Contractual or Judgmental Approach: Unearthing the Legal Nature, Effect and Execution of Compromise Agreement under Ethiopian Law

Abstract

As a matter of general principle, voluntary and pacific settlement of civil matters (and arguably some criminal matters) through compromise agreement between parties to an actual or potential legal dispute is commendable on various beneficial grounds. Compromise is a voluntary resolution of legal disputes to avoid litigation or put an end to one already commenced. Yet, an effective accomplishment of its purpose requires establishing an efficient legal framework that regulates every aspect of legal issues it involves. Accordingly, this article investigates the status, requirements, parties, subject matter, time, execution and legal effect of compromise under Ethiopian law. Based on a doctrinal legal research approach, it argues that the legal status, clarity and effect of compromise are vague in the Ethiopian legal framework. The legal regime is ambiguous about whether compromise is a contract or consent decree in addition to the vagueness of its substantive and procedural requirements for an execution. The recently introduced Arbitration and Conciliation Working Procedure Proclamation [No.1237/2021] also overlooks the subject of compromise. Hence, this article recommends an overall revision of compromise in the Ethiopian legal system. This includes clearly defining its legal status, scope that identifies subject matters not amenable to it, and establishing conditions such as the requirement for a written form to enter into it and court approval for its execution.