Commercial Law in Times Crises

by Ilias Kazeem


As the global economy and domestic economies seek to recover from the crises of Covid-19, different fields of human endeavour and knowledge are challenged to develop innovative solutions. Commercial law is a key factor in this regard, and it is important to examine how commercial law is responding to the broad range of issues that need to be addressed at this time. Consequently, experts require collaborations that have real prospects of engendering innovative legal solutions.

The conference organised by the Centre for Commercial Law on 23 June 2021 recorded a huge success and it created an opportunity for future collaborations that have real prospects. The conference focused on a theme that enabled participants to discuss the legal perspectives of the commercial realities of this time – “Commercial Law in Times of Crises”. The conference was well thought out and it addressed topical and important issues in connection with the theme. The conference commenced with opening remarks by The Rt Hon Lord Stephen Woolman (Senator of the Court of Session) and Professor Emerita Margaret Ross (University of Aberdeen).

Lord Woolman drew his remark from the Biblical account of King Solomon’s decision to cut a child into two pieces, while resolving a dispute over custody of the child by two women. According to Lord Woolman, King Solomon’s conduct of the proceedings progressively generated different reactions – awe, relief and surprise – but it ended up with understanding. The decision has endured for 3,000 years because it was wise, brief, clear and ingenious. The lessons are: (i) to value simplicity, clarity and precision in promoting the rule of law; and (ii) not to get distracted by the details of commercial documents or the complexity of the arguments.

Professor Ross noted that the Centre has been a supportive platform to discuss ideas on a broad range of issues relating to commercial law. As a scholar of evidence, procedure and dispute resolution, she observed that commercial law comprises both the substantive law and procedural law aspects. Furthermore, the Professor noted that the focus of the conference is particularly apt, having regards to how the dispute resolution processes have responded to the Covid-19 crisis. She noted the leverage on technology to make quality decisions even when physical hearing became impossible. According to her, we will for many years to come, continue the discussions about open justice and access to justice. Lastly, Professor Ross pointed out the need to consider the perspectives of the end users of commercial and legal documents in any discussion about commercial law.

The conference was divided into two panels. The first panel was dedicated to “IP and Technology Law” while the second panel was dedicated to “Trade and Commercial Law.” I will share my reflections on the second panel. The importance of trade and commercial law is underscored by the need for the regulation of existing problems that have been exacerbated by the crises of Covid 19, measures taken to address the crises and measures of economic recovery taken to improve trade and commerce. A good example of the problems is found in cyber security which became more fragile upon heavier reliance on the cyberspace for trade and commerce, following restrictions of physical activities. Challenges faced by the developing and least developed countries with respect to sovereign debt is another example of existing problems that have been aggravated by the crises. Moderated by Dr Ohio Omiunu (De Montfort University and African Sovereign Debt Justice Network (AfSDJN)), the panel covered the following crucial issues: cyber self-defence, sovereign debt in Africa, the African Continental Free Trade Area Agreement alongside the interconnections of tax treaties and international investment agreements.

University of Aberdeen’s Dr Irène Couzigou presented a paper entitled “The Right to Cyber Self-Defence: A Controversial Solution for the Protection of Companies against Cyber Attacks.” Dr Couzigou’s presentation highlighted the problem of cyberattacks and shows that sovereignty of each state extends to the cyberspace and the regulation of cyber activities. It identifies that defence to cyberattack can be passive (where the defence takes place within the network of the defender) or active (where the activity extends to the network of the attacker). The active defence is known as ‘hack-back’ defence and it is currently unlawful under the Convention on Cybercrime by the Council of Europe. The Convention prohibits interference with the integrity, confidentiality and availability of computer systems. Also, domestic laws do not currently make provisions to authorize hack-back activities. The presentation considers whether hack-back defence should be made lawful, highlighting its advantages and disadvantages. It concluded that a legal regime can be created to provide licence to a few corporations to use hack-back cyber defence, but this has to be properly regulated and monitored by the states. Licence to corporations is necessary because states often lack the technological ability to adequately respond to the problems of cyberattacks or they are often slow in responding. Also, corporations may not want states to have access to their computer systems for the purpose of cyber defence, due to confidentiality concerns. However, the licence regime must ensure that the companies are made to observe certain rules, such as necessity and proportionality. Dr Couzigou concluded that there is the need for international legal regime for the licensing system.

Schulich School of Law, Dalhousie University and African Sovereign Debt Justice Network (AfSDJN)’s Professor Olabisi D. Akinkugbe, presented a paper entitled “A Critical Analysis of Sovereign Debt in Africa through the Lens of the African Sovereign Debt Justice Network”. Professor Akinkugbe’s presentation was based on a collective project at the African Sovereign Debt Justice Network and personal experience of the speaker. He pointed out that the issue of sovereign debt in the developing and least developed countries of Africa has historical, social, political, economic and legal dynamics. The current crisis in the global economy, as a result of Covid-19, has deepened the significance of the issue. Many of the countries were already hugely indebted before the pandemic and the crisis of the pandemic exacerbated their conditions. For example, the Nigerian economy is dependent on the oil sector and the drop in oil prices did not help the matter. He noted that one of the significant challenges of sovereign debts in Africa is the inability of the projects financed to connect with the needs of the people at the grassroots who are mostly impacted by the projects. He referred to his experience in Nigeria while working in a team that drafted the concession agreement in the Lekki-Epe toll project and subsequently working as part of the team that implemented the agreement. With respect to the project, he noted that people at the grassroots were sceptical even though the project was excellently executed. Apart from the cost of using the toll, other concerns relate to the impacts of the project on the socio-economic lives of the people. He concluded that the African Sovereign Debt Justice Network is building alternative ways of dealing with debts and sovereign debts in particular. It is advocating for debt restructuring, rescheduling or cancellation, as well as improved transparency and accountability in the technical and commercial design and implementation of debt schemes. The approach of the Network is to ensure that both the lenders and the states (borrowers) act more responsibly, without trading blames.

University of Aberdeen’s Mr Hakeem A Tahiru presented a paper entitled “The Challenges, Prospects and Pathways of Achieving the Objectives of the African Continental Free Trade Agreement (AfCFTA).” Mr Tahiru’s presentation provided background to the AfCFTA. 54 of the 55 African countries have signed and it is about the largest free trade area in the world. Its secretariat is in Ghana, and it covers trade in goods and services, investments, intellectual property and competition. It seeks to: (a) boost intra-African trade by elimination of tariff and non-tariff barriers, (b) promote industrialization, and (c) reposition Africa to become more competitive in the global economy. It is a very ambitious agreement which seeks to achieve the agenda 2063 on the transformation of Africa. The agreement is based on the principle of reciprocity, and it builds on the strength of the existing trade blocs in Africa. The implementation mechanisms include: (i) the protocols on goods and services, dispute resolution and protocols in phase II negotiations that will entail investments, intellectual property rights and competition policy; (ii) free movement of goods and services; (iii) institutional framework – African Union assembly, Council of Ministers, Committee of Senior Trade Officials and the Secretariat; (iv) Rules of origin – that goods and services accorded treatment must originate from Africa.

Mr Tahiru observed that elimination of tariffs is not sufficient to guarantee the objectives of AfCFTA. Attention must be paid to: (1) the determinants of free trade – demand and supply, consumer preferences, peace and security, technological innovation capacity and infrastructure; and (2) the facilitators of free trade – agreements, access to larger market, globalization and technological advancements. The Agreement faces enforcement and compliance challenges relating to: (a) lack of continental trade infrastructure, (b) political and social barriers, (c) bureaucratic and institutional corruption, (d) overlapping trade agreements, (e) technical barriers like difference of language, (f) political will to implement commitments, and (g) lack of common currency. The prospects include market access, incentives for research and development, progressive technological capacity and experiences from the existing trade blocs in Africa.

Vienna University of Economics and Business’s Professor Jeffrey Owens and Ms Joy Waruguru Ndubai concluded the panel 2 presentations with a paper entitled “The Interface between Tax Agreements and Bilateral Investment Agreements.” The presentation was made jointly in a flow of conversation between the two speakers, which was very interactive and engaging. It highlighted the overlapping aspects of international investment agreements (“IIAs”) and tax agreements. The two agreements have similar objectives. Yet, they represent two communities that often do not work together in sync and they are therefore in a state of flux. IIAs address cross border investments with the aim of treating foreign investors the same way as the domestic investors. Its protection includes guarantee on income or profit repatriation, protection against discrimination, fair and equitable treatment, full protection and security and dispute settlement. Tax treaties seek to address issues around double taxation, tax avoidance and evasion, exchange of information, efficiency of tax collection and dispute settlement. IIAs overlap with tax treaties because tax measures may be seen as violation of the protections under the IIAs. Old generation IIAs (about 85% of existing IIAs) do not have carve out provisions for tax measures and most of the contentions now are about this old generation IIAs. Examples of contentious issues include definition of investment and investors, treaty shopping, national treatment (where tax treats foreigners differently) and taxes applied to transfer of funds such as withholding tax and capital gain tax. Some countries respond by trying to cancel IIAs, but it is usually difficult to do so. Instead, the speakers concluded that it is advisable to improve on the IIAs and harmonize IIAs with tax treaties and tax measures.

The conference has shown that trade law and commercial law continue to shape commercial trends, regulate the conduct of parties to commercial transactions and enhance sustainability of markets, despite the crises of Covid-19 and its attendant challenges.

https://www.abdn.ac.uk/law/blog/commercial-law-in-times-of-crises/


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