Enactment of International Arbitration Act, the Establishment of Malawi International Arbitration Centre and Support of the Courts Clears the Way for International Arbitration in Malawi
MLS Executive Committee, AFSA officials pose for a picture with the State President of the Republic of Malawi, His Excellency Dr Lazarus McCarthy Chakwera and the Attorney General of the Republic of Malawi
The Malawi Government acceded the New York Convention effective 2nd June, 2021. Malawi is the 167th country in the world to accede to the Convention. By doing so, Malawi qualifies itself as a suitable jurisdiction in which international and local commercial disputes can be resolved through arbitration as an alternative dispute resolution to litigation. With these developments, there was and there is now special focus on Malawi as a seat for international commercial arbitration.
The Malawi Law Society (MLS) in collaboration with the SADC-Lawyers Association (SADC-LA) and the Arbitration Foundation of Southern Africa (AFSA) organized an inaugural International Commercial Arbitration Seminar as a first step towards establishment of an international commercial arbitration seat in Malawi. The seminar took place in Mangochi, Malawi from 26th to 28th January, 2022. It trained almost 200 lawyers from Malawi, Zambia, Zimbabwe, Namibia and South Africa in the theory and practice of international commercial arbitration. The seminar provided a comprehensive introduction to international commercial arbitration and a review of current developments in the SADC region.
Following the Mangochi seminar, at a joint review meeting held on 28th January, 2022, the SADC-LA, AFSA and MLS leadership and the Attorney General of the Republic of Malawi resolved to pursue the establishment of a seat for international commercial arbitration in Malawi.
The Government of Malawi endorsed the project from inception through the Attorney General at the seminar, and later through the Minister of Justice and publicly by the President of the Republic of Malawi, His Excellency Dr Lazarus McCarthy Chakwera. The public endorsement by the State President was made in his speech during the Constructive Engagement Meeting Towards the Establishment of the Malawi International Commercial Arbitration Centre and the Signing of the Project Partners Memorandum of Understanding at Bingu International Convention Centre, in Lilongwe, Malawi on 15th August, 2022. The President also directed the Attorney General to prioritise the processing of the Arbitration and Mediation Bill so that it is enacted into law as soon as possible. The significance of the President’s remarks cannot be overemphasized as he made them whilst he was also doubling as the Chairman for SADC thereby, indirectly endorsing the project at the SADC Community level. The Malawi Judiciary, through the Chief Justice of the Republic of Malawi, Justice Rezine Mzikamanda, SC publicly supported the project. He emphasised the importance of the project to promote Malawi as a suitable destination for investment.
On 7th September, 2023 the MLS jointly with the Malawi Confederation of Chambers of Commerce and Industry, a partnership of private enterprises and associations representing all sectors of the economy of Malawi, registered a company limited by guarantee, Commercial Arbitration Centre Limited. This company is the vehicle through which the Malawi International Arbitration Centre (MIAC) will be operated. Mr Patrick Gray Mpaka, the President of Malawi Law Society, Mr Lekani Katandula, the President of Malawi Confederation of Chambers of Commerce and Ms Emily Makuta, a senior corporate executive from the corporate and business world are the first Directors of the company. The Company is currently working towards operationalising so that the Centre can open its doors and start administering commercial and investment arbitrations. It is a legal requirement in Malawi for a company to obtain permission of the Government in order to use the word “Malawi” in the name of a company. Following an application on 5th January 2024, the Malawi Government through the Secretary to the President and Cabinet issued permission to use the protected name and so “Malawi International Arbitration Centre” is fully authorized to operate as such.
Following the acceptance of the request of MLS and AFSA SADC Division by the Minister of Justice to draft a International Arbitration Bill, the MLS and AFSA SADC Division developed the draft International Arbitration Bill adopting the UNCITRAL model law. The MLS submitted the Bill to the Ministry of Justice on 19th September, 2023. The Bill was introduced in Parliament in its November, 2023 sitting.
On 7th December, 2023, the Malawi National Assembly passed the International Arbitration Bill. On 1st February, 2024, the Malawi Government announced that the Bill was assented to by the President of the Republic of Malawi on 31st January, 2024. The Act was published on 2nd February, 2024. The International Arbitration Act has domesticated the Model Law on International Commercial Arbitration as adopted by the United Nations Commission on International Trade Law. This covers the space for international arbitration in Malawi. The International Arbitration Act can be downloaded here.
On 14th March 2024 the Supreme Court of Appeal delivered a judgment in a matter in which one of the parties had referred to the International Chamber of Commerce in London a commercial dispute in respect of a contract which was being performed in Malawi. The other party sought an anti-arbitration injunction. Both the High Court and Supreme Court of Appeal refused to grant an injunction against the arbitration. The Supreme Court of Appeal justified its position by, among others, stating that the overarching idea is to provide a one-stop forum for the effective and efficient resolution of commercial disputes through arbitration and judicial intervention should not disrupt the process of arbitration. The decision of Justice of Appeal Kapanda, JA, SC in Projex Group Limited v. Central East African Railways Limited can be downloaded here.
So, all is set in Malawi for international arbitration: the Judiciary, the Legislature and the Executive Branch of Government have clearly expressed themselves on the matter. It is now for the private sector, the international community, and the regional Bar associations to fully and finally implement the ideas encouraging international arbitration in Malawi. The detailed journey towards the establishment of the Malawi International Arbitration Centre can be found in this booklet..
MIAC Is the Future of Resolving Investment and Commercial Disputes in SADC Region and Beyond
Justice of Appeal Kapanda, JA, SC
For a long time, Malawi has been relying on ad hoc arrangements for commercial dispute resolution outside the Court system. The setting up of MIAC enhances economic justice delivery by alleviating the Commercial Courts in Malawi of the pressures of commercial litigation in matters that qualify and can be dealt with at an institutionalized and internationally recognized centre for resolving international investment and commercial disputes. The political and legal environment makes Malawi a suitable destination for investment.
The setting up of Malawi International Arbitration Centre and the enactment of the International Arbitration Act followed by the decision of the Supreme Court of Appeal positions Malawi as a favourable option for parties seeking a neutral venue in resolving disputes connected with Southern Africa. Therefore, all investors, corporations, lawyers, and governments are invited to make use of MIAC in resolving international investment and commercial disputes.