African SMEs and MSMEs Must Be Appraised with International Commercial Arbitration Frameworks

Published on 18th August 2020

The revelation that Commonwealth countries are at risk of losing foreign investment and trade from not having modern dispute resolution systems available to their business communities is disturbing. A majority of small to medium-sized enterprises (SMEs) are unable to expand into international markets or cross-border trade due to uncertainty over dispute resolution.

A recent study developed by the Commonwealth Secretariat’s Office of Civil and Criminal Justice Reform identifies 10 challenges hindering the use of international commercial arbitration as a dispute resolution mechanism. One challenge is that more than half of Commonwealth countries do not have a structure that reflects modern best practice, with a small number not having a legislative framework for arbitration at all. Other obstacles include costs, regulatory issues and a lack of understanding, expertise and diversity.

It is important that African countries appraise their SMEs and MSMEs on hallmarks of a modern international arbitration framework to enable them do business in other countries and cushion them from losing foreign direct investment and trade revenue.

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