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New Court Proceedings for Commercial Disputes


As part of its mandate to administer federal courts, the Federal Supreme Court of Ethiopia recently enacted the ‘Federal First Instance Court Commercial Bench Proceedings Code’ (the “Code”), a special code applicable to commercial benches. The Federal courts in Ethiopia have specialized divisions such as Civil Benches, Criminal Benches, Labor Benches and Commercial Benches.

The main objective of the new Code is to create a system that would allow commercial disputes to be dispensed in a speedy, cost effective and predictable manner. It also aims to provide judges, lawyers and practitioners with substantive and procedural guidance that will improve the quality of court decisions. The Code also aims to set uniform interpretation rules, procedural applications and adjournment between the Federal Commercial Benches. In this issue of our legal update, we present a brief summary of the Code with a focus on its scope, applicable laws and disputes, and timeframe for their adjudication.


The Code serves as a supplement and not a substitute to the Ethiopia’s existing Civil Procedure Code of 1965 which governs civil and commercial disputes. The scope of application of the Code is limited to disputes relating to commercial matters falling within the jurisdiction of the Federal First Instance Courts. These are disputes not exceeding 500,000 Birr and other commercial disputes that are not valued in money but with a significant economic implication.

Applicable Legislations

The Code provides for the main sources of laws that should inform and guide commercial benches. These are:

    • The Constitution of Federal Democratic Republic of Ethiopia Proclamation No.1/1995
    • Federal Courts Proclamations and the amendments
    • Commercial Code of Ethiopia Proclamation no. 166 of 1960
    • The Civil Code of Ethiopia Proclamation No. 1/1952
    • The Civil Procedure Code of Ethiopia Decree No. 52/1965
    • Commercial Registration and Business Licensing Proclamation no. 980/2016
    • Commercial Registration and Business Licensing regulation No. 392/2016
    • Trademark registration Proclamation No. 501/2006
    • Trademark Registration Regulation No. 272/2012
    • Trade Competition and Consumer Protection Proclamation No. 813/2013
    • Decisions of the Cassation Bench of the Federal Supreme Court relating to commercial matters.
    • Other applicable laws based on the type and nature of the case

Applicable Disputes
The Code provides for the following categories of disputes that are subject to the jurisdiction of the Commercial Benches.

A. Business Organization and Shareholder Matters – these are disputes relating to:

    • Appointment of provisional managers;
    • Involuntary or voluntary withdrawal of shareholders from the company.
    • Call of general meeting;
    • Protection of shareholder rights (distribution of profit, inspection of documents, certificate of shareholder and other rights);
    • Claim of injunction for adverse action against the shareholding right.
    • Cancellation of minutes and their execution;
    • Removal of directors and managers;
    • Application for judgment of bankruptcy and scheme of arrangement;
    • Proceedings of bankruptcy (such as appointment of trustees and commissioners, establishment of creditors committee and determining date of suspension of payment);
    • Dissolution of business organizations and procedures thereof;
    • Appointment of liquidators, shareholders and creditors request for modification, rejection or adjudication of the liquidation processes;

B. Negotiable instruments – disputes related to checks and promissory notes.

C. Arbitration Proceedings – disputes related to:

    • Application to set up an arbitration tribunal
    • Application for requesting for the affixing of the court seals to orders and interim measures of ad hoc-arbitration tribunal
    • Applications seeking the assistance of a court for ad-hoc tribunal (e.g. injunctive reliefs)

D. Trade laws: disputes related to:

    • Registration and license, and
    • Trademarks.

The Code applies not only to ordinary procedures, but also to the summary and accelerated procedures provided under Book four of the Civil Procedure Code. Section 2.5 of the new Code provides for the timeline and procedures of the accelerated and summary procedures as long as they are under the jurisdiction of commercial benches. For instance, the summary and accelerated procedures do not have a rule on adjournment which is covered by the new Code. The COde provides that the maximum time required to complete proceedings in summary and accelerated procedure is one month while the minimum is 15 days.

Adjudication Timeframe

The Code provides a comprehensive timeline of the steps and procedures that should be followed by commercial benches starting from the submission of statement of claim to execution of the judgment. Applicable procedures and corresponding timelines are provided for first hearing, examination of witnesses, special procedures, provisional remedies, execution of judgments and others. Accordingly, the maximum time frame provided for the settlement of commercial disputes is as follows:

Matters Relating to:  Maximum Time-frame for Settlement 
Business Organizations 180 days
Negotiable Instruments 120 days
Other contractual matters  120 days

Given the importance of time in any transaction, the intervention of the Supreme Court on enacting special procedures for commercial benches is a commendable first step. If the Code is applied as projected, the protracted litigation of commercial disputes would be avoided and the ease of enforcing contracts improved

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