Arbitration or Court? Choosing a Dispute Resolution Clause That Works

Nearly every contract we review has a dispute resolution clause that was copied from an earlier deal. When a dispute arises, that clause decides where you fight, how long it takes, what it costs and whether the outcome can be enforced against assets. It deserves more than five minutes.

When national courts are the right answer

Litigation in the Cameroonian courts is the sensible default where the counterparty and its assets are all in Cameroon, the amounts do not justify arbitration costs, or the likely dispute is a straightforward debt claim. The OHADA simplified recovery procedures are efficient for undisputed debts, and a court judgment is directly enforceable without an additional recognition step.

When arbitration earns its cost

Arbitration tends to be worth it where:

• the counterparty or its assets sit outside Cameroon, and enforcement will be needed abroad;
• the subject matter is technical and a specialist tribunal is preferable to a generalist judge;
• confidentiality has real commercial value;
• the parties want a single forum for a multi-party, multi-country project.

The enforcement point is usually decisive. An arbitral award benefits from the New York Convention in over 170 states, and from the OHADA framework across member states. A national judgment travels far less easily.

The CCJA option

The Common Court of Justice and Arbitration administers arbitration under its own rules, and an award rendered under those rules has a streamlined enforcement route throughout the OHADA space. For regional contracts it is often a better fit — and considerably cheaper — than defaulting to a European institution.

How clauses fail

Naming an institution that does not exist

Approximations of institution names are surprisingly common and cause months of jurisdictional argument.

Contradicting yourself

A clause that submits disputes to arbitration and then confers exclusive jurisdiction on a named court is not a clause; it is a future application.

Ignoring the seat

The seat determines the supervisory court, the availability of interim relief and the grounds for setting aside an award. It is not the same as the venue for hearings, and it should be chosen deliberately.

Over-engineering the tribunal

Three arbitrators on a contract worth a modest sum is a clause that makes disputes uneconomic to pursue. Match the machinery to the value.

A workable default

For most CEMAC commercial contracts of moderate value, a sole arbitrator, a seat within the OHADA space, proceedings in the language of the contract, and a short mandatory negotiation window before commencement produces a clause that is fast, enforceable and proportionate. Whatever you choose, choose it consciously.