By: Fardin “Jamal”
While talking in relation to solving a dispute in Afghanistan, most of people might start thinking about the courts. Whereas, there is alternative way in this regard which allows parties to a dispute to solve the dispute by relying to arbitration, and by arbitrators instead of going to courts and follow its strict formalities. In comparison with litigation, this manner of dispute resolution has its own advantages and disadvantages but in the recent world, arbitration as alternative dispute resolution method to litigation has been evolved and used significantly. This is on the condition that Afghanistan has only two issued arbitration awards in its history which reflects lack of sufficient use of it in the country.
What is Arbitration?
Arbitration is an alternative dispute resolution manner that accordingly parties intend to solve their disputers without referring to trail, and by third party. The third party finds a solution to dispute by taking into consideration oral statements of the parties and witnesses, and submitted documents. This decision issued by the third party is final and contrary to the procedures of courts it cannot be subjected to appeal.
According to Halsbury’s law of England, Arbitration is considered as:
“A process used by agreement of the parties to resolve disputes. In arbitration, disputes are resolved, with binding effect, by a person or persons acting in a judicial manner in private, rather than by a national court of law that would have jurisdiction but for the agreement of the parties to exclude it.” A general concept of arbitration is stated above, which reflects what should be expected from arbitration. However, while coming to definition of arbitration we can reach to a conclusion that it is impossible to have a common and unit definition of that. This is because of various nature and process of arbitration in context of its historical evolution. The origin of Arbitration and its Historical background in Afghanistan
It is unclear that when a person decided to submit his/her adversary for a decision to his friend, parent, chief or someone else. Whereas, by the meaning of arbitration based on legal terminology of today’s world it is rooted to England in middle ages. Merchants in the middle age objected to the existed royal courts of that time because of its time-consuming characteristic and not being accessible for those who are not resident in England. As result of such of such concern, international and local courts were established. These courts court, contrary to royal courts, were recognized with lack of usual and strict formalities that allowed for quick proceedings of dispute resolutions. In 1698 parliament of England passed the first arbitration act. This act gave statutory basis for previous practice of arbitration in England.
In Afghanistan, beside courts, alternative methods of dispute resolution are existed in its ancient culture. “Shura” and “Jirga” are obvious and well known examples of them. These methods have been used by people of Afghanistan to solve their disputes from long time ago till now. Even while deciding on issues which have significant importance with national impact the methods in question have been relied upon.
Government of Afghanistan signed New York convention on the recognition and enforcement of foreign Arbitral awards in 2004. In 2007, Parliament of Afghanistan enacted commercial Arbitration law to “facilitate and encourage prompt, fair, and neutral resolution of commercial and economic disputes through arbitration”. Furthermore, according to the Private investment law of 2005 and commercial procedure code of Afghanistan 1965, parties are allowed to submit their disputes to be solved through Arbitration. These instruments are acting to facilitate and govern arbitration proceedings as an alternative dispute resolution in Afghanistan. In addition, Afghanistan is a party to international center for settlement of Investment Disputes (ICSID) convention which investment disputes of a contracting state and investor of a contracting state are resolved through. Despite of these all, Afghanistan is faced with significant challenges and legal gap regarding usage of arbitration in practice. This issue is discussed astutely by “Zahid Omarzai” executive director of Afghanistan center for Commercial Dispute Resolution (ACDR) in his article under the title of “Overview of Arbitration in Afghanistan: A practical approach”.
As mentioned before the origin of Arbitration is connected to its simplified and speedily procedure. Whereas, there are many other advantages to arbitration as well:
Fairness: In Arbitration there is no concern regarding knowledge and impartiality of the authorities who decide the case. This is because parties are allowed to choose expert, impartial and independent arbitrators to solve their dispute.
More Convenience: Parties to a dispute can choose a particular language that they are familiar and more convenient with that. This is considerable when investors do their businesses in foreign states. Besides that, parties can decide to choose any place they want for arbitration proceeding to be conducted there.
Confidentiality: In comparison with trials, Arbitration is more private, which is significant issue in commercial activities. In Arbitration, parties and arbitrators could be under confidential obligation to not disclose any information related to arbitration.
Finality: Arbitral awards are final and binding on the parties, and they cannot be appealed. Such characteristic of arbitration is suitable for merchants by taking into consideration they can be imparted from outcome of arbitration without being affected from existed delays in litigation.
However there are several advantages to arbitration but in another view, arbitration has its own disadvantages that should be considered as well. For instance, even a party feels any kind of unfairness or discrimination in the issued award, it is impossible to appeal to it.
Arbitration is an alternative method of dispute resolution to litigation, which accordingly the parties decide to solve their dispute through arbitration. Its origin is rooted to England, and found for being more speedily in relation to solving commercial disputes of merchants. In Afghanistan “Jirga” and “Shora” have played role of resolving disputes out of courts, which have a long historical background in the country. But in relation to arbitration despite of existence of several instruments which governs and allows arbitration in Afghanistan, there are still gaps and challenges on the way of utilizing from Arbitration in practice. There are many advantages to arbitration such as confidentiality, finality, flexibility, less formalities and timeliness whereas its disadvantages should not be abnegated as well. By taking in to consideration benefits of arbitration in commercial related issues, filling legal gaps, and investing on this area in Afghanistan could be effective regarding attracting of investments and commercial activities of foreign companies in Afghanistan.
By: Fardin “Jamal”