Democratic Republic of Congo accedes to the New York Convention
01 October 2013
This accession is of major importance for international investors seeking to develop activities in the DRC in a legally more secure environment, as it facilitates the enforcement of international arbitral awards in the DRC.
However, the DRC has formulated a reservation in the statute of 26 June 2013, which is an important limitation to the scope of the New York Convention in the DRC. Disputes relating to immovable property situated in the DRC or relating to rights in connection with that immovable property do not fall under the New York Convention.
In practice, mining rights are characterised as immovable property under Congolese law. Given that a large part of the DRC economy revolves around mining activities, this is a material point.
One further detail to bear in mind: Congolese rules of collection and enforcement will apply to enforcement under the New York Convention, ie those set out in the OHADA Uniform Act organising simplified collection and enforcement procedures. Article 30 of this OHADA Uniform Act awards immunity of enforcement to all public entities including state-owned companies. As a result, foreign arbitral awards which fall under the scope of the New York Convention cannot be enforced in the DRC on the DRC’s property or any property belonging to state-owned entities, unless these entities have expressly waived their immunity of execution.
Note that these awards can nevertheless be enforceable on the DRC’s assets in Belgium (and possibly in other countries outside of the OHADA geographical zone). Indeed, while foreign states have immunity of execution in Belgium, this immunity is not without limitations and only applies to the property of the state that is used for the sovereign activities of the state but not to any property used for commercial purposes. A consistent line of case law allows enforcement of arbitral awards and judgments on commercial use state-owned assets in Belgium.
Finally, the DRC made two further reservations which were also made by a large number of contracting states, namely reciprocity (awards will be enforceable provided that they were handed down by an arbitral tribunal having its seat in the territory of a contracting state) and commerciality (only awards regarding matters that are considered to be “commercial matters” under national law will be recognised and enforced in the DRC).
Under Congolese law, disputes relating to commercial companies and acts taken indirectly by the DRC in its capacity as sole shareholder of public companies that have been converted into commercial companies, also fall within the scope of commercial matters. Combined with the OHADA Uniform Act on arbitration and the OHADA CCJA Arbitration Rules, applicable in the DRC since July 2012, the accession to the New York Convention is another major step for alternative dispute resolution in the DRC.