SUDAN Trends and Developments Contributed by: Omer Ali Abdelrahman, Omer Ali Law Firm
Khartoum, Darfur and other parts of Sudan. This war is still ongoing, causing huge destruction to the coun - try’s infrastructure and mass displacement of people. Legal Developments As part of its legal and regulatory reform, the transi - tional government has introduced certain legislation, such as: • the Encouragement of Investment Act 2021, pro - viding, inter alia, for incentives and guarantees to foreign and local investors; • the Public-Private Partnerships Act 2021, setting rules governing public-private partnerships as a tool of investment in the country; • the Anti-Corruption Commission Act 2021, for the purpose of tackling and eradicating corruption from transactions with public entities; and • a law permitting conventional banking side by side with Islamic banking, which was the only banking system allowed previously. Before the 2021 coup, plans for other laws and regula - tions were under way, particularly those designed to reform banking and financial services to pave the way for Sudanese banks to be integrated into the interna - The main legislation governing arbitration (both domestic and international) in Sudan is the Arbitra - tion Act. This Act has been the subject of controversy among Sudanese lawyers from its inception, and this controversy is still ongoing. The main criticism of the Act is that it is not in line with the UNCITRAL Model Law on International Commercial Arbitration, and thus foreign investors would not look upon it favourably. Another point of criticism is that it has left the door open for prolonged appeals in cases of challenges to an international arbitration award. The Act provides for certain grounds to apply for the setting-aside of an arbitration award (which in Sudan is called an action of annulment). Under the previous law (the Arbitra - tion Act 2005), such an application was a one-step procedure; once the competent court had decided on the application, its decision was final. In Faisal Islam- ic Bank v Othman Ismael Mousa (SC/CA/86/2007; tional banking system. Current Arbitration Law
REV/21/2008), the Supreme Court held that an annul - ment case under the Arbitration Act 2005 was not intended to be subject to the applicable appeal rules under the civil procedures law, as one aim of the arbi - tration proceedings is to shorten the time and scope of the dispute. Under the current Act, an application for annulment shall be submitted to the Court of Appeal; however, a newly introduced provision allows for appeal against the decision of the Court of Appeal. Appeals from the Court of Appeal are submitted to the Supreme Court. Decisions of the Supreme Court are open to further appeal by way of an application to review on grounds of violation of Islamic law. Theoretically, a fur - ther appeal to the Constitutional Court on grounds of violation of constitutional rights may be made. These appeals could be used tactically to delay execution of arbitration awards. A counter-argument against this criticism raised by lawyers is that opening the door for multiple appeals is important to ensure justice by allowing higher courts to oversee the rulings of lower courts. Yet another point of criticism of the Arbitration Act is that it sets fixed figures as arbitrators’ fees if such fees have not been determined under the arbitration agree - ment/clause. The fees in a scaling belong to a sliding scale based on the amount disputed, and are set out in a schedule attached to the Arbitration Act. With the ongoing deterioration of the Sudanese currency against other currencies, the figures in the schedule are very low, and would discourage experienced arbi - trators from participating in an arbitration where their fees are based on the schedule. Interest as Part of Award Another point that raises concern when a foreign arbi - tration award is sought to be enforced in Sudan is that any interest ruled as part of the award would be con - sidered illegal and unenforceable in Sudan, as Section 110 of the Civil Procedures Act 1983 provides that a court in Sudan shall under no circumstance whatso - ever make a decree ordering payment of interest on a principal sum adjudged, and also as the dominant view in Islamic law literature is that interest would be considered as usury ( riba ), disallowed under Islamic Shari’a rules, which Sudanese courts are directed to
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