By Geda Yoseph, Associate at DMLF Introduction Arbitration is a consensual dispute resolution process based on the parties’ agreement to submit their disputes for resolution to an arbitral tribunal, usually composed of one or three independent arbitrators appointed by or on behalf of the parties. Arbitration can also be defined …
The FDRE House of Peoples Representative on March 12, 2024 appointed 16 judges for judgeship at the Federal Supreme Court. The Constitutional procedure for appointment of Federal Judges is that the Federal Judicial Administration Council shall select candidates. Then the Prime Minister shall submit these candidates to the House of Peoples’ Representatives for appointment. Accordingly, 3 women and 13 men were appointed Federal Supreme Court Judges. The Federal Supreme Court has first instance jurisdiction, appellate jurisdiction and power of cassation, as per Federal Courts Proclamation No 1234/2021.
The FDRE Constitution on Article 79 Sub-article 3 guarantees that judges shall exercise their functions in full independence. Judges are expected to be directed solely by the law.
No judge shall be removed from their duties before the judge reaches the retirement age determined by law. The current Public Servants’ Pension Proclamation No 1267/2022 specifies 60 years, as the retirement age of a public servant, that includes judges as well. The FDRE Constitution states that such a retirement age that is determined by law cannot be extended for a judge.
However, there are exceptions whereby a judge is removed from office prior to retirement age. These include where the Judicial Administration Council decides to remove the judge for violations of disciplinary rules or on the ground of gross incompetence or inefficiency; or where a judge can no longer carry out his/her responsibilities on account of illness. Such assessment and decision of the Judicial Administration Council has to be approved by the majority vote of the House of Peoples Representative.
Arbitration is a consensual dispute resolution process based on the parties’ agreement to submit their disputes for resolution to an arbitral tribunal, usually composed of one or three independent arbitrators appointed by or on behalf of the parties. Arbitration can also be defined as the resolution of a dispute by a privately appointed third-party decision-maker. Arbitration is a mechanism for settling disputes. If there is no dispute, there can be no arbitration. Arbitration is known for its procedural flexibility, which allows parties to engage in an efficient, confidential, and fair process leading to a final, binding, and enforceable award. From an international perspective, arbitration awards are enforceable in over 150 countries around the world due to the application of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). Currently, both at the national and international level, arbitration is becoming one of the most preferable dispute settlement mechanisms. As compared to formal court proceeding arbitration, arbitration is flexible, saves a lot of costs, and enables the parties to resolve their dispute in an amicable manner. At the international level, arbitration is also one of the areas showing good progress and advancement. Countries are signing different bilateral and multilateral agreements with each other to regulate and facilitate transactions and dispute settlement.
Characteristics Feature of Arbitration
Arbitration is a mechanism for resolving disputes in accordance with the rules and principles of the law. It is a right-based mechanism. Rules and principles of law may sometimes be chosen by the parties. In contrast, other alternative dispute settlements, like mediation and conciliation, shall not be bound to be governed by any other substantive or procedural laws.
Arbitration is consensual as far as its initiation is concerned; an agreement to arbitrate is the cornerstone of arbitration. There are exceptions for this consensual nature of arbitration under Cooperative Society Proclamation 985/2016 and National Payment System Proc. 718/2012.
Arbitration is a private procedure. The reason it is called a private procedure is that several issues are determined by the parties. The parties organize the tribunal, the parties determine the jurisdiction, and the parties with the tribunal determine the venue, the language, the time, etc. of arbitration. For this reason, arbitration is called a private procedure.
Arbitration leads to a final and binding determination of the rights and obligations of the parties. The process and outcome of arbitration are binding on the parties. Sometimes it is also final and non-appealable.
Advantages of Arbitration as Compared to Court Litigation
Arbitration permits the parties to choose people with specialized knowledge to judge their dispute. Judges in state courts are less likely to acquire the same degree of expertise in the technical aspects of the transactions that come before them, as are the lawyers who represent the parties and who may later serve as arbitrators in similar transactions. In construction arbitration, there may be engineers or architects as well as lawyers serving as arbitrators.
The procedure in arbitration is flexible and can be adapted to the needs of the particular dispute. Due to the flexibility and finality of arbitration proceedings, resolving disputes through arbitration may often be quicker and cheaper than resolution through court litigation or other means of dispute resolution.
Arbitration is not subject to appeal on its merits unless otherwise agreed upon by the parties. What the parties lose in legal security, because errors made by the tribunal in the application of the law cannot be corrected, they gain in the reduced amount of time required to reach a final decision and reduced costs.
Faster decisions and lower costs as compared to litigation in the courts have been one of the traditional arguments in favor of the arbitration-stamp duty proclamation. Faster decisions and lower costs as compared to litigation in the courts have been two of the traditional arguments in favor of arbitration.
international Commercial Arbitration
In international transactions, people and different international organizations also resort to international commercial arbitration. In international commercial arbitration:
Litigating in foreign courts is unthinkable. While that is good for one party to the transaction, it is not so good for the other party, who faces all the difficulties of litigating in an unfamiliar procedure, in a language that may be foreign and may not be the language of the contract, and not being able to use its lawyers who are familiar with the company. It is also not irrelevant that one party is staying at home while the other party is staying in a foreign country, with all the inconvenience and expense that entails.
Arbitration reduces inequalities. Arbitration of disputes among organizations or people living in different countries is a means to reduce the inequalities. While it is possible for the arbitration to take place in an arbitration organization located in the home country of one or the other party, it is also possible for the arbitration to be administered by an arbitration organization located in a third country.
When the state is a party, a foreign court is even more unattractive. There are special concerns about the partiality of the courts when the state is a party to the dispute. The state has too many means to influence decisions in its own courts for foreigners to feel comfortable litigating against it there. This factor is the major reason for the extraordinary increase in the number of bilateral investment treaties in recent years in which foreign investors have the option of instituting arbitration in one of several arbitration forums outside the host state.
Ease of enforcement: A final reason for the current popularity of international commercial arbitration is the comparative ease of enforcement of an award as compared to the enforcement of a judgment of a foreign court.
Different Types of Arbitration
There are different types of arbitration that deal with different subject matters. These types of arbitrations include:
Commercial arbitration
Investment arbitration
Commodity arbitration
Sports arbitration
IP Arbitration
Public law arbitrations
International arbitrations
Major Concepts /Issue in Arbitration
There are four (4) major concepts or issues in arbitration. These are: arbitrability, jurisdiction, arbitration agreement, and separability. Let’s consider each of them briefly.
Arbitrability: In Ethiopia, arbitrability is simply the notion of whether a dispute falls within the category of disputes that can be resolved by arbitration. What disputes are not arbitrable in Ethiopia are listed under Article 7 of Arbitration and Conciliation Working Procedure Proc.1237/2021. This includes divorce, adoption, guardianship, tutorship, succession, criminal cases, tax cases, judgments on bankruptcy, decisions on the dissolution of business organizations, all land cases, including leases, administrative contracts, except where permitted by law, trade competition and consumer protection, and administrative disputes falling under the powers given to relevant administrative organs by law.
Jurisdiction: Jurisdiction refers to the scope of powers of the arbitration tribunal. Article 19 of Proclamation 1237 provides that the arbitral tribunal can determine its own jurisdiction. With regard to an objection against the decision of the tribunal on its jurisdiction, Art. 19(5) provides that an objection against the decision of the tribunal on its jurisdiction shall be submitted to the First Instance Court within one month from the date of rendering such a decision. The submission of an objection in accordance with Sub-Article (5) of this Article shall not prevent the tribunal from continuing with the arbitration proceedings and rendering an award according to Article 19(6). The implication of Art. 19(5) and 19(6) is that arbitration will not be stayed because of a jurisdictional objection. The implication is that defendants will not delay arbitration by raising jurisdictional objections. The tribunal may go on and issue its award, and the court may rule that the tribunal doesn’t have jurisdiction. In which case, the award will be void.
The arbitration agreement: An arbitration agreement is an agreement to submit present or future disputes between the parties to arbitration. The notion of an arbitration agreement comprises two basic types: a) A clause in a contract by which the parties to a contract undertake to submit to arbitration the disputes that may arise in relation to that contract (arbitration clause); or b) An agreement by which the parties to a dispute that has already arisen submit the dispute to arbitration (submission agreement). The arbitration agreement has to be in writing in light of Art. 6 of Proc. 1237/2021. An arbitration agreement has to be written, signed, and attested by witnesses in light of Article 6 of Proc. 1237/2021. Arbitration agreement can be made by electronic means such as emails, telegrams, etc. that can be retrieved.
The Arbitration Tribunal: The Arbitration Tribunal is a sole arbitrator or a panel of arbitrators that hears the case and makes the award or other necessary orders. With regard to the appointment of arbitrators, contracting parties are free to agree on the procedure for the appointment of arbitrators, whether by arbitration centers or by a third party, in light of Article 12 of Proc. 1237/2021. Objection is possible if there are circumstances that create justifiable doubts as to impartiality, independence, or fulfillment of the criteria stated in the arbitration agreement. where one of the contracting parties fails to appoint the co-arbitrator within 30 days from the date of receipt of the notice by the other party, or where the two arbitrators fail to agree on the appointment of the third arbitrator within 30 days from the date of their appointment, or where the contracting parties fail to agree, in the case of a sole arbitrator, the First Instance Court shall appoint such arbitrator upon the request of one of the parties. Once arbitrators are appointed, they have their own rights and duties.
Right of Arbitrators
Right to fee
Duties of Arbitrators
The duty to be and remain impartial and independent
The duty to conduct the arbitration in an efficient manner
Duty to decide the case expeditiously
Not meet any of the parties separately.
Not to receive any gifts from the parties
Decision of Arbitration Tribunal
The arbitrator tribunal, after reviewing substantive parts of the issue final, gives an award. Award is a generic term denoting the decisions of the arbitral tribunal. On the other hand, an order is a decision of the tribunal determining the procedural direction of the proceeding (procedural orders). An award has the aspect of finally disposing of a particular issue in dispute between the parties. In arbitration, both judgment and decree are called awards.
Status of the decision Arbitration Tribunal in Light of Arbitration and Conciliation, Working Procedure Proclamation, Proc. No. 1237/2021
One of the characteristics of arbitration is that it leads to a final and binding determination of the rights and obligations of the parties. Arbitration leads to a final and binding determination of disputes. Article 44(6) also provides that any decision of the arbitral tribunal shall be deemed to be a decision given by a court, shall be binding on the parties, and prevents bringing suit on similar matters between such parties.
Appeal and Cassation Review With Regard to Arbitral Award
Before Proclamation No. 1237/2021 came into force, there was controversy and uncertainty about whether the decision of the arbitrator tribunal was subject to appeal or not, even in the absence of agreement parties. The Federal Cassation Bench also considered several cases, even in the presence of an agreement between parties, to appeal to a formal court after the tribunal rendered the decision. This issue and uncertainty were resolved after the coming into force of Proclamation No. 1237/2021.
Appeal under Proclamation No. 1237/2021
According to Proclamation No. 1237/2021, Article 49 an appeal is not automatically available; it depends on the presence of an agreement. Article 49(1) states that unless the contracting parties agree otherwise in their arbitration agreement, no appeal shall lie to the court from an arbitral award. In the absence of agreement between the parties, there is no appeal. With regard to an error of law, parties can exclude cassation by agreement. Article 49(2) of Proclamation 1237/2021 provides that unless there is agreement to the contrary, an application for cassation can be submitted where there is a fundamental or basic error of law. According to the above provision, cassation review is available unless excluded by agreement.
Article 49(3) provides exceptions for exceptions. It provides grounds on which appeals are never allowed, even if the parties agree to appeal. These are:-
Appeal on arbitration on equity, According to Art. 41(5), an arbitral award may be granted based on equity or known commercial practices where such power is expressly given to the tribunal by the contracting parties or the applicable law authorizes such application. With regard to such an arbitral award, parties cannot appeal even by entering into an agreement.
Arbitration on agreed terms/consent award: According to 43, when contracting parties have resolved their dispute by agreement before an arbitral award is rendered on the subject matter of the arbitration, parties cannot appeal to court by opposing such a decision even by entering into an agreement.
Arbitration without reason: according to Art. 44(2), contracting parties may agree not to disclose the reason or whether the arbitral award is granted based on mutual consent. With regard to such decisions, parties cannot appeal to the court even after entering into an agreement.
In light of Article 49(3) of Proclamation 1237/2021, parties cannot appeal on the above-listed grounds even by entering into an agreement. Article 49(3) limits parties’ autonomy by limiting their contractual power with regard to appeals.
International conventions on Recognition and Enforcement of foreign arbitral awards
There are different international conventions and treaties with regard to recognition and enforcement of foreign arbitral awards. Let’s briefly consider the New York convention.
The NY Convention has two objectives:
The recognition and enforcement of arbitral agreements
The recognition and enforcement of arbitral awards
The Convention is an international treaty and thus part of public international law. Article I(1) of this convention also provides that the Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought, arising out of differences between persons, whether physical or legal. It also applies to arbitral awards not considered as domestic awards in the State where their recognition and enforcement are sought. On 24 August 2020 Ethiopia acceded to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “Convention“).The ratification of the NYC comes at a time where the country is undertaking major economic and legal reforms including the privatization and liberalization of mega sectors. It also plays a significant role in attracting foreign investors and creating a good environment for investment.
Investment Arbitration
Ethiopia’s special law includes arbitration as an alternative dispute settlement mechanism. A case in point is the Investment Proclamation Procl.No. 1180/2020.
Ethiopia recently enacted a new investment law with the purpose of promoting investment and encouraging foreign investors to invest in Ethiopia. The new investment proclamation introduces several changes, like using a negative listing approach with regard to areas of investment those foreigners can invest in, which is a provisionally positive listing approach. Other than areas reserved for domestic investors, foreign investors can invest in any area. To be more specific, the new investment proclamation also introduces provisions that deal with arbitration, which allow investors to resolve the dispute through arbitration in light of Articles 28(2, 3).Investment Proclamation under Article 28(2) provide that the Federal Government may agree to resolve investment disputes involving foreign investments through arbitration. The inclusion of such provisions in investment law plays a significant role in creating a favorable environment for investment. Another important provision is Article 28(3) of the investment proclamation, which provides that where a foreign investor chooses to submit an investment dispute to a competent body with judicial power or arbitration, the choice shall be deemed final to the exclusion of the other. Currently, at the international level, arbitration is becoming an effective and widely used dispute settlement mechanism. Investors also prefer arbitration over formal court proceedings due to several factors we mentioned above. Hence, recognition of arbitration in investment law is a good legal reform to attract foreign investors.
Conclusion
Arbitration is a formal method of alternative dispute resolution (ADR) involving a neutral third party who makes a binding decision. The dispute will be decided by one or more persons (the ‘arbitrators’, ‘arbiters’, or ‘arbitral tribunal’), which renders the ‘arbitration award’. Parties often seek to resolve disputes through arbitration because of a number of perceived potential advantages over judicial proceedings. Arbitration is often faster than litigation in court. Arbitral proceedings and an arbitral award are generally non-public and can be made confidential. Because of the provisions of the New York Convention of 1958, arbitration awards are also generally easier to enforce in other nations than court verdicts. In most legal systems, including Ethiopia, there are very limited avenues for appealing an arbitral award, which is sometimes an advantage because it limits the duration of the dispute and any associated liability. Hence Arbitration is becoming the most preferable dispute settlement method, and Ethiopia also recognizes arbitration under Proclamation 1237/2021 and different other special laws like investment law.
For arbitration related inquiries, you may contact us at info@dmethiolawyers.com
Women, Business and the Law (WBL) 2024 is the 10th in a series of studies measuring the laws that affect women’s economic opportunities in 190 economies of the world. This year’s edition will be out in March 2024. For more than a decade, WBL has analyzed the laws and regulations that affect women’s economic opportunity. However, laws alone are not enough to improve gender equality. Their implementation and enforcement are critical to the full realization of women’s rights.
As a result, WBL 2.0 was introduced. The new additions as indicators are Safety and Childcare. The previous namely mobility, workplace, pay, marriage, parenthood, entrepreneurship, asset and pension remain intact. This year’s edition goes beyond what is there in the law; it further looks into implementation on the ground.
This 2024 edition of WBL is coined in two versions of the legal index. The first WBL 1.0 is to update data within reforms implemented from Oct 2,2022 to Oct 1,2023. WBL 2.0 on the other hand is a new index that includes additional indicators of safety and childcare.
The WBL 2.0 looks into a)the legal framework (measures the state of the law within a given economy in relation to a specific right), b)Supportive framework (capture the existence of policy mechanisms to implement rights) and c) Expert Opinions( shed light on the progress towards realizing a particular right).
Consequently, Ethiopia scored 80.0 on WBL 1.0 legal framework but scored 60 on WBL 2.0 legal framework score, 30.8 on WBL 2.0 Supportive Framework and 43.1 on WBL 2.0 Expert Opinion Score. Italy has the highest WBL 2.0 legal framework score of 95.0, whereas 15.0 on WBL 2.0 legal framework score is by West Bank and Gaza.
The Transaction of Minerals Ratification Proclamation No. 1144/2019 governs the transaction of minerals resources after production. The Proclamation covers all transactions of minerals produced from all mining operations conducted in Ethiopia. The FDRE Constitution provide that the rights to ownership of all natural resources of Ethiopia is exclusively vested in the government and its people. Accordingly it has become necessary to regulate the transaction of minerals by a proclamation. We shall briefly look into the competency requirements, licenses required, eligibility, duration of licenses and a brief conclusion shall follow.
Authority and Ministry
The licence issuing Authority and the Ministry mentioned in the Proclamation are the Ministry of Trade and Regional Integration and the Ministry of Mines, respectively. These Federal organs issue mineral refining, smelting for metallic and associated minerals and mineral exporters certificate of competence. Licences and certificates other than the once given to the authority or Ministry are given by the Regions.
Certificate of Competence
To transact minerals, a person has to qualify to carry out the trade. The following certificates of competence (coc) may be requested and upon fulfillment of the requirements, issued : a) mineral supplier coc, b) mineral crafting coc, c) mineral refining coc, d) mineral smelting coc, d) mineral transaction coc and f) mineral export coc.
Licenses
Any person who wishes to trade in minerals shall present a coc and shall be issued with the following License : a) mineral supplier licenses b) mineral crafting license c) mineral refining license d) mineral smelting license d) mineral trade license and e) mineral export license.
Eligibility
Among the Licenses referred above, mineral supplier license or gold and silver smelting license shall not be issued to foreign investors. A holder of a mining license shall not be issued with a supplier licence. Similarly regarding eligibility for coc, mineral transaction or export certificate of competence shall not be issued to foreign investors.
Duration and Renewal
Any license or coc shall be valid for one year from the date of issuance subject to renewal upon fulfillment of the requirements.
In conclusion, the Transaction of Minerals Proclamation aims to modernize the mineral transaction scheme so as to create proper structure that enhances the contribution of the mining sector to the economy of Ethiopia. The Proclamation also enables investors engaged in mineral transactions perform their rights and obligations as per the rules and regulations.
For any Mining related inquiries, you may contact us at info@dmethiolawyers.com
By DMLF The FDRE House of Peoples Representative on March 12, 2024 appointed 16 judges for judgeship at the Federal Supreme Court. The Constitutional procedure for appointment of Federal Judges is that the Federal Judicial Administration Council shall select candidates. Then the Prime Minister shall submit these candidates to the House of Peoples’ Representatives for…
By Geda Yoseph, Associate at DMLF Introduction Arbitration is a consensual dispute resolution process based on the parties’ agreement to submit their disputes for resolution to an arbitral tribunal, usually composed of one or three independent arbitrators appointed by or on behalf of the parties. Arbitration can also be defined as the resolution of a…
By Mahlet Mesganaw, Partner at DMLF Women, Business and the Law (WBL) 2024 is the 10th in a series of studies measuring the laws that affect women’s economic opportunities in 190 economies of the world. This year’s edition will be out in March 2024. For more than a decade, WBL has analyzed the laws and…
By Mahlet Mesganaw, Partner at DMLF The Transaction of Minerals Ratification Proclamation No. 1144/2019 governs the transaction of minerals resources after production. The Proclamation covers all transactions of minerals produced from all mining operations conducted in Ethiopia. The FDRE Constitution provide that the rights to ownership of all natural resources of Ethiopia is exclusively vested…
By Dagnachew Tesfaye, Managing Partner at DMLF The National Payment System Proclamation No 718/2011 has been amended. The amendment proclamation is the National Payment System(Amendment) Proclamation No 1282/2023. The latter Proclamation was made in Addis Ababa, on February 3/2023. The objective of Proclamation 1282/2023 is to accommodate the developments, changes and innovations in the National…
By Geda Yoseph, Associate at DMLF Introduction Bitcoin is the first decentralized digital currency that allows peer-to-peer transfers without any intermediaries such as banks, governments, agents, or brokers, using the underlying technology of blockchain. Anyone around the world on the network can transfer Bitcoins to someone else on the network regardless of geographic location; you…
The National Payment System Proclamation No 718/2011 has been amended. The amendment proclamation is the National Payment System(Amendment) Proclamation No 1282/2023. The latter Proclamation was made in Addis Ababa, on February 3/2023. The objective of Proclamation 1282/2023 is to accommodate the developments, changes and innovations in the National Payment System. Since the amendment Proclamation, the National Bank of Ethiopia (NBE) has issued Licencing and Authorization of Payment Instrument Issuers Directive No ONPS/09/2023, effective as of October 6,2023. Regarding payment system operators, the Licencing and Authorization of Payment System Operators Directive No ONPS/02/2020 govern the operators. A brief overview of these laws shall be dealt hereunder.
Payment Instrument Issuer and Payment System Operator
The National Bank of Ethiopia is entrusted to regulate the sector. The NBE shall receive any application from any interested party to be a payment instrument issuer or payment system operator. Payment Instrument Issuer can be a company, or a government owned enterprise or a bank or micro finance institution authorized by the NBE to issue payment instruments. Whereas a Payment System Operator could be a financial institution or any other company licensed or authorized to establish and operate a payment system including routing, matching, clearing, netting and settlement of payment instructions or government securities.
Licencing and Authorization
Among several general requirements, some of the sector specific requirements shall be the focus. A business organization that wishes to acquire a license for payment instrument issuer or a payment system operator shall be obliged to form a subsidiary company exclusively for the business objective of performing payment system operation or payment instrument issuing. The applicant should fulfill minimum paid up capital.
The NBE has put a minimum paid-up capital of ETB 50 million or its equivalent in foreign currency for payment instrument issuer on Directive No 09/2023 Article 4 sub-article( 5).The contribution has to be in cash. The cash has to be deposited in a blocked account in a bank in the name of the payment instrument issuer. NBE shall respond to such applications within 60(sixty days).
Similarly, according to Directive No ONPS/02/2020, an applicant intending to be licenced as a payment system operator shall be established as a company, have a minimum of 10 shareholders to operate more than one system, capital of not less than ETB million if it is a switch, ETB million capital, if it is an automated teller machine operator, ETB 10 million capital, if it is a point of sale device orator and ETB 3 million if it is a payment gateway operator.
The national switch operator on the other hand is required to have ownership by a person limited to 40%. The national switch operator shall be only owned by financial institutions and the NBE. The ownership by a natural person is limited to 1 share at the time of entry and have 1 more share every time new shares are sold thereafter. When the ownership is by an institutional shareholder other than the NBE, the ownership is limited to 5%. The national switch operator shall have a paid up capital of ETB 300 million.
Foreign Nationals
Foreign Nationals may be allowed to engage in a payment instrument issuer business or a payment system operator business. Such foreign-owned companies are required to raise capital fully in foreign currency. In the case of collaboration with Ethiopians, the foreign partners are required to contribute in foreign currency to the extent of their aggregate percentage holding.
Investment Protection Fee
Investment Protection Fee has been defined in the Proclamation 1282/2023 as an amount of money paid to the government by foreign nationals who invest in businesses that are reserved for domestic investors only. Hence the foreign-owned company is required to pay not only a licence or authorization fee but also an investment protection fee. The NBE shall determine from time to time the amount of the investment protection fee.
Rejection of Licencing
The NBE may reject an application for authorization or licensing for payment instrument issuer and payment system operator. These rejection points have been included in NBE Directive No. ONPS/09/2023 and NBE Directive No.02/20 . Such a rejection is appeal-able.
Pilot Trial and Grant of Licence
Based on the result and assessment of pilot trial period of 30 -60 days for payment system operator and 6-9 months for payment instrument issuer, the NBE may grant full licence.
In conclusion, the amendment in the proclamation and issuance of Directives on the payment system signifies a big step in Ethiopia’s endeavour to improve and innovate the financial regulatory landscape.
For any related inquiries, you may contact us at info@dmethiolawyers.com
By DMLF The FDRE House of Peoples Representative on March 12, 2024 appointed 16 judges for judgeship at the Federal Supreme Court. The Constitutional procedure for appointment of Federal Judges is that the Federal Judicial Administration Council shall select candidates. Then the Prime Minister shall submit these candidates to the House of Peoples’ Representatives for…
By Geda Yoseph, Associate at DMLF Introduction Arbitration is a consensual dispute resolution process based on the parties’ agreement to submit their disputes for resolution to an arbitral tribunal, usually composed of one or three independent arbitrators appointed by or on behalf of the parties. Arbitration can also be defined as the resolution of a…
By Mahlet Mesganaw, Partner at DMLF Women, Business and the Law (WBL) 2024 is the 10th in a series of studies measuring the laws that affect women’s economic opportunities in 190 economies of the world. This year’s edition will be out in March 2024. For more than a decade, WBL has analyzed the laws and…
By Mahlet Mesganaw, Partner at DMLF The Transaction of Minerals Ratification Proclamation No. 1144/2019 governs the transaction of minerals resources after production. The Proclamation covers all transactions of minerals produced from all mining operations conducted in Ethiopia. The FDRE Constitution provide that the rights to ownership of all natural resources of Ethiopia is exclusively vested…
By Dagnachew Tesfaye, Managing Partner at DMLF The National Payment System Proclamation No 718/2011 has been amended. The amendment proclamation is the National Payment System(Amendment) Proclamation No 1282/2023. The latter Proclamation was made in Addis Ababa, on February 3/2023. The objective of Proclamation 1282/2023 is to accommodate the developments, changes and innovations in the National…
By Geda Yoseph, Associate at DMLF Introduction Bitcoin is the first decentralized digital currency that allows peer-to-peer transfers without any intermediaries such as banks, governments, agents, or brokers, using the underlying technology of blockchain. Anyone around the world on the network can transfer Bitcoins to someone else on the network regardless of geographic location; you…
Bitcoin is the first decentralized digital currency that allows peer-to-peer transfers without any intermediaries such as banks, governments, agents, or brokers, using the underlying technology of blockchain. Anyone around the world on the network can transfer Bitcoins to someone else on the network regardless of geographic location; you just need to just open an account on the Bitcoin network and have some Bitcoins in it, and then you can transfer those Bitcoins. Bitcoin can be used for online purchases and or as an investment instrument. Primarily it’s used to buy goods and services. On the other hand, Bitcoin mining refers to the process of validating and recording transactions on the Bitcoin network. The primary purpose of Bitcoin mining is twofold: validating transactions to prevent fraud and adding new blocks to the blockchain, thereby creating new Bitcoins in a decentralized manner.
Trading of Bitcoins and other cryptocurrencies remains mostly as an unregulated activity. Cryptocurrencies have three core characteristics: decentralized, unregulated, and quasi-anonymity. However, this does not mean that cryptocurrencies do not have self-regulation protocols. Cryptocurrencies such as Bitcoin have their own self-regulating protocol. Bitcoin is an internet-based cryptocurrency. Individuals can earn Bitcoin by trading, mining,and payment for services. As of January 2020, over 160 international branded companies accept Bitcoin for their services and products. This indicates that cryptocurrencies are becoming the payment system of future generations.
Advantages of Bitcoin
Both Bitcoin and traditional currency are similar in that both are a store of value, they differ in many ways. First things first, Bitcoin is the first and most recognized cryptocurrency, a digital currency that is secured by cryptography. Bitcoin has several advantages as compared to traditional fiat currencies, assets can be transferred faster on the bitcoin network. The system also has lower transaction fees, because it’s decentralized and there are no intermediaries, and it is cryptographically secure; the identities of the sender and the receiver are kept hidden, and it is impossible to counterfeit or hack the transactions. Plus, all the information is available on a public ledger, so anyone can view the transactions. Hence, Bitcoin plays a significant role in attracting investors from different countries by facilitating financial transactions.
Bitcoin in Ethiopia
Bitcoin is a simple and secure way to enter crypto mining. Ethiopia has now seen Bitcoin networks and clubs, such as Bit Club and AWS Mining, across the country, and more and more people are investing in them. In February 2024, it has been reported that the Ethiopian Government’s investment arm, Ethiopia Investment Holding (EIH) signed a Memorandum of Understanding with Honk-Kong-based West Data Group’s Center Service PLC to commence mining bitcoin. Moreover, according to the Reporter, in May, 2018, a Memorandum of Understanding (MoU) was signed between the Ethiopian Ministry of Science and Technology (MoST) and Input Output Hong Kong (IOHK) for the use of blockchain application platform called Cardano, a type of blockchain record management platform used in Ada cryptocurrency.
Bitcoin Mining
According to data from Bitcoin mining services company Luxor Technologies, in 2023, Ethiopia ranked fourth behind the USA, Hong Kong, and Asia as one of the top destinations for Bitcoin mining rigs. Russian bitcoin mining company Bitcluster has already built the first bitcoin mining facility, and companies such as Hashlabs Mining have started building bitcoin mines in Ethiopia for their global clients. Ethiopia is positioning itself as a leader in the data center space in Africa, which is estimated to grow to $5.4 billion by 2027, according to Aritzon Advisory and Intelligence. The economic benefits of Ethiopia strategically leveraging its abundant energy resources for Bitcoin mining are vast and far-reaching. It is only a matter of time before other African nations join the bandwagon.
Regulating Bitcoin
In order to determine the legal status of bitcoin under the current Ethiopian legal framework, it is important to review the proclamation that establish the NBE ,the National Payment System Proclamation and proclamation that establish Information Network Security Administration (INSA). According to the National Bank of Ethiopia Establishment Proclamation, Proclamation No. 591/2008, Article 5(1), the NBE has the power and duties to coin, print, or cause to be coined, printed, and circulated the legal tender currency. This provision does not talk about bitcoin and other cryptocurrencies .The NBE also made a statement regarding cryptocurrencies in 2022, which states that the use of Bitcoin and other digital currencies for transactions is illegal in Ethiopia, warning that violators will face strict action. The National Bank of Ethiopia (NBE) also added that it will take “legal measures” against anyone found to be using cryptocurrencies for transactions in the country. “Birr is the only legal currency in Ethiopia, and all financial transactions shall be effected through it’’ said NBE. The NBE stressed that there is still no officially recognized cryptocurrency exchange in Ethiopia.
The Information Network Security Administration (INSA) stated on August 24, 2022, that “individuals and entities” involved in “crypto operations” must register with the authority within 10 days. The “urgent notice” comes after parliament amended INSA’s mandate to “regulate and control cryptographic products and their transactions”. Proclamation No. 808/2013, which established INSA, under Article 6(9), provides that the agency shall have the powers and duties to regulate cryptographic products and their transactions, set necessary criteria and develop operating procedures, and develop and implement cryptography infrastructure.
The other legal framework is the Ethiopian National Payment System Proclamation (Amendment) Proclamation No. 1282/2022. Under Article 2(20), the Proclamation defines a payment instrument as any instrument, whether tangible or intangible, that is issued against the receipt of a fund equivalent in Ethiopian Birr that enables a person to obtain money, goods, or services or to otherwise make payments, which include electronic money and cards. This definition is based on traditional currencies rather than emerging cryptocurrencies like bitcoin. Article 5 of this Proclamation also states that no person except the National Bank may be an operator or issuer of payment instruments unless such person is licensed or authorized by the National Bank.
Conclusion
There are strategic deficiencies in the country’s legal norms to govern Bitcoin. Ethiopia has not enacted a law that allows the use of cryptocurrencies. However, Bitcoiners are engaged in expanding the business in the country. Bitcoiners inspire Ethiopians to partake in the Bitcoin business either by buying Bitcoin or through engagement in mining. Signing a memorandum of understanding with different organs is not enough; providing an effective, efficient, and adequate legal and institutional framework for the implementation and regulation of the agreement is very important. Thus, the Ethiopian government should consider enacting a law that comprehensively governs bitcoin. Along with this, improving the capabilities of financial institutions, law enforcement agencies, and regulatory authorities is crucial to deal with the bitcoin system.
For any related inquires, you may contact us at info@dmethiolawyers.com
By DMLF The FDRE House of Peoples Representative on March 12, 2024 appointed 16 judges for judgeship at the Federal Supreme Court. The Constitutional procedure for appointment of Federal Judges is that the Federal Judicial Administration Council shall select candidates. Then the Prime Minister shall submit these candidates to the House of Peoples’ Representatives for…
By Geda Yoseph, Associate at DMLF Introduction Arbitration is a consensual dispute resolution process based on the parties’ agreement to submit their disputes for resolution to an arbitral tribunal, usually composed of one or three independent arbitrators appointed by or on behalf of the parties. Arbitration can also be defined as the resolution of a…
By Mahlet Mesganaw, Partner at DMLF Women, Business and the Law (WBL) 2024 is the 10th in a series of studies measuring the laws that affect women’s economic opportunities in 190 economies of the world. This year’s edition will be out in March 2024. For more than a decade, WBL has analyzed the laws and…
By Mahlet Mesganaw, Partner at DMLF The Transaction of Minerals Ratification Proclamation No. 1144/2019 governs the transaction of minerals resources after production. The Proclamation covers all transactions of minerals produced from all mining operations conducted in Ethiopia. The FDRE Constitution provide that the rights to ownership of all natural resources of Ethiopia is exclusively vested…
By Dagnachew Tesfaye, Managing Partner at DMLF The National Payment System Proclamation No 718/2011 has been amended. The amendment proclamation is the National Payment System(Amendment) Proclamation No 1282/2023. The latter Proclamation was made in Addis Ababa, on February 3/2023. The objective of Proclamation 1282/2023 is to accommodate the developments, changes and innovations in the National…
By Geda Yoseph, Associate at DMLF Introduction Bitcoin is the first decentralized digital currency that allows peer-to-peer transfers without any intermediaries such as banks, governments, agents, or brokers, using the underlying technology of blockchain. Anyone around the world on the network can transfer Bitcoins to someone else on the network regardless of geographic location; you…
The Ethiopian health sector is one of the areas that has shown good progress in the recent past. Following the change of government in 1991, the new Government of Ethiopia put in place many political and socio-economic transformation measures. Among these, it developed a first national health policy, which was followed by the formulation of four consecutive phases of comprehensive Health Sector Development Plans (HSDPs), starting from 1996/97. The policy and the first HSDP were based on critical reviews of prevailing national health problems and a broader awareness of newly emerging health problems in the country. At the core of the health policy are democratization and decentralization of the health care system; developing preventive, promotive and curative components of health care; assurance of accessibility of health care for all parts of the Population; and encouraging private and NGO participation in the health sector. During the past fifteen years, the Federal Ministry of Health has built an impressive framework for improving the health for all, including maternal and neonatal health.
Providing an effective and adequate legal framework for the health sector plays a crucial role in enhancing the development of the health sector by advancing the quality of service and its coverage.
There are only a few scattered laws and regulations enacted to govern and regulate the health sector.
Legal Framework of Health Sector
FDRE Constitution 1995
The legal framework plays an important role in promoting, developing, and regulating the health sector. The health sector deals with the life of a human being; it’s all about the protection of the health of citizens; hence, strict and effective regulation is very important. The purpose of laws is not only regulation; they also play a significant role in promoting the development of the health sector by encouraging the participation of the private sector and all other stakeholders in the health sector. The EFDRE Constitution provides a general framework for the state structure, rights, and duties of citizens and government. The 1995 FDRE Constitution also provides a general framework with regard to public health and the right to a clean and healthy environment. The Constitution, under Article 41(4), imposes an obligation on the state to allocate ever-increasing resources to provide public health, education, and other social services. States play an important role in providing good public health in developing countries like Ethiopia, where the private sector is not strong enough to provide effective health services to the public. The health sector also deals with citizen’s health rights. The EFDRE Constitution, also under Article 44, recognizes citizen’s right to a clean environment, and it provides that all persons have the right to a clean and healthy environment. This right is also among the rights that obtain international recognition through different treaties and conventions. Ethiopia also enacted a proclamation that regulates environmental issues. The Constitution also imposes an obligation on the state to establish and implement basic policies for public health, which is provided under Article 51 of the Constitution. The government also has a duty to protect and promote the health, welfare, and living standards of the working population of the countries. Ensuring access to public health and a clean environment are also among the duties of government provided under the constitution. This general framework provided in the constitution is implemented by proclamations, regulations, and directives issued by the representatives of the House of Representatives, the Council of Ministers, and Health Minister, respectively.
Proclamations governing the health sector
In order to encourage the expansion of health services, the government enacted Social Health Insurance Proclamation No. 690/2010. Social health insurance is one of the sustainable health care financing mechanisms that enhance equitable access to improved health services through cross-subsidization. The main objective of this proclamation is to ensure the expansion of health service coverage, which plays a significant role in the accelerated socio-economic development of the country. The other objective of social health insurance is to provide quality and sustainable universal health care coverage to the beneficiary through the pooling of risks and reducing financial barriers at the point of service delivery. This social health insurance ensures the expansion of health services through cost sharing between beneficiaries and the government in the health sector. This social health insurance is playing a crucial role in ensuring health service coverage, especially in rural areas. The health service package given to beneficiaries of this social health insurance includes all essential health services and other critical curative services, which are determined by regulations.
The health sector is one of the areas that needs strict and effective regulation.. Unless regulated, unsafe, inefficacious, and of poor quality modern and traditional medicines can cause serious health problems in the society. To prevent such risk Food, Medicine and Health Care Administration and Control Proclamation, PROCLAMATION NO. 661/2009 is issued. Primary objective of this proclamation are:
To protect the public health from unsafe, inefficacious and poor quality modern and traditional medicines;
To protect the public from health risks emerging out of unsafe and poor quality food;
To avert health problems due to substandard health institutions, incompetent and unethical health professionals, poor environmental health and communicable disease;
To control and deter illicit production, trafficking and use of narcotic drugs, psychotropic substances, and precursor chemicals;
To make the fragmented and poor quality administrative and regulatory system in the health sector efficient and effective, it is found necessary to establish a new and coordinated food, medicines and health care regulatory system.
Unlike Proclamation No. 690/2010, which focuses on encouraging the expansion of health services, Proclamation No. 661/2009 is concerned with the regulation of the health sector, especially with regard to medicine, food quality, drugs, and chemicals, and providing an effective and efficient legal framework for the health sector.
Entry Regulation
Health professionals to engage in this activity of providing health services, first of all, they have to obtain a license or certificate issued for a health professional to provide medical or other health-related services. Proclamation No. 661/2009, under Article 33, provides that no person shall practice as a health professional without having obtained a professional practice license issued by the appropriate organ.
Proclamation No. 661/2009 has regulatory purpose. Hence executive organs play significant role in this regulatory activity by:
prepare and submit to appropriate organ health regulatory standards for safety and quality of food, safety, efficacy, quality and proper use of medicines, competence and practice of health professionals, hygiene and environmental health, competence of health and controllable health related institutions;
Issue, renew, suspend and revoke certificate of competence for specialized health institutions, food and medicine processing plants, quality control laboratories, bioequivalence centers, importers, exporters, storages and distributors and trans-regional health service institutions. The other power and duties of the executive are provided under Article 4 of Proclamation No. 661/2009
Regulation after entry
The law regulates not only at the point of entry or license, but even after health professionals obtain a license to provide health services, they are subject to regulation and inspection. The executive organ appoints inspectors to implement the provisions of the Proclamation and other laws and directives related with food, medicine and healthcare administration and control.
The other proclamation is Drug Fund and Pharmaceuticals Supply Agency Establishment Proclamation, PROCLAMATION NO.553/2007.Primary objective of this proclamation are:
to supply quality assured essential pharmaceuticals at affordable prices in a sustainable manner to the public;
to design a system of mobilizing funds from different sources to ensure uninterrupted and sustainable supply of pharmaceuticals to all public health facilities and thereby serve the public in an equitable manner
This proclamation establishes the Pharmaceutical Supply Agency (hereinafter referred to as “the Agency”) as an autonomous federal organ having its own legal personality. The objectives of the agency include:
to enable public health institutions to supply quality assured essential pharmaceuticals at affordable prices in a sustainable manner to the public;
to play a complementary role in developmental efforts for health service expansion and strengthening by ensuring enhanced and sustainable supply of pharmaceuticals
to create enabling conditions for enhancing the accumulation of the Fund in its revolving and cost recovery process
The other legal framework is the Proclamation on Public Health, Proclamation No. 200/2000. This proclamation is issued to promote the health of society and the creation of a healthy environment for future generations by enhancing the active participation of society in the health sector. This Proclamation imposes a duty on the Public Health Authority to appoint qualified inspectors to implement the provisions of Proclamation No. 200/2000 and other laws and directives related to public health. Public health proclamations regulate food quality, food standard, water quality, waste handling and disposal, the availability of toilet facilities, the disposal of dead bodies, control at entry and exit ports, communicable diseases, etc. The primary concern of this proclamation is to protect public health by regulating and setting standards in order to protect society from any health issues. This Proclamation is also one way by which the government implements its constitutional duty to protect public health as stated under Article 90 of the EFDRE Constitution.
Conclusion
The health sector is one area that is showing good progress in terms of quality of services and coverage. Legal frameworks also play an important role in regulating and promoting the health sector. In this short brief on the legal framework of the Ethiopian health sector, we try to discuss constitutional frameworks and different proclamations enacted by the House of Representatives to govern the health sector and promote the development of this area. The legal framework governing the health sector in Ethiopia is more scattered and disorganized, and the number of articles and commentary written on this area is also very few. We recommend that an effective, efficient, and organized legal framework is very essential to the development of the health sector and protecting public health.
For related inquires, you may contact us at info@dmethiolawyers.com
By DMLF The FDRE House of Peoples Representative on March 12, 2024 appointed 16 judges for judgeship at the Federal Supreme Court. The Constitutional procedure for appointment of Federal Judges is that the Federal Judicial Administration Council shall select candidates. Then the Prime Minister shall submit these candidates to the House of Peoples’ Representatives for…
By Geda Yoseph, Associate at DMLF Introduction Arbitration is a consensual dispute resolution process based on the parties’ agreement to submit their disputes for resolution to an arbitral tribunal, usually composed of one or three independent arbitrators appointed by or on behalf of the parties. Arbitration can also be defined as the resolution of a…
By Mahlet Mesganaw, Partner at DMLF Women, Business and the Law (WBL) 2024 is the 10th in a series of studies measuring the laws that affect women’s economic opportunities in 190 economies of the world. This year’s edition will be out in March 2024. For more than a decade, WBL has analyzed the laws and…
By Mahlet Mesganaw, Partner at DMLF The Transaction of Minerals Ratification Proclamation No. 1144/2019 governs the transaction of minerals resources after production. The Proclamation covers all transactions of minerals produced from all mining operations conducted in Ethiopia. The FDRE Constitution provide that the rights to ownership of all natural resources of Ethiopia is exclusively vested…
By Dagnachew Tesfaye, Managing Partner at DMLF The National Payment System Proclamation No 718/2011 has been amended. The amendment proclamation is the National Payment System(Amendment) Proclamation No 1282/2023. The latter Proclamation was made in Addis Ababa, on February 3/2023. The objective of Proclamation 1282/2023 is to accommodate the developments, changes and innovations in the National…
By Geda Yoseph, Associate at DMLF Introduction Bitcoin is the first decentralized digital currency that allows peer-to-peer transfers without any intermediaries such as banks, governments, agents, or brokers, using the underlying technology of blockchain. Anyone around the world on the network can transfer Bitcoins to someone else on the network regardless of geographic location; you…
Partners at DMLF has taken the Mediation Training Program organized by Federal Supreme Court of Ethiopia in collaboration with Free AMSTERDAM UNIVERSITY. The training occurred from February 1-6,2024. The training aimed at teaching the practical skills in conducting court-annexed mediation. The participants were judges, assistant judges, lawyers, advocates, social workers and engineers.
Bankruptcy is the death of a business organization. Just like a human being, business organizations pass through different stages from establishment through registration, development, and bankruptcy due to losses. Like entry, exits from businesses or activities for which they are licensed are also subject to rules and regulations. When a business organization suffers losses or is declared bankrupt, the law regulates how such an organization exits from the business. Bankruptcy law under the Commercial Code provides the rules and procedures through which business organizations go when they are declared bankrupt. A business organization is established by registration upon their exit from business due to bankruptcy or any other reason registration of that business organization is canceled. This material (Brief) is prepared to give a brief on bankruptcy law under the new commercial code, which was adopted on March 25, 2021, by the Ethiopian Parliament. This brief also gives an overview of existing rules, and regulations under the new commercial code.
Bankruptcy
Bankruptcy is the judicial process by which the debtor is found not able to meet his commitments towards his creditor. On the other hand, the Black‟s Law Dictionary defines winding up as: “process of settling the accounts and liquidating the assets of a partnership or corporation, for the purpose of making distribution of net assets to shareholders or partners and dissolving the concern.” What one can infer from this definition is that winding up presupposes a company or another business organization where there are shareholders or partners. The Commercial Code did not define the concept of bankruptcy. It simply dealt with the conditions of bankruptcy. There are two important conditions that need to be fulfilled for the existence of bankruptcy. The two conditions are suspension of payments and declaration of bankruptcy. In the absence of any of these two conditions there is no bankruptcy. In other words, the two conditions are cumulative rather than alternative. The objective of bankruptcy proceedings is to timely, efficiently and effectively organize the liquidation of the debtor’s business, whether by piecemeal liquidation or by a sale of business as a going-concern, in order to maximize the value of the assets available for recovery by creditors, to ensure for honest debtors a fresh start after a full discharge of their debts and to provide for sanctions against debtors and their management as well as creditors that are responsible for its bankruptcy.
Conditions of bankruptcy
Any trader who has suspended payments and has been declared bankrupt shall be deemed to be bankrupt. Suspension of payments shall result from any fact, act, or document showing that the debtor is no longer able to meet the commitments related to his commercial activities.
Opening of Bankruptcy Proceedings
Bankruptcy proceedings shall be opened upon the application of a debtor who has been in cessation of Payments. Debtors who have been in cessation of payments shall at the latest within forty-five days apply to court for the opening of bankruptcy proceedings unless the debtor has already applied for the opening of reorganization proceedings. Bankruptcy proceedings may also be opened upon the application of: a) persons who are jointly and severally liable with the debtor; b) one or more creditors whose claim against the debtor is due and payable; c) a liquidator appointed to liquidate the debtor’s business outside bankruptcy proceedings. In addition to his application, debtors shall submit documents listed under Article 637(1) of commercial Code. These documents are:
The last three balance sheets or financial statements of the business organization;
A profit and loss account;
A cash flow statement in order to demonstrate that the debtor is able to finance the observation period.
A list of commercial credits and debts to be collected, with the names and address of the Creditors and debtors.
Where the debtor is not in a position to provide the Court for a complete set of documents, the debtor shall explain the reasons in the petition. The Court may ask the debtor to submit any further relevant documents and may ask any third party to provide such documents, in particular banks and public administrations. The court may also initiate bankruptcy proceedings on its own motion where, as a result of proceedings against the debtor, it is apparent that the debtor is in cessation of payments. The court which has ascertained the debtor’s cessation of payments shall refer the case to the court that has jurisdiction to order judgment of bankruptcy, which is the Federal High Court, in light of Article 11 Sub Article (2) of Federal Court Proclamation No. 1234/2021. In addition to their application, creditors shall submit documents listed under Article 637 Sub-Article (4) of commercial code and may suggest the name of the person to be appointed as trustee in bankruptcy. These documents are:
Evidence that creditors have a due and payable claim that has not been paid;
Evidence showing why the debtor was unable to effect payments;
Evidence showing the reasons why the creditor, using ordinary civil procedures could not or was no longer in a position to enforce his claims against the debtor;
Evidence showing that the debtor is in a situation of cessation of payments.
Judgment of Bankruptcy
At first hearing, or, where appropriate, on receiving the report from the investigator the Court shall:
declare the debtor bankrupt;
appoint the supervisory judge
appoint the trustee in bankruptcy for the conduct of the bankruptcy proceedings
fix the date of cessation of payments, where the date has not been fixed in the context of reorganization proceedings
A judgment of bankruptcy against a business organization comprising joint and several liability partners shall result in the bankruptcy of partners; the assets of the firm and of the partners shall be dealt with separately and the bankruptcy proceedings shall be conducted separately.
Notice to Creditors
Where an application for bankruptcy is filed by creditors, partners with joint and several liabilities or a public prosecutor, the Court shall notify the debtor of the application within seven days from the application. The debtor shall, within twenty days from the receipt of the application, submit his reply indicating his agreement with or opposition to the application of bankruptcy. The debtor shall submit the documents listed above and other supporting documents indicating whether he is in cessation of payments. Where the debtor admits the cessation of payments, the debtor shall indicate whether his business can still be eligible for reorganization proceedings or should go to bankruptcy proceedings.
Opening of Bankruptcy Proceedings after Death
A debtor, whose registration has been struck off the commercial register may be declared bankrupt where such trader has been in cessation of payments within one year from the date he was struck off from the register. Where the trader was not registered in the commercial register, he may be declared bankrupt at any time after the cessation of payments.
Publication of Judgments
Bankruptcy judgments shall be publicized according to Article 648 of the commercial code. The judgments rendered on bankruptcy shall be publicized by the registrar of the court by means of notices posted at the entrance of the Court and by an exact publication in a newspaper of wide circulation in Ethiopia. The court’s registrar shall ensure that the judgment rendered for opening reorganization proceedings is entered in the commercial register in accordance with the relevant laws.
Conclusion
Ethiopian Bankruptcy Law is the least known and hence the least practiced in Ethiopia. There have been relatively few bankruptcy cases since the Commercial Code went into effect in I960. This brief provided a general overview of Ethiopian bankruptcy law under the new commercial code. Bankruptcy, as a judicial process, passes through several stages and processes until the final process is finalized. Different parties and bodies also participate in and conduct this judicial process; each of these parties has their own respective duties and responsibilities in this process. This brief highlights the duties and responsibilities of these different parties and bodies during this judicial process under the new commercial code. Like entry, exit from business is also subject to regulation because, unless it is strictly regulated, the interests of different parties may be affected; hence the law provides strict regulation. This brief also provides a general overview of this regulation, procedure, procedure and material required, and duties of each party during this judicial process of bankruptcy.
For any inquiries, you may contact us at info@dmethiolawyers.com
By DMLF The FDRE House of Peoples Representative on March 12, 2024 appointed 16 judges for judgeship at the Federal Supreme Court. The Constitutional procedure for appointment of Federal Judges is that the Federal Judicial Administration Council shall select candidates. Then the Prime Minister shall submit these candidates to the House of Peoples’ Representatives for…
By Geda Yoseph, Associate at DMLF Introduction Arbitration is a consensual dispute resolution process based on the parties’ agreement to submit their disputes for resolution to an arbitral tribunal, usually composed of one or three independent arbitrators appointed by or on behalf of the parties. Arbitration can also be defined as the resolution of a…
By Mahlet Mesganaw, Partner at DMLF Women, Business and the Law (WBL) 2024 is the 10th in a series of studies measuring the laws that affect women’s economic opportunities in 190 economies of the world. This year’s edition will be out in March 2024. For more than a decade, WBL has analyzed the laws and…
By Mahlet Mesganaw, Partner at DMLF The Transaction of Minerals Ratification Proclamation No. 1144/2019 governs the transaction of minerals resources after production. The Proclamation covers all transactions of minerals produced from all mining operations conducted in Ethiopia. The FDRE Constitution provide that the rights to ownership of all natural resources of Ethiopia is exclusively vested…
By Dagnachew Tesfaye, Managing Partner at DMLF The National Payment System Proclamation No 718/2011 has been amended. The amendment proclamation is the National Payment System(Amendment) Proclamation No 1282/2023. The latter Proclamation was made in Addis Ababa, on February 3/2023. The objective of Proclamation 1282/2023 is to accommodate the developments, changes and innovations in the National…
By Geda Yoseph, Associate at DMLF Introduction Bitcoin is the first decentralized digital currency that allows peer-to-peer transfers without any intermediaries such as banks, governments, agents, or brokers, using the underlying technology of blockchain. Anyone around the world on the network can transfer Bitcoins to someone else on the network regardless of geographic location; you…
The Ethiopian Ministry of Women and Social Affairs(MoWSA), introduced in October 2023 “Alternative Childcare and Support Directive Number 976/2023” (hereafter the Directive). The Directive adds a new form of child care support service, namely residential care. The preamble of the Directive stresses the increasing number of children in Ethiopia facing natural and man-made disasters. As a result there is the need for alternative childcare and support systems. Therefore it became necessary to provide standardized and comprehensive childcare and support for these children. Identifying current alternative support and care mechanisms are found scattered in different documents and legally not binding making implementation difficult. Hence this Directive attempts to gather up scattered child support and care systems into one document and developed a comprehensive directive that encompasses all alternative childcare services in this Directive.
The Directive sets out and recognizes three sorts of alternative care. The first are family based care namely family preservation and strengthening, reintegration and reunification, kinship care, foster care and adoption. The second type of child care is categorized under community-based care. Last but not least is residential care. Our focus shall be on residential care.
Residential Care is defined as an establishment founded by a governmental, a non-governmental organization or individuals according to appropriate procedures that provides care in any non-family-based group setting but does not include boarding schools.
All residential care facilities including community integrated childcare facilities must be registered in accordance with government directives contained in the Organizations of Civil Societies Proclamation 1113/2019. The Directive prohibits any organization not to operate as a residential care facility unless it has received prior approval from the MoWSA or the relevant licensing authority to operate a residential care facility.
The objective of residential care is to provide short-term alternative care. The short term support includes catering for the basic and psychosocial needs (food, shelter clothing, education, sanitation, and health, play and recreation, counseling, emotional needs as well as social interaction) of children in the residential care institutions for their holistic growth and development. In addition to this the residential caregiver shall opt for the child’s reintegration within their family or, where this is not possible or in the best interests of the child, to secure their safe, stable, and nurturing care in an alternative, family-based care arrangement. Residential care shall in no way, irrespective of size, be viewed as a way to fulfill a child’s right to live in a family environment.
Where the reunification of a child with his parent(s) or placement in kinship care is not possible or suitable and in the best interests of the child, another form of alternative family-based care shall be sought. Where appropriate and desirable, such alternatives include foster care, or facilitating local adoption services for children who cannot be raised by their own families. Children aged below three (3) years should not be admitted to residential care facilities in line with international best practice, unless this is strictly temporary with the view to foster care placement or another community-based placement as soon as possible
Moreover, should there be any need, children and young people who have left the residential home should have the opportunity to receive assistance and support after they have left care for up to three years. The residential home must designate a staff member to contact the care leaver at least quarterly to establish whether advice or support is required. The frequency, however, will be determined by the case worker based on the individual needs of a child.The residential home should have an open-door policy. Children and young people who have lived there can always return to the residential home for advice and support, provided it remains operative.
The scope of the Directive extends to apply to all appropriate Federal and city administration Government institutions, charitable organizations, relevant stakeholders, and alternative childcare service providers authorized to provide childcare services as per the requirements of the Federal Government. It is advised based on this Directive, that regions and city administrations adopt or prepare their own contextualized Directive. However, the Directive shall not apply to institutions for child juvenile offenders.
In conclusion, residential care is introduced as a temporary alternative child care and support mechanism. Residential care objectives coincides to certain extent with private or government orphanages. The Revised Family Code Proclamation No 213/2000 on Article 192 provides that government or private orphanages may give any child under their custody to adopters. In addition to this the orphanage before giving the child for adoption, provides sufficient information to the government organ having authority to follow up the well being of children as to the identity of the child, how the orphanage received him and about the personal, social and economic position of the adopter. Residential care does the same. The Directive seems to purposely ignore the word ‘orphanage’ and also opted to come up with a different term that partly encompasses the task of ‘orphanages’ namely ‘residential care’.
For any inquiry, you may contact us at info@dmethiolawyers.com
By DMLF The FDRE House of Peoples Representative on March 12, 2024 appointed 16 judges for judgeship at the Federal Supreme Court. The Constitutional procedure for appointment of Federal Judges is that the Federal Judicial Administration Council shall select candidates. Then the Prime Minister shall submit these candidates to the House of Peoples’ Representatives for…
By Geda Yoseph, Associate at DMLF Introduction Arbitration is a consensual dispute resolution process based on the parties’ agreement to submit their disputes for resolution to an arbitral tribunal, usually composed of one or three independent arbitrators appointed by or on behalf of the parties. Arbitration can also be defined as the resolution of a…
By Mahlet Mesganaw, Partner at DMLF Women, Business and the Law (WBL) 2024 is the 10th in a series of studies measuring the laws that affect women’s economic opportunities in 190 economies of the world. This year’s edition will be out in March 2024. For more than a decade, WBL has analyzed the laws and…
By Mahlet Mesganaw, Partner at DMLF The Transaction of Minerals Ratification Proclamation No. 1144/2019 governs the transaction of minerals resources after production. The Proclamation covers all transactions of minerals produced from all mining operations conducted in Ethiopia. The FDRE Constitution provide that the rights to ownership of all natural resources of Ethiopia is exclusively vested…
By Dagnachew Tesfaye, Managing Partner at DMLF The National Payment System Proclamation No 718/2011 has been amended. The amendment proclamation is the National Payment System(Amendment) Proclamation No 1282/2023. The latter Proclamation was made in Addis Ababa, on February 3/2023. The objective of Proclamation 1282/2023 is to accommodate the developments, changes and innovations in the National…
By Geda Yoseph, Associate at DMLF Introduction Bitcoin is the first decentralized digital currency that allows peer-to-peer transfers without any intermediaries such as banks, governments, agents, or brokers, using the underlying technology of blockchain. Anyone around the world on the network can transfer Bitcoins to someone else on the network regardless of geographic location; you…