The following is an Africa Business Blog, presented by CHANG LAW. The blog series is posted on CHANG LAW’s International Arbitration (IA) Blog page, and covers a range of topics related to doing business in Africa.
The Arbitration Foundation of Southern Africa (AFSA) recently announced the creation of a new international arbitration center specialized in the resolution of commercial disputes between African and Chinese parties.
The new center is called the China Africa joint Arbitration Centre (CAJAC) and will be initially based in Johannesburg. CAJAC is the creation of AFSA, Africa ADR, the Association of Arbitrators, and the Shanghai International Trade Arbitration Center. Further, CAJAC will enjoy the support of the China Law Society (and the substantial governmental support that will entail) to promote the initiative as the approved forum for China-Africa commercial disputes.
CAJAC will reportedly begin accepting cases this October, and there are further plans to open a center in China.
The concept of a China-Africa dispute resolution center makes eminent sense, given that China is one of the largest sources of investment in Africa. The Chinese government has publicly stated that its outward foreign direct investments (FDI) will quadruple to USD $100 Billion from 2014 to 2020, while trade will double going from USD $200 Billion to USD $400 Billion in that same time frame. By comparison, the United States’ trade with Africa, while healthy (and catching up), was less than half of China’s in 2013.
In a sign of the importance of China-Africa trade and investment relations, Mauritius’ international arbitration center, the LCIA-MIAC, is also actively promoting itself as a strong choice for administration of Chinese-African disputes. The Mauritian government has presented itself as a financially, politically and legally stable and modern seat for Chinese investment into Africa and China-Africa disputes, as well as Africa-related arbitration disputes in general.
The establishment of CAJAC further evidences the considerable investment and trade pouring into Africa, and the accompanying need for specialized legal and dispute resolution services focused on Africa.