Promotion of International Commercial Arbitration and other Alternative Dispute Resolution Techniques in the MEDA Region

As the MEDA region’s strategic economic partner, the European Union sought to promote effective mechanisms of development through increased industrial cooperation, to create an Euro-Mediterranean area of shared prosperity. Despite this the region was continually described as an area with low attractiveness for international investment. While the factors that prevent unlocking the economies of the MEDA countries are, of course, multiple and very complex, certainly the lack of an effective and reliable public and private infrastructure to prevent and resolve trade and investment disputes efficiently, both at the inter- and intra-regional level, was conspicuous among them.

If the delivery of justice in a country is not only seen as fair but also as quick and inexpensive, and involves procedural formalities that are not onerous, that country enjoys a perception of reliability, and better confidence among investors. But courts alone may not always be enough for the task, particularly when a country is in the developing stage. The result is that cases take an unduly long time to decide, even while the disposition of the merits of cases becomes very expensive and unreliable for the parties. Based on the foregoing, there was no doubt that the availability of functioning commercial arbitration and mediation systems in the MEDA countries would materially help them in both trade and investment.

As a result in 2005, ADR Center was chosen as the leader of a pilot project, the EU’s first major ADR specific project, designed to facilitate international trade (including South-South Trade) and foreign investment in the 10 MEDA countries through increased confidence in, and capacity to conduct and manage, commercial dispute resolution. A second objective of this project was to reinforce the business networks which already existed at the sub-regional and regional levels on both sides of the Mediterranean. A longer-term objective was to prepare the main stakeholder groups (the judiciary, lawyers’ associations and business associations) to cooperate in the future on new projects on these issues, assuming the beneficiary countries request follow-up projects once this pilot project has been fully implemented.

The project also promoted awareness, acceptance and use of international arbitration, negotiation and ADR in the MEDA countries (including mediation), with special reference to SMEs, to forestall and to resolve international commercial disputes arising from: business transactions between MEDA and EU-based companies; business transactions between companies based in two or more MEDA countries; and disputes arising from foreign investment. Technical assistance was focused on the following main areas: provision of specialized training; preparation of relevant documentation; information dissemination; and networking. Furthermore, the project sought to encourage the creation of new Arbitration/ADR Centers, as well as to strengthen the existing centers in each country.