In January of this year, CNN posted an article in its travel section on the beautiful island of Mauritius. It was called “The Best African Destination You Know Almost Nothing About.” The article focused on the island’s attractions for tourism and how the country is a prime example for democracy. Mauritius is an island located in the middle of the Indian Ocean, with a population of almost 1.3 million people. 68% of the island’s inhabitants are Indian, with the remainder comprised of Creole, Chinese, French, English and South African. Although the island’s official language is English, some of inhabitants speak French, Creole and Hindi, amongst other languages.
But many of you know more about the island than you think. Many Nigerian artists know enough about the island of Mauritius; enough to be bound by their laws. Artists like Ice Prince, Banky W, Wizkid, and 2face Idibia all know just enough to be bound by the laws of Mauritius. This is due to the contractual relationship that they share with the company known as Spinlet.
Spinlet, since its recent emergence in Africa’s music space, like other digital distribution companies, has been signing numerous licensing deals with Nigerian/African artists.
The relationship is typically cemented with “Spinlet’s Digital Rights Agreement -Artist,” a lengthy twenty (22) page contract (mostly because of the exhibits incorporated into the contract – the contract itself is only ten (10) pages long) that right from the onset, makes it clear Mauritius law governs any disputes. However, what does it mean to say Mauritius law governs a dispute for an artist based in Nigeria on the continent?
Of importance to know when transacting business on international shores, especially where digital rights agreements like these are concerned, for now, are: “The Arbitration,” The Dispute Resolution” and the “Choice of Law” clauses.
Arbitration: An Alternative to Litigation
Like many agreements, the Spinlet Digital Rights Agreement calls for arbitration in the face of a legal dispute between the company and its clients (musicians/entertainers). An Arbitration is a form of dispute resolution that occurs outside of court where the parties refer their dispute to a neutral third party known as an arbitrator, whose decision by which the parties agree to be legally bound. Both parties pay a fee and the winner is sometimes allowed to request re-payment of his arbitration fees by the loser. There is no jury and no formal legal proceeding.
Arbitration tends to be the dispute resolution method of choice in business transactions today due to the fact that it tends to be a much cheaper alternative to litigation. But there always comes a question as to what law will govern the dispute.
Choice of Law
Laws vary from state to state, and from country to country. They vary in regards to the length of statute of limitations (the maximum time permitted to sue) and the type of damages (money) that can be awarded, to the enforceability of certain contractual clauses. In order to prevent future confusion, parties today include a “choice of law” provision in their contracts. Sometimes parties choose the law of the location of their headquarters while others think more strategically and choose the law of a country or state that would grant them a more favorable outcome. Knowledge is power, and knowing and understanding which country’s law will govern in the event of a dispute will help you avoid disputes or at least predict an/the outcome should a dispute arise.
Just because parties agree to confer jurisdiction on an arbitration tribunal in one country does not in itself mean that the parties have agreed to be bound by the laws of that country. A dispute resolution clause is not the same as a choice of law clause. A dispute resolution clause states how disputes will be resolved (arbitration, mediation, litigation) and where the resolution will take place. A choice of law provision states what laws will be applied in the arbitration proceedings. This law also applies to all other aspects of the contract.
Nigerian Artists, here is what you are agreeing to when you sign a contract with Spinlet or similar companies like Spinlet:
1. Page 8, Clause 12 the “Dispute Resolution” clause of Spinlet’s agreement requires arbitration in the presence of three arbitrators instead of one. This actually works out better as three heads are definitely better than one. It also requires that the arbitrators and participants follow the rules of the Permanent Commercial Arbitration Court of the Mauritius Chamber of Commerce and Industry.
Parties to such a contract (or their lawyers) would do well to familiarize themselves with the rules governing their agreed upon dispute resolution process.
2. In addition to agreeing to arbitrate under Mauritian rules, you also agreed for Mauritian law to govern your contract as whole. Not only that, you also agree for Mauritian law to be the law applied during your arbitration proceedings should the need for such proceedings arise. Take a look at page 10, clause 13(g) Governing Law/Jurisdiction.That is where you agreed to be governed by the laws of Mauritius, the best African destination you know almost nothing about. This is not necessarily a bad thing but it might not be a great thing either. Your entertainment lawyer would need to research the law of this island in order to ensure that it is in line with your goals/views in order to make a determination on how favorable it will be to you.
You should consult with your attorney and also think about consulting with a local entertainment lawyer in Mauritius before you sign a contract binding you to the laws of Mauritius. This way, if you find yourself in a doozy, Mauritius, which will more than likely be your destination, will not be the African destination that YOU know almost nothing about.
Photocredit: Tourism Mauritius
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