Version classiqueVersion mobile

Grass-roots Justice in Ethiopia

Alula Pankhurst
Getachew Assefa

Regional Case Studies

11. Alternative Commercial Dispute Resolution Mechanisms in Addis Ababa: The Case of Merkato

Mintiwab Zelelew et Mellese Madda

Texte intégral

Profile of the Area

1This Study was conducted in Merkato of Addis Ababa, which remains to the biggest market area in the country. The area consists of three Weredas, 51 kebeles and one zone. According to a census taken in February 2000, out of Addis Ababa’s population, 14.9% (314,565) live in Merkato area. The traders in Merkato vary from the small street venders to owners of big hotels and large-scale investors. They come from diverse ethnic and religious backgrounds.

2In Merkato area, merchants have the tradition of settling differences particularly commercial disputes using CDR mechanism. In spite of this, it was found out that cases for alternative commercial dispute settlement are not properly documented as there have not been as yet a formally organized CDR system. While this made this study very difficult it also underscored the importance of working in this area.

3Most of the data in this Chapter were obtained through interviews with merchants of different classes, ages, ethnicities and types of business, judges, professional arbitrators and professionals working in the Ministry of Justice, Addis Ababa Chamber of Commerce and the Ethiopian Arbitration and conciliation center.

Types of Dispute

4Sources of commercial disputes in the Merkato area can be divided into three types. The first and perhaps the main source of disputes is the failure to pay back the money that individuals borrow in order to run their own business. The borrowers usually take the money without any written agreement or witnesses from the lender. This is because of the loyalty or the culture of trust among the merchants, who seem to have been governed by traditional values of mutual progress and brotherhood.

5The second source of dispute prevalent in Merkato is the credit (later-pay) system. Usually importers of various merchandises distribute their articles to retail traders on credit basis. Here again, in most of the cases, there are no written agreements. Merchants who have taken the merchandises may, for various reasons, fail to pay the money to the distributors whose goods they have taken.

6The third source of dispute is the case of Iqqub, to which the merchants give a big place for its contribution, as a source of finance to increase their business activities. Iqqub is a system widely practiced by a good portion of the Ethiopian society. It is possible to state that merchants in the urban areas like Merkato use Iqqub, as their sole contributor for the progress of their business activities. Despite the contribution of the Iqqub, disputes usually arise because some of those who have taken their respective rounds defect without fully paying their debts.

Setting the CDR system in motion

7When any one of the disputes described above ensue, the party(ies) seeking the performance of the obligation give notice to the defaulting party(ies). If there is no action towards paying, the lender (in cases of loan agreement), or the credit giver (in cases of credit agreement) or the chairman of the Iqqub grouping would ask the person in default to discharge the obligation as agreed or expected.

  • 184 Interview with Feleke Bedasso (trader in the Merkato).

8Normally, first steps are taken by different kinds of negotiation short of initiating more formal CDR process. If the initial, less formal process bears no fruit, steps would be taken to initiate the formal Shimgilinna (settlement though shimagillés) process. The shimagilé is usually one who knows both parties. Being so, he in the first instance talks to the debtor about the matter. He will communicate the complaints of the creditor. Even if there is no rule as to the form of communicating the matter to the parties, according to the interviewees, it is done orally. After hearing the debtor’s part, the Shimagillé will call a meeting, where both parties could come together and select their shimagillés, who can settle the matter at hand. In the first session, in the presence of the parties and the first shimagillé, the parties will name individuals who can be their shimagillés. Since it is only after both parties agree on the shimagillés, that they will assume the status, the nominated shimagillés need not be present during the first meeting. During the selection of shimagillés both parties are present, so that the parties have a chance to challenge the independence and impartiality of the shimagillés. One of the requirements to be a shimagillé is impartiality. There are no clear-cut criteria for impartiality. But if the nominated shimagillé has dispute with a party or if he is close relative to a party, it is sufficient to cancel the nomination, as there is possibility to be partial. Shimagillés would be those who are ethically good, respected and relatively aged people. In addition to this, the ability of a shimagillé in bringing the parties to the agreement in his previous engagement is also important. The shimagillés get this skill from life experience. In almost all cases the shimagillés are males. The data shows that there was no case in which women acted as shimagillés.184 This relates to the prevalent cultural influence.

9The Shimagilles once selected are the ones to settle the dispute the way they think is appropriate. The number of shimagillés differs from one case to another. The number varies from three to nine depending on the complexity of the case. This means the simpler the case, the less the number of Shimagilles. However, whatever the number is, it should be odd. This is to avoid deadlock in giving decisions or to have a majority decision easily.

10The appointed Shimagilles usually accept the position and responsibility to mediate the disputing parties. This is because of the culture of the society which gives elders respected status and responsibility for the wellbeing of the society. The shimagillés normally come from among the traders.

The Dispute Settlement procedures

11There is no hard and fast rule either orally or in written from governing the process which bind the shimagilles. The Shimagillés try to balance things based on their sense of justice and fairness.

  • 185 Some informants to this study however disputed this information saying that the processes do not ge (...)

12Before rendering decisions, the Shimagillés will try to digest the case thoroughly. They normally have a separate talk with each of the disputants. And then they conduct a session of their own where each of the shimagillés shares their part of appreciation of the case. After this they will have a session together with both disputing parties. If the parties have written evidence, they can present it at some stage of the process. Otherwise, it is not usual to bring witnesses. Since it is believed that the disputing parties will not lie before the shimagillés, there is no need to bring witnesses. Though there is no agreement on this issue, it was stated that the process of a given dispute would be recorded from beginning to end by one of the shimagillés who would be assigned as a secretary.185

13After the hearing of the case, the shimagilles render decision, which they think is fair. The remedies for the dispute differ with the type of the case in dispute. If the case for the dispute is failure to pay back lent money now established by the shimgilinna, then the shimagillés will order the money to be payed back. The shimagillés, however, give decisions taking into account several factors, such as the degree of fault of the defaulting party, the paying capacity and the consequence of the decision. So there are times when the shimagillés try to compromise or balance things to lessen the burden of the defaulting party. For example, if a person lends 100,000 birr to another and the latter fails to return the money back, the shimagillés, might order the party at fault to pay the 50,000 birr and order the creditor to leave the 50,000 birr claim. Or they may order the payment of the money over a long period of time so that the debtor would be able to pay the debt without hardships.

14There is no appeal system against decisions rendered by shimagillés. The system does not provide for hierarchical layers of dispute settlement. So, if one of the disputants is dissatisfied with the decisions of the shimagillés, there is no within-the-system review mechanism. But the data shows that disputing parties don’t usually have appeal against decisions. In other words, facing un-enforced judgments rendered by the shimagillés is rare. Two things are said to have contributed much to this. The first one is the selection process of the shimagillés. Since the disputing parties themselves select the shimagillés, and since the latter are the most respected people, both the parties would respect the decision. Secondly, failure to comply with the decision of the shimagillés would have a negative impact on the social life of the party who lost the case. For fear of this, in most cases there is the tendency of accepting the decisions of the shimagillés. But if a person is defiant to all the moral authority of the shimagillés and social consequence of his defiance, there is no mechanism of actually compelling the defaulting party to discharge as adjudged.

Links to the formal and informal justice system

15The shimagillé system has links with the formal justice system in three ways. First, there are instances where cases are referred by courts to the shimagillés for adjudication purpose. There are instances where due to lack of evidence, the party with the truth would be the loser. The judges understanding the case might refer it to shimagillés orally. This is because under the present law, courts do not have power to instruct parties to take their cases to Shimagillés.

16Secondly, there are times when disputing parties may bring their case after the court has rendered judgment. Here the judgment debtor may think that what the court decides, though it is right, is out of his capacity. And if the courts are to enforce the decisions, he might even lose all his properties. In such cases, such a person would refer the matter to shimagillés. And the shimagillés will reform the decision in such a way that both parties wouldn’t be adversely affected.

  • 186 Shimagillés who were informants in this study had encountered similar experience in the past.

17Thirdly, in cases where the decision of the shimagillés is not enforced, judgment creditors take their case to courts. This also shows that there is another sort of link between the shimgilinna system and the formal court. What is interesting here is that there is a practice that shimagillés are not to be called as witnesses in case where the case is settled by the shimagillés but the case is brought before courts. In fear of such instances, usually the shimagillés warn the disputing parties not to call them as witnesses if the case is to be later taken to courts. However, in spite of this practice and the warnings made by the shimagillés, there are times when they are called by courts as witnesses.186

18The study has revealed that the shimgilinna system shares a lot of features with the customary dispute settlement mechanisms discussed in other chapters of this book. The chief explanation for this is that the traders themselves are influenced by the rural cultures of their respective communities.

Attractions of the Shimgilinna System

19The Shimgilinna system has a number of strong sides. First and foremost, the system in most cases is cost free. Since there are no lawyers involved, there is no cost for lawyers. The appointed shimagillés have a social obligation to settle disputes free of charge. There is no payment similar with a court fee. Secondly, the system has the advantage of settling disputes in a shorter period of time. The time shimagillés take to settle disputes is usually very short compared with the formal justice system. As much as possible, the shimagillés, taking cognizance of the responsibility they have taken, try to settle the disputes within a short period of time. Thirdly, the system could be taken as a fair one. For example, it gives the disputing parties the right to choose their own judges. Since the shimagillés are relatives of or very close persons with the disputing parties, the parties will have confidence in them. Finally, because the decisions are usually outcomes of compromises and give and take, there is strictly no winner or looser.

20There is no hard and fast evidence rule to be followed by the shimgilinna process. Nor is the system dependent on the availability of the same. Even if the party who brings the complaint has no evidence to assert his case, the shimagillés will decide in favor of him if they are convinced that he/she is telling the truth. There is no practice of bringing witnesses and examining their words to reach at the truth. Evidence, including witnesses, is optional.


Providers of Arbitration Services

21The other method of commercial dispute settlement is arbitration. The study found that arbitration is not very prevalent among the majority of the merchants. Arbitration in Ethiopia is practiced in two ways: on an ad hoc basis and on an institutionalized basis. Through the ad hoc system, the parties themselves or third party(ies) nominated by them would select the arbitrators. The number of arbitrators differs from case to case. It depends on the will of the disputing parties. Usually two or four arbitrators will be selected by both parties, and the selected arbitrators will select another individual as chairperson of the arbitrators. Like the courts, here also the number of arbitrators should be an odd number. In this system of arbitration, the place of arbitration, the payment for arbitrators, etc., would be determined by the agreement of disputing parties and the arbitrators.

22Coming to the institutionalized system, there are to date two institutionalized arbitration centers in Ethiopia. One of these is established under the Addis Ababa Chamber of Commerce, under the name Addis Ababa Chamber of Commerce Arbitration Institute’ (AACCAI). This Institute is established in 2003 with the aim of solving the problem of commercial community including disputes that arise among national and international firms. It has developed its own rules of arbitration, which contain rules on the procedures of arbitration, payment system, etc.

23The AACCAI provides disputing parties with a forum or place of arbitration, name of possible arbitrators or it will nominate one if the disputing parties give it the power to, and above all, the rules of arbitration. But to do so, the disputing parties in their original contract should agree to submit their case to the AACCAI.

24The second provider of arbitration service is Ethiopian Arbitration and Conciliation Center (EACC), established as an association. It has the aim of involving itself in mediation and arbitration services. It also provides disputing parties who need the service of the center with venue or place of arbitration, roster having names of professionals who can act as arbitrators, and determine the fee that should be given to arbitrators.

  • 187 Interview with Ato Solomon Imiru, Federal Judge.
  • 188 This view was also advanced by Ato Yosef Aemero, Federal Judge.

25Both types of arbitration services — ad hoc or institutional - have much more links to the formal justice system. In most cases, the arbitrators are generally expected to use the substantive law of the country. Besides, they should act in line with the Civil Procedure Code. If a party is dissatisfied, appeal is to be launched to the formal justice system. The enforcers of awards given by arbitrators are courts. Courts also refer cases to arbitration up on the request of the disputing parties.187 However, under the existing law of the Country, judges can only make suggestions that cases be settled through arbitration; they cannot order that a case be seen by arbitrators or shimagilles.188

Conformity with the Formal Justice System

26The practices of arbitration in most cases are done in conformity with the provisions governing it under the Ethiopian Civil Code and Civil Procedure Code. Therefore, complaints about the unfairness of arbitration system would not have to do much with the problems of the law. But this does not mean that the existing laws fully provide for the necessary details. For example, courts have problem in executing the awards of arbitral tribunals due to the vague nature of Art 319 of the Civil Procedure Code. This article requires the court to homologate the awards before execution. But to homologate the award, what should the court do? Is the court required to look into the issues of the case? What if the court thinks that the award is not a fair one? These and similar questions have not been answered by the existing laws. In practice, courts are just executing awards without homologating it.

  • 189 See for example Art. 315 of the Ethiopian Civil Procedure Code.

27Another problematic area raised in relation to arbitration is that the Ethiopian law makes administrative contracts not subject to arbitration.189 Practically, nonetheless, cases where government organs are parties to (or administrative contracts) are usually referred to arbitration. This is an instance where the law has become an impediment to the flourishing of CDR systems.


28Earlier we have noted that both the shimgilinna and the arbitration systems do have links with the formal justice system in their own ways. What is missing is making the link more elaborate and be guided by laws to be enacted by the state. If institutionalized, these systems of dispute settlement will greatly contribute to lessening the caseload of courts.

29But at the same time, the issue should be looked at in an integrated fashion. For example, the practical problems of training, selection, rules of procedure, etc, in relation to the shimagillés should be addressed. Similarly, practical problems of the institutions providing arbitration should be addressed. These institutions should exist in the quantity and quality to serve that would enable them give the services as demanded.


30The following steps are suggested to reform the legal and practical setting surrounding alternative dispute settlement of commercial cases.

  1. Detailed laws that clearly provide for arbitrable matters, manner of arbitration, and fees to arbitrators, etc, should be promulgated.

  2. A law that gives courts the power to remand cases for compulsory arbitration should be enacted with clear regulation of relevant matters such as types and nature of cases to be settled by arbitration or shimgilinna.

  3. CDR and ADR systems have to be popularized through training and other means so that people would believe in the use and integrity of the system as a good alternative to formal litigation.

  4. Appropriate link in times of necessity should be created between the CDR and ADR systems and the formal justice machineries, including the courts.

  5. Institutionalized arbitration centers should be encouraged by the Government.

  6. The possibility for creating court-annexed CDR/ADR systems should be explored

List of Informants


Name of Informant



Ato Sirgaga Dari



Ato Belay Chebsi



AtoFeleke Bedaso



AtoTilahun Debela



Ato Worku G/Egiziabher



Ato Wubshet Ayele

Lawyer and Founder of the Ethiopian Arbitration and Conciliation Center


Ato Zenebe Burke

Ministry of Justice Head of Legal Drafting Department


Ato Tilahun Teshome

AAU Law Faculty Instructor former Supreme Court Judge and Arbitrator in most cases


Ato Mehari Redai

AAU Law faculty Instructor


Ato Zekarias Kenea

AAU Law faculty Instructor


Ato Yoseph Aemero

Judge Federal First Instance Court


Ato Solomon Imiru

Judge Federal First Instance Court


184 Interview with Feleke Bedasso (trader in the Merkato).

185 Some informants to this study however disputed this information saying that the processes do not get recorded.

186 Shimagillés who were informants in this study had encountered similar experience in the past.

187 Interview with Ato Solomon Imiru, Federal Judge.

188 This view was also advanced by Ato Yosef Aemero, Federal Judge.

189 See for example Art. 315 of the Ethiopian Civil Procedure Code.

© Centre français des études éthiopiennes, 2008

Conditions d’utilisation :


Rechercher dans OpenEdition Search

Vous allez être redirigé vers OpenEdition Search