THE REGULATION OF COSTS OF ARBITRATION IN ETHIOPIAN LAWS

Abstract

Arbitrators be it investment or commercial, are typically experienced attorneys, former judges or lecturers of universities, or industry leaders who are expected to use their knowledge and expertise when hearing and resolving disputes through Arbitration. In doing so, although being among the most efficient and prevalent means of resolving commercial & investment disputes, and the one generally favored, arbitration is not a gratuitous task which the arbitrators undertake without consideration as there are certain costs to be covered by the parties. Although it is the traditional way of resolving dispute in Ethiopia in which arbitrators literary known as <shemagele’s> undertake the arbitration without consideration, as Arbitration is not of gratuitous, the issues relating to costs involved there in Arbitration Process must be regulated so as to make the system and culture of Arbitration run smoothly. Different jurisdictions have enacted laws that clearly provides the types of costs to be reimbursable by the parties, how such costs where to be allocated and who is to be the ultimate bearer of the costs, the effect of nonpayment of advance costs by the parties, the power of Arbitrators to order for security of costs and the power of courts in regulating the costs of Arbitration especially in reviewing unreasonable and excessive Arbitrators fee set by Arbitrators. Ethiopia has enacted a civil code and civil procedure code in 1960 and 1965 respectively and included therein provisions relating to Arbitration. This research therefore looks to the provisions of the civil code and the civil procedure code and analyze them with the existing practice of deciding costs of arbitration through data’s collected from key informants and through analysis of the practice in 51 awards published by Ethiopian conciliation and Arbitration center from Volume 1-3, together with the experience of countries selected based on their success and experience in Arbitration and relevance to Ethiopia; and argued that, the costs of Arbitration and issues related with costs of Arbitration xi are not regulated Properly in Ethiopia. Finally the study has ended up with recommending possible solutions for better regulation of the costs of Arbitration in Ethiopian Law.