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Alternative Dispute Resolution improving the business environment in Ivory Coast

May 31, 2016

Effective custom procedures essential to facilitate trade

Most small business owners in Africa are competing for business in an increasingly competitive global environment and entering into agreements with third parties is a business norm for those wanting to succeed. However, when one party or the other fails to keep the promises that were agreed on, disputes arise and it is vital for business continuity that all disputes are resolved in an effective and timely matter. This is why Alternative Dispute Resolution plays a critical role in promoting business activities in Africa.

According to the World Bank, effective commercial dispute resolution has various benefits. Courts are an essential stakeholder for entrepreneurs and business owners as the courts are responsible for interpreting the rules of the market to protect people’s economic rights. Efficient and transparent courts encourage new business activities, as businesses are not scared to take on new customers if they are confident that they can rely on the court to intervene if the new customer fails to pay. 

Efficient trials are also an essential factor for small businesses, as these organisations often lack the resources to stay in businesses while awaiting the outcome of a long court dispute. African countries need alternative mechanisms for dispute resolution to complement the services offered by the judicial systems.

Enforcement of contracts in Ivory Coast used to involve unpredictable, slow and costly procedures. The key limitations of this sector included the lack of specialised arbitrators, mediators and judges as well as a lack of transparency. 

To address this, ICF has worked with the Chamber of Commerce of Ivory Coast to promote arbitration and mediation processes in the country. The project is helping to improve contract enforcement in the country by promoting an alternative avenue for small businesses to resolve commercial disputes. This enables these businesses to focus their time and resources toward achieving their business goals instead of resolving disputes. 

The project has promoted the Court of Arbitration of Ivory Coast (CACI) by reinforcing the internal capacity of the CACI and all its stakeholders. It also promoted the use of alternative dispute resolution mechanisms as a swift and transparent way for settling commercial disputes in the country.

The Ivory Coast Alternative Dispute Resolution Project aims to reduce the time from filing a case to judgement from 180 days to only 100 days. An additional objective is to reduce the cost for a small business to file a case from US$ 300 to US$ 100. 

In the World Bank’s 2016 Doing Business Report, Ivory Coast improved five positions in its ranking for enforcing contracts – it went from 125th in 2015 to 120th in 2016. Overall, the country jumped three places in their ranking for ease of doing business, now standing at 142nd out of 189 countries. 

The Organisation for Economic Co-operation and Development (OECD) explains that exclusive reliance on formal systems of contract enforcement (litigation through the judiciary system) can prove to be an extremely slow process for solving disputes between two parties. Thus having effective alternative dispute resolution systems to resolve the differences between disagreeing parties quickly and fairly is very important for promoting a conducive business environment.

The main examples of alternative dispute resolution mechanisms include arbitration, mediation, adjudication and conciliation hearings which are usually conducted by industry bodies, specialised agencies or third party evaluators at a national or international level. Good alternative dispute settlement processes often complement judicial contract enforcement procedures and can strengthen contractual commitment at a much lower cost. These benefits are of critical importance to business owners in Africa, as they need to have confidence in their country’s judicial and dispute resolution systems.

 

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