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21/04/2017

Arbitration in Mozambique – The Basics


A)   Legal Framework
In Mozambique, arbitration is primarily recognized by the Constitution of the Republic[1]. Article 4 establishes that “the State recognizes the various normative and dispute resolution systems which coexist in the Mozambican society, as long as they do not contradict the fundamental values and principles of the Constitution”. Specifically Article 223 states that “administrative, labour, fiscal, customs, maritime, arbitration and communal tribunals, may exist[2].

Arbitration in Mozambique is governed by the Law on Arbitration, Conciliation and Mediation dated 8 July 1999[3] (“the Arbitration Law”). It was formerly governed by provisions in the Civil Procedure Code[4] but it can be said that it is also based on a mixture of laws from other jurisdictions.

Mozambique is a party to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) and also a party to the 1960 Convention on the International Centre for Settlement of Investment Disputes (ICSID).

Mozambique is a civil law jurisdiction, and therefore does not have an established practice of binding case law. Cases are cited as persuasive authority in the courts. Cases from the Supreme Court if quoted have binding power on the lower courts. Mozambique also does not have a formal or established case reporting system, and as such, it is difficult to obtain case authorities on matters. The Supreme Court has started populating cases in its website, but these are few and there are none on arbitration. The Constitutional Council publishes cases on its website, but these are mostly on electoral matters. Most cases are presently obtained from a practitioners own experience, or through obtaining copies of cases from the Supreme Court Registry.
The UNCITRAL Model Law on Arbitration is considered the main source of inspiration for the Arbitration Law. However, the Arbitration Law is a combination of diverse sources of law, and a great example of legal pluralism established in the Constitution[5]. For example:

a)                 The Arbitration Law bases its definition of an arbitration agreement, establishment of an autonomous arbitration clause and the format of the arbitration agreement on the UNCITRAL´s Model Law;
b)                 Referral to voluntary labour arbitration, under special laws, is based on Argentinean and Bolivian laws;
c)                 Portuguese law has also had some influence on the Arbitration Law. This includes the stipulation of general minimum requirements necessary to be complied with by the arbitrators; and the inclusion of the criterion “when international trade interests are put at stake” in the definition of international arbitration;
d)                 The inclusion of an article requiring adherence to arbitration on part of a party in standard terms and condition contracts (adhesion contracts) which provide for arbitration has been inspired by Brazilian Law[6].

It should be noted that treaties or multilateral or bilateral conventions entered into by the Government of Mozambique which relate to the scope of arbitration, conciliation and mediation will prevail over the Arbitration Law[7] .

In relation to administrative contracts[8] and non-contractual civil responsibility of public administration or their heads, employees or agents for losses due to public management acts, the rules of arbitration are provided for in the Law of Administrative Litigation Procedure[9]. This law does not distinguish between domestic and international arbitration. When analyzed, it seems to be primarily applicable to domestic arbitration. It also suggests that, within this ambit, if the arbitration is international it should be subject to the relevant international arbitration provisions in the Arbitration Law.[10]

The Arbitration Law distinguishes domestic arbitration (Articles 1 to 51) from international arbitration (Articles 52 to 59). International arbitrations are arbitrations involving international trade interests and in particular, where the following circumstances apply:    

a)                 At the point of termination of the relevant contract, the parties to the arbitration agreement are commercially domiciled in different countries; 

b)                 One of the following is situated outside the country, where the parties possess their establishment: i) the seat of arbitration (if this has been established or is determinable in terms of the arbitration agreement); ii) any place where a substantial part of the business relationship obligations are executed or iii) the place that is most closely linked to the subject matter of the litigation; or

c)                 The parties have expressly agreed that more than one country is connected to the litigation subject matter.

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