Investment Protection in the Framework of the Treaty of Harmonizing Business Law in Africa (OHADA)

doi:10.4236/blr.2013.41001

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Beijing Law Review

2013. Vol.4, No.1, 1-7

Published Online March 2013 in SciRes (http://www.scirp.org/journal/blr) http://dx.doi.org/10.4236/blr.2013.41001

Investment Protection in the Framework of the Treaty of

Harmonizing Business Law in Africa (OHADA)

Paulin Houanye1, Sibao Shen2

1University of International of International Business and Economics, Beijing, China

2Hua Mao & Gui Gu, Beijing, China

Email: [email protected]

Received November 2nd, 2012; revised December 3rd, 2012; accepted December 11th, 2012

A few years ago, African contribution of the world trade was only around 2%. The investors, except those

who are exploiting natural resources, never want to dare dispensing their fund in Africa. The reason of

this situation was very simple. The majority of investors denounce the juridical insecurity and also the po-

litical preponderance across the African continent. With human and natural resources abundant, Africa is

regarded as a continent equipped with a great potential of development. The years of independences in

Africa saw being born in many States, of the organizations trying to solve these difficulties and to rein-

force their capacities by the constitution of international organizations acting in all the fields. But it is

only in the year 1990; some organizations appeared in the continent and knew of real rise thanks to the

liberal and democratic economic policies. This article wishes to present an assessment of seventeen years

implementation of the African Harmonization of Business Law Treaty of 1993. Firstly, it will describe the

system from an institutional point of view and hence from a normative point of view. Secondly, during

the course of this essay, there will be a focus on analysis of OHADA’s laws, its system and its potential

impact. In addition, the article will concentrate on OHADA’s appropriateness in the business sector and

necessary guarantees it must offer for a successful investment partnership with foreign investment.

Keywords: Investment Law; Harmonization Business Law; OHADA; Regional Integration; African

Development

Introduction

A few years ago, African contribution of the world trade was

only around 2%. The investors, except those who are exploiting

natural resources, never want to dare dispensing their fund in

Africa. The reason of this situation was very simple. The ma-

jority of investors denounce the juridical insecurity and also the

political preponderance across the African continent. It is this

cocktail of dysfunctional attributes which is partly at the origin

of the economic development delay of the African continent.

It is certainly as a remedy for this plight that the “Organiza-

tion for the Harmonization of Business Law in Africa”

(OHADA) was created. This structure set up in 1995 gathers

fourteen African countries of Central and the Western Africa.

Firstly, it constitutes a security tool for the investments in the

countries concerned. But one notes so far, surely due to a lack

of an adapted communication system, that the work of the

OHADA organization and the results reached by this structure

are insufficiently acknowledged. The evidence confirming this

being the simple fact that, investors continue to consider as one

of their investment priorities.

For a few years now, a quasi unanimous awakening has

struck the African diaspora. It is a fact that the step which con-

sists in requesting Western government aids is not only un-

fruitful but is very detrimental to pride the dignity of Africa and

the African people. It is more and more a question of weaving

bonds of business between amongst already in partially devel-

oped centres of Western dominance, and even Asian finance

and Africa. It is in the wake of this knowledge that it is neces-

sary for us to consider the following: “The Treaty of the Har-

monization Business Law in Africa and Investment Opportuni-

ties in Africa”.

The study will proceed as follows. The first part introduces

our work. In the second part, we present the system of OHADA

Treaty from an institutional point of view and hence from a

normative point of view, the third part analyzes OHADA’s laws,

its system and its potential impact. The forth section presents

the various obstacles and challenges faced by investors in Af-

rica. In the section five, we underline the establishment of laws

and rule of the investment policy under the framework of the

Treaty of Harmonizing Business Law in Africa to improve,

increase and protect foreign investment in order to promote

investment in Africa area. Finally, the section six concludes the

work.

The Treaty of OHADA and Its Institutions

The OHADA’s Treaty

The Organization for the Harmonization of Business Law in

Africa was initiated and made up by sixteen countries of the

Zone Franc and was created by the treaty relating to the Har-

monization in Africa of Business laws. Initially fourteen Afri-

can countries signed the treaty, with two countries subsequently

adhering to the treaty (Comoros and Guinea) and a third the

Democratic Republic of Congo which adhesion is completely

on 2012. However the Treaty is open to all States, whether or

not they are members of the African Unity. “The OHADA laws

retain the strong French flavour of their predecessors” (Mama-

dou, 2003). This is to say, as mentioned in my introduction, that

P. HOUANYE, S. B. SHEN

recent economic scholars have asserted that the French legal

system may be less favourable to investment than the common

law system.

This Treaty entrusts the production of the business laws at an

organization called Organization for Harmonization in Africa

of Business Laws (OHADA), and which came into effect since

July 1995. The will of the sixteen Contracting States, already

seventeen with Democratic Republic of Congo’s adhesion, is to

achieve progress in the way of African unity and to establish a

wave of confidence and to thus create a new development pole

in Africa. Since 1963, the Ministers for justice of the French-

speaking countries were desired the harmonization of their laws

since the legal insecurity had followed the moments of inde-

pendence. Then, the harmonization appeared necessary follow-

ing the report of the deceleration of the investments. Apart from

this report, the standardization of the business laws aims to

improve the legal environment generally and will allow the

provision of simple and powerful legal texts to restore a climate

of confidence. The laws of OHADA are certainly new but al-

ready reassuring. The objective of the OHADA is clearly the

reinforcement of the legal and judicial safety of the right of the

businesses.

OHADA equipped its various Member States with a modern

legislation concerning business laws and hence facilitated in-

vestments; this will allow in the long run, the economic inte-

gration anticipated by the continent.

The Institutions of the OHADA Organization

To see their business law reinforced, the Member States of

OHADA set up the bodies charged to promote the correct op-

eration and the best legal framework within the space of

OHADA (Martor, Pilkington, Sellers, & Thouvenot, 2004). It

acts through the General Secretaryship and the Council of Min-

isters of the OHADA organization. On the organic level, these

two institutions contribute together to the legal security in the

OHADA area but, the executive and legislative body was in-

carnated by the Council of Ministers. It occupies a dominating

place and is the support of political decisions of OHADA hav-

ing important competences. In the same way, these States set up

rules called “uniform Acts” charged to govern the standardized

business law.

The Council of Ministers

The organisation lawmakers took on Africa’s specificity to

create this supranational structure which is called the Council

of Ministers. It is the supreme decisional body of OHADA.

Under article 27 of the Treaty, the legislative organ of OHADA

is the Council of Ministers comprising the Ministers of Finance

and Justice of each Member State, and whose presidency ro-

tates on an annual basis. The Council of Ministers has two

functions or duties: administrative and regulation duties on one

hand and of the legislative duties on the other hand. In its ad-

ministrative and regulation duties performance, the decisions of

the Council can have a general range, such as the arbitration

tuition’s decision1. And its legislative functions concern mainly

the “Uniform Acts”2 whose procedure of adoption is described

in articles 6 and following of the Treaty.

The Permanent Secretariat

The Permanent Secretariat is the administrative body of

OHADA organisation which is autonomous from the Member

States or other regional organizations. The functions of the

Permanent Secretariat are purely administrative, auxiliary and

consist mainly in assisting the Council of Ministers in the exe-

cution of its legislative functions. It is charged to prepare the

Uniform Acts projects; to present them to the Member States

for examination and remarks, and to seek the opinion of the

Common Court of Justice and Arbitration before their adoption.

It publishes the Uniform Acts in the OHADA Official Journal

after their adoption3. This procedure makes them opposable in

the Member States without another formality.

The Common Court of Justice and Arbitration

The Common Court of Justice and Arbitration (CCJA) is one

of the most successful regional legal harmonization efforts on

African continent. Unlike the other continental regional inte-

gration groups, OHADA does not seek to conform national law

to an overarching treaty and successive regulations and direc-

tives which allow national legislature some leeway. The Treaty

of OHADA awards the interpretive function to the Common

Court of Justice and Arbitration which is a very important and

innovate institution. The CCJA is a complete judicial system

that is supranational within the OHADA territory and operates

parallel to the national system. This court has two principal

roles with respect to the business laws adopted under OHADA

(Issa-Sayeh, 2002). It offers a forum for international arbitrage

and serves as the court of last resort for judgments rendered and

arbitrations instituted within Members States.

The Higher Regional School of Magistrate

(ERSUMA)

The “Ecole Régionale Supérieure de la Magistrature” (ER-

SUMA) Higher Regional School for Magistrates, another struc-

ture established and designed to educate the legal professionals

of the OHADA territory. It reinforces norms as it imparts sub-

stantive legal knowledge. The OHADA organization publishes

cases and provides legal texts. Before the advent of OHADA,

lawyers and even judges could remain ignorant of the status of

entire bodies of law, including the bankruptcy-law regime.

OHADA’s Laws Pragmatic Reach and

Enforcement

OHADA law may be balanced and sophisticated, and it may

be particularly suited to encourage both foreign and domestic

investment; however, it will not be effective unless it is en-

forced. There are two aspects to this problem of enforcement.

The threshold assumption of OHADA’s founders is that a har-

monized, modern system of business laws will enhance the

territory’s economic development, in part by making the region

attractive to foreign investment. For these purposes “harmoni-

zation” is no flimsy concept: the process creates truly uniform

business laws throughout the OHADA territory. Even if there is

enforceability, a variation from state to state will weaken the

nations’ ability to define their own norms, and to then impose

them on foreign investors. If each member state of OHADA

can interpret the laws at the national level, the effort to attract

1See Decision n˚004/99/CM dated March, 12th 1999 for approbation o

decision n˚004/99/CCJA of February 3rd, 1999 regard ing arbitration fee.

2The “Uniform Acts” are associated to the European concept of payment

and are the acts of general interest obligation in all its elements and directly

applicable in any Contracting States. 3Article 9 of the OHADA Treaty.

P. HOUANYE, S. B. SHEN

foreign investment can become a race to the bottom. Before

broaching the question of the OHADA laws enforcement, we

will look first at the interpretation through OHADA suprana-

tional structures.

OHADA Uniform Acts Interpretation

One of the major obstacles to investment in Africa is the lack

of legal and judicial security. OHADA set itself the ambitious

objective of giving to African states a modern and uniform

business law. To attract investors into Africa by establishing a

modern and uniform business law, the legislative organ of

OHADA adopted uniform laws known as Uniform Acts after

their unanimous vote, come into force and are directly applica-

ble into each member state, and overrule any conflicting provi-

sion of Member State’s national law, be it previous or subse-

quent. The simple adoption of uniform laws is a relinquishment

of sovereignty contemplated by the OHADA treaty: a law that

OHADA adopts is automatically and immediately an internal

law of each of OHADA’s member-states4. Accept a uniform

interpretation and enforcement represents another significant

step in the same direction. At this point, it is worth to consider

why national elites would have allowed the OHADA project to

exist at all. The first reason is that the political leaders in the

region really did understand OHADA to be pro-development

and had been deeply worried by the economic downturn of the

early 1990s. It may also be that the elites recognized that the

OHADA laws’ nuanced balancing act protects the elites. Elites

may typically be majority holders in domestic investments, but

we have seen that they tend to have minority positions when

foreign investors are involved (Lavelle, 2001). A neutral law

can protect their holdings in both circumstances.

The other reason why the national elites, including the na-

tional governments, accepted the relinquishment of sovereign

authority is almost certain because of the manner in which the

OHADA drafters structured the new regime and it is the tri-

umph of structure and procedure, deployed in the service of

substance. OHADA is not just a system of uniform laws; it is a

unified legal system designed to protect and enhance the

pro-investment qualities of the OHADA laws. It accomplishes

this by erecting an entire legislative and judicial structure that

formulates and interprets the OHADA laws, and prepares them

for enforcement.

Enforcement

The OHADA Treaty and its Uniform Acts are judicial in-

struments, which create favourable conditions and environment

for economic development within the OHADA contracting

state. Therefore, there is no doubt that OHADA is helping

member states to move towards a sound legal framework, ef-

fectively enforced for good economic development.

No matter how elegantly it is drafted, a statute is only as ef-

fective as its enforcement. The OHADA laws’ uniformity

throughout the territory is protected by the CCJA’s authority to

interpret. Execution of judgments, on the other hand, inevitably

requires an interface between the OHADA regime and national

judicial system. Once a court has rendered its judgment under

OHADA laws, the nation’s bailiff has to levy, and quarrels

about the execution of the judgment end up in national courts.

The Uniform Act on Recovery Procedures offers better pro-

tection through harmonized enforcement procedures against

debtors even if practical issues have arisen: endless appeals

from debtors for instance. Also, the possibility of automatic

set-off of debts between State owned entities and commercial

operators can be co nsidered as significant improvements even if

sovereignty restrictions may limit the enforcement of such

regulations. The recovery of an unquestionable debt due for

immediate payment may be secured through the injunction to

pay procedure.

It is important to appreciate that, with every step taken; the

OHADA system becomes more fully woven into the comer-

cial fabric of the region, and thus more difficult to reverse. This

in turn means that long-term benefits may still be reaped; it

does not mean that no short-term benefits are available.

Impact of OHADA’s Organisation

With almost twenty years of practice, OHADA has not only

offered a soft and immediate benefit but also providing the

“hard” benefit of judgments rendered and executed in a pre-

dictable and transparent manner. OHADA laws relating to crea-

tion and management of corporations are vastly clearer than the

pre-existing law. Some OHADA judgments are of course exe-

cuted, and some legal professionals do focus on corporate gov-

ernance in the context of OHADA. OHADA adopted a uniform

corporate law that appears finely balanced between foreign and

domestic interests. It retains simplicity and formalism compati-

ble with an evolving legal infrastructure. It is consistent with

concerns explored by law and finance theory and the endow-

ment theory.

On the procedural way, OHADA is designed to avoid exist-

ing authoritarian structures, while on the substantive side, it has

established a structure to protect private property and enhance

incentives for capital formation.

Opportunities and Challenges for Investment

We cannot deny that Africa faces wars, famines and natural

man-made disasters, but it also has high rises, stock markets,

and a lot of resources. We challenge the stereotypes and prove

that Africa cannot be so easily defined.

The profitability of investments is, of course, of prime inter-

est to foreign investors. The least known fact about FDI in Af-

rica is that the profitability of foreign affiliates of Transnational

Corporations (TNCs) in Africa has been high and that in recent

years it has been consistently higher than in most other host

regions of the world. It should be noted in this context that

investors perceive, rightly or wrongly, Africa in general as a

risky place to invest and that there are some factors, such as the

difficulty of reversing investment decisions as a result of weak

capital markets, that increase the risk for foreign companies of

investing in the continent (Collier & Gunning, 1999). How-

ever, there is no systematic evidence that FDI in Africa in gen-

eral is associated with more risks than FDI in other developing

regions.

4OHADA Treaty, Article. 10 (explicitly stating that the uniform acts

adopted pursuant to the treaty are directly and mandatorily applicable in the

member-states). The CCJA has explicitly ruled that the OHADA Treaty

abrogates national laws that contrary to, and even merely identical with, the

OHADA laws.

Legal Factors of the Company’s Success

When a legal system is unreliable, the “shadow of the law” is

P. HOUANYE, S. B. SHEN

faint to non-existent. In such an environment, corporate gov-

ernance still may have meaning, as may the larger principle,

corporate social responsibility. However, the meaning of these

terms, and even our understanding of the business organization

will be based on social reality. And the OHADA regime in-

cluded eight uniform acts which under the treaty automatically

become part of each member-state’s internal law (Issa-Sayegh,

Pougoué, & Sawdogo, 2002)5. Sometimes laws are enforced

because of formal legal structures, and sometimes because they

conform to existing norms. They will also sometimes be ig-

nored because they are incompatible with social norms. Society

defines the organization’s corporate social responsibility. In the

North where developed nations predominate, they have forgot-

ten this reality; they would do well to follow the example of the

South and its developing economies, and reanalyse what it is

that society wants of our business institutions (Dickerson,

2005).

The corporation law theories and those development eco-

nomics indicated that any corrective measure must be to protect

the private property and encourage capital formation whatever

the economic regime adopted by the political body. Private

ordering must be as reliable as possible within the shadow of

whatever political regime exists.

The corporate law must provide a clearly understanding of

the corporate social responsibility. This conception incorporates

the behaviour that its community expects of corporations. Re-

garding Africa, the business law must clearly identify the type

of the corporate governance which is appropriated for the con-

tinent. The corporate law has received a great deal of attention

in recent years both in Europe and the United States; so it is

essentially the implementation of the applicable principle of

“corporate social responsibility” for company’s success which

is to generate maximum profits legally possible for its share-

holders (Friedman, 1970).

The OHADA corporate law’s keeping of the norm of “cor-

porate interest” thus is the first indication of the balance that the

OHADA legislators sought. Specifically, they opted for a con-

cept responsive to local expectations, but one that already in-

cludes some guidelines. A foreign investor might prefer share-

holder primacy, depending on applicable factors. The local

government that includes not only elites that might invest, but

also voters who may be employees of the enterprise, might well

prefer the stakeholder approach (Llewellyn & Hoebel 1967).

Investment Risk in Africa

Risk is the potential that a chosen action or activity will lead

to a loss. A common definition for investment risk is deviation

from an expected outcome. It is well known that investors make

decisions based on a function that includes the rate of return

and the risk of any investment choice: the higher the risk, the

higher the required rate of return. Each investment carries its

own particular risk-return ratios. However, in Africa, a number

of environmental factors, external to the individual investment,

tend to raise the risk, and thus, for any given rate of return,

reduce the rate of investment. There are too many investment

risks in Africa as everywhere over the world but two major

risks involving legal factors.

Concerning the lack of policy transparency, it is not easy to

accurately identify the specific aspects of corporate policy be-

cause of the political regime changes in most sub-Saharan Af-

rican countries and also regional policy. The consequence of

the lack of transparency in economic policy in a country is the

increases in transaction costs due to strict regulation while re-

ducing the incentives for foreign investment. In Africa, the

situation is one of concern and needs to be contained. The lack

of transparency makes the conditions and the assessment of the

debts very difficult. It also increases the risk that funds will not

be used as intended and might be cases of illegitimate debt in

the future. The lack of a favorable investment climate also con-

tributed to the low FDI trend observed in the region as no for-

mal environment. In the past, domestic investment policies

were not conducive to the attraction of FDI.

Most African countries have a high protectionism policy.

The low integration of Africa into the global economy as well

as the high degree of barriers to trade and foreign investment

have also been identified as a constraint to boosting Foreign

Direct Investment (FDI) in the region. The relationship between

openness and FDI flows to Africa must be very positive and

suitable to the continent. There are also other factors that con-

tribute to the low FDI flows to the region such as the high de-

pendence on commodities, the intensification of competition

due to globalization which has made an already bad situation

worse in Africa because globalization has led to an increase in

competition for FDI among developing countries. The Weak

law enforcement stemming from corruption and the lack of a

credible mechanism for the protection of property rights are

possible deterrents to FDI in the region. Foreign investors al-

ways prefer to make investments in countries with an effective

legal and judicial system to guarantee the security of their in-

vestments. Investors can choose globally where to put their

money and countries shouldn’t make it too difficult for foreign

investors if they want to get a benefit from that money. Some-

times, the African governments stifle investment by their regu-

latory policy whereas companies can only invest in big projects

in countries where there is certainty and security for their prof-

its and operations.

The Investment Protection under the

Framework of the Treaty of Harmonizing

Business Law in Africa

The Policy Framework for Investment is intended to assist

governments to create an environment that attracts domestic

and foreign investment, taking into account the broader inter-

ests of the communities in which investors operate. The Frame-

work helps countries to develop a sound investment environ-

ment by fostering an informed process of policy formulation

and implementation across government agencies. Based on best

practices drawn from OECD6 and non-OECD experiences, it

proposes a set of practical policy considerations in ten in-

ter-related areas that, beyond stable macroeconomic conditions,

contribute to such an investment environment. Governments

can consider these policy considerations in country self-evalua-

tion and for reform implementation, in regional co-operation

and peer reviews and in multilateral discussions.

5They cover the following disciplines (in order of adoption): company law

and economic interest groupings; general commercial law; law of security

interests and other encumbrances; simplified recovery procedure and meth-

ods of execution of judgments; bankruptcy and insolvency law; arbitration

law; accou nt ing law; law on transport of goods by road.

A checklist of questions in each of the following ten policy

areas is included in the Framework: 1) investment policy; 2)

6OECD is Organisation for Economic Co-operation and Developme nt

P. HOUANYE, S. B. SHEN

investment promotion and facilitation; 3) trade policy; 4) com-

petition policy; 5) tax policy; 6) corporate governance; 7) pro-

moting responsible business conduct; 8) human resource de-

velopment; 9) infrastructure and financial sector development;

and 10) public governance. The Framework also provides ex-

planatory background material on these various issues.

OHADA offers modern business laws that are transparent

and accessible, and are in a setting that maximizes the predict-

ability of their enforcement. While implementation is not yet

perfect, OHADA has already demonstrably increased transpar-

ency and predictability within its territory. This is significant to

business people within the OHADA member-states, of course,

but also to foreign investors in and foreign traders with busi-

ness people in the OHADA territory. For this reason, busi-

nesses in Europe and North America, and importantly else-

where on the African continent, need to know about these laws,

uniform across more than 150 million people - 225 million after

the DRC completes its adhesion to the treaty.

The OHADA laws articulated purpose is to facilitate invest-

ment in general and foreign investment in particular. “OHADA

may materially change the investment climate in West Africa.

If successful, it offers a model for development in other parts of

the developing world” (Dickerson, 2005) the need for the pro-

motion of and adoption of harmonized Business Laws in the

region cannot be over-emphasized.

The OHADA Treaty and laws offer a unique model for the

harmonization of business laws as a starting point for the har-

monization of other laws within the ECOWAS states. The

OHADA Initiative has created a body of harmonized business

laws in its member-states, which have, in consequence facili-

tated business transactions to a large extent.

Within an overarching strategy for improving the investment

environment, investment promotion and facilitation can help to

increase both domestic and foreign investment and to enhance

their contribution to national economic development. Success

in promoting investment requires a careful calculation of how

to employ resources most effectively and how to organize in-

vestment promotion activities within the government so that the

overriding goal of economic development through improve-

ments in the investment climate remains at the forefront of poli-

cymaking.

Such as a part of development strategy, investment promo-

tion and facilitation can help attract new investors and retain

existing ones, especially in smaller, more remote markets or in

those countries with a recent history of macroeconomic and

political instability. Effective investment promotion highlights

profitable investment opportunities, by identifying local part-

ners and by providing a positive image of the economy. Promo-

tion should not be seen as a substitute for more general policy

reforms or try to camouflage underlying weaknesses in the

investment climate.

OHADA’s Challenge: The Future Adhesion of

Common Law Countries

The Organization for Harmonization of African Business

Laws was established by a Treaty among African countries

mainly within the French-speaking area7. It entered into force

on July 1995 and belongs to the Franc zone. We know that its

objective is the implementation of a modern harmonized legal

framework in the area of business laws in order to promote

investment and develop economic growth.

Generally speaking, the current membership hauls from a

common tradition except Guinea-Bissau and Equatorial Guinea

where Portuguese and Spanish are spoken respectively and the

Anglophone provinces of Cameroon. All the OHADA member

countries have a civil law tradition, with the only exception of

the above mentioned English-speaking provinces of Cameroon,

where the common law legal system is adopted.

The legal framework provide through the present Uniform

Acts is, in general, based on civil law and has, to a certain ex-

tent, borrowed from the French business law even if it does not

amount to a mere transplant to the French law, having several

substantial differences.

The aim of the OHADA is to go beyond the original mem-

bership and have other African countries-that should not be

necessarily Francophone countries or States belonging to the

civil law legal tradition-joining OHADA. The Treaty indeed

opens the doors of the accession to all countries members of the

Organization for the African Union and to other non-member

States unanimously invited to join OHADA8.

The issue of the relationship between OHADA law and the

common law is not only theoretical, as it deals only in the per-

spective of future accessions of countries belonging to common

law legal tradition; it has also immediate effects since some of

the English-speaking provinces of Cameroon still apply their

common law system with the Cameroonian legal framework.

But, let us consider the following quote, “The OHADA laws

retain the strong French flavour of their predecessors” (Mama-

dou, 2003). This is to say as mentioned above that recent eco-

nomic scholars have asserted that the French legal system may

be less favourable to investment than the common law system.

This understanding in consistent with traditional theories is

comparative law.

Compariso n between Common Law and Civil Law

There is a general agreement in considering civil law and

common law as two different legal families, and as the two

major families of the world due to their geographical extension

and historical importance (Zweigert & Kotz, 1993).

In comparative law, there are many situations where the

same legal term has different meanings, or where different legal

terms have same legal effect. This can often cause confusion to

both lawyers and their clients. This condition most often occurs

when civil lawyers have to deal with common law or when

common law lawyers deal with civil law issues. While there are

many issues which are dealt with in the same way by civil law

and common law systems, there also remain significant differ-

ences between these two legal traditions related to legal struc-

ture, classification, fundamental concepts, terminolog y, etc.

But, today’s reality tells us that the cultural and geographic

limits that have been historically used to distinguish between

these two legal families are not so important anymore.

Civil law and common law seem to converge into a larger

and more comprehensive Western liberal democratic family of

legal systems where some common values about law and de-

mocracy, as well as general legal principles both in the area of

public, administrative, criminal and private law are shared by

the legal traditions belonging to it. Within it a general sub-

distinction between common law and civil law still persists, but

the major distinctions between them have been greatly diluted

8Article 53 of the OHADA Treaty.

714 of the 17 present member countries are French-speaking countries.

P. HOUANYE, S. B. SHEN

in a continuous way between these two legal traditions (Glenn,

1993) that find today its clearest examples in the harmonization

initiatives taken at Eu rop ean -and obviously African-level.

The Place of African Law and Overcoming the

Difference

According to the place of African law, we know that the is-

sue of diversity of laws has remained an important obstacle to

the African economic development which for a long time has

not been taken into proper consideration by the Af ric an States.

The diversity of laws in Africa can be examined from three

different perspectives: diversity within each country, diversity

among the African countries and diversity between African and

non-African countries (David, 1982). The legal stratification

proper to the African countries is the clear evidence of the dif-

ferences that may exist within the same country.

In the first hand, the customary laws which have been ap-

plied in African countries prior to colonization and are still

applied today present large differences among one another,

even within a single country.

Secondly, colonization has brought into the African countries

different western legal systems imposed upon customary laws

and still coexisting with them.

In the third place, after independence the African countries

made different choices that increased lack of uniformity within

the same country.

The comparative studies have now identified the African le-

gal systems as a legal family with specific peculiarities and

different from the order of the world legal system (Mancuso,

2007). The above mentioned legal stratification shows us how

the import of western legal systems has given a specifi c imprint

to the legal system of each African State that differentiates it

from the others and gives rise to a sub-classification of the legal

system of the African countries according to the family to

which the legal system of the former parent country belongs

(Bamodu, 1994).

Despite of that, even if the African legal system can be as-

similated to the one of the respective colonizing continent, it

must not be assumed that the legal rules in African countries

are the same as the European countries from which they re-

ceived the legal system.

Conclusion

The desire to attract investment as well as foreign direct in-

vestment has led most developing countries to adopt policies

designed to create a favourable investment climate. These poli-

cies are legal safeguards that include the stability of the legal

conditions under which an investor can operate the quality of

the local public administration, the transparency of the system

of local regulations and an effective system of dispute settle-

ment.

The case study of OHADA is emblematic in considering the

issue of the relationship between civil law and common law

legal system at the same time with the present development of

protection law.

The debate reflects the needs of the harmonization process

behind the idea of OHADA: from one side reinforce the mem-

bership with other countries belonging to the French, from the

other side to open the doors giving access to other African

countries belonging to different legal and cultural experiences.

Some problems have been highlighted studying the way of

joining OHADA by African countries adopting a legal system

based on the common law.

One question is referred to the principle which: “Uniform

Acts are directly applicable and overriding in the Contracting

States notwithstanding any conflict they may give rise to in

respect of previous or subsequent enactment of municipal

laws”9. As it may be easily noted, not only the new Uniform

Acts automatically repeal any piece of legislation contrary to its

content, but also the State cannot enact laws anymore with

regard to the subject matter, as this issue falls under the juris-

diction of the OHADA Council of Ministers who has the right

to render any eventual municipal law null and void in accor-

dance to the provision of article 10. Moreover, Uniform Acts

can only be modified under the conditions provided for their

adoption, as the possibility to intervene in such matters at mu-

nicipal level is co mpletely removed.

Respectively, the Common Court of Justice and Arbitration

has clarified that the repealing effect set forth in Article 10 of

the OHADA Treaty is referred to abrogation and the prohibit-

tion to enact any internal norm of law or regulation present or

future having the same object of a rule from an Uniform Act

and being contrary to it (Onana Etoundi & Mbock Biumla,

2006).

The OHADA legal framework already contains principles

that can be handled with the lens of a common lawyer should

bring us to affirm that the problem of the relation between

OHADA and common law is considerably less important than

the way it is normally presented. Surely the language issue

exists, but there’s a need of changing Article 42 of the Treaty

by the same OHADA members States in view of inserting Eng-

lish, Spanish and Portuguese as languages having the same rank

and value of French. And the fact that a proposal with this

change has been elaborated shows that there is a will from the

same countries to solve the main problem that may prevent the

accession of countries belonging to different legal experiences.

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