, unless such minor or person is represented by a competent person.

Zambia follows the UNCITRAL Model Law and recognises the principle of competence-competence. An arbitral tribunal may rule on its own jurisdiction.

An application to address issues relating to the jurisdiction of an arbitral tribunal must be made to the Zambian High Court only after the arbitral tribunal has made a determination on its jurisdiction. 

The courts will only intervene at the instance of an aggrieved party.

Zambian law does not provide for the review of negative rulings on jurisdiction by the court. Therefore, in instances where the tribunal has determined that it does not have jurisdiction, the courts will not intervene.

A party may challenge the jurisdiction of an arbitral tribunal within 15 days of the appointment of the arbitral tribunal. An aggrieved party has 30 days from the date of notice of ruling by the arbitral tribunal on its jurisdiction to apply to the High Court for determination of the arbitral tribunal’s jurisdiction. The decision of the High Court is final and not subject to further appeal. 

Arbitration in Zambia is not subject to judicial review.

The standard for judicial review for questions relating to admissibility and jurisdiction is de novo.

In line with Zambian law, the Zambian courts have consistently stayed proceedings before them and referred the matter to arbitration, where a party has commenced proceedings in breach of an arbitration agreement.

Zambian courts do not generally entertain proceedings in breach of an arbitration agreement.

Zambian law has no provisions that allow an arbitral tribunal to assume jurisdiction over individuals or entities that are not parties or signatories to an arbitration agreement or contract. 

An arbitral tribunal in Zambia is permitted to award preliminary or interim relief – unless the parties to the dispute have agreed otherwise. The said preliminary or interim relief, when granted, is binding.

The courts do play a role in preliminary or interim relief arbitration proceedings. For instance, the court is sometimes required to give executory assistance in aid of an interim relief granted by a foreign-seated arbitration proceeding. Another example where the courts play a role is the stay of any legal proceedings in contravention of a submission to arbitration. The courts will also play a role in granting relief where an arbitral tribunal has not yet been appointed but an urgent matter arises that requires an injunction.

The Zambian Arbitration Act allows for the courts and/or the arbitral tribunal to make security for costs orders. It is up to a party to the dispute to make a request for such interim measure of protection. 

The Arbitration Act does not prescribe any rules to be applied in arbitration proceedings. The choice of procedure remains for the parties to agree at the inception of the proceedings. The predominant choice would be the rules applicable, in the case of institutional arbitrations, by the institution under which the dispute is being arbitrated.

For instance, most domestic arbitrations would ordinarily be administered under the Procedural Rules of the CiArb Zambia Branch Rules, 2022. Where the proceedings relate to an international dispute, the applicable rules would be those of the institution that the parties selected in the arbitration agreement.

In the case of an ad hoc arbitration with no identifiable institution chosen by the parties, the procedural rules would be resolved by agreement during the course of the proceedings. Where the parties cannot agree, the act empowers the tribunal to prescribe the rules.

The procedural steps in any arbitration proceedings are a matter for agreement by the parties, and the law does not impose these in any dispute whether international or domestic. However, there is provision under the law to resolve an instance where there is default and, in that event, procedural steps are stated in the act.

The statutory default procedural prescriptions relate to:

• the appointment of an arbitrator(s) including a substitute arbitrator(s);
• the powers of a tribunal to order interim and other measures;
• the default of a party and failure to comply with directions in the timetable for the exchange of pleadings or to appear and attend hearings;
• the procedure for recognition and challenge of awards; and
• the procedure for initiating actions to invoke the court’s supervisory/executory powers in relation to arbitration proceedings.

The Act gives arbitrators the power:

• to order interim and other appropriate measures which include interim measures of protection, interim injunctions, orders compelling the attendance of a witness, etc;
• to appoint arbitrators in the event of failure to appoint, either by a party to the proceedings or where party-nominated arbitrators fail to agree the appointment of a third arbitrator;
• to grant leave for the revocation of a submission to arbitration for just cause;
• to stay court proceedings where there is a valid and subsisting submission to arbitration; and
• to extend the time within which an award may be delivered, or to remit and set aside an award.

Arbitration imposes duties on arbitrators which include:

• the duty to disclose circumstances that give rise to justifiable doubts as to the arbitrator’s impartiality or independence; and
• the duty to render an impartial award which conforms with Zambian laws.

The qualifications and requirements for legal representatives in Zambia relate only to representation before the courts. In that instance, a person must be admitted to the Zambian Bar. However, as regards representation for parties that are appearing in arbitration proceedings, the Act does not prescribe any qualifications or requirements, and therefore the parties are free to appoint a representative as they please.

The implication of this autonomy in the selection and appointment of legal representatives in arbitration proceedings is that, in fact, in the Zambian sense, a party can appoint a lawyer that is not qualified to appear before the courts in Zambia to act as counsel in arbitration proceedings without restriction. This applies to both domestic and international arbitrations.

The rules as to the admission and collection of evidence at pleading stage and at the hearing are not matters that are provided for in the Act and there are no prescribed rules for parties to follow in the arbitration process.

The parties are at liberty at the inception of the arbitration process, in the case of ad hoc submissions, to agree the rules of evidence that will apply and those will dictate the pace of submission and collection of evidence.

In the case of institutionally administered submissions, however, the applicable rules reside in the procedural rules of the respective arbitral institutions.

This position applies in both international and domestic arbitration.

Where the submission is administered under the procedural rules of an arbitral institution, the applicable rules of evidence would ordinarily be prescribed in those procedural rules. However, in any other instance, the parties are at liberty to agree whether or not their submission should be subjected to strict rules of evidence, and that agreement will prevail for that hearing.

On the application of a party, the courts have the power to hand out orders directing witnesses to attend hearings and to give evidence in a submission. This assistance by the courts extends to non-parties as well as parties, and the orders to attend to give evidence are compulsory in nature, in the manner of a subpoena before a competent court.

Confidentiality is emphasised in the Act. Parties to an arbitration agreement are deemed to commit not to publish, disclose or communicate any information relating to the arbitration proceedings or to an award made under those proceedings. This confidentiality obligation is subject to contrary agreement and the parties may, by mutual consent, indicate the instances where publication disclosure or communication is permissible. There are also exceptions under which disclosure may be permitted:

• when it is required under law;
• if it is to a professional or other adviser of the parties; and/or
• if it is required by an arbitral institution with assurances of anonymity.

The Act must also be read with the Arbitration (Court Proceedings) Rules which extend confidentiality to all proceedings that may arise out of the arbitration proceedings and these rules provide for the storage of records in a confidential registry with restricted access, and for all related court proceedings to be held in camera.

The Act specifies formal requirements for any award to be enforceable. The award must:

• be signed by the arbitrator/s;
• state the reasons upon which it is based, unless the parties have agreed otherwise;
• indicate the date and place where it is made; and
• be delivered to all parties to the arbitration.

There are no time limits for delivery of the award, although the Arbitration (Code of Conduct and Standards) Regulations issued under the Act require timely delivery of awards.

A tribunal may award remedies, legal and equitable, that are available to parties without limitation. The parties may, however, restrict the remedies that would be available if they so wish. If such an agreement is made, then the tribunal will be limited to that extent.

This means that under the law in Zambia, a tribunal can award punitive damages, order injunctive relief and hand down any relief possible and permissible under the law of the arbitration.

An arbitrator has the power to allocate the costs of the arbitration, including the arbitration fees, unless there is a contrary agreement by the parties. Normally, the rule of thumb is for the costs to be borne by the losing party, but the arbitrator may reallocate costs for various reasons, including improper conduct resulting in unnecessary delays or instances where a party unreasonably refuses a settlement against it which is equal to or about the amount actually awarded. The usual practice is for costs to follow the event.

A tribunal is also empowered to make awards of interest if the parties have not made any agreement to this effect and particularly, to award the interest (simple or compounded) in accordance with the law applicable to the arbitration.

Awards cannot be appealed. They are treated as final and can only be amended where:

• a party to the arbitration agreement was under some incapacity;
• the party making the application was not given proper notice of the appointment of the arbitrator or the proceedings;
• the award deals with matters not contemplated by or not falling within the terms of the submission to arbitration;
• the composition of the tribunal or the procedure followed was not in accordance with the agreement of the parties or of the law; and/or
• the award has not yet become binding on the parties or it has been set aside in the country in which it was made.

A challenge may also be mounted in instances where the subject matter cannot be settled by arbitration under the law in Zambia, or the award is in conflict with public policy, or if it can be shown that the award was influenced, induced or affected by fraud, corruption or misrepresentation.

The option to exclude or expand the scope of the appeal or challenge does not exist under Zambian law. The parties are bound by the provisions of the act as they relate to the finality of the award.

The standard of judicial review is not applicable in Zambia because of the finality of the award.

Zambia is party to the New York Convention, which it adopted in 2000. The adoption of the convention was a ratification on a non-reciprocal basis, meaning that foreign arbitral awards are enforceable in Zambia regardless of whether the awards were made in a party or non-party state.

A party wishing to enforce an award in Zambia should first attend to the award’s registration in terms of the Arbitration (Court Proceedings) Rules and, once that application is made in the prescribed format and it satisfies the requirements, the registrar will grant leave to have the award registered.

This order will specify a period within which application can be made to set aside the registration. A challenge should only be made in that period (usually 90 days). After this period, an applicant is at liberty to file a notice of the registration and, once registered, serve it on the judgment debtor on whom it can then be enforced.

An award that has been set aside by the courts of the jurisdiction where it was made or which is undergoing set-aside proceedings, may not be registered and its registration will be suspended pending the proceedings at the seat.

The sovereign immunity defence can properly be raised after registration.

The courts have been responsive regarding the recognition and enforcement of arbitration awards. The general approach has been to recognise the commitments made under the New York Convention and the prescriptions that are set out under the Act and its attendant regulations. There is no sign of the courts applying the “open-ended” public policy grounds for refusal of recognition. The position on the public policy argument, where it has arisen, appears to acknowledge the views of the Supreme Court of Zimbabwe in Zimbabwe Electricity Supply Authority v Maposa, where it was stated that public policy should be applied restrictively in order to preserve and recognise the basic objective of finality in arbitration.

Class action or group arbitrations are not provided for under Zambian law.

The ethical standards in arbitration practice reside in the Arbitration (Code of Ethics and Standards) Regulations 2007 which set out a code of conduct for arbitrators, resolving issues of:

• fairness and impartiality;
• disclosure;
• conflicts of interest;
• conduct of proceedings;
• settlement;
• confidentiality;
• impropriety;
• arbitrators’ qualifications;
• standards of decision-making and delays; and
• discipline for erring arbitrators.

The ethical standards for the lawyers appearing as counsel in arbitration proceedings are matters that are ordinarily dealt with under the regulatory framework for lawyers under the Legal Practitioners Act.

Zambia has no rules for third-party funding in arbitration.

The consolidation of disputes submitted separately or arising in any other instance is a procedural matter to be resolved by the applicable rules of procedure in any particular case. The rules applicable to a submission would therefore determine whether consolidation would be possible or not.

Where arbitrations are conducted and administered under institutional rules that provide for consolidation, then this would be possible for an arbitration taking place in Zambia. The element of party consent in that consideration would obviously bear on the decision to consolidate.

Third parties are not generally bound by agreements to which they are not a party, or to an award handed down from disputes arising from those agreements.