The regulatory framework of arbitration in Morocco has been modernized and repositioned
What innovations does the new regulation of arbitration and mediation in Morocco bring? Can international arbitral awards be enforced in Morocco?
In June 2022, the highly anticipated Law Loi n°95-17 on arbitration and conventional mediation came into force in Morocco. What is the economic policy background of the law and what innovations does it bring?
What are the advantages of arbitration over state jurisdiction in Morocco?
With the latest reform, the Moroccan legislator has polished the already internationally oriented regulatory framework for arbitration, expanded it in some places and cast it into a law of its own.
The practical advantages of alternative dispute resolution (ADR) through mediation and/or arbitration continue to apply to Morocco, as they do to other states. The ADR often meets the needs of the business world better than the state judiciary. Arbitration and mediation are fast, flexible, confidential and relatively inexpensive (especially for high-value disputes).
In Morocco, the state judiciary is still in a process of modernisation. Since the language of proceedings is Arabic and judges are hardly ever confronted with international disputes from the entrepreneurial world in their traditional training, a trial before the Commercial Courts is less predictable than arbitration before a panel of experts who usually speak at least French, but often also English, and have international experience.
The law Loi n°95-17 of 06/13/2022 – An overdue set of rules
The law is part of a policy Morocco has been pushing for more than ten years to strengthen foreign economic relations, which have already received a considerable boost from the free trade agreements signed in recent decades – most notably the agreement with the USA, which came into force in 2006, and the association agreement with the EU in 2012. Moreover, the law aims to promote and consolidate Morocco as an international location for arbitration and mediation, especially with regard to the African business community, for which Morocco is positioning itself as a springboard for European and other non-African companies.
Morocco was already part of the international arbitration world
The introduction of the Arbitration Law, which is intended to better meet the needs of investors, highlights Morocco’s efforts to open up its economy. The country has been a party to the New York Treaty of 06/07/1958 (Convention on the Recognition and Enforcement of Arbitral Awards) since 1959 and to the Washington Treaty of 03/18/1965 (Convention on the Settlement of Investment Disputes) since 1967.
Arbitration has been the subject of a number of reforms in Morocco. The Dahir to the Code des obligations et contrats (a set of rules comparable to the continental civil codes), enacted in 1913, was fundamentally updated with the judicial reform in 1974. After a further reform in 2007, Morocco achieved comprehensive codification of the arbitration system in 2022 with Law Loi n°95-17 of 06/13/2022, which is independent of the Moroccan Code of Civil Procedure.
Main innovations of the arbitration system in Morocco
The law is divided into a first section on arbitration (1.) and a second on mediation (2.), which have differences but also similarities (3.).
In its first section, the Act standardises the expected clarifications regarding various definitions of terms such as arbitration, arbitral tribunal or competent state court and enshrines essential principles such as the independence of the arbitration clause or the principle of jurisdiction with the purpose of promoting the use of arbitration and its acceleration.
The law is also characterised by its flexibility with regard to internal and international arbitration, conditions for the validity of an arbitration agreement or the requirements for resorting to arbitration in certain administrative matters.
It equally takes into account technological progress by allowing the conclusion of the arbitration agreement, the filing of motions and the correspondence of pleadings by electronic means. It also creates the possibility to issue arbitral awards electronically and to hold oral hearings by videoconference. This is of no small importance with regard to the efficiency and cost control of international proceedings.
The list of arbitrators, which was previously kept by the Courts of Appeal, will now be regulated by an ordinance. At the same time, the law tightens the requirements for acting as an arbitrator.
The state courts have jurisdiction to challenge arbitrators as well as to decide on submissions that have been ignored by the Arbitral Tribunal. If a party is a legal person under public law, the Administrative Court has jurisdiction in this respect. Otherwise, it is up to Civil or Commercial Courts, with the exception of international arbitration, which remains under the jurisdiction of the Commercial Court.
What’s new in mediation in Morocco
The second section concerning mediation also brings considerable innovations, as the mediation process becomes more flexible with regard to the conditions for setting up the mediation agreement or the conduct of the mediation. Mediators must now – actually as a matter of course – fulfil a number of qualities, which include independence, impartiality, integrity and loyalty. The choice of arbitrator or mediator is not insignificant in this respect, as one is particularly valued in disputes of a technical nature, especially in legal issues concerning new technologies, environmental law and, more generally, in all disputes requiring a high degree of technical knowledge or expertise. The outcome of mediation remains a settlement that can be enforced, with the court required to rule on it within seven days.
Similarities and differences between arbitration and mediation in Morocco
Although both are about resolving a dispute, the new rules on arbitration and mediation have some differences.
For example, mediation has a time limit of three months within which a decision must be reached. This makes mediation a very speedy procedure for resolving disputes. It can be extended up to a maximum period of six months, but in contrast, arbitration proceedings are already subject to a six-month period, which can be extended once. Mediation, as the often unjustly ridiculed little brother of arbitration, is not only shorter but also less expensive.
Both mediation and arbitration are confidential; negotiations and hearings are not public, so both procedures are of interest to parties who do not wish to make the dispute in question or certain facts from it public.
Both the arbitral award and the settlement in mediation proceedings are decisions that are equivalent in terms of enforceability to the value of a final and enforceable court decision. There is no need to wait for an appeal period, nor does the (state) judge appointed to enforce the decision carry out a substantive review.
It remains to be mentioned that mediation in particular, due to its amicable character, should enable the parties even more to maintain and possibly expand their economic and trade relations. Furthermore, the parties are free to resort to mediation at any time, even after recourse to a state court or arbitral tribunal. Nevertheless, mediation remains dependent on the parties’ willingness to reach a consensus. The procedure only leads to an enforceable title if the parties reach an agreement. Otherwise, mediation is a diversion to arbitration, at the end of which, even without the cooperation of one of the parties, there will be an arbitral award that can be enforced even against the will of the losing party.
