Dispute Settlement
In general, investor rights are backed by an impartial procedure for dispute settlement that is transparent. In 2009 a few U.S. companies had investment disputes with the Government of Morocco but no new cases emerged in 2010. In most cases, through U.S. advocacy, these minor disputes were resolved with the relevant government agencies.
While Morocco's commercial and appeals courts have generally improved the dispute settlement climate, Moroccan and foreign companies continue to complain about the inefficiency and the lack of transparency in the judicial system. Among King Mohammed VI's six priority areas identified in a major annual address in August 2009 were improving the business environment and the fairness and efficiency of the judicial system. The King's emphasis is well placed, as recent UN and World Bank studies highlight Morocco's shortcomings in this area, indicating that bankruptcy protection and liquidation procedures are inefficient and that the courts are slow and often fail to enforce legal rulings.
In an effort to promote foreign investment, the Moroccan legislature has adopted laws to protect both foreign investors and their Moroccan counterparts. Morocco is a member of the International Center for the Settlement of Investment Disputes (ICSID) and a party to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (with reservations) and the 1965 Convention on the Settlement of Investment Disputes between States and Nationals of Other states. Legislation extending the scope of arbitration and mediation and giving them added legal standing took effect in July 2007, partly as a result of FTA required reforms. Arbitration, in particular, finds increasing use in Morocco today. Moreover, USAID, in collaboration with IFC, assisted the Government in 2008 and 2009 with the establishment of a national commission on Alternative Dispute Resolution (ADR) with a mandate to regulate mediation training centers and develop mediator certification systems. The goal of this program is to increase the use of mediation in the prevention phase of bankruptcy proceedings and in the resolution of business disputes outside of the courts. Although the program remains limited in its implementation, the business community has generally viewed early use of the system in Rabat and Casablanca as favorable.