Morocco: A Dispute Resolution Overview

Overview

Morocco is enhancing its international visibility and influence, with the ambition of becoming a regional and global hub connecting Europe, Africa and the Atlantic, by developing world-class infrastructure and logistics, accelerating the green energy transition, fostering industrial diversification, and leveraging sports and culture as drivers of international influence.

The main sectors of the Moroccan economy have historically been natural resources (phosphates), agriculture, fishing, textiles, leather goods, food processing and tourism. There is strong development in emerging sectors like renewable energy, electronic assembly, automotive, aeronautic manufacturing, offshoring, healthcare and infrastructure.

Morocco has signed an advanced statute with the EU under the European Neighbourhood Policy and is bound by free trade agreements with the United States, Turkey and the Arab Free Trade Zone. It has also concluded multiple bilateral investment treaties for the promotion and protection of investment and non-double taxation, and is a signatory of the Abraham Accords.

A special monetary regime with tax incentives has been put in place for companies operating in the Casablanca Finance City, alongside a public-private partnership (PPP) law to enhance the development of strategic sectors. There is also a new version of the law on competition, including merger control rules.

New Legislation

The following key recent legal changes are of note:

• Law No 49-16 (16 August 2016) amending the legal framework applicable to commercial leases;
• Law No 73-17 (23 April 2018) amending the provisions of the Moroccan Commercial Code on insolvency and bankruptcy proceedings;
• Law No 20-19 (26 April 2019) amending Law No 17-95 on joint stock companies and Law No 21-19 (26 April 2019) amending Law No 5-96 on limited liability companies;
• the reform of the legal framework applicable to securities over movable assets, introduced by Law No 21-18 (22 April 2019);
• a new General Instruction on Foreign Exchange Operations by the Moroccan Foreign Exchange Office (1 January 2020);
• Law No 19-20 (22 July 2021) amending Law No 17-95 on joint stock companies and Law No 5-96 on limited liability companies;
• Law No 46-18 amending Law No 86-12 on PPP agreements;
• Law No 57-19 relating to the regime governing real estate of the regional and local authorities; and
• the new Law on Competition and Merger Control/concentration rules (23 May 2023).

Legal System

Morocco’s legal system is based on a new and modern Constitution dated 2011, the laws and implementing regulations of which set the basis for a more open and democratic society, increased decentralisation, modern institutions and a renewed state of law more broadly.

The legal system is based on civil law, with Islamic law governing areas like inheritance and family law. The judicial system is headed by the Supreme Court.

Foreign Investment

There are generally no limitations on foreign investment, regardless of the type of company, except in certain specific business sectors such as fishery, media and military armament.

There is no distinction between national and foreign investments, except that foreign exchange regulations regulate foreign investors’ ability to repatriate their investment capital and proceeds deriving from capital and dividends. Investment loans to a Moroccan corporate entity are also subject to foreign exchange regulations.

Law No 43-05 on the fight against money laundering requires licensed financial institutions to carry out customer due diligence, and to investigate the source of the funds transferred to a given account.

Foreign investors can benefit from incentive programmes or measures provided by the governmental authorities, the availability of which depends on several factors.

There are also general incentives that apply regardless of the investor’s nationality (such as free export zones, export transactions and financial activities).

Disputes 

The Moroccan court system comprises ordinary and specialised commercial and administrative courts.

The ordinary courts are divided into three levels:

• the courts of first instance;
• the courts of appeal; and 
• the Cour de cassation (Supreme Court), which is the highest court, ruling only on the legal issues at stake in the case and not on the facts.

Proceedings are brought before courts by a writ signed by the claimant’s lawyer. A copy is served on the defendant by a bailiff.

Judges have power to freeze a party’s assets pending judgment where there is prima facie evidence of a good arguable case against the owner of the assets and a credible risk that such assets may be dissipated to defeat a judgment.

Judgments and orders may be appealed within 30 days from the date on which they are served on the unsuccessful party. This timeframe may be reduced to 15 days for judgments rendered by commercial courts. Parties may also appeal to the Supreme Court within 30 days from the notification of the appeal decision.

Recognition and enforcement of foreign judgments

It is possible to enforce a foreign judgment in Morocco by leave of the local court of first instance or commercial court, at the place of residence of the defendant or, where applicable, the place of enforcement. However, this court will not give leave to enforce the judgment unless:

• it was made by a competent court in the relevant jurisdiction;
• the judgment is final under the law in which it was rendered;
• the parties have been properly represented and duly notified; and
• the decision is not contrary to Moroccan public policy.

Arbitration 

There is a new Arbitration Code governing the arbitration of domestic and foreign awards. Morocco was the second country to sign the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which has been in force in Morocco since 7 June 1959.

It is possible to enforce a foreign arbitral award in Morocco by leave of the Moroccan courts. However, the courts will not grant leave to enforce the award unless:

• it was made by a competent court in the relevant jurisdiction;
• it is enforceable under the law in which the judgment was rendered;
• the parties have been properly represented; and
• the decision is not contrary to Moroccan public policy.