An Overview of the Attitude of Sudanese Public Policy towards International Commercial Arbitration by Dr Salah Abdelkadir Jebarah

An Overview of the Attitude of Sudanese Public Policy towards International Commercial Arbitration by Dr Salah Abdelkadir Jebarah – Wolverhampton University

To give a single definition of public policy is difficult. In as much as public policy is a recognised principle, a comprehensive definition has never been proposed. However, its significant operation is in the area of choice of law and the area of recognition and enforcement of foreign judgments. That said, law and order in the State are meant to set ethics and higher values which shape the identity and features of the ideal human life and its efforts towards achieving its goals whether political, social, and economic or ethical. It imposes itself on the various legal relationships in the State in the form of mandatory legal rules that control this relation and nullifies any contractual relations or otherwise that violate these rules.

Arbitration was part of traditional Sudanese society even in early times and this has also contributed towards it facilitating a modern method of dispute resolution in the Sudanese arbitration system. The modern approach of this practice is relatively new and so, academic analyses on the subject are somewhat inadequate.

Due to the lack of a modern system of government and legislative authority, the early Sudanese tribal societies tended to resolve their problems through “Agaweed”, which in Arabic means mediators/arbitrators, who undertook conflict resolutions through the rules and traditions of the parties to the conflict.

Those mediators /arbitrators were acclaimed for their wisdom. Arbitration has prevailed in the past and is still functioning now both in the rural societies and also at the municipal levels. Moreover, in Sudan’s traditional legal culture, there was no concept that ” rational and the just” procedure would be necessary for the resolution of disputes. The early Sudanese people believed that referring disputes to a court would interrupt the stability of both society and customs. Thus, public opinion favoured resolving their disagreements by conciliation and arbitration rather than taking disputes to court. The rules were based on the traditions of the tribe and people believed in ethics as the most effective means of regulating standards of behaviour. By contrast, they deemed law, which is enforced through the exercise of power, as false, independent and lacking effectiveness.

They also believed that although the law can force a person to do or refrain from doing something, it cannot make a person act on his initiative and the law was thus much less effective than the ethical traditions of the tribes. However, traditional Sudanese culture had an in depth philosophy; some of its contents were positive, but some were not beneficial for the development of Sudanese law.

There was no particular law which regulated arbitration in Sudan prior to the Arbitration Act 2005. Arbitration law was fundamentally dealt with in Chapter IV of the Procedures of Civil Code 1983, under the title of “Arbitration and Conciliation”. The detailed provisions of arbitration are explained in 17 Articles (from Article 139 to Article 156). These provisions mainly dealt with national arbitrations and permitted the court to oversee most arbitration in Sudan. The Civil Procedure Code of 1983 granted the courts the right and authority to dismiss any arbitrator and issue an anti-arbitration order. Under the Civil Procedure Code, 1983, the courts were also empowered to correct, enforce, accept or refuse an arbitral award. The country developed doubts about the Sudanese court system and encouraged arbitration in the country.

However, the Sudanese arbitration system witnessed some progressive and radical changes. The approach adopted lacked simplicity. Prior to that, the Arbitration Act 2005 was not a stable driver for many of the significant foreign investors in Sudan.

A new Arbitration Act was passed in 2016, by an interim order of the President of the Republic of Sudan based on Article 197 of the Constitution of 2005[1]. This new law has given rise to several issues in the Sudanese arbitration system. The Arbitration Act 2016 did not differ from the previous arbitration law in form and content. However, it is inconsistent with the UNCITRAL Model Law and the international practice of commercial arbitration and was not in line with the economic, legal developments that have occurred in the region. It also repeated the same provisions, which caused great controversy. For example, the new law did not create a distinction between domestic and international arbitration.

There are two possible reasons why the public policy of Sudan may prove a challenge to the recognition and enforcement of the foreign arbitral awards.

The first reason is that despite the fact that Sharia principles form the basis for the constitution of Sudan and cannot be invoked even in the absence of law text or case law, the role of Islamic public policy still remains undefined in the Sudanese legal system. This argument is restricted to domestic and international commercial transactions, which are mostly related to arbitration practices. An example of this argument is set in the ‘Riba’?case that limited recognition and enforcement of the foreign arbitral award in Sudan on the grounds of Sharia public policy. However, ‘Riba’?is currently received and accepted in the most Middle East and Islamic countries, although it breaks the public policy of Sharia.

However, in light of the current political and legal transition towards secularisation in Sudan, this author suggests that the role of Sharia policy should be defined in the legal system of Sudan. For example, there could have been an article in the Sudanese constitution defining what the public policy of Sharia is and in what circumstances that might be invoked. Ignoring the question of the role of Sharia based public policy in the country’s legal system provides uncertainty and does not deliver any help for the growth of international commercial arbitration in Sudan. This is also apparent, for example, by the arbitration practitioners who rated Sharia Public Policy together as one of the obstacles to recognition and enforcement of foreign arbitral awards.

The second reason is that to introduce Sudanese public policy to block recognition and the enforcement of foreign arbitral awards, owing to the lack of a legal distinction between national and international public policy may provoke controversy. It may be said that the Sudanese Act, 2016 permitted arbitral agreements in all the commercial issues other than the mandatory rules relating to public policy. Therefore, the arbitral agreement would be deemed invalid if it relates to the mandatory rules, as previously discussed and other matters such as personal status, or disputes related to criminal matters or illegal activities. However, section 48 (e) of the Arbitration Act 2016 contains two grounds of public order and public policy, which deal with the issue of recognition and enforcement of foreign arbitral awards.?Furthermore, that section specifies that a competent court may refuse the award only if the appeal for setting aside is based on the grounds that are ‘inconsistent with morals in Sudan.’ That raises a specific question on the arbitration law in Sudan in that what establishes a ‘moral’ is not explicitly identified, whereas, as per Sharia under Article 5 of the Sudanese Constitution 2005, such reasons stem from a violation of Sharia principles or public policy.

The examination of an arbitration settlement system in force in Sudan, particularly towards arbitrability leads to certain conclusions. In order to encourage foreign investors, it should be clear that the current arbitration system in Sudan is in line with those in the Western World except where the matter at issue relates to public morality or dicta of Islamic law. Arbitration has shown to be a significant dispute settlement method and therefore, complex legislation would not assist.

Another disadvantage that makes defining public policy in Sudan difficult is the lack of case precedent in the Sudanese legal system. As a result, there is no clear position as to when the court may deny or set aside the award. In order to determine Shari’a’s position on a particular topic, there is a structure of sources in Shari’a that are ordered according to their relevance. However, various academics and schools of thought continue to have opposing opinions on the grounds for rejection. There is still no agreement in Shari’a about public policy grounds for setting aside the award.

However, the Sudanese courts might refuse to enforce an arbitral award even if the submission to arbitration was lawful under its jurisdiction, on the grounds that the arbitral tribunal overrode its jurisdiction. Also, Sudanese courts may refuse to enforce a foreign arbitral award on the grounds of public policy. That is so because there are several public policies to be considered owing to the multinational nature of commercial arbitration. Hence if a Sudanese court is facing a foreign arbitral award or order seeking recognition in Sudan which outrages sharia law such as a foreign award or judgment concerning gambling or the principle of polygamy, the court must refuse to recognise it.?In a metaphorical sense, the Sudanese concept of public policy is a coin with two sides, each holding a plethora of serious legal difficulties. The fundamental point, however, is to moderate Sudanese public policy and put it in step with the leading countries in the evolution of arbitration law. The notion is that legislators, the courts and the Sudanese legal community must work together to reshape the scope of Sudanese public policy.

It is critical to investigate why the Sudanese judiciary has many mutually contradictory Sharia provisions, why Sharia is the source of the majority of the legal grounds on which foreign judgments and arbitral awards are set aside, why Sudan has not codified Islamic law like other Islamic countries, and the best way to codify Sharia. It will be critical to study these concerns in order to discover innovative answers to current legal problems. The Sudanese constitution provides that specific laws, identified as public policy include Islamic jurisprudence, constitutional law, civil law, criminal law, laws that organise personal family’s status laws, laws forming the judicial courts, mandatory rules of law and regulation related to the national economic system such as remuneration and national currencies, cannot be submitted to arbitration.

However, Sudanese public policy towards arbitration and particularly international commercial arbitration, should play a more significant role, by adopting a clarification that public policy is not counter to Sudanese arbitration law, particularly international arbitration. The approach should consider all issues coming within the exclusive jurisdiction of the Sudanese court. The legislator, however, should create a distinction between domestic and international commercial arbitrations, with the latter being more connected with public policy. It should open the doors to as many proposals as possible that would make the arbitration system ready to implement and improve the performance of the New York Convention in Sudan considering the need to reduce public policy consideration as a basis for rejecting recognition and enforcement of the foreign arbitral awards in Sudan.

The legal system must create a balance between the country’s interests and the necessity for developing international trade in the country.?This can be achieved by applying the approach of differentiating between domestic and international public policy in the field of international commercial arbitration. The extreme judicial application of law procedure and grounds of protecting the interests of the country is seen as damaging to arbitration proceedings and may prevent parties from choosing Sudan as a seat for arbitration. However, it is doubtful whether the jurisprudence of Sudan’s courts will support a restricted understanding of public policy in order to avoid recognition and enforcement of foreign arbitral awards under Article V (2) (b) of the New York Convention 1958.

The scope of Sudanese public policy is very wide ranging and important steps must be taken to narrow it, including the adoption of the concept of international public policy as practised in France, Italy, Portugal, Algeria, and other jurisdictions; the adoption of a distinct, comprehensive new arbitration law for international commercial arbitration; the codification of the basic principles of national laws; and the codification of the fundamental principles of international law. The importance of these legal proposals rests in taming Sudanese public policy’s wild horse by harmonising local and international principles. To reconcile domestic and global ideals, the Sudanese legal system must deploy the weapon of public policy in legal subjects deemed “basic,” and it should only be used in “exceptional circumstances” involving severe national concerns. The overarching goal and benefit of enacting these legislative proposals is to create a sophisticated Sudanese arbitration environment that correlates with the leading countries in the development of arbitration law. However, how to execute these ideas in a way that is appropriate for Sudanese society is an important research subject that must be addressed.

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References

[1]Sudan’s?provisional?de?facto?Constitution?is?the?Draft?Constitutional?Declaration,?signed?on?4?August?2019 by members of the Transitional Military Council and the Independence and Reform Powers Alliance.

This?replaced?the?Provisional?National?Constitution?of?the?Republic?of?Sudan?2005?(INC),?adopted?on?6?July?2005, which was suspended on?11?April?2019?by?Lt.?Gen?Ahmed?Awad?Ibn?Auf,?the?Sudanese?coup?d’état?in?2019.