Yemen, known to the Greeks and Romans as 'Happy Arabia' (Eudaimon Arabia, Arabia Felix) and home of the Queen of Sheba, is one of the world's oldest civilizations. It is strategically located, sharing boundaries with the Kingdom of Saudi Arabia and the Sultanate of Oman, with direct access to the Gulf of Aden, the Red and the Arabian Seas. The country has important natural resources: over four billion barrels of oil reserves, over 480 billion cubic meters of natural gas reserves, significant zinc, lead and nickel deposits, and waters rich in fish. Its geographical diversity, climate and access to water also offer considerable opportunities for agriculture. All these resources are mostly underexploited. The same can be said of tourism, for which the country's history, culture, architecture and landscapes make it well-suited.

Notwithstanding these assets, Yemen remains one of the most under-developed countries in the Arab world. This is in part due to the great political turmoil resulting from foreign domination and civil war that beset the country for two centuries, leading to its division in 1967. Since Yemen's reunification on 22 May 1990, the country's leaders seem to have been more focused on strengthening their authority rather than promoting investments.

In these circumstances, foreign investors have remained somewhat reluctant to invest in Yemen. Their concerns over the legal and political environment range from safety issues to the shortcomings of the judicial system and the potential for governmental interference.

To address these concerns, Yemen has engaged in reforms during the last two decades. It has modernized both its arbitration law (section I) and its investment law (section II), and has entered into treaties intended to protect investments and/or offer alternative dispute resolution avenues to foreign investors and facilitate the enforcement of foreign judgments and awards (section III). This article describes these efforts and points out the shortcomings of Yemen's current international arbitration framework.

I. Arbitration law

On 29 March 1992, Yemen enacted a new arbitration law (the 'Arbitration Law') which repealed and replaced the old law of 1981. Amendments were made to certain articles of the Arbitration Law in 1997 and work has been continuing for some time now on new legislation designed to correct some of the Arbitration Law's shortcomings described below. [Page42:]

The Arbitration Law recognizes the validity of both ad hoc and institutional arbitration and arbitration clauses and submission agreements.1

It reflects generally accepted principles of arbitration law such as: (i) the severability of the arbitration clause;2 (ii) the right of the parties to challenge an arbitrator;3 (iii) Kompetenz-Kompetenz;4 (iv) the power of the arbitral tribunal to order interim measures;5 (v) party autonomy;6 (vi) the confidentiality of hearings7 and awards;8 (vii) assistance from local courts in the arbitral process, for instance in connection with the constitution of the arbitral tribunal;9 and (viii) the parties' right to request the correction and interpretation of arbitral awards.10

The Arbitration Law is nonetheless far from perfect. It fails to address current problems in international arbitration, such as multiparty arbitration and the joinder of third parties. Furthermore, it contains many atypical and unclear provisions and significant gaps, the most important of which are detailed below.

Scope of the Arbitration Law

The Arbitration Law applies to 'any arbitration taking place in the Republic of Yemen and to any arbitration taking place outside of the Republic of Yemen if the parties so decide'.11 It does not contain distinct provisions for national and international arbitration, although its drafters saw a need to distinguish between the two. Arbitrations in which the parties to the dispute hold Yemeni citizenship are considered as national, while arbitrations in which the parties are of different nationalities or are domiciled or have their head offices in different countries and arbitrations that take place in an international arbitration institution are considered as international.12One might wonder what purpose these definitions serve if the Arbitration Law does not contain distinct provisions for national as opposed to international arbitration. The only distinction found in the Arbitration Law relates merely to nationality and concerns arbitrations in which at least one of the parties is a foreign national, i.e. a non-Yemeni national. In such cases the parties are allowed to agree 'on the substantive and procedural law, as well as the language and place of arbitration'. 13 However, this is but a partial application of the above definition of international arbitration as no consideration is given to the place where the parties are domiciled or have their head offices. [Page43:]

Arbitral tribunal

The Arbitration Law does not require arbitrators to be Yemeni nationals, male or Muslims. Article 6 of the Arbitration Law merely provides that arbitrators must have full capacity, be fair and be competent to decide the dispute.14 Article 20 adds: 'An arbitrator may not be incapable, under judicial disability or deprived of his civil rights.' Thus, provided the requirements of Articles 6 and 20 and the independence requirements of Article 23 are met,15 foreign non-Muslim males and females may act as arbitrators under the Arbitration Law.

The Arbitration Law allows the parties to agree on the number of arbitrators,16 and even to agree on an even number.17 Failing agreement, the number of arbitrators shall be three.18

Article 22 of the Arbitration Law provides that, without prejudice to the other provisions of the Arbitration Law, the parties may agree on the method and timetable for the appointment of the arbitrator(s). Failing such agreement, the default provisions of Article 22 described below will apply.

Where the arbitral tribunal consists of a sole arbitrator, Article 22(a) provides that the arbitrator will be appointed by the 'competent court'19 at the request of one of the parties. In the case of a three-member tribunal, Article 22(c) provides that each party appoints one arbitrator, with the chairman of the arbitral tribunal being appointed by agreement of the arbitrators within 30 days of the appointment of the second arbitrator. Failing agreement, the chairman will be appointed by the competent court at the request of any of the parties. No time frame is mentioned in Article 22(c) for the appointment of the two party-appointed arbitrators, nor is there any reference to the possibility of one party requesting the court to appoint a party-appointed arbitrator when the other party has failed to do so. This could cause respondents to deliberately create a deadlock by refraining from appointing a party-appointed arbitrator. Pending reform of the Arbitration Law on this point, all one can do is hope that Yemeni courts would appoint an arbitrator at the claimant's request.

The situation becomes further complicated by Article 17, which requires the parties to appoint the arbitrator(s) in the arbitration agreement. This is obviously inconsistent with the default provisions of Article 22. According to one commentator, the best way out of this contradiction is 'to consider, notably, articles 320 and 721 of the [Arbitration Law] which very heavily insists [sic] on party autonomy, as do other articles. It should [Page44:] then be possible specifically to exclude Article 17 when one refers to the [Arbitration Law] as the applicable law'.22 Article 17 is not a public policy provision and can thus be waived by the parties. If they do not do so, however, does the arbitration agreement then become null and void? One could argue that the drafters intended to have the parties name the arbitrator(s) in the submission agreement only, as opposed to the arbitration agreement in general. Another explanation may be that the drafters simply intended to give the parties the option, rather than the obligation, to name the arbitrator(s) in the arbitration agreement.

Applicable law and procedure

Article 45 of the Arbitration Law provides: 'The arbitral tribunal shall resolve the dispute in accordance with the legal rules agreed upon by the parties. If the parties agree on a law other than Yemeni law, the arbitral tribunal shall follow the substantive provisions of such law.' This affirmation of party autonomy in the choice of the law applicable to the merits is attenuated, however, by Article 7 of Arbitration Law, which states: 'Subject to complying with the provisions of this law, the parties may, if one or both of them are not Yemeni nationals, agree on the substantive and procedural law, as well as the language and place of arbitration.' In other words, it is only when one or both of the parties are not Yemeni nationals that the arbitral tribunal is required to apply the law chosen by the parties. In all other cases, the arbitral tribunal must apply Yemeni law. It is to be hoped that a foreign-owned local company would be considered as a foreign national for the purposes of Article 7.

If (in cases where at least one of the parties is a foreigner) the parties fail to agree on the applicable substantive law, it will be determined by the arbitral tribunal in accordance with Yemeni conflict-of-law rules. Thus, unlike modern arbitration legislation and institutional rules,23 the Arbitration Law does not give the arbitral tribunal the freedom to select the law it considers to be most appropriate.

The Arbitration Law further states that in all cases, the arbitral tribunal 'shall take into account the social customs and usages and the customs and usages of the trade applicable to the transaction, subject always to compliance with the provisions of the Sharia'.24 This is consistent with public policy requirements contained in most arbitration laws and conventions.25 It is thus not the requirement itself that causes concern but rather the way in which it is applied. Here again, one can only hope that it be applied fairly in a manner consistent with business requirements and the legitimate expectations of foreign investors.

The Arbitration Law also allows the parties to agree on the applicable procedural law, provided that one or both of them are not Yemeni nationals26 and, in all cases, to agree on the procedures to be followed by the arbitral tribunal.27 Failing agreement, 'the [Page45:] arbitral tribunal shall follow the procedures it deems appropriate in accordance with the provisions of this law, subject to compliance with the provisions of the Judicial Proceedings Code that are considered to be part of public policy'.28 The Yemeni Law No. 40 of 2002 on Civil Judicial Proceedings and Enforcement ('Yemeni Civil Procedure Law') does not exhaustively list the provisions deemed to be part of public policy. Provisions expressly said to be part of public policy that may be considered applicable to arbitration proceedings include the rules relating to the capacity and standing of the parties29 and the prohibition on relitigating a dispute that has become res judicata.30

Due process

Article 33 of the Arbitration Law affirms the parties' right to be treated equally and to be given a full opportunity to present their cases. However, it can be questioned whether the Arbitration Law effectively protects the parties' equality and due process rights.

Before being amended in 1997, Articles 35 and 36 of the Arbitration Law provided that the parties have to communicate their written statements to each member of the arbitral tribunal and to each other. As amended, these articles now unfortunately require the parties to communicate their respective written statements and reports to the members of the arbitral tribunal only.31 The only document that appears to have to be communicated by one party to the other is the request for arbitration, which the claimant has to communicate to the respondent.32

This is unacceptable, particularly when there is an imbalance between the parties, as when the respondent is no other than Yemen itself or one of its entities. In a recent arbitration commenced by a foreign investor against a Yemeni entity, the arbitral tribunal did not copy the Yemeni entity's submissions to the foreign investor and, when ruling on a material issue, relied on evidence advanced by the Yemeni entity that was wrong and could have been corrected by the claimant if it had been informed by the respondent or the arbitral tribunal. The drafters of the new arbitration law currently in preparation intend to put an end to this violation of due process by reinstating the obligation for a party to communicate all submissions to the other party or parties.

Capacity of the Yemeni State to arbitrate

The Arbitration Law does not address the question of whether the Yemeni State or State entities may enter into arbitration agreements. Nor is the matter addressed in other Yemeni laws.33 This is not unwelcome, as when the matter is addressed in national laws, they often prohibit the State from entering into arbitration agreements or make the validity of such agreements subject to burdensome requirements. In practice, the matter should not cause any difficulty as the execution of arbitration agreements by the State appears to be well accepted in Yemen. Moreover, as further explained below, both the Yemeni investment law and the treaties entered into by Yemen provide for the resolution of disputes between foreign investors and the Yemeni State through [Page46:] arbitration. Assuming that the Yemeni State or any of its entities would for any reason challenge an arbitration agreement based on an alleged incapacity deriving from its internal law, the principle that a State may not rely on its internal law to invalidate an arbitration agreement, which has been recognized in certain circumstances by arbitral tribunals34 and courts,35 is likely to bar it from doing so.

Challenge of arbitral awards

Arbitral awards rendered in Yemen may be challenged in the Yemeni courts through an action to set aside.36 Such an action suspends the enforcement of the award, unless the court decides otherwise at the request of the prevailing party.37

Under Article 53 of the Arbitration Law, an award may be set aside at the request of one of the parties only if:

a. the arbitration agreement is non-existent, has expired or is null and void according to the provisions of the law;

b. one of the parties lacked capacity;

c. procedural irregularities have occurred;

d. the arbitral tribunal has exceeded its mission;

e. the arbitral tribunal was not constituted in accordance with the arbitration agreement;

f. the award is not reasoned; or

g. the award conflicts with the provisions of the Sharia and public policy.

Under Article 55 of the Arbitration Law, the competent court of appeal may set aside an award ex officio if it finds that:

a. the award was rendered in a matter that is non-arbitrable; or

b. the award conflicts with the provisions of the Sharia and public policy.

The above-apart from the reference to the Sharia-are internationally recognized grounds for setting aside arbitral awards.38 The reference to the Sharia should not in itself cause concern. After all, a large number of arbitration laws contain non-standard provisions.39 What is concerning is whether all of these grounds for setting aside awards will be fairly applied by the judiciary in accordance with international standards. In general, it is recommended that, as far as possible, foreign investors refrain from placing the seat of the arbitration in Yemen, especially when the opposing party is the Yemeni State, so as to avoid the jurisdiction of Yemeni courts and the consequent risk of error and/or unfairness in the application of the grounds for setting aside awards. [Page47:]

Article 53 of the Arbitration Law further states that, 'apart from the cases set forth therein [grounds for setting aside at the request of one of the parties] and other cases foreseen in this law, awards rendered pursuant to the provisions of the Arbitration Law may not be challenged through any of the means set forth in the Code of Civil and Commercial Procedure' (emphasis added).

One might conclude that setting aside is the only means of challenging awards under the Arbitration Law. However, a different conclusion has been advanced on the basis of the ambiguous wording of Article 48, which provides that 'an arbitral award is final and not subject to challenge if the parties so decide, if the arbitral proceedings are terminated through conciliation,40 and in the cases foreseen in this law'.

Some commentators interpret Article 48 as meaning that the Arbitration Law allows arbitral awards to be appealed on the merits whenever the arbitral proceedings have not ended through settlement (award on agreed terms) or the parties have not decided otherwise.41 This interpretation finds some support in a recent decision rendered by the Sana'a High Court of Cassation.42 The drafters of the new arbitration law currently in preparation intend to expressly exclude such an appeal on the merits. Meanwhile, foreign investors agreeing to arbitration governed by the Arbitration Law would be well advised to explicitly exclude the possibility of an appeal on the merits against the arbitral award.

Enforcement of arbitral awards

The Arbitration Law provides that awards rendered pursuant to its provisions are enforceable in Yemen once the time allowed for bringing an action to challenge or set aside the award has expired or, if such an action is brought, once a decision rejecting the application to set aside has been issued.43

The Arbitration Law is silent as to the enforcement of foreign arbitral awards. Moreover, Yemen has not ratified the 1958 UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards ('New York Convention').44 It has, however, ratified the Arab Convention on Judicial Cooperation ('Riyadh Convention').45

The Riyadh Convention is a regional convention relating to judicial cooperation between Arab countries, including the recognition and enforcement of 'judgments', [Page48:] which are defined as 'any decision-whatever its name-made, following judicial proceedings, by a court or any other competent authority in one of the Contracting States'.46 This definition would appear to cover arbitral awards.47 Judgments and awards made against the government of a contracting State where enforcement is sought are however excluded from the scope of the Riyadh Convention. 48

The likening of awards to judgments is however limited by the fact that the Riyadh Convention contains distinct provisions regarding foreign judgments and arbitral awards. Article 37 sets forth the standard grounds for refusing the enforcement of an arbitral award.49 Regrettably, it also requires that the party requesting enforcement provide 'a certificate of the judicial authority attesting to its enforceability', which may amount in practice to a double exequatur, i.e. the need to obtain an exequatur first in the country where the award was rendered prior to seeking enforcement in other Riyadh Convention countries.50 It is also unfortunate that Article 37 appears to make the enforcement of arbitral awards subject to the grounds for refusing the recognition of foreign judgments set forth in Article 30.51

Although Yemen's ratification of the Riyadh Convention marks a step forward with regard to the enforcement of foreign arbitral awards in Yemen, its significance is limited by (i) the small number of countries party to the Riyadh Convention; (ii) the Riyadh Convention's requirement for double exequatur; and (iii) the fact that it does not seem to apply to awards made against the government of a contracting State where enforcement is sought.

In addition to the Riyadh Convention, Yemen has signed a number of other treaties providing alternative avenues for arbitral proceedings. The enforcement of awards rendered pursuant to those treaties will be discussed in section III below. [Page49:]

II.Investment law

On 20 July 2002, Yemen updated its Law No. 22 of 1991 relating to investments ('Investment Law'), notably by creating exemptions from tax and duties with a view to promoting Yemeni and foreign investment.

The Investment Law is not the only instrument regulating investments in Yemen.52 As described in section III below, investments may also be regulated by bilateral and regional investment agreements.

The Investment Law provides for the resolution of investment disputes between a foreign investor and Yemen through arbitration pursuant to one of the following sets of rules: (i) the Unified Agreement for the Investment of Arab Capital in the Arab Countries ('Unified Agreement'),53 (ii) the Convention on Settlement of Investment Disputes Between States and Nationals of Other States ('ICSID Convention'), (iii) 'any international or bilateral agreement to which the Republic [of Yemen] is a party', (iv) 'commercial arbitration rules and procedures of the United Nations Commission on International Trade Law [UNCITRAL] at the nearest regional centre for international commercial arbitration using such rules', or (v) the rules and procedures of arbitration within the Republic of Yemen.54

III.Treaties

Today, bilateral, regional and international treaties provide foreign investors in Yemen with a cornucopia of protected rights and alternative avenues for investment and dispute resolution.

Bilateral investment treaties

Since the early 1970s, Yemen has signed and ratified bilateral investment treaties with, several States including France,55 Jordan,56 Lebanon,57 the Netherlands,58 Oman,59[Page50:] Sweden60 and the United Kingdom.61 These treaties usually provide that in the event of a breach by one of the contracting States of the substantive provisions of the treaty, disputes will be referred to ICSID arbitration,62ad hoc arbitration63 (including pursuant to the UNCITRAL Arbitration Rules),64 or to the Arab Investment Court ('AIC')65 created pursuant to the Unified Agreement.66 There is currently only one reported arbitration against Yemen: it is an ICSID arbitration, initiated pursuant to a bilateral investment treaty.67

The substantive provisions of the various treaties entered into by Yemen are largely similar. They generally provide that the investor may freely transfer the investment and shall be accorded fair and equitable treatment, most-favoured nation and/or national treatment, full protection and security, and protection against arbitrary or discriminatory measures and expropriation.

There are differences with respect to the application of the treaties, including for instance the question of retroactivity. In some of the bilateral investment treaties to which Yemen is a party-e.g. those with the United Kingdom and the Netherlands-no reference is made to retroactivity. The bilateral investment treaty with Jordan applies to 'investment invested or to be invested . . . in the territory of the other Contracting Party'.68 The bilateral investment treaties with France,69Lebanon,70 Oman71 and Sweden72 likewise apply to investments made both before and after the entry into force of the treaty.

Regional and international investment treaties

The regional and international investment treaties signed and ratified by Yemen include notably the ICSID Convention73 and the Unified Agreement.74[Page51:]

(I) ICSID CONVENTION

Yemen signed the ICSID Convention on 28 October 1997, but ratified it only in late 2004. The Convention entered into force in Yemen on 20 November 2004. As a party to the Convention, Yemen accepts the jurisdiction of the International Centre for Settlement of Investment Disputes ('ICSID') over investment disputes involving investors of other Contracting States.

There are three alternative ways in which foreign investors may obtain Yemen's consent to ICSID jurisdiction. The first is obviously through the insertion of a clause to this effect in a State contract. The second is through a bilateral investment treaty between the investor's State and Yemen providing for settlement of investment disputes before ICSID. The third is by way of the Investment Law, which, as we have seen, also provides for the settlement of investment disputes before ICSID.

The ICSID Convention is undoubtedly the most important convention to which Yemen is a party, from an enforcement perspective.75

When ICSID does not have jurisdiction over a dispute, it is advisable for foreign investors to opt for other arbitral institutions and place the seat of their arbitration outside Yemen to avoid (i) the application of the Arbitration Law with its broad grounds for setting aside awards and recourse to local courts for assistance with such matters as the constitution of the arbitral tribunal in ad hoc arbitrations, (ii) the risk of the Yemeni party (whether private or public) interfering in the arbitral process through local courts; and (iii) the application of Yemeni conflict-of-law rules as discussed in section I above.

(II) UNIFIED AGREEMENT

Yemen is also a party to the 1980 Unified Agreement,76 which aims to promote investment in Contracting States so as to encourage 'their development, freedom and modernization and to raise the living standards of their citizens'.77 It lays down a minimum standard for the treatment of Arab investors.

The Unified Agreement provides that disputes arising out of its application shall be resolved by conciliation, arbitration,78 or judicial proceedings before the competent courts of the host State79or the AIC.80 Article 31 of the Unified Agreement provides that 'submission of the dispute to one jurisdiction . . . shall preclude its submission to the other'. [Page52:]

The rules governing the conciliation or arbitration of disputes are set forth in the Appendix to the Unified Agreement,81 which states that parties may agree to resort to arbitration if (i) the two parties do not agree to resort to conciliation; (ii) the conciliator fails to issue his report within the time set; or (iii) the parties do not agree to accept the proposed solutions.82 An arbitral award rendered pursuant to the Unified Agreement is final and binding and is not subject to appeal. 83 Nothing further is said about the challenge or enforceability of awards other than that failure to perform the arbitral award within three months of its being rendered will cause the matter to be referred to the AIC for a decision on the appropriate action to be taken to ensure enforcement. 84

The AIC was created by the Unified Agreement. It is composed of five members selected by the Economic and Social Council of the League of Arab States and is located in Cairo, at the permanent seat of the League of Arab States.85 The AIC has jurisdiction over disputes relating to the application of the Unified Agreement or arising thereunder between, inter alia, contracting States, a contracting State and an Arab investor, and a contracting State or Arab investor and institutions providing investment guarantees in accordance with the Unified Agreement.86

A dispute may be referred to the AIC if (i) the two parties fail to agree to conciliation; (ii) the conciliator fails to issue his report within the time set; (iii) the two parties fail to implement the solutions proposed in the conciliator's report; (iv) the two parties fail to agree to arbitration; or (v) the arbitral award is not issued within the prescribed time limit.87

Under Article 34 of the Unified Agreement, the AIC's rulings are binding, final, not subject to appeal and enforceable in contracting States as if they were enforceable judgments rendered by the competent courts in those States.88

Although the AIC was created in the middle of the 1980s, it was only very recently that it heard its first case.89 It is still too early to comment on the impartiality of the AIC with respect to investor-State disputes. Concern may be felt over its lack of complete independence from the Council of the League of Arab States.90[Page53:]

Concluding remarks

Yemen's enactment and subsequent updating of its arbitration law, its accession to the ICSID and Riyadh Conventions, and its signing of a number of bilateral investment treaties have no doubt improved the situation of arbitration in the country and offered foreign investors some safeguards. Yet, these efforts and safeguards are not sufficient.

It is high time that Yemen followed the example of the 142 States that have already ratified the New York Convention. There is no reason for its not doing so, as the New York Convention sets forth only very basic ground rules for the enforcement of foreign arbitral awards. Also, it would do well to amend the Arbitration Law by at least clarifying its provisions and harmonizing them with international standards. It is to be hoped that the new arbitration law currently in preparation and which is intended to provide such clarification and harmonization will be soon finalized and enacted.

Finally and most importantly, Yemen would benefit from playing by the rules. It is all well and good to enact laws and ratify conventions, but what is more important is that they should be correctly applied. Only when Yemen applies these norms in conformity with international standards, reinforces protection and security and reduces governmental interference in foreign investor's rights will it make the country a happy place for investment.

Meanwhile, foreign investors could mitigate the risk of unpleasant surprises in two ways. One would be by ensuring that they come within the scope of one of the bilateral investment treaties to which Yemen is a party and/or Yemen's Investment Law. Another would be by delocalizing to the greatest extent possible their arbitrations with Yemeni parties. To achieve this, apart from choosing a foreign law to govern the contract and the arbitration procedure and clause, they should consider placing the seat of the arbitration outside Yemen (in cases other than ICSID arbitrations) and opting for institutional rather than ad hoc arbitration.

1
Articles 2 and 16.

2
Article 16.

3
Article 23-26. According to Article 23, an arbitrator may be challenged if not fit to decide the dispute, for failing to comply with the conditions agreed on by the parties or the Arbitration Law, or for the reasons for which a judge may be challenged.

4
Article 28.

5
Article 30.

6
Articles 3, 7, 32 and 45.

7
Article 38.

8
Article 49.

9
Article 22.

10
Article 52

11
Article 3.

12
Article 2 of the Arbitration Law. Contrary to other arbitration laws, such as the French arbitration law, the Arbitration Law does not define international arbitration with respect to the international character of the underlying transaction, but rather refers to the nationality of the parties or the fact that the arbitration is administered by an 'international arbitration centre'.

13
Article 7 of the Arbitration Law.

14
Some commentators interpret the requirement contained in Article 6 of the Arbitration Law (that the arbitrators be fair) as requiring the arbitrators to be Muslim, since-according to them-only Muslims can be fair. See N.A.A.T. Al Jabali, Al Tahkim fi Al Kawanin Al Arabyah 256 (Al Maktab Al Jamihi Al Hadiss, 2006).

15
See supra note 3.

16
Article 21.

17
Article 17.

18
Article 21.

19
According to Article 2 of the Arbitration Law, the competent court is the 'court that would normally have jurisdiction for the resolution of the dispute or to which this law refers for matters outside the arbitral tribunals' jurisdiction'. Article 8 of the Arbitration Law adds: 'The Courts of Appeal have jurisdiction to decide matters that this law refers to national courts, unless the parties agree to grant jurisdiction to another court.'

20
Article 3 provides: 'The provisions of this law apply to any arbitration taking place in the Republic of Yemen and to any arbitration taking place outside the Republic of Yemen if the parties so decide.'

21
Article 7 provides: 'Subject to complying with the provisions of this law, the parties may, if one or both of them are not Yemeni nationals, agree on the substantive and procedural law, as well as the language and place of arbitration.'

22
A.H. El-Ahdab, Arbitration with the Arab Countries, 2d ed. (Kluwer Law International, 1999) at 753.

23
See e.g. Article 1496 of the French New Code of Civil Procedure and Article 17 of the ICC Rules of Arbitration.

24
Article 45.

25
See e.g. Articles 34(2) and 36(1) of the 1985 UNCITRAL Model Law on International Commercial Arbitration and Article V(2) of the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

26
Article 7.

27
Article 32.

28
Ibid.

29
Article 186 of the Yemeni Civil Procedure Law.

30
Ibid.

31
See also Article 37.

32
Article 34.

33
Al Jabali, supra note 14 at 201.

34
ICC case 1939, cited by Y. Derains, [1973] Rev. arb. 145; ICC case 1803, (1980) V Y.B. Comm. Arb. 177; Benteler v. Belgium, [1989] Rev. arb. 339.

35
Paris Court of Appeal, Gatoil v. National Iranian Oil Company, [1993] Rev. arb. 281; Paris Court of Appeal, Ministère Tunisien de l'Equipement v. Société Bec Frères, [1995] Rev. arb. 277; Stockholm Court of Appeal, 19 June 1980, (1981) 20 I.L.M. 893.

36
As the Arbitration Law also applies to arbitrations seated abroad which are expressly governed by the Arbitration Law, there is a risk that Yemeni courts would also hear annulment actions under the Arbitration Law against awards rendered abroad.

37
Article 54.

38
See e.g. Article 36(b) of the UNCITRAL Model Law on International Commercial Arbitration.

39
See H.G. Gharavi, The International Effectiveness of the Annulment of an Award (Kluwer Law International, 2002) at 36ff.

40
'Conciliation' is the English translation of 'Al Solh' used in the Arabic version. Article 2 of Arbitration Law, in its current amended form, defines Al Solh as 'the settlement of the dispute by mutual agreement without violating the provisions of the Sharia'.

41
See e.g. N. Najjar, L'arbitrage dans les pays arabes face aux exigences du commerce international (L.G.D.J., 2004) at 480-81. See also El-Ahdab, supra note 22 at 769.

42
Sanaa, High Court of Cassation, Commercial Bench, Judgment No. 35/1420, 6 May 2000, cited in I. Ghanem, Yemen: Recent Cases, (2000) 15 Arab L. Q. 401 at 403. The court held that no appeal on the merits is allowed when the parties have so agreed. A contrario, this means that an appeal on the merits is possible when the parties have not excluded it.

43
Article 57.

44
The New York Convention was signed on 10 June 1958 and entered into force on 7 June 1959. As of the date of this article, 142 States have ratified this convention. The list of member States is available at <http://www.uncitral.org/ uncitral/en/uncitral_texts/arbitration/NYConvention_status.html>.

45
The Riyadh Convention was signed on 6 April 1983 and entered into force on 30 October 1985. This convention has been ratified by Algeria, Bahrain, Iraq, Jordan, Libya, Mauritania, Morocco, Oman, Palestine, Saudi Arabia, Somalia, Sudan, Syria, Tunisia, the United Arab Emirates and Yemen. South Yemen ratified the Riyadh Convention on 13 April 1984 and North Yemen on 11 June 1984. An excerpt in English can be found in the International Handbook on Commercial Arbitration, Supplement 11.

46
Article 25(a).

47
Najjar, supra note 41 at 525.

48
Article 25(c) provides in its relevant part: 'This Article does not apply to: - judgments made against the government of the signatory party where enforcement is sought, or against one of its officials for acts accomplished during, or arising out of, performance of their functions.'

49
These grounds are: (i) the dispute is not arbitrable under the law of the State where enforcement or recognition is sought; (ii) the award was made on the basis of an arbitration agreement that is void or has not became final; (iii) the arbitrators lacked jurisdiction under the arbitration agreement or under the law on the basis of which the award was made; (iv) the parties were not duly summoned to appear; or (v) the award is contrary to the Sharia, public policy or good morals in the signatory State where enforcement is sought.

50
Moreover, Article 31(1) of the Riyadh Convention states: 'The judgments made by the courts of one of the signatory States, and which are recognized by the other signatory States under the provisions of this Convention, are enforceable in any of the signatory States if they are enforceable in the signatory State where the court which made the judgment is located.'

51
Article 30 provides the following grounds for refusing recognition of a judgment: (i) the judgment is contrary to the Sharia, the Constitution, public policy or good morals in the State where recognition is sought; (ii) the party against which a default judgment was rendered was not duly summoned to appear so as to be able to defend itself; (iii) the legal provisions on legal representation of persons lacking capacity in the State where recognition is sought have not been complied with; or (iv) a judgment that has become res judicata in the contracting State where recognition is sought or in a third State has already been rendered with respect to the same dispute, between the same parties and with respect to the same cause of action. Article 30 further provides that if the dispute that is the subject matter of a judgment is the subject of a pending action between the same parties with respect to the same rights, and such action was commenced in a court of the contracting State where recognition is sought prior to the submission of the dispute to the courts of the State which rendered the judgment in question, then the judicial authority examining the request for enforcement in accordance with Article 30 shall comply with the legal provisions in force in its own State.

52
Article 3 of the Investment Law specifies that the Investment Law merely aims to protect Yemeni and foreign 'projects registered under its provisions'.

53
The Unified Agreement was signed on 26 November 1980 and entered into force on 7 September 1981. The text of the agreement is reproduced in English in (1988) 3 ICSID Rev. 191.

54
Article 61 of the Investment Law.

55
Agreement between the Government of the Republic of France and the Government of the Yemen Arab Republic on the Encouragement and Protection of Investments, signed 27 April 1984, entered into force 19 July 1991 ('Yemen-France BIT').

56
Agreement between the Government of the Hashemite Kingdom of Jordan and the Government of the Republic of Yemen on the Mutual Promotion and Protection of Investments, signed 18 June 1995, entered into force 28 January 1998 ('Yemen-Jordan BIT').

57
Agreement between the Government of the Yemen Arab Republic and the Government of the Lebanese Republic on the Reciprocal Promotion and Protection of Investments, signed 25 November 1999, entered into force 13 May 2002 ('Yemen-Lebanon BIT').

58
Agreement on Encouragement and Reciprocal Protection of Investments between the Kingdom of Netherlands and the Yemen Arab Republic, signed on 18 March 1985, entered into force 1 September 1986 ('Yemen-Netherlands BIT').

59
Agreement on the Reciprocal Promotion and Protection of Investments between the Government of the Sultanate of Oman and the Government of the Yemen Arab Republic, signed 20 September 1998, entered into force 6 September 2000 ('Yemen-Oman BIT').

60
Agreement between the Government of Sweden and the Government of the Yemen Arab Republic for the Promotion and Protection of Investments, signed 29 October 1983, entered into force 23 February 1984 ('Yemen-Sweden BIT').

61
Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Yemen Arab Republic for the Promotion and Protection of Investments, signed 25 February 1982, entered into force 11 November 1983 ('Yemen-UK BIT').

62
Yemen-UK BIT, Article 7. See also Article 7 of the Yemen-Sweden BIT.

63
See e.g. Article 11 of the Yemen-Oman BIT.

64
See Article 7 of the Yemen-Lebanon BIT.

65
See below for further details about the Arab Investment Court.

66
See Article 11 of the Yemen-Oman BIT.

67
Desert Line Projects v. The Republic of Yemen, Case No. ARB/05/17, see <http://www.worldbank.org/icsid/cases/pending.htm>. See also <http://www.iisd.org/pdf/2005/investment_investsd_nov2_2005.pdf>.

68
Article 9 of the Yemen-Jordan BIT.

69
Article 1.1 of the Yemen-France BIT.

70
Article 10 of the Yemen-Lebanon BIT.

71
Article 13 of the Yemen-Oman BIT.

72
Article 1 of the Yemen-Sweden BIT.

73
Convention on the Settlement of Investment Disputes between States and Nationals of Other States, signed on 18 March 1965, entered into force on 14 October 1966.

74
Yemen is also a party to the Agreement on the Settlement of Investment Disputes between Arab Host States and Nationals of Other Arab States, signed on 10 June 1974, entered into force on 20 August 1976 ('Arab Investment Convention'). The text of the convention is reproduced in French in [1981] Rev. arb. 348. This convention is a regional Arab convention closely modeled on the ICSID Convention. It has been ratified also by Egypt, Iraq, Jordan, Kuwait, Libya, Sudan, Syria and the United Arab Emirates. It aims to settle investment disputes between Arab host States and nationals of other Arab States through conciliation and arbitration in order to promote Arab investments in Arab countries. In similar vein to the ICSID Convention, the Arab Investment Convention provides for (1) the establishment in Amman, Jordan, of a permanent body called Council for the Settlement of Investment Disputes Between Arab Host States and Nationals of Other Arab States ('Council') responsible for the administration of disputes, and (2) the appointment of a Secretary General in charge, inter alia, of ascertaining whether the dispute that is the subject of a request for arbitration or conciliation filed with the Council does not manifestly fall outside the Council's jurisdiction. The Council has not as yet been established, nor has a Secretary-General been appointed. The Council for Economic Arab Unity and its Secretariat General currently fulfil the role of, respectively, the Council and its Secretary General in accordance with Article 46 of the Arab Investment Convention. See Gharavi, supra note 39 at 183.

75
According to Article 54(1), each contracting State considers an arbitral award as binding and enforceable as if it were a final judgment handed down by one of its own courts. According to Article 53(1), an ICSID award is not subject to any appeal or any other remedy except for those provided for in the ICSID Convention, namely interpretation, revision and annulment exclusively by an ad hoc committee pursuant to the limited grounds relating essentially to procedural safeguards.

76
In addition to Yemen, the following States have ratified this agreement: Bahrain, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Oman, Palestine, Qatar, Saudi Arabia, Somalia, Sudan, Syria, Tunisia and the United Arab Emirates.

77
Preamble.

78
Article 25.

79
Article 31.

80
Article 46 provides: 'Jurisdiction of the [Arab Investment] Court shall be transferred to the Arab Court of Justice upon its establishment.' As of the date of this article, the Arab Court of Justice has not yet been established.

81
Article 26 of the Unified Agreement.

82
Article 2(1) of the Appendix.

83
Article 2(8) of the Appendix.

84
Article 2(11) of the Appendix.

85
Article 28 of the Unified Agreement.

86
Article 29 of the Unified Agreement.

87
Article 27 of the Unified Agreement.

88
Article 34 of the Unified Agreement. According to Article 35, however, the AIC may review a judgment at the request of one of the parties on the grounds that 'it was in serious violation of an essential rule in the Agreement or in its procedures or that a fact decisively pertinent to the dispute was revealed, which, at the time of rendering the judgment, was not known to the [Arab Investment] Court or to the petitioning party unless due to that party's negligence'.

89
Tanmiah for Management and Marketing Consulting v. Tunisia and Committee for the Organization of Mediterranean Games, 12 October 2004. The Arab text of this decision is available at <http://ita.law.uvic.ca/ documents/Tanmiah.pdf>. An English summary is available at <http://Arbitration Laweglobal.Arbitration Lawe.edu /display .article?id=4760>. A challenge to this award is currently pending before the AIC. Two other investment arbitrations have recently been initiated before the AIC. The first is between a Kuwaiti investor and Egypt, the second between an Egyptian investor and the United Arab Emirates.

90
The members of the Arab Investment Court are appointed and their remuneration is set by the Economic and Social Council of the League of Arab States and, as noted above, the seat of the AIC is located at the permanent seat of the League of Arab States.