Commercial disputes in Morocco can be addressed and resolved through various channels, primarily through state courts (judicial litigation) or via arbitration, an alternative dispute resolution method.
The Judicial Route (Litigation before Commercial Courts)
Disputes between traders or relating to commercial acts fall, in the first instance, under the jurisdiction of commercial courts. These specialized courts were established in Morocco by Law No. 53-95 (forming the Commercial Code) and are present in major cities such as Casablanca, Rabat, Tangier, etc.
Typical Procedure: Proceedings before commercial courts often begin with a conciliation attempt, which is even mandatory in some matters, or through fast-track procedures like an order for payment for certain, liquid, and due debts. If conciliation fails or if the nature of the dispute requires it, the case is judged on its merits after an exchange of written submissions (petitions, briefs) between the parties. The duration of legal proceedings can be relatively long, sometimes spanning one to three years, or even longer in case of appeal. Decisions of commercial courts are appealable before the Commercial Court of Appeal (or the commercial chamber of the Court of Appeal). As a last resort, an appeal can be made to the Moroccan Court of Cassation (for example, pursuant to Article 74 of the Dahir of Obligations and Contracts for certain aspects).
Advantages and Disadvantages: Using state courts offers the legal certainty of an institutionalized system with established appeal routes. Judges in commercial courts are specialized in commercial matters. However, hearings are generally public, which may not be suitable for disputes requiring confidentiality. Moreover, although specialized, judges may not always possess in-depth technical expertise in highly specific sectors. It is possible to obtain interim measures (such as a judicial mortgage or a protective attachment) before or during the trial to secure the future enforcement of the judgment.
Commercial Arbitration
Arbitration is a consensual method of dispute resolution whereby parties agree to submit their dispute to one or more arbitrators (an arbitral tribunal) who will render a binding decision (the arbitral award). In Morocco, commercial arbitration is governed by Law No. 08-05 of February 21, 2006, significantly amended and supplemented by Law No. 95-17 of 2017.
Implementation: Parties can agree to resort to arbitration either by inserting an arbitration clause in their contract (before any dispute arises) or by concluding an arbitration agreement (once the dispute has arisen). Arbitration can be domestic (if all elements of the dispute are located in Morocco) or international (particularly if one of the parties is foreign or if the interests of international trade are at stake). Institutional arbitration centers, such as the Casablanca International Mediation and Arbitration Centre (CIMAC) of the Moroccan International Chamber of Commerce, offer arbitration rules and administer proceedings, thereby facilitating the process.
Advantages and Disadvantages: The main advantages of arbitration are:
- Speed: Proceedings are often shorter than in state courts (a few months generally).
- Confidentiality: The proceedings and the arbitral award are confidential, unless otherwise agreed by the parties.
- Choice of Arbitrators: Parties can choose arbitrators known for their expertise in the field relevant to the dispute.
- Flexibility: Parties can tailor the procedural rules to their needs. Arbitral awards, whether domestic or international (after an exequatur order), are enforceable. Moroccan law allows for limited judicial review of the award by the Court of Appeal (mainly on procedural or jurisdictional grounds) before its enforcement. Morocco is a signatory to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which facilitates the enforcement of international awards. The main drawback of arbitration often lies in its cost, which can be higher than a state court trial due to arbitrators' fees and the administrative costs of the arbitration center. Furthermore, appeal options against an arbitral award are limited (mainly an action to set aside on strict grounds, not an appeal on the merits).
Mediation and Other Alternative Dispute Resolution (ADR) Methods
Besides arbitration, other Alternative Dispute Resolution (ADR) methods are encouraged. Mediation, for example, is a voluntary process where a neutral and impartial third party (the mediator) helps the parties find a negotiated solution to their dispute themselves. CIMAC and other organizations also offer mediation services. Judicial conciliation procedures are also provided for within the courts.
Recommendation: It is highly advisable to include a dispute resolution clause in commercial contracts, specifying the preferred method of resolution (prior mediation, arbitration, judicial jurisdiction), the place of resolution, and possibly the applicable law. A typical clause might state: "Any dispute arising out of or in connection with this contract shall be submitted, at the option of the claimant, either to the Commercial Court of Casablanca or to arbitration by the Casablanca International Mediation and Arbitration Centre (CIMAC) in accordance with its rules in force at the time of filing the request for arbitration."
For a broader understanding of the legal aspects crucial for any investment in Morocco, consult our comprehensive guide: Legal Framework for Doing Business in Morocco: An Investor's Guide. To learn more about drafting effective agreements, check out our article on key clauses in Moroccan commercial contracts.