Academic journal article Journal of Legal, Ethical and Regulatory Issues

The Disputes of Administrative Contracts: The Possibility of Using Arbitration According to the Jordanian Arbitration Act 2001

Academic journal article Journal of Legal, Ethical and Regulatory Issues

The Disputes of Administrative Contracts: The Possibility of Using Arbitration According to the Jordanian Arbitration Act 2001

Article excerpt

INTRODUCTION

Governments have a duty to continually upgrade the services that are delivered to people through joint government and private sector initiatives. In Jordan, administrative contracts are particularly important as it is a poor country and the involvement of private investors in its projects is vital.

Companies considering entering into government contracts in poor countries such as Jordan are often very eager to ensure that their investments would remain safe in the event of a dispute with the government in question. It is believed that arbitration is an attractive method of dispute resolution in these circumstances since it offers investors a neutral environment for settling any potential disputes of this kind. The existence of a well-developed system of arbitration in Jordan could therefore be a significant draw for private investors, who would generally rather avoid the possibility court action. However, at present Jordan is only beginning to develop in this regard and the feasibility of using arbitration in administrative contract disputes need to be investigated.

The Arbitration Act 2001, in ruling that 'the provisions of this law shall apply to every conventional arbitration conducted in Jordan and relate to civil or commercial disputes between parties of public or private law persons, whatever the legal relationship to which the dispute is connected, whether contractual or not' notably did not refer to administrative disputes (The Arbitration Act, 2001). In addition, since the introductions of the Arbitration Act in 2001, there have to date been no legal precedents concerning arbitration in administrative contracts. Whether or not the Act can be said to permit arbitration in administrative disputes, despite it not mentioning them specifically, is a controversial question. While Alshatnawi, for example, infers that administrative contracts cannot be arbitrated, Abdulhadi has argued that power has clearly been granted to public authorities in this regard. Abdulhadi's position appears to be stronger, although it may not be true to say the Arbitration Act 2001 was entirely clear.

In his book, "Arbitration in Administrative Contracts", Abdulhadi comprehensively studied the use of arbitration in administrative contracts in France and Egypt, but his assertion that the Jordanian Arbitration Act 2001 was clear in giving providing permission for Jordanian public authorities to arbitrate was not based on similarly thorough examination (Abdulhadi, 2005). Also, although Abdulhadi demonstrated the advantages of arbitration in general, it can be said his failure to counter any opposing arguments somewhat weakened his stance.

Since the Jordanian Arbitration Act 2001 is derived from the Egyptian Arbitration Act 1994, it is argued here by some Egyptian and Jordanian authors that the Arbitration Act 2001 does allow for arbitration to be used in settling the disputes of administrative contracts in Jordan (Sharaf, 1993; Nasar, 1997; Ibrahim, 1991; Alam, 1986; Aldori, 1985; Sari, 1999). This is because there was no specific prohibition of this in the Act, even though it may only have explicitly permitted arbitration as a means of resolving civil or commercial disputes. According to a basic principle of Jordanian law, actions are generally allowed rather that forbidden as long as they are in the public interest1. In other words, consent to carry out an act that is ostensibly beneficial to the public, does not have to be explicitly provided by the law.

In order to add weight to the above argument, however, it is important to refute the claims of those who are inclined to disagree. The case against the use of arbitration in administrative contracts includes the arguments that it infringes on the obligatory nature of judicial jurisdiction, that it is not compliant with administrative contract theory, that arbitration does not provide legal and technical guarantees and that the Arbitration Act 2001 is in fact unconstitutional. …

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