Review of Alternative Dispute Resolution Law in Kenya

By Charlene Mwaura LLB (Hons)

ALTERNATIVE DISPUTE RESOLUTION

Article 159 – different principles that should guide the courts

The work of a mediator is to facilitate communication.

1.      Negotiation

2.      Mediation

3.      Arbitration

Overview of ADR

What is ADR? Wide variety of methods of dispute resolution other than through litigation.

Strengths of ADR

1.      Saves time – there is a lot of backlog in the courts. Length of time depends on the complexity

2.      It’s confidential – parties not part of the subject matter cannot be privy to the proceedings. The advantage of this is you do not have to reduce your matter to something legal.

3.      Bargain – this preserves relationships.

4.      Increases access to justice

5.      Flexibility – modify your situation according to the needs of the party.

6.      Less formality – court etiquette; how you address the court, how you dress.

7.      Generally it is cheaper than litigation.

8.      Better able to address the needs of the party – litigation is more structured to strict adherence of procedure.

9.      Gives savings to the justice system.

Weaknesses of ADR

1.      No precedent – precedent are essentially for public interest.

2.      Enforcement of decisions – power of the courts is not there

3.      Decisions are not binding

4.      Inequality of bargaining power – one party may be more manipulative than the other

5.      Voluntary – parties can decide that they do not want to go through the process.

6.      Mediator/arbitrator does not have a public duty – hired in a private capacity for a certain amount of money.

Strengths of Litigation

1.      Creation of precedent

2.      Decision is binding and enforceable by the courts

3.      More satisfactory – due to the fact that the judges are conversant with the law

4.      It is appropriate for all types of disputes – as opposed to ADR that is limited to civil cases

Weaknesses of Litigation

1.      Expensive

2.      Time consuming

3.      Too formal

4.      Acrimonious and does not preserve relationships.

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NEGOTIATION

Negotiation – interactive process whereby parties together create and explore alternatives in their common quest to reach a value enhancing agreement that is mutually acceptable and will be honoured by both parties

Pre-negotiation considerations and planning

Establishing objective criteria

-          Negotiators consider which objective criteria to apply in the negotiation

Creating options/alternatives

-          Creativity

-          Brainstorming

Impediments to creating options include;

-          Pre mature judgment

-          Pre mature though closure

-          The single solution syndrome – where the negotiator thinks there’s only one solution – flexibility is important when taking on the mantle as negotiator

-          Assuming a fixed size pie

Considerations in planning

Successful negotiators take cognisance of the following

i.                    Conflict of the relationship

ii.                  Kind of conflict situation

iii.                Past relationships with the other party

iv.                Issues

v.                  Best possible deal based on assumptions and information

vi.                Competitive advantage

You do not go into negotiation without planning – you must think about what you want to achieve.

Negotiation skills for lawyers

i.                    Flexibility – think about options – not strictly rule based

ii.                  People skills – how to come up with a win-win situation – it is not a competition – it is a collaborative thing

iii.                Listening and questioning -

iv.                Handling emotions – do not let things escalate – attack the problem not the person

v.                  Building rapport –maintain relationships – sustain relationships

Negotiating Style

There is no right or wrong way. There are two basic ways;

i.                    Competitive

ii.                  Co-operative

Types of Negotiators

Avoider (Turtle)

-          Prefers not to get involved – avoids situations with winners and losers

Accommodator (The Teddy Bear)

-          Resolves problems by resolving the other party’s problem – if the counterpart is similar-shares wealth, if not similar you might not end up with anything.

Competitor (Sharks)

-          First instinct is to see “zero sum” allocations; likes to win. May even lie to get his/her way

Compromisers (Fox)

-          Favours deals the give something to each party

-          Interested in maintaining relationships

-          Tends to ‘split the difference’

Collaborator (Owl)

-          Do not stand a chance against the sharks.

-          Tries to get a way for both parties to get the best outcome

-          Willing to be creative and brainstorm

POSITIONS

This is the ground that you will fiercely defend.

Ground that the negotiator feels obliged to strongly defend in the face of opposing party

INTERESTS

Whereas positions are something the parties decide to adopt, interests are reasons why the parties adopt particular positions.

E.g. Maslow’s hierarchy of needs – a good indicator of what interests people

Positions inform interests

Positional Bargaining

-          Ego becomes identified with the position

-          More attention to positions and less to underlying interests

-          Dragging feet, stone walling, threatening to walk out

-          Bitter feelings generated

-          Choosing a soft position makes one vulnerable

-          Does not bring mutually beneficially agreements

Principled Negotiations

i.                    People – separate the people from the problem

ii.                  Interest-  focus on interests not positions

iii.                Options – generate a variety of possibilities before deciding what to do

iv.                Criteria – insist that the results be based on an objective standard.

People

-          The on-going relationship is far more important that the outcome of any negotiation

-          If there are psychological problems use psychological tactics

-          It perceptions are inaccurate, look for ways to educate

-          If emotions run high, then find ways to let all involved let off steam.

-          If misunderstanding exists, work to improve communication.

Interests

-          They motivate people

-          Acknowledge the other parties’ interests as part of the problem.

-          Be hard on the problem, soft on the people

Options

-          Both sides must be considered

-          Options should satisfy both sides

-          Shared interests are opportunities

-          Look for options that are low cost for one party but high for the other

Criteria

-          Frame each issue as a joint search for objective criteria

-          Reason and be open to the standards you want to apply – about principle and not pressure

-           Never yield to pressure, only principle.

Best Alternative to a Negotiating Agreement (BATNA) – fall-back plan in case the negotiation fails

1.      Invent a list of actions you might conceivably take if no agreement is reached.

2.      Improve some of the more promising ideas and convert them into practical alternatives

3.      Tentatively selecting the alternative that seems best.

If you do not have a BATNA;

i.                    There will be too much pressure to reach an agreement

ii.                  Over-optimism about the proposed agreement

iii.                The danger of becoming totally committed to reaching an agreement

iv.                Pessimist

What if they do not co-operate?

-          Do not push back – when they assert their position, do not reject them

-          Do not attack their position, look for the interests behind it

-          Do not defend your ideas, invite criticism and advice – ask them what’s wrong with their position

-          Recast an attack on you as an attack on the problem, do not defend yourself

-          Ask questions – use questions and not statements

Negotiations may fail because of Perceptions and Assumptions

-          Parties make faulty assumptions about the other party

-          The other party is necessarily difficult and inflexible

-          Contracting zone is far narrower than it actually is

-          Flexibility leads to victimization

-          The only form of power lies in escalating the situation

-          Concessions are a form of weakness

Managing first impressions

90% of the opinion that people form of one another is established within the first 4 mins of their meeting.

How to manage first impressions;

i.                    Know what you wish to project

ii.                  Look what you wish to project

iii.                Act what you wish to project

iv.                Take control

v.                  Be what you wish to be

Ethics in negotiation

Three schools of bargaining ethics

1.      ‘It’s a game’ Poker School – the end justifies the means sometimes – you can bluff your way through something – e.g. the globe

2.      The ‘Do the right thing even if it hurts’ Idealist School – religious – lying is a sin – same ethics that apply to normal life should apply in bargaining

3.      The ‘What goes around, comes around’ Pragmatist School – finding alternatives to the lie – you will end up losing more because of a lie

Instead of Lying about;

i.                    Bottom line – ask about their bottom line, it’s not your business, tell the truth

ii.                  Lack of authority – obtain a limited authority in the first place, require ratification by your group

iii.                Availability of alternatives – initiate efforts to improve alternatives, stress opportunities and uncertainties.

iv.                Commitment to positions – commit to general goals, commit to standards, commit to addressing the other side’s standards.

v.                  Phony issues – inject new issues with real value or make a true wish list

vi.                Facts – focus on uncertainty regarding fact, use language carefully, express the opinion

vii.              Intentions – make only promises you can and will keep

viii.            Threats – use cooling-off periods, suggest 3^rd party help, use a formula to discuss.

MEDIATION

-          Article 159 (2) c) and Art 67 of the constitution

-          Sec. 2 and 59 of the CPA

-          Industrial Court Act, 2011

-          Land Act, 2012

-          Elections Act, 2011

-          Supreme Court Rules, 2011

-          Mediation (Pilot Project) Rules, 2015 –court annexed mediation

There is increasing acceptance of mediation as an alternative dispute resolution mechanism.

They were all enacted post 2010

ATTRIBUTES OF MEDIATION

i.                    Voluntariness – exception, court annexed mediation

ii.                  Autonomy – parties are able to enter into the process on their own

iii.                Party satisfaction – better than the court process – win-win outcome

iv.                Speed – it is not as lengthy as litigation

v.                  Confidentiality – private process

vi.                Focus on interests and not rights – as opposed to the court process; additionally, the issue need not be a law one

vii.              Non-binding – decision is not final; you do not have to adhere to the decision. Also non-enforceable

viii.            Non-coercive – no one will force you to go

ix.                Flexibility – choose your own timing

x.                  Cost-effective – filing paperwork can be costly

xi.                Informality – from dress code, to the language and procedural aspects e.g. venue. It is yet to be institutionalized.

Mediation – its forms and functions

-          Def. – “flexible process conducted by a neutral 3^rd party to work towards the settlement of a resolution”

-          Cannot be separated from negotiation

-          Can take place with/without lawyers

-          Agreements can be enforced as settlement contracts – the mediated settlement can be taken to court and recorded as if it were a judgment.

Spectrum of Intervention

i.                    Evaluative – mediator plays a stronger role; with stronger suggestions e.g. likelihood of success.

ii.                  Facilitative – involves a neutral 3^rd party. Mediator does not come up with decisions.

iii.                Transformative – not focused on the settlement as they are on the relationship. Communication is key, as it leads to a settlement - Preserving the relationship. Not a very common type.

The Facilitative Mediator

-          An impartial 3^rd party

-          Secures negotiation environment

-          No authority to make a determination

-          Any authority is acquired from the parties

-          Facilitates negotiation

-          Confidentiality

-          No substitute for independent advice – mediator is not to take sides.

Characteristics of Mediation

-          Transforms negotiations from dyad to triad

-          Dyad handicapped in resolving problems of internal order

-          The mere presence of a 3^rd party will change the dynamics of the dispute.

Power of the Mediator

-          Derives power from the parties

-          Outsider – he is not party to the dispute

-          Charisma – tend to get the respect of the parties

-          Power of suggestion – mediators make proposals and if both parties trust the mediator, it is likely the parties will listen

-          Alternatives to zero sum – reciprocity – mediator can give an alternative to the win-lose situation – 3^rd party gives alternatives

-          The ability to raise taboo subjects – the fact pattern is important as opposed to reducing the issue to a strictly legal one

-          Contractual backing – in cases where the matter has been referred to in a contract

THE MEDIATION PROCESS

STAGE I: ESTABLISHING THE ARENA

-          First contact and reception

-          Facilitating communication

STAGE II: CLARIFYING THE ISSUES

-          Agreeing and defining the agenda

-          Facilitating communication

STAGE III: EXPLORING THE ISSUES

-          Managing differences in the early stage

-          Managing high conflict

-          Facilitating communication

STAGE IV: DEVELOPING OPTIONS

-          Facilitating communication

-          Furthering information exchange and learning

STAGE V: SECURING AGREEMENT

-          Concluding the session

Techniques

i.                    Shuttle diplomacy or caucusing – whenever parties cannot stand to be in the same room.

ii.                  Round table;

Other techniques

iii.                Slow release of information

iv.                Translation of emotive language – “I hear you to say….”

v.                  Avoidance of anger spots and impasse

vi.                Focus on future and not the past

vii.              Reality checking

viii.            Devil’s Advocate

ix.                BATNA – best alternative to a negotiated agreement

x.                  WATNA – worst alternative to a negotiated agreement

PSYCHOLOGICAL ISSUES IN MEDIATION

Every conflict has an emotional element.

Mediator must be aware of the underlying issue.

Emotional needs of the party need to be considered – could be an apology, a self-esteem issue

As a mediator, you must maximize the issue.

i.                    Understand the parties

-          Mediator should carry the agenda of assisting parties to continue with the negotiations with a view of resolving the conflict

-          Mediator should understand that the parties are people first and disputants second

-          Ask open-ended questions – helps to understand parties

ii.                  Proposals by the Mediator

-          Outcome of mediation is deemed a reflection of who they are – issues of self-identity and self-esteem play an important role

-          Mediator should use looping (paraphrasing) and also can suggest proposals in order to reach an agreement

iii.                Meeting the parties’ needs

-          Keep in mind the parties needs

-          Mediator should be empathetic to help parties

iv.                Creative Solutions

-          If parties actually participate, they will reach a mutually acceptable agreement

v.                  Fairness in Mediation

-          Every human being reacts to unfairness

-          When the disputant feels that the opponent is distrustful, he may think that he is being treated unfairly and retaliate.  The process may become a standstill.

-          The process needs to be fair and must be perceived as such.

LAWYERS IN THE MEDIATION PROCESS

How do we end up at a mediation table?

-          Disputes come with lawyers involved e.g. – in litigation or court annexed mediation

-          Lawyers understand the risks involved and clients tend to take counsel to AD

-          Lawyers can help to achieve client satisfaction.

Impact of Lawyers on mediation (positive)

i.                    Help clients make informed decisions

ii.                  Enhancing client’s participation in the mediation process

iii.                Promote creative problem solving

iv.                Helping in off-setting power imbalances

v.                  Helping clients assess their BATNA

vi.                Help in taking care of details.

Mediation skills for lawyers

-          Active listening skills

-          Non-verbal communication techniques

-          Rapport building – an atmosphere of trust

-          Objectivity -

-          Emotional intelligence – instead of minimizing, listen to the parties and do not reduce them to IRAC

ARBITRATION

POWERS AND JURISDICTION OF AN ARBITRATOR

-          Judge Nyarangi in 1989 while sitting at the Mombasa High Court ruled in the seminal case on Motor Vessel ‘Lilian S case’ v Caltex Oil Kenya that Jurisdiction is everything, without it a court or a decision making body cannot make one more step ,it must down it’s tools.

Definition of Jurisdiction

-          Jurisdiction is the legal authority or right over something

-          It is the scope, validity, legitimacy or authority to preside over a matter

Pecuniary jurisdiction – to hear matters related to a particular amount of money/

What is power?

-          Ability to produce certain legal effect/legal discretion to carry out a certain act.

Powers of an arbitrator

-          Devices, tools, capability, influence, resources vested in someone to carry out a task.

-          Does the arbitrator have the jurisdiction or power to decide on the venue? He/she has the power.

-          You have power to seek the court system, where a witness does not want to appear– Arbitration Act

-          The jurisdiction to listen to a challenge of jurisdiction

-          Section 18 – interim protection measure – Arbitrator has the power to issue interim protection measures – only where he feels it is necessary.

-          Section 20 – arbitrator’s power to determine evidence – its relevance, materiality, admissibility – similar to a judge’s role.

-          Section 24(3) – amendment of submissions – to determine whether or not to amend submissions; pleadings. They have to be careful with this because sometimes it is a delay tactic by one party.

-          Section 26 – termination of proceedings – sometimes a claimant may make a claim and fail to appear. The arbitrator may hear the matter ex parte, summary judgment may be entered (in the absence of the defendant)

-          Power to appoint expert witnesses -  he can also instruct that every party cooperate with the expert.

-          He/she can request assistance in collecting evidence – where witnesses have refused to come, he may request assistance from the court because he/she does not have the power to swear in or issues summons.

-          Arbitrator can correct, interpret awards.

-          Section 25 – decide on the form the arbitration will take; oral or written

How to ensure you have jurisdiction

i.                    Binding agreement

ii.                  Arbitrator must have been appointed

iii.                Dispute must be arbitrable

Sources of jurisdiction

i.                    Arbitration Act of Kenya 1995 – AA95 – sec. 18 (competence competence) – establish jurisdiction

                  English Arbitration Act – AA96

ii.                  Arbitration agreement – arbitration clause – e.g. Sec 18 as read with Sec. 7 AA95 – interim protection, security

iii.                Judicial means – court orders the parties to proceed to arbitration

iv.                Institutions -  Chairman of Chartered Institute of Arbitrators – international chamber of commerce is the international institution – UNICTRAL, ICC Rules, ICSID

v.                  Customs of certain trades (look-sniff) – e.g. – coffee and wine tasters – where rules and procedures have developed over time for the settlement of disputes.

-          Creeping Jurisdiction – when parties come to you and bring a matter of which you have no jurisdiction but the parties introduce the matter during the talks, by conduct you may agree to the subject matter and as such, you have to ask the parties to give you jurisdiction to hear the matter although it is not within your jurisdiction. Otherwise, this would be the easiest way for the award to be challenged – Sec. 35

-          Parties are expected to object to matters that are not within the arbitrator’s jurisdiction.

-          Sec. 5 of AA, 95 or S. 73 of AA, 96 deals with Loss of Rights to Object

-          Challenge of jurisdiction – you are allowed to challenge the jurisdiction at the earliest point in time.

-          Arbitrator has two choices in the event that his jurisdiction is challenged;

ü  hear the matter and determine it at the end with the merits of the decisions – because – you are convinced the party who brought it up is using it as a delay tactic – he/she may then appeal to the HC -  and the matter for arbitration will be suspended until the determination is made by the HC – sometimes you may need to hear more

ü  Hear and determine the matter immediately it is brought up.

Limitations to jurisdiction

i.                    Section 15 – if he is unable to carry out the functions of his office

ii.                  Section 16 – arbitrator is not liable as long as he acts in good faith (bonafidice) not malafide.

iii.                Section 19 – independence/impartiality of the arbitrator – it is one of the grounds to challenge.

iv.                Section 21 – may only become master of procedure if parties have defaulted. (failure by the parties to agree)

v.                  Section 19 – the dispute must be settled according to the law decided – seat of arbitration – you cannot bring something the parties have not agreed to.

vi.                Section 32 – award – must be recorded in writing and dated.

Challenges to Jurisdiction

-          One of the most common challenges brought before an arbitrator is in regard to his very own jurisdiction.

-          One party, usually the respondent, yearns to throw a stone in the arbitral machinery at an early stage by claiming that the arbitrator has no jurisdiction thus bringing the proceedings to a halt.

-          It can be partial or whole. You may have partial or whole jurisdiction.

-          The power of an arbitral tribunal to rule on its own jurisdiction is referred to as “inherent” power

Substantive v Procedural Challenges

-          The seat of arbitration – the laws that will govern the proceedings - the juridical seat – can be English even when the actual siting is in Nairobi

-          Substantive law – binds the contract

-          Interim or on Merit – Sec. 17

-          If the Tribunal whose jurisdiction has been challenged has two options (S. 17 AA, 95 and Sec. 30 AA. 96)

-          Usually, both parties will be requested to make submissions as to fact and law and then a reasoned award on the issue of jurisdiction only can be issued in the first opinion. The award will be binding to the parties, subject to any right of recourse available to the disappointed party.

Master of Procedure

-          Where parties cannot agree, then the arbitrator becomes the master of procedure.

Sec. 8 – perpetual jurisdiction of arbitrator – death of party does not revoke jurisdiction of the arbitrator, unless the dispute has to do with a personal claim.

-          On matters to do with procedure, the arbitrator is the master of procedure

-          The principal source of procedural rules will be those adopted by the parties.

-          In the absence of agreement, the arbitrator shall conduct the arbitration in the manner it considers appropriate

-          The arbitrator is otherwise the Master of Procedure (always subject to any restrictions imposed by the arbitration agreement and to any constraints imposed by the mandatory requirements of the Act

-          Party autonomy – parties should determine how to resolve their own disputes, unless they fail to agree.

Where a party has challenged the award;

i.                     the court can declare the award null and void

ii.                  The court can remit the award back to the arbitrator

iii.                Correction or clerical errors

Internal incoherency – you cannot lead the parties to believe you are heading one direction and you head in another.

TRADITIONAL DISPUTE RESOLUTION MECHANISMS (TDRMs) / AFRICAN JUSTICE SYSTEM / INFORMAL JUSTICE MECHANISMS / NON-FORMAL / NON-STATE / COMMUNITY JUSTICE SYSTEMS / INDIGENOUS MECHANISMS

Why talk about TDRMs?

-          Informal justice mechanism – not hampered  with procedural rules

-          Non-state justice processes – suggests that there are state mechanisms (court process, arbitration)

-          TDRMs – communal, involvement of the whole community,

-          Indigenous – speaks to the pre-colonial methods of resolving disputes.

-          Use of the term AJM is a way of generalizing as some of the features may be common to some communities.

-          Not only found in the African context.

FEATURES OF AJS

I.                   Community inclusive mechanisms – try to involve all the members of the community – contrary to litigation, your community cannot be involved in the dispute resolution.

II.                They are resolution processes as opposed to settlement; win-win situation for the parties – mechanisms that bring about resolution – TDRMs, negotiation, mediation, problem solving – settlement processes include litigation and arbitration. With a settlement, it is possible for the issue to re-emerge again.

III.             They are informal – not hampered by the rules of evidence or procedural technicalities – there is use of local languages, giving the parties confidence – do not allow for legal representation

IV.             They are flexible – because they are not affected by procedural rules and other rules governing litigation.

V.                Try to peruse restorative justice as opposed to retributive justice – aims at restoring peace and not punishing a person. Litigation anticipates dispute and also seeks to allocate rights – litigation assumes positions by deciding one party as the plaintiff or defendant (higher bargaining power)

VI.             Voluntary – they are not mandatory.

VII.          They focus on a win-win paradigm – every party wins at the end of the day.

VIII.       Enhance access to justice – applicable to remote areas – Art. 159 – Justice should be easily accessible.

IX.             Inexpensive as there is no legal representation and no paper work to be filed.

X.                They are expeditious.

Theories to support TDRMs

i.                    Structural functionist theory – the way a society is structured influences the way in which disputes are resolved.

ii.                  Social solidarity theory – an extension of structural functionist theory – the way a society is structured is a social fact – useful in the way disputes are resolved – looks at certain facts within the society e.g. are there elders?

iii.                Social capital theory – African society is communal in nature – as such, there were certain ties that kept the community together – bonding capital; tries to keep the people together – aspect of sharing and reciprocity – brings people together; bridging capital; connects one clan/family/community to another – the family exists within a community.

iv.                Optimal (maximize) psychology theory – explains the utility of TDRMs – people are able to use their culture to solve disputes will achieve better results as opposed to using cultures outside their own.

Legal provisions of TDRM

i.                    Article 159 of the Constitution - ADR

ii.                  Article 60 – Land Act – use of local community initiatives in solving community land disputes.

iii.                Marriage Act Section 68 – parties to a customary marriage may undergo a process of conciliation or customary dispute resolution mechanisms before the court may determine a petition for dissolution of marriage.

iv.                Article 67 (2) (f) of the Constitution -encourage the use of TDRMs in resolving land disputes

v.                  Article 11 (1) Constitution– culture as the foundation of the people

vi.                Article 2(4) of the Constitution – customary law is recognized

-          African Customary Law informs the way in which disputes are resolved however, not all informal processes are informed by ACL.

-          ACL could be informed by modern factors – due to the fact that it is dynamic and changes overtime.

-          TDRMs are based on social pressures and as such may lack adequate enforcement mechanisms.

challenges in the use of TDRMs

I.                   Interaction between the formal and the informal processes

II.                Scope of application – civil and criminal matters

III.             Human rights issues – there should be a framework outlining the due process of TDRMs, as opposed to legislating on the substance

IV.             Globalization, modernization of ACL – communal land is being converted to private land

V.                Terminological challenge – are the terms used interchangeably? Do they mean the same thing?

AJS can therefore;

i.                    Promote culture;

ii.                  Foster peace and social harmony;

iii.                Enhance access to justice.

ARBITRATION

Role of courts in arbitration proceedings

The award: enforcement, recognition and setting aside the award.

-          Arbitration Act Sec.10 – courts should not intervene in matters governed by the Act.

-          However, you cannot oust the jurisdiction of the court – that contract will be void  - HC has a power that is inherent in it.

-          Article 5 of UNCITRAL – law on International Commercial Arbitration.

Role of the Court BEFORE Arbitration

i.                    Stay of legal proceedings; eg where there was no agreement to go into arbitration– Sec. 6 – refers parties to arbitration unless agreement is null and void, inoperative or incapable of being performed or there is no dispute capable of such reference.  

ii.                  Interim measures of protection – Sec. 7 – to maintain status quo of the subject matter of arbitration pending determination of the dispute through arbitration. Eg. Interim injunctions, preserving of property, interim custody.

Role of courts DURING Arbitration

i.                    Appointment of arbitrators

-          Where a party defaults in making appointment, the court may assist in appointment of the arbitral tribunal.

ii.                  Challenging Arbitrator(s)

-          Parties are free to agree on a procedure for challenging the arbitral tribunal.

If parties default, a party may within 15 days write to the tribunal stating the reasons for its challenge.

If the challenge does not succeed, the challenging party may apply to the HC within 30 days of refusal of the challenge – decision of the court is final.

Determining the Arbitral Tribunal’s Jurisdiction - The tribunal is competent to determine its competence if a question of jurisdiction is raised.

iii.                Interim orders of protection during arbitration – the Act gives the HC powers to enforce the peremptory orders of protection given by the tribunal

iv.                Determination of a question of law – parties may agree for an application to be made by a party to the HC for determination of questions of law arising in arbitration - parties may agree that the right of appeal be available to an aggrieved party on questions of law.

v.                  During collection of evidence –

Role of the courts AFTER arbitration

i.                    Setting aside the arbitral award – HC may on application by a party set aside an arbitral award.

ii.                  Recognition and enforcement of arbitral award – recognised by the court as binding.

ARBITRAL AWARDS

Definition – is a determination on the merits by an arbitral tribunal – similar to a judgment in a court

Types of awards

1.      Interim/partial award - Sec. 36(2) – the tribunal may make a partial award by which some, but not all of the issues between the parties are determined.

-          Used where disputes can be divided into stages – where there are preliminary issues to be determined and to deal with the question of costs separately.

2.      Provisional award - orders a part of the claim to be paid up, subject to a final decision later – e.g. Security

3.      Consent award – incorporates the terms of a settlement which the parties have negotiated, before it reaches a hearing or an award. E.g. – a plaint, not everything is usually in dispute – an award will be issued on the points not in dispute

4.      Final award - Sec. 32 – an award is deemed final and it concludes a reference.

-          As soon as a final award is given, the arbitrator becomes functus officio.

5.      Additional award – Sec. 34(4) – a party may be giving notice in writing to the other party within 30 days of receipt of the arbitral award, request the tribunal to make an additional award.

-          Relates to the claims presented in the proceedings but omitted from the award.

-          Made within 60 days.

Formal requirements of the award

-          In writing;

-          Signed by the arbitrator (otherwise it is not binding), no witness required;

-          Dated;

-          State the juridical seat of arbitration as agreed by the parties;

-          State the reasons upon which it is based;

-          Published to the parties; signed copy delivered to each party.

Substantive requirements

i.                    Cogent – must be compelling/convincing in its reasoning;

ii.                  Complete – must deal with all the issues presented to the arbitrator

iii.                Certainty – must state what has been decided, have no scope for doubt and should be capable of performance/enforcement – no ambiguity.

iv.                Finality – final and binding and there should be no recourse against the parties – no question of fact but question of law is acceptable.

v.                  Enforceability – capable of enforcement.

vi.                Consistency – consistent and clear – logical and can be understood.

Power to award costs

-          These include – arbitrator’s fees of hiring the venue, costs of providing transcripts of the proceedings and legal fees if any.

-          Arbitrator agrees with the parties on the method of charging his fees before he accepts the appointment.

-          If there is no agreement by the parties, the costs and expenses of the arbitration are to be determined and apportioned by the tribunal.

-          Award of costs is done either at the award stage or after the award.

-          In default of award of costs and expenses, each party is responsible for the costs and expenses of the arbitration.

-          The award is usually collected on payment of the arbitrator’s fees and can be held as security for fees - Sec. 32B (3).

-          If there is a disagreement on fees, parties may apply to the HC, and the decision is final.

NB – Arbitration may sometimes be more expensive.

Power to award interest

-          Sec. 32 C – an award may include provision for the payment of simple or compound interest calculated from such date and at such rates as specified in the award – has to be according to the CBK rates.

-          An arbitrator has discretion to provide for interest in the award.

Setting aside the award

-          Once the award is published, the tribunal becomes functus officio.

-          If a party is aggrieved by the award, the only recourse available is to make an application to the HC to set aside that award.

-          The HC will set aside an award if the aggrieved party proves:

i.                    The other party was under incapacity; lacked the capacity to enter into the arbitration  agreement;

ii.                  The arbitration agreement is not valid under the law to which the parties have subjected it;

iii.                A party was not given an opportunity to present his case.

iv.                The dispute was not contemplated by or within the terms of the reference to arbitration

v.                  Tribunal disregarded the agreement

vi.                Making of the award was induced by vitiating factors; undue influence, fraud…

vii.              If the dispute is not capable of settlement by arbitration (e.g. criminal cases), or conflicts with public policy(immoral/corruption) – Glencore Grain Ltd v TSS Grain Millers Ltd.

Recognition and enforcement of award

Recognition – acknowledgement of the award as valid and capable of enforcement.

A party seeking recognition applies to court to recognize the award.

Enforcement – compelling the adverse party to perform by applying legal sanctions.

Where a party fails/refuses to perform the award, his property and other assets may be seized/attached and his bank accounts may be frozen.#

Relationship: a court prepared to grant enforcement will do so because it recognizes the award as valid and binding.

The law on recognition and enforcement

Sec. 36(1) – domestic awarded – made in Kenya – recognized as binding

Sec. 36(2) – an international award – recognized and enforced according to the provisions of the New York Convention to which Kenya is a signatory.

Sec. 37 – The HC may refuse to recognize an award on various awards.

Sec 37 (1) – The HC may also refuse to enforce an award if it finds the subject matter of the dispute incapable of settlement or it would be contrary to public policy.

Appeals

-          Parties may agree on the availability of appeal to an aggrieved party on questions of law arising out of the award. -  Appeal to the HC, which can either determine the questions of law, arising or confirm, vary or set aside the award.

-          An appeal lies in the court of appeal if; parties have agreed so, or, if the court is of the opinion that a point of law of general importance is involved, the determination of which will substantially affect the rights of one or more of the parties.

MANDATORY AND COURT ANNEXED ADR

-          Does not stem from an agreement by the parties

Two types;

i.                    Court-annexed arbitration

ii.                  Court-sanctioned mediation

COURT-ANNEXED ARBITRATION

Sec. 59 – Civil Procedure Act – provides for references of issues to arbitration to be governed by the Civil Procedure Rules

Order 46 CPR

-          Arbitrator is appointed in a manner that the parties have agreed upon.

-          Where there is no arbitrator, court may appoint one.

-          Where an award is made, parties should date it and cause it to be filed within 14 days.

-          A court has power to modify/correct an award if there is an obvious error or accidental slip/omission.

-          The court also has power to remit an award for reconsideration by the arbitrator.

-          Court can enter judgment according to the award and give a decree. No appeal shall lie from such decree.  – however, the parties can appeal to the Court of Appeal on matters of law.

-          Rules obligate the court to employ ADR mechanisms to facilitate the just, expeditious, proportionate and affordable resolution of all civil disputes.

Not ideal for everyone, but preferred by companies due to the short amount of time it takes as opposed to litigation.

COURT-SANCTIONED MEDIATION

This may take the form of;

i.                    Court-mandated mediation

-          Arises where the parties have come to lodge a dispute in court and the court encourages them to have their dispute mediated.

-          The outcome of that mediation is thereafter tabled in court for ratification.

ii.                  Court-annexed mediation

-          Mediation of matters which a judicial officer has ordered to go to mediation or which are mediated pursuant to court direction.

Judiciary Pilot Project

-          Former CJ launched a campaign aimed at clearing the backlog of cases in courts which have led to delayed justice.

-          The Court Mediation Pilot Program was launched at the Commercial and Family Division of the HC at Milimani.

-          Mediation (pilot project) Rules 2015 – gazetted in October 2015.

-          Every case is screened.

-          For cases referred to mediation, the Registrar shall notify the parties within 7 days of completion of screening to enable them file a case summary.

-          3 qualified mediators will be nominated by the deputy registrar and the parties notified within a 7-day period.

Challenges in Court-Sanctioned Mediation

1.      Voluntariness of the process – if parties fail to submit to mediation voluntarily, the mediator may find it hard to get the parties to contribute to the resolution process. Parties identify with mediated agreements reached voluntarily.

2.      Composition of MAC – former CJ appointed 12 members. The composition includes members of the judiciary and arbitration practitioners.  There has been an exclusion of real informal mediation practitioners.

3.      Confidentiality – confidentiality provisions perform an important role by keeping the judging functions separate from the mediation function – these functions are more closely linked than when a privately mediated dispute is later litigated. As such, parties may fear that their conversations are being conveyed – hence defeats the purpose of mediation.

4.      Party autonomy – excessive control by the courts compromises the parties’ right to self-determination.  Parties should be free to conduct themselves as they see fit during the mediation. Overarching priority in mediation should not be compromised by co-operative compulsion.

5.      Sanctions –failure to participate in mediation may also result in coercion and undermine the nature of mediation as a voluntary process. If punitive sanctions have to be imposed in order to compel a party to participate in a voluntary process.

6.      Quality standards in mediation – no code of ethics regulating mediation practice – uniformity of practice, quality control, costs of mediation should provide an incentive to encourage parties to engage in mediation even when there are viable alternatives.

In the Kenyan Court Mediation Pilot Program – if a party fails to attend the mediation proceedings, a certificate of non-compliance may be issued.

i.                    The parties attend further mediation sessions on such terms as it deems appropriate

ii.                  Strike out the pleadings of the non-complying party

iii.                Order the non-complying party to pay costs as assessed and determined by the court or make any other order as it deems fit.