Keeping It legal
CHINA has been the largest trading partner of Africa since 2009 and with the rapid growth in terms of the country’s direct investment to Africa. In the first 10 months of 2016, China’s non-financial direct investment in the continent exceeded $2.5 billion, a year-on-year growth of 31 percent, according to the Ministry of Commerce of China. More than 3,000 Chinese enterprises have investment in 52 countries and regions in Africa. This makes the continent the second largest contract project market for China. According to the FOCAC Johannesburg Action Plan (2016-18), China will scale up its investment to Africa and plan to increase the stock of direct investment in Africa to $100 billion in 2020, which will lead to more civil and commercial transactions between both sides.
The frequent civil and commercial transactions between both sides have resulted in various cross-border legal issues which will have negative impact on the sustainable business relations if they are not dealt with properly and efficiently. The cross-border legal issues arising from China-africa business transactions are mainly those concerning civil, commercial and criminal matters. The number of cases involving Chinese parties in the African courts or arbitral institutions and the cases involving African parties in the Chinese courts or arbitral institutions are rising rapidly.
The civil and commercial disputes between both sides are mainly from contracts, investments, delict and family matters; and the criminal matters are mainly from illicit drug trafficking, dealing in precious animal and plant products and telecommunication fraud. The increasing cross-border legal issues have, to some degree, impeded the healthy development of business relations and attracted attention from governments involved. In some of the action plans adopted by the FOCAC Ministerial Conference, proposals have been made to tackle such cross-border legal issues.
The proper and efficient settlement of the cross-border legal issues between the parties involved requires a comprehensive and sound bilateral legal framework covering civil, commercial and criminal matters, investment and double taxation. But at present, the bilateral legal framework between China and African countries is far from complete and needs to be improved.
Currently there are also very few