Alternative Dispute Resolution

Paul Ngotho

AfRES from African Real Estate Society (AfRES)

Abstract: The delivery of new cities, large residential housing (including low-income schemes) and infrastructural projects in Africa have been delayed or stopped altogether by various types of disputes, for example, disputes between land owners and buyers, developers and contractors, developers and the financiers, developers and communities and disputes among the joint-venture partner. This paper will analyse the problem and propose solutions from an Alternative Dispute Resolution (ADR) perspective with reference to the Arbitration Acts in use in various parts of Africa. It will highlight case studies of real estate projects that have been frustrated by such disputes and success stories in which ADR resolved disputes promptly. It will also discuss court cases in which courts have supported the use of ADR in resolving such disputes privately.International and regional international investors feel unsafe in national courts, which could be manipulated by their governments. In any case, courts take long to resolve the disputes, while the losing party typically prolongs the dispute by appealing to a higher court. Meanwhile, costs escalate while the housing deficit mounts.ADR is generally a creature of contract between the individual parties through ad hoc contracts. Large donor-funded projects typically incorporate the ADR procedures in use internationally, for example the FIDIC Contracts. Finally, Bilateral Investment Treaties (BITs) have provisions for ADR. The paper will also define the various ADR procedures and comment on their suitability for use singly or in tandem in different scenarios.The legal recognition of mechanisms to resolve such disputes out of court through internationally recognised procedures boosts investor confidence among domestic, regional and international investors. So does a framework through which courts can enforce the decisions of the ADR procedures.ADR has generally been resolved by Europe-based dispute resolvers using procedures developed in Europe. This is likely to change following the emergence of ADR institutions in East and Central Africa. An attempt will be made to quantify the number of professional dispute resolvers in Africa.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2013-10-01
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