In the past couple of years, the business environment in Morocco has really improved. There is a higher level of international openness, which came out of the general liberalisation process of the Moroccan economy as well as its trade agreements, especially with the US and the EU. These immediately repositioned Morocco in another context economically. However, they have also demanded additional juridical frame working in the way foreign investment is dealt with in Moroccan law. This has brought new challenges and interesting cases to the attention of law pundits. In terms of contracts, for example, a lot of foreign exporters or operators do not want to submit their contracts to be considered uniquely under Moroccan law and the Moroccan Commercial Court. Moroccan operators used to oppose to this, but sometimes there are advantages. Some Moroccan operators understand that in some cases, choosing another country’s law to guide a business deal with a foreign company can sometimes be better than to abide strictly to the Moroccan law. By simply refusing to do business with a foreign company because it means abiding by laws from another country might mean a lost opportunity.
Sometimes by comparing the Moroccan law to other options, local operators can find more advantageous conditions. Of course this abidance by a foreign law system can sometimes bring problems under Moroccan law. This makes arbitration in cases of disagreement very important.
Nowadays, international arbitration has become more and more prevalent. This will sometimes demand an inclusion of internal arbitration laws. When the disagreement is between two Moroccan business operators, they are always under Moroccan law, therefore arbitration procedures are strictly internal. So there has been a lot of advancement in the way business disagreements are resolved in Morocco.
In terms of the general law, the Commerce Law will remain the legal backbone of business in Morocco. But there are still some changes to be made to it. Since the code was implemented ten years ago, several reforms that have been made during that time were not included. The law relating to bankruptcy, for example, has not been upgraded accordingly. Some companies use bankruptcy status to keep operating, even if they cannot pay their employees or their suppliers, and they keep this situation for years. Things are moving now, because the reform process is under way at all levels of the law system. A lot of this is being driven by the increasing economic openness.
The intellectual property laws, for example, are where Morocco has already made progress, simply because the actors that are supposed to assure intellectual property are operational. Customs, for example, is now looking closely at what comes into Morocco, especially if they are branded products where the potential for counterfeit is larger.
Similarly, in terms of competition laws, the Competition Counsel will now be an effective body, acting when there is a breach of competition regulations.
In legal matters, when there is a trial regarding a foreign company operating in Morocco, that entity will be treated equally to a domestic company. The question is when there is a decision taken by a foreign court within another country’s legal framework but that must be enforced in Morocco. Imagining that a certain contract is conceived under the law of a foreign country, an executing procedure will be implemented.
This procedure means that a Moroccan court will equalise this decision and apply it to the Moroccan context.
This local court cannot delve into the decision or re-open the case, especially if there is a legal convention between Morocco and the foreign country. But the Moroccan court will only verify that the decision taken by a foreign court is not against the local law or has an impact on the public order in Morocco. As Morocco opens more and more to the global economy, the country’s legal system is increasingly adapting in order to increase fairness in economic disputes and allow businesses to have a clear operating framework.
