Major Points on Federal Courts Court-led Mediation Directive

By Dagnachew Tesfaye, Attorney-at-law at DMLO


The Federal Supreme Court(FSC) has issued Federal Cours Court-led Mediation Directive No 12/2021 effective as of December 27/2021. The Directive provides procedure of court-led mediation, structural organization of court-led mediation, principles of mediation, and about mediators and their fees. Few core contents of the court-led mediation will be dealt here below.

Structural  Organization of Court-led Mediation

There shall be a Court-led Mediation Committee organized under the FSC with 9(nine) members with mandates to oversee the whole court-led mediation process and particularly duties and responsibilities and disciplinary matters. The Committee shall engage in presenting recommendations for improvement of the court-led mediation.

Court-led Mediation Coordination Office shall be established in the FSC, FHC and FFIC. The Coordination Office in the FFIC and FHC shall be accountable to their respective presidents and are subordinate to the one in the FSC. Each coordination office shall have coordinators and relevant employees. 

There will also be Court-led Mediation Centers at FHC and FFIC branches. These centers shall have mediation officers and mediation secretaries. 

Finally, the FSC shall organize a Court-led Mediation Roster that registers interested and qualified mediators. The registered mediators shall pay an annual fee of ETB 750 as a membership fee and for initial registration ETB 300.

Court-led Mediators

Court-led mediators could be employees of the court who have taken mediation training. Any other person whose name is entered in the FSC Roster as a mediator can also be a mediator. Not only lawyers but also engineers, psychologists, agricultural professionals, medical professionals can be included in the FSC Roster. For lawyers, a first degree in law and 5(five) years relevant experience and for non-lawyers 10(Ten) years relevant experience is required. Both lawyers and non-lawyers should take a training of 80 hours in mediation and obtain certification. The idea of certification entails the establishment of not only mediation training centers but also ADR training centers. These centers can be private or governmental. It is part of making Addis Ababa as the hub for arbitration and mediation centers in Africa.

The fee for the mediator in principle is the agreed amount by the parties to the case. However, when the mediator is the employee of the court, the mediator shall not be paid mediation fee. Whenever there is no agreement on the fee by the mediator and the parties, the standard mediation fee arrangement as attached to this Directive shall apply. The manner of payment of the fee by the parties is that each party shall divide equally the fee and pay. To whom the parties pay the fee is not clear. Since it is court-led mediation, probably the parties pay directly to court and not personally to the mediator. The mediator who is registered in the roster of the FSC has the obligation to do at least two pro bono court-led mediation cases in a year.

Procedure of Court-led Mediation

New cases that are subject for mediation shall be referred to mediation before oral hearing is conducted on the cases. Civil cases that are subject to automatic court-led mediation are labour cases, commercial cases, construction cases, family cases, succession cases, contract cases and extra-contractual cases. Nevertheless, bankruptcy cases, cases in which the government or public enterprise are parties to the case as a plaintiff, defendant or intervening party, cases that have public interest in them, cases in which the judge thinks court judgment should be passed on the cases, consensual divorce and consensual division of property after divorce shall not be referred to court-led mediation.

Not only new cases, but cases that are pending with a judge can also be referred to court-led mediation if the judge thinks there is a possibility of resolving the case through court-led mediation.

The parties to the case are at liberty to choose a mediator from the Mediation Center before the date assigned for mediation. If there is no agreement, the Coordinator shall assign one mediator from the roster or assign a mediator from those employees of the court that are hired for mediation purposes.

On the date of appointment of mediation and afterwards, the mediator is obliged to conduct the mediation following mediation principles and mediation procedures. Non appearance of both parties or one of the parties at the time of assignment for agreement has the consequences of payment of ETB 1000 cost. To whom this cost is paid is not specified. The cost is paid to the court or to the appearing party if any or that of the mediator has to be cleared out.  

The mediation has to be completed within 30 days of the commencement of the court-led mediation. Prolongation for an additional 20 days is possible if there are sufficient reasons to do so.

The participating parties to the court-led mediation are the parties themselves or their duly assigned proxies with special power of attorney to mediate. The Attorney’s role is limited. The attorney can participate in the proceeding and only speak at the end of the mediation upon the permission of the mediator. Whether the Attorney can advise his client on legal matters to enable his client to reach agreement is left silent here as the focus is on the mediator and the mediation process. The possibility of an attorney of the client receiving a special power of attorney to mediate is not a closed option. Since a special proxy to mediate is a possibility, attorneys may take up the mediation on behalf of their clients.

If the parties reach an agreement, the mediator  shall prepare the agreement. The mediator shall make sure the agreement is read for the parties and both parties sign them. The Coordinator shall prepare a cover letter and send the agreement for the approval of the court. Whether the judge has the discretion to reject the agreement is not clearly mentioned, but since agreements are approved as per the Civil Procedure Code, the judge shall make sure the agreement is not contrary to law and morals. In those cases that agreement is not reached, the mediator shall return the file back to the court through the Coordinator.

Place of Mediation

The court-led mediation can be conducted in a designated place chosen by the Court-led Mediation Committee that is outside of the court. However, in all other circumstances, the place of court-led mediation shall be inside the offices of the different branches of the FFIC and FHC mediation centers. Here the question raised will be the unavailability of space suitable for mediation, how to conduct the mediation of multiple cases assigned by different judges at the same time and how to manage individual mediator’s case loads.

Principles of Mediation

The mediator should show professional competence, due diligence and secure quality of the mediation process. In doing so the mediator has to assure confidentiality, equality between the parties, neutrality and assist the parties reach an agreement by themselves.


The court-led mediation Directive is issued following the Federal Court Proclamation No 1234/2021 Article 55(2) whereby the FSC is assigned the task to issue a directive to implement the Proclamation. The rules indicated in Article 45-48 of the Proclamation on court-led mediation are now elaborately detailed for easier execution by this Directive. The Directive has established organs to implement the tasks of court-led mediation. Mediators are required to undergo training and strictly follow basic mediation principles. Court-led mediation shall benefit in resolving issues between parties in a short amount of time and as a result reduce the courts’ caseloads.

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Highlights of Foreign Currency Allocation: NBE Directive


By Luwam Chalachew, Legal Assistant at DMLO


The National Bank of Ethiopia pursuant to the authority vested to it by Article 20(3) &27(2) of the National Bank of Ethiopia Establishment Proclamation no.591/2008, has issued a new directive concerning transparency in foreign currency allocation and foreign exchange management. The Foreign Currency Allocation and Foreign Exchange Management Directive No FXD/77/2021 has entered into force on December 1/2021. The main objectives of this Directive is in order ensure efficient and proper allocation of foreign exchange. And in order to ensure that foreign exchange is allocated in a transparent and sound manner to priority and other economic sectors without opening a room for rent seeking behavior and malpractice. The Directive requires each bank to have transparent and sound foreign currency allocation and foreign exchange management guidelines or procedure manual which shows the accountability of each employee of a bank involved in the foreign exchange transaction. For effective implementation, the Directive stipulated  powers and functions of different organs. A brief look into responsibilities of different organs of a bank and foreign currency allocation priority areas shall be made here below.

Responsibility of Board of Directors of a Bank

Responsibilities of the board of directors of a bank are stipulated under Article.3 of the Directive. Among these responsibilities, the board is responsible to develop a foreign exchange operation management guideline in line with the NBEs directives. The board is also responsible to review the bank’s overall foreign exchange exposure at least once a month in order to ensure that it is maintained at prudent levels and is consistent with available resources. In evaluating and controlling these operations the board has the responsibility to ensure that adequate resources, both technical and human are available. The board also has the responsibility to create reporting and compliance mechanisms to establish rules.

Responsibility of Executive Management of a Bank  

The executive management of a bank is responsible to maintain records which are sufficient to determine at all times the bank’s compliance with its own internal foreign exchange transaction policies and procedures. The management should avail any information and documentation when requested by National Bank. The executive management should also maintain a daily record showing close of business in foreign exchange. It should also ensure that proper reporting procedures are put in place between the head office and its branches on daily foreign exchange operations. Regarding the bank’s foreign currency open position and outstanding balances, the executive management should reconcile foreign exchange transaction accounts at least every month diligently and with due consideration to the need to provide timely information to the National Bank. Generally the executive management should establish effective internal controls to monitor and control the overall foreign exchange operation.

Responsibility of Internal Audit   

The internal audit in each bank shall conduct at least one audit semi-annually and make surprise checks when necessary to test compliance with the foreign exchange operations guidelines. The auditor shall report the findings to the respective bank’s board as well as senior management of the bank and a copy of the internal report shall be submitted to the Foreign Exchange Monitoring and Reserve Management Directorate of the National Bank at the same time of the submission of the report to the board of management. 

Foreign Exchange Allocation and Priorities 

The Directive laid out foreign exchange allocations and priorities in three categories. The Directive also stipulated import items and payments are to be served on a first come first served basis.

The directive put a first priority to pharmaceutical items, medicine, input for manufacturing of pharmaceuticals and laboratory reagents. It also adds input for manufacturing of edible oil and liquefied petroleum gas that has not been listed in the previous directive. The reason for listing pharmaceutical inputs, edible oil inputs and fuels in the first priority is in order to mitigate shortage of foreign currency in those sectors.

As second priority, inputs for agriculture and inputs for manufacturing including fertilizer, seed, pesticide and chemicals shall follow. 

Third priority includes motor oil and lubricants, agricultural inputs and machineries, pharmaceutical products, manufacturing industries request for procurement of machineries, equipment, spare parts, and accessories, import of nutritious food for babies, spare part for construction machineries for own use by construction companies whose total values not exceeding  USD 50,000 and educational materials. Profit or dividend transfer, transfer of excess sales of foreign airlines and sales from share and liquidation of companies by FDI are also categorized under the third priorities. 

The Directive also stipulated that the total foreign currency allocated for imports listed in the three categories shall not be less than 50 percent of the total foreign currency allocated for all imports of goods and services at any time. In this case the bank is obliged to surrender the difference to the National Bank every month within the first working days of the next month. 


The NBE Directive No FXD/77/2021 has been anticipated to enable the NBE to carefully manage its scarce reserve in foreign exchange and ensure its efficient and proper allocation. To do that the Directive laid core responsibilities to management of each bank. For easier implementation and management, priority sectors have been identified in line with the economic wheel of the country.

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One Key Aspect of Employment Law: Probation Period

By Luwam Chalachew, Legal Assistant at DMLO


Probation period is a fixed period of time that employees are exempt from certain rights. Most importantly, the absence of notice period required for termination of contract and payment of compensation as well as severance payment after termination. From the employer point of view, probationary period is used to evaluate the workers performance, skill, abilities, and personality. Also whether the employee can engage with the existing organizational culture. And from an employee’s point of view, probationary periods are there to see if the employee enjoys working for the employer and whether the employee is a suitable match for their skills and abilities required for the job. Generally the probationary period allows both employee and employer to see if they are a good fit and to make things easier if they need to terminate the contract. We will see in this article the probation period from the employer as well as employee point of view as envisaged under the Labour Proclamation of Ethiopia Proclamation No 1156/2019.

Importance of Probationary Period  

From the employers perspective, probation periods are important as they help employers to be sure they have made the right recruiting decision and to take action more quickly if they feel the new employee is not suitable for the role. These reduce the expenses of keeping employing someone who is unsuitable for the job. Probation enables the employer to replace the unsuitable employee more swiftly.

Probation Period under the Ethiopian Labor Proclamation

The previous Labor Proclamation no.377/96 was replaced in 2019 by the new Labor Proclamation No.1156/2019 (hereinafter the Labor Proclamation).

Few changes are introduced regarding the probation period under the new proclamation. These include one the length of probation period was extended from 45 consecutive days to 60 working days and two the new Labour Proclamation specifies the beginning date of probation period under Article 11(3) which is the first date of employment while the previous proclamation was silent about this. 

Agreement of Probation Period

Probation period is not a mandatory procedure. It is made when the parties agree to have a probation period. Silence about it doesn’t amount to presumption of probation period.  According to Article 11(3) of the Labor Proclamation, if the parties agree to have a probation period, the agreement shall be made in writing. And the length of the probationary period shall not exceed 60 working days starting from the first date of employment. The length of the probationary period is limited in that the probation period cannot be extended by agreement beyond 60 days.

Reemployment by the Same Employer

According to Article 11(2) of the Labour Proclamation, a worker re-employed by the same employer for the same job shall not be subjected to probation. In this case a worker who is reinstated to a position in the same organization in the same area doesn’t have to serve a probationary period.

 Rights and Obligations of Probationary Workers

During probation period, probationary workers shall have the same rights and obligations that a worker who has completed his probation period possesses unless the law or work rules or collective agreement provides otherwise.

Termination of Probation Period 

According to Article 11(5) of the Labour Proclamation, if the worker during his probation period proves to be unfit for the post, the employer can terminate the contract of employment without notice.  In this case the law is silent on the grounds to evaluate the fitness of the worker to the post. So it seems it is left for the employer to decide.  Evaluation of fitness goes beyond competence and may include personal characteristics of the employee. In making the evaluation, the employer may use subjective as well as objective criteria to determine the workers fitness to the post.  If the worker proves to be unfit for the post, the employer may terminate the contract of employment without notice. Unlike termination of a normal contract of employment, the employer is not obliged to pay severance payment or compensation while terminating the contract of employment during the probation period.

The worker may also terminate the contract of employment without notice during his probation period.

Unlawful termination  

One case in which termination of contract of employment during probation period may be unlawful is termination based on the grounds listed under Article 26(2) (d) of the Labour Proclamation. This includes termination of contract of employment based on the workers nation, sex, religion, political outlook, marital status, race, color, family responsibility, pregnancy, disablement or social status. If termination is made based on these grounds, the termination will be unlawful.  

End of Probation Period 

Length of probation is fixed as it is stipulated under Article 11(3) of the Labour Proclamation. So according to Article 11(7) of the Labour Proclamation,  if a worker continues to work after the expiry of the fixed period, a contract of employment for the intended period or type of work shall be deemed to have been concluded from the beginning of the probation period. 


Generally the probation period is a fixed period which allows both employee and employer to see if they are a good fit for the job. During the probation period, both employee and employer can terminate their contract of employment without giving notice. And the employer is not expected to pay severance payment or compensation.

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Conditional Dissolution of Marriage and Period of Limitation for Partition of Common Property: Cassation Decision

By Luwam Chalachew, Legal Assistant at DMLO
This article summarizes the decision of the Federal Supreme Court Cassation Division decision regarding conditional dissolution of marriage and period of limitation for demanding partition of common property of spouses after divorce. The case has been between applicant Mrs. Almaz Leshe VS respondent Mr. Bekele Belachew on Vol.19 File No. 102662 on April 15/2008.
Regional First instance court
The case was first brought to Amhara Region Debre Berhan First Instance Court by the applicant. The issue first provided under the statement of claim of the applicant was that the applicant and respondent were married and lived together for 40 years but due to disagreements between them since 2006 E.C the applicant petitioned for a divorce and partition of common property.
The respondent on his statement of defense accepted the fact that they were married but he states that the applicant left the house and they were living separately since she left him 19 years ago and he objected by raising the period of limitation as preliminary objection and for the defence the respondent argued there are no common properties to be shared among them. Finally the regional First Instance Court after hearing both parties decided that the marriage was dissolved 10 years ago and closed the case citing period of limitation.
Appeal to the High Court and Application to Regional Cassation
The applicant appealed to the Semen Shewa Zone High Court opposing the decision of the First Instance Court. But the court did not accept the application. The case was also brought to the Regional Supreme Court Cassation Division. The Cassation bench also dismissed the case stating that there is no basic error of law.
Review by the Federal Supreme Court Cassation Bench
On application the Cassation framed an issue on the appropriateness of decision of lower courts that ordered marriage of applicant and respondent is dissolved conditionally. The Cassation first examines the lower court’s decision. And the reasons of the lower court to conclude that the marriage of applicant and respondent dissolve conditionally were due to the fact that they were living separately since 1987E.C. The high court also accepted this fact.
The Federal Cassation bench states that the First Instance Court bases its decision on Federal Supreme Court Cassation decision file no.31891 i.e. living separately for a long period of time will result on the dissolution of the marriage between spouses conditionally even though court didn’t approve on this matter as it is also stipulated under Article 2(1) of Proclamation no.454/1997. There is also a binding decision of the Federal Supreme Court Cassation decision on file no. 679224 which states the fact that if obligations of cohabitation, support and assist each other are in place, merely physical separation of spouses does not dissolve the marriage.
The Cassation also examined the case in line with its former decisions on file no. 14290, 20983, 31891 and 67924. Applicant and respondent got married and have children but it is witnessed that they were living separately since 1987. Accordingly, the Cassation reasoned that according to Amhara Regional Family Code Article 61 spouses owe each other respect, support and assistance during their marriage time. So this thing was not in place between the parties due to the space between them for a long period of time. So the Cassation concluded that marriage of applicant and respondent was dissolved conditionally since 1987. Regarding partition of common property, the Cassation stated that application for partition of common property should be closed by period of limitation as long as it is not brought within 10 years according to the relevant Cassation decisions mentioned above. Generally the Cassation concluded that there is no basic error of law.
The main idea of marriage is about cohabitation, respect, assisting and supporting each other. So spouses who live separately for a long time without the intention of getting back together and in the absence of the obligation to respect, support and assist each other the marriage is presumed to be dissolved conditionally. Regarding application for partition of common property it will be barred by a 10 years period of limitation.
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