Angola’s ratification of the New York Convention is an invitation to foreign investors to start spending in the oil rich country struggling to maintain its balance sheet in the new world of sub-$50 per barrel oil prices.
Historically, Angola has been an uncertain jurisdiction for foreign investors. It is not a member of the International Centre for Settlement of Investment Disputes (ICSID), the World Bank’s dispute resolution body, or of the Organisation pour l’Harmonisation en Afrique du Droit des Affaires (OHADA), the Central and Western African organisation set up to promote investment and development in sub-Saharan Africa. Whilst an UNCITRAL based domestic arbitration law was enacted in 2003, international arbitration was not widely used as a method of dispute resolution
With oil making up 97% of Angola’s exports, encouraging investment will help the government to cope with the recent downturn in oil prices. Signing the Convention is also a step towards diversifying Angola’s economy and addressing other ongoing challenges in the country, including rebuilding its infrastructure and industry. Investors look for protections, such as that offered by the New York Convention, when making investment decisions. Being able to enforce an arbitral award in the country of investment is a selling point in an increasingly competitive global market. Together with the recent national investment law passed by the country, the ratification of the New York Convention indicates that the Angolan government is doing everything it can to encourage investment. The publicity which the ratification has generated may well be at the forefront of its decision to sign the Convention.
Until the application of the New York Convention by the Angolan courts is tested, there may still be some nervousness about investing in the country. This is particularly true since key contracts are likely to be with state-owned entities, who are major players in the Angolan market, and against whom enforcement is traditionally seen as more difficult from a public policy perspective. However, with a track record of national arbitration awards being enforced by the local courts and the Supreme Court, and investment opportunities a plenty, the addition of the New York Convention to Angola’s marketing to foreign investors is certainly a signal to international investors that Angola is open for business and ready to look further afield for investment.