Burundi, a state in East Africa, has become the 150th state party to the New York Convention 1958 (the Convention). Burundi made a “commerciality reservation” to the Convention, which means that the Convention will only apply to disputes characterized as commercial under municipal law. So long as this requirement is met, as of 21 September 2014 (the date the Convention comes into force in Burundi), arbitral awards made in Burundi will be enforceable in all states that are party to the New York Convention, and awards made in other states will be enforceable in Burundi.
No doubt, this is likely to improve the confidence of foreign investors not only in Burundi, but East Africa generally, as all members of the East African Community (comprising the Republics of Burundi, Kenya, Uganda and the United Republic of Tanzania) have now become party to the New York Convention. In the last few years, East Africa has become a new hot spot for foreign investors particularly as new oil reserves have been discovered in Kenya and Uganda, and given the presence of hydrocarbons generally in East Africa. It is apparent that governments of the member states of the East African Community have recognized that to retain these foreign investors and attract new ones, they must ensure their legal framework has been modernized and that visible steps are taken to demonstrate their seriousness in doing so. For example, Rwanda opened the Kigali International Arbitration Centre in 2012, and Kenya has recently announced the opening of the Nairobi International Arbitration Centre. These are all encouraging and positive steps which are likely to have a significant impact on investor confidence in East Africa.
For further information, please contact Andrew Cannon, Partner, Saloni Kantaria, Senior Associate, or your usual Herbert Smith Freehills contact.