The Organization for the Harmonization of Business Law in Africa

With the globalization of world markets, competition is consequently rampant. The emergence of the new global village means that nations around the world are looking for ways to be more competitive and more open to foreign investments. It creates a denationalisation of economic conflicts. Alternative dispute resolution and supranational organizations became the two legal solutions to the new economic needs. Nations began coupling the two and many trade treaties have been signed. The most well-known system is the European Union, which promotes a unified continent. As in Europa, several African countries, most of them being former French colonies, joined forces to harmonize and unify their business laws by creating the Organization for the Harmonization of Business Law in Africa (OHADA). 

The OHADA was signed on September 17th, 1993. Its purpose is to promote regional integration and economic growth and to ensure a secure legal environment through the harmonization of business law. The organization’s Council of Ministers has already adopted unified laws for the following: General Commercial Laws, Corporate Laws and Rules concerning different types of joint ventures, Laws concerning secured transactions (guarantees and collaterals), Debt Recovery and Enforcement Law, Bankruptcy Law, Arbitration Law, Accounting Law, Law Regulating Contracts for the Carriage of Goods by Road. The Uniform Act on Cooperative companies was adopted on December 15th, 2010 and will be enforced on May 15th, 2011 according to Section 9 of the OHADA treaty. Labour Law, contract law and consumer sale law are the next areas to be harmonized. They also have plans to harmonize many other aspects of law that have an impact on Business. The main purpose of the system is to secure all of the aspects of the business, legal and judicial systems, which explains why the state parties accepted to relinquish a part of their sovereignty to OHADA. The Unified laws are automatically part of the domestic laws of the states and the decisions of the Common Court of Justice and Arbitration are automatically enforceable in any of the states of the Union.

Contrary to the European Union, OHADA integrated the legal system by harmonizing the business laws of the state parties that will be followed by an economic integration. It is a more appropriate process for the African continent, as the countries are generally developing nations; they have to seduce investors from other countries by showing them that they have a reliable judicial system that is applying the law that is enforced. To ensure the quality of the formation of the judges, there is a Regional training School of the Judiciary in Porto-Novo (Benin). The Common Court of Justice and Arbitration, based in Yaoundé (Cameroon) has already ruled on over 3000 cases. 

The state parties soon understood that they required a simple and unique system tailored for them because of the multiplicity and complexity of their laws that are obsolete and were never really appropriate to their needs as they were imposed by colonizers. This legal harmonization will stabilize relations between nations and facilitate trade between them and with other states outside of the OHADA Union. 

The following 16 countries are presently part of the treaty: Benin, Bissau Guinea, Burkina Faso, Cameroon, Central Africa, Chad, Comoros, Congo, Equatorial Guinea, Gabon, Guinea, Ivory Coast, Mali, Niger, Senegal and Togo. The membership of the Democratic Republic of Congo is under way. According to Section 54 of the Act, the treaty is open to other states, including non-African countries. Therefore, countries that may see an interest in being part of the treaty can indeed ask to be part of it. It could be a great way for developing countries, regardless of their position on the map, to open their borders to international business. 

There are OHADA Clubs in many countries around the World. The Canadian OHADA Club is located in 110 rue De La Barre, suite 1820, Longueil, Quebec and was first affiliated with the Faculty of Law of the University of Ottawa. Its actual president is Karel Dogué. Canada’s OHADA Club’s mission is to contribute to the popularization and better understanding of OHADA law throughout the Canadian legal community through conferences, roundtables and other similar activities. For those doing business in one of the African state parties, an efficient way to proceed would be to consult the treaty and its uniform acts and then contact the regional OHADA club. 

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