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To Regulate or Not to Regulate ADR Practice in Kenya?

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By Dr. Kariuki Muigua, PhD (Leading Environmental Law Scholar, Policy Advisor, Natural Resources Lawyer and Dispute Resolution Expert from Kenya), Winner of Kenya’s ADR Practitioner of the Year 2021, ADR Publication of the Year 2021 and CIArb (Kenya) Lifetime Achievement Award 2021*

Regulation of ADR is a subject wrought with contentious discourse. There are those who strongly advocate for ADR to be deregulated, while others argue for strong state regulation. On one end, the legislation of ADR carries with it the advantages of encouraging its adoption nationally; establishing standards of ADR practitioner’s competence; developing systems of compliance and complaints;[1] addressing weaknesses of ADR such as ensuring the fairness of the procedure and building capacity and coherence of the ADR field. Proponents of regulation have argued that regulation of ADR will increase the use and demand of services and create or enhance an ADR “market”.[2] There are those who believe that the regulation of ADR may have its value in assuring that the parties employ qualified, neutral and skilled mediators and arbitrators in resolving a wide variety of disputes. However, this is countered by the argument that in mediation where the parties select private non-government mediators, monitoring is complimented by the fact that the parties share in the compensation of such neutrals, better assuring their freedom from bias.[3]

This assertion may be relevant to Kenya considering that private mediators are also appointed and compensated the same way. It is therefore possible to argue that the mediator may be compelled by this fact to act fairly. Contention would, however, arise where there are allegations of corruption. It is not clear, at least in Kenya, how the parties would deal with the same. This is because, unlike in arbitration where parties may seek court’s intervention in setting aside the otherwise binding arbitral award, mediation award is non-binding and wholly relies on the goodwill of the parties to respect the same. Therefore, faced with the risk of corruption and the potential non-acceptance of the outcome by the parties, it is arguable that the foregoing argument of the compensation being a sufficient incentive may not be satisfactory. This may, arguably, call for better mechanisms of safeguarding the parties’ interests.

In arbitration, the argument advanced is that whether of interests or rights disputes, the same process of joint selection and joint funding coupled with mutual selection of neutral from a tried and experienced cadre of professional arbitrators further assures their independence and neutrality, with protection of their integrity as their only ticket to future designations.[4] Again, the issue of independent practitioners would arise. For instance, in Kenya, there has been increased number of professionals taking up ADR. Professional bodies and higher institutions of learning have increased their rate of teaching ADR, as professional course and academic course respectively. The net effect of this will be increased number of ADR practitioners in the country.

As part of professional development, not all of those who get the academic qualifications may enroll with the local institutions for certification as practitioners. There are also those who may obtain foreign qualifications and later seek such certification. However, there are those who are not affiliated to any institution or body. In such instances, it would only be hoped that they would conduct themselves in a professional manner, bearing in mind that any misconduct or unfair conduct may lead to setting aside of the award or even removal as an arbitrator by the High Court. The court process obviously comes with extra costs and it would probably have been more effective to have a supervisory body or institution to report the unscrupulous practitioner for action, without necessarily involving the court. Such instances may thus justify the need for formal regulation, especially for the more formal mechanisms.

Currently, there are attempts to make referral to ADR mandatory in Kenya. This is especially evidenced by the gazetted Mediation (Pilot Project) Rules, 2015, which provide that every civil action instituted in court after commencement of these Rules, must be subjected to mandatory screening by the Mediation Deputy Registrar and those found suitable and may be referred to mediation.[5] Thus, there is no choice as to whether one may submit the matters voluntarily or otherwise. While this may promote the use of mediation where the parties are generally satisfied with the outcome, the opposite may also be true. Caution ought to be exercised in balancing the need for facilitating expeditious access to justice through ADR and retaining the positive aspects of the processes. For instance, in other jurisdictions where there is provision for mandatory promotion of ADR processes, the use of those processes has not necessarily become common.[6]

Among the reasons given for this reluctance towards the adoption of ADR include lack of education and training in the field, lack of court-connected programs, whether voluntary or mandated and insufficient legislation. The argument is thus made that when introducing ADR for the first time, there may be a need for some element of compulsion or legislative control, as this can support its growth.18 This is the path that the Kenyan Judiciary has taken. The Judiciary mediation programme is still on a trial basis and the outcome will inform future framework or direction. The pilot program (having been rolled out to other stations outside Nairobi in May 2018) will define how the practitioners as well as the general public perceive court-annexed mediation and ADR in general. It is therefore important that the concerned drivers of this project use the opportunity to promote educational programming, with the efforts including workshops and seminars among the local practicing lawyers to enhance their understanding of ADR and the services provided by the pilot project. This, it is argued, may enable them to assist their clients in making informed decisions about whether or not to use ADR.[7]

On the other end, it has been argued that legislative regulation, no matter how well meaning, inevitably limits and restrains.[8] The regulation of ADR is feared to hamper its advantages. The developing country’s experience with court-annexed ADR indicates that when a judge imposes a conciliator or mediator on the parties, it does not provide the proper incentive for the parties to be candid about the case. ADR advantages such as low cost, procedural flexibility, enhanced access for marginalized groups and a predictable forum for conflict management tend to disappear when there is discretionary power with court personnel, procedural formalities within the ADR process or an artificial limit to competition within the ADR market. Court mandated mediation has been argued to negate the fundamental aspects of voluntariness and party control that distinguish it from litigation, the very aspects attributed to its success in a vast number of cases.[9]

In addition, the “one size fits all” approach taken by legislation that encourages or requires all to use ADR, without regard to needs in various contexts and to the distinctions among the various processes, is another reason why ADR legislation should be undertaken with caution.[10] For instance, in the Kenyan situation, while the Mediation (Pilot Project) Rules, 2015 require screening of civil matters for possible submission for mediation, it is possible for the Registrar to realise that some of the cases may be appropriate for arbitration instead of mediation. The programme only takes care of mediation process with no reference to arbitration or any other process, well, apart from litigation.[11]

The question that would, therefore, arise is whether the Registrar has powers to force parties into arbitration as well. Further, if they have such powers, the next question would be who would pay for the process, bearing in mind that it is potentially cost-effective but may be expensive as well. On the other hand, if the Registrar lacks such powers, it is also a question worth addressing what the Court would do if it ordered the parties to resort to arbitration but both parties fail to do so due to such factors as costs. It is, therefore, worth considering whether the Mediation Accreditation Committee, established under the Civil Procedure Act,[12] should have its mandate expanded to deal with all processes, or whether there should be set up another body to deal with the other processes.[13]

*This article is an extract from the Article Regulating Alternative Dispute Resolution (ADR) Practice in Kenya: Looking into the Future, 10(1) Alternative Dispute Resolution Journal, p. 1 by Dr. Kariuki Muigua, PhD, Kenya’s ADR Practitioner of the Year 2021 (Nairobi Legal Awards), ADR Publisher of the Year 2021 and ADR Lifetime Achievement Award 2021 (CIArb Kenya). Dr. Kariuki Muigua is a foremost Environmental Law and Natural Resources Lawyer and Scholar, Sustainable Development Advocate and Conflict Management Expert in Kenya. Dr. Kariuki Muigua is a Senior Lecturer of Environmental Law and Dispute resolution at the University of Nairobi School of Law and The Center for Advanced Studies in Environmental Law and Policy (CASELAP). He has published numerous books and articles on Environmental Law, Environmental Justice Conflict Management, Alternative Dispute Resolution and Sustainable Development. Dr. Muigua is also a Chartered Arbitrator, an Accredited Mediator, the Africa Trustee of the Chartered Institute of Arbitrators and the Managing Partner of Kariuki Muigua & Co. Advocates. Dr. Muigua is recognized as one of the leading lawyers and dispute resolution experts by the Chambers Global Guide 2022.

References.

[1] Robert, J.M., ‘Florida’s Experience with Dispute Resolution Regulation: Too much of a Good Thing?’ Florida Conflict Resolution Consortium, available at http://consensus.fsu.edu/ADR/PDFS/FloridaADR.pdf [Accessed on 26/02/2022].

[2] Zack AM, ‘The Regulation of ADR: A Silent Presence at the Collective Bargaining Table,’ p.4, Seventh Annual Conference of the ABA Dispute Resolution Section Los Angeles, California, April 15, 2005, available at http://www .law.harvard.edu/programs/lwp/people/staffPapers/zack/The%20Regulation%20of %20ADR-ABA%207 th%20conference.pdf [Accessed on 26/02/2022].

[3] Zack AM, Ibid.

[4] Zack AM, Ibid.

[5] Mediation (Pilot Project) Rules, 2015, Rule 4(1).

[6] Leon, J.A.R, ‘Why Further Development of ADR in Latin America Makes Sense: The Venezuelan Model’, Journal of Dispute Resolution, Vol. 5, No. 2, (2005).

[7] Muigua, K., “Enhancing The Court Annexed Mediation Environment in Kenya,” A Paper Presented at the 2nd NCIA International Arbitration Conference held from 4th to 6th March 2020 in Mombasa, Kenya; Available at: http://kmco.co.ke/wp-content/uploads/2020/03/Enhancing-The-Court-Annexed-Mediation-Environment-in-Kenya-00000002.pdf.

[8] Bryan, K. & Weinstein, M., ‘The Case against Misdirected Regulation of ADR,’ Dispute Resolution Magazine, (Spring, 2013).

[9] Hedeen, T., “Coercion and Self-determination in Court-Connected Mediation: All Mediations Are Voluntary, But Some Are More Voluntary than Others,” The Justice System Journal Vol. 26, No. 3 (2005), pp. 273-291.

[10] Spencer D, ‘Court given power to order ADR in civil actions’ (2000) 38(9) Law Society Journal 71 at 72; NADRAC, above note 3 (as referenced in Green, Cameron, ‘Where did the ‘alternative’ go? Why Mediation should not be a Mandatory Step in the Litigation Process, DR Bulletin, Vol. 12, No. 3, Art. 2, 2010.

[11] Muigua, K., Ibid.

[12] S. 59A, S.59B, Cap 21, Laws of Kenya.

[13] Muigua, K., Ibid.

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Former KCB Company Secretary Sues Over Unlawful Dismissal

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Former KCB Group Company Secretary Joseph Kamau Kania who has sued the Bank for Unlawful Dismissal

Former KCB Group Company Secretary Joseph Kamau Kania has sued the lender seeking reinstatement or be compensated for illegal sacking almost three years ago. Lawyer Kania was the KCB Group company secretary until restructuring of the lender in 2021 that saw some senior executives dropped.

Through the firm of Senior Counsel Wilfred Nderitu, Kamau wants the court to order KCB Group to unconditionally reinstate him to employment without altering any of the contractual terms until his retirement in December 2025.

In his court documents filed before Employment and Labour Relations Court, the career law banker seeks the court to declare the reorganization of the company structure a nullity and amounted to a violation of his fundamental right to fair labour practices as guaranteed in Article 41(1) of the Constitution. He further wants the court to declare that the position of Group Company Secretary did not at any time cease to exist within the KCB Group structure.

He further urged the Employment Court to declare that the recruitment and appointment of Bonnie Okumu, his former assistant, as the Group Company Secretary, in relation to the contemporaneous termination of his employment, was unprocedural, insufficient and inappropriate to infer a lawful termination of his employment.

“A declaration that the factual and legal circumstances of the Petitioner’s termination of employment were insufficient and inappropriate to infer a redundancy against him, and that any redundancy declared by the KCB Group in relation to him was therefore null, void and of no legal effect and amounted to a violation of his fundamental right to fair labour practices as guaranteed in Article 41(1) of the Constitution,” seeks lawyer Kamau.

Kamau says he was subjected to discriminatory practices by the KCB Bank Group in violation of his fundamental right to equality and freedom from discrimination as guaranteed in Article 27 of the Constitution and the termination of his employment was unfair, unjustified, illegal, null and void.

Lawyer Kamau further seeks the court to declare that the Non-Compete Clause in the 2016 Contract is unenforceable by the KCB Group as against him and is voidable by him as against the Bank ab initio, byreason of the termination of the Petitioner’s employment having been a violation of Articles 41(1) and 47(1) and (2) of the Constitution, and of the Employment Act.

He also wants the Employment Court to find that finding that KCB’s group legal representation by Messrs of Mohammed Muigai LLP Advocates law firm in respect of his claim for unlawful termination of employment resulted in a clear conflict of interest by reason of the fact that a Founding and Senior Partner at the said firm lawyer Mohammed Nyaoga is also the Chairman of the CBK’s Board of Directors.

“A Declaration that the circumstances of KCB’s legal representation by Messrs. Mohammed Muigai LLP Advocates resulted in a violation of the Petitioner’s fundamental right to have the employment dispute decided independently and impartially, as guaranteed in Article 50(1) of the Constitution,” seeks lawyer Kamau.

Kamau is seeking damages against both KCB Group and Central Bank of Kenya jointly and severally for the violation of his constitutional and fundamental right to fair labour practices.

He wants  further wants court to declare that CBK is liable to petitioner on account of its breach of statutory duty to effectively regulate KCB Group to ensure that KCB complied with the Central Bank of Kenya Prudential Guidelines and all other Laws, Rules, Codes and Standards, and that, as an issuer of securities, it complied with capital markets legislation.

Kamau through his lawyer Nderitu told the court that he was involved in Shareholder engagement in introducing the Group aide-mémoire that significantly improved the management of the Annual General Meetings, including obtaining approval without voting through the Memorandum and Articles of Association of Kenya Commercial Bank Limited among others.

He said that during his employment at KCB Bank Kenya and with the KCB Group, he initially worked well with former KCB CEO Joseph Oigara until 2016 when the CEO allegedly started sidelining him by removing the legal function from his reporting line.

He further claims he was transferred from the Group’s offices at Kencom House to its offices Upper Hill under the guise that the Petitioner was merely to support the KCB Group Board.

He adds that at that point his roles were given to Okumu for reasons that were not related to work demands.  He stated that Oigara at one time proposed that he should leave his role in the KCB Group and go and serve as the Company Secretary of the National Bank of Kenya Limited, a subsidiary of the Group, a suggestion which he disagreed with to Oigara’s utter annoyance.

Kamau stated that his work was thenceforth unfairly discredited, leading to his being taken through a disciplinary process whose intended outcome failed miserably, and the Petitioner was vindicated.

“More specifically, the Petitioner contends that the purported creation of a new organizational structure towards the end of 2020 was in fact Oigara’s orchestration targeted to remove certain individuals by requiring them to undergo interviews in the pretext that new roles were created, and amounted to a further violation of the Petitioner’s fundamental right to fair labour practices under Article 41(1) of the Constitution,” said in his court documents.

He further adds that this sham reorganization demonstrates how the role of the KCB Group Company Secretary purportedly ceased to be and was then very briefly replaced with a new role of the KCB Group General Counsel. The role of KCB Group Company Secretary then ‘resurfaced’ immediately thereafter, in total violation of legal and regulatory requirements.

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Court of Appeal Upholds Eviction of Radcliffes from Karen Land

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Adrian Radcliffe, the Expatriate Squatter, Evicted from Karen Property by Innocent Purchaser for Value

The Court of Appeal has stayed the decision of the Environment and Land Court purporting to reinstate Adrian Radcliffe into possession of the 5.7 Acre Karen Land by Kena Properties Ltd after eviction by the lawful owners in February 2022. Adrian Radcliffe who was evicted by Kena Properties Ltd, the innocent purchaser of the Land for value.

Before his eviction, Mr. Radcliffe had been living on the land as a squatter expatriate for 33 years without paying any rent. Since he moved into the property as a tenant, he only paid deposit for the land in August 1989 despite corresponding severally with the owner of the land. His attempt to acquire the land by adverse possession claim filed in 2005 was dismissed by Court in 2011 on the basis that he has engaged with the owner of the land July 1997 and agreed to buy the land which he failed to do. The High Court [Justice Kalpana Rawal as she then was] concluded that:

“His [Mr. Adrian Radcliffe] averments that he did not have any idea of the whereabouts of the Defendant and that he could possibly be not alive, were not only very sad but mala fide in view of the correspondence on record addressed by him to the Defendant’s wife. I would thus find that the averments made by him to the contrary are untrue looking to the facts of this case.”

On 10th March 2022, Mr. Adrian Radcliffe and Family purported to obtain court orders for reinstatement into the land. However, the Court of Appeal issued an interim stay of execution of the said orders. The Court of Appeal has now granted the application of Kena Properties Ltd and stayed the execution of the Environment and Land Court Order pending the hearing and determination of the Appeal.

The Court also stayed the proceedings at the Environment and Land Court on the matter during the pendency of the Appeal. In effect, the eviction orders issued by the Chief Magistrate Court for eviction of Mr. Adrian Radcliffe in favour of Kena Properties as the purchaser of the property for value were upheld and the company now enjoys unfettered ownership and possession of the suit property until the conclusion of the Appeal.

The Court of Appeal in granting the orders sought by Kena Properties Ltd concurred with Kena Properties Ltd that as the property owner it had an arguable appeal with a high probability of success which would be rendered nugatory if Adrian Radcliffe a trespasser was to resume his unlawful possession of the suit property, erect structures thereon, recklessly use or abuse the said suit property as he deems fit. In any case, that is bound to fundamentally alter the state of the suit property and render it unusable by Kena Properties Ltd as the property owner.

At the same time, the Appellate Court rubbished the argument of Adrian Radcliffe in opposition to the application for stay that he has been in occupation of the suit property for more than 30 years and that he and his family were unlawfully evicted from the suit property on 4th February, 2022. The Court also rejected Radcliffe’s claim that Kena Properties Ltd has no valid title to the suit property and held that as the purchaser, the company was entitled to enjoy ownership and possession of their property during the pendency of the appeal.

The Court dismissed claims of Mr. Adrian Radcliffe that Kena Properties Ltd as the property owner acquired title to the suit property illegally and unprocedurally finding to the contrary. Further, it rejected Adrian Radcliffe’s claim that Kena Properties as the purchaser cannot evict a legal occupier of a property putting paid to the claim that he was a legal occupier at the time of eviction.

As a matter of fact, Mr. Adrian Radcliffe cannot claim to be the legal occupier of the property having attempted to acquire it by adverse possession before the High Court thwarted his fraudulent scheme on 28th February 2011. Mr. Radcliffe did not appeal the 2011 High Court decision meaning it is still the law that he is not the owner of the land nor the legal occupier of the land having attempted to adversely acquire against the interests of the lawful owner who sold it to Kena Properties.

Mr. Adrian Radcliffe is a well-to-do Water, Sanitation and Hygiene (WaSH) UNICEF consultant and former UN employee (who has been earning hefty House Allowance). Many have wondered why he has been defaulting in paying rent for 33 years on the prime plot of land in Karen while living large and taking his kids to most expensive schools in Kenya. No question, a local Kenyan could never have gotten away with such selfish impunity.

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Review: Journal of Conflict Management and Sustainable Development, Vol. 9, No. 1

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The Journal of Conflict Management and Sustainable Development, Volume 9, Issue No. 1, which is edited by and published by Dr. Kariuki Muigua, PhD is out and stays true to the reputation of the journal in providing a platform for scholarly debate on thematic areas in the fields of Conflict Management and Sustainable Development. The current issue published in September 2022 covers diverse topics including Resolving Oil and Gas Disputes in Africa; National Environment Tribunal, Sustainable Development and Access to Justice in Kenya; Protection of Cultural Heritage During War; The Role of Water in the attainment of Sustainable Development in Kenya; Property Rights in Human Biological Materials in Kenya; Nurturing our Wetlands for Biodiversity Conservation; Investor-State Dispute Resolution in a Fast-Paced World; Status of Participation of Women in Mediation; Business of Climate Change and Critical Analysis of World Trade Organization’s Most-Favored Nation (MFN) Treatment.

Dr. Wilfred A. Mutubwa and Eunice Njeri Ng’ang’a in “Resolving Oil and Gas Disputes in an Integrating Africa: An Appraisal of the Role of Regional Arbitration Centres” explore the nature of disputes in the realm of oil and gas in Africa taking a look into the recent continental and sub-regional developments in a bid to establish regional integration. Additionally, it tests the limits of intra-African trade and dispute resolution and the imperatives for the African regional courts and arbitration centres. In “National Environment Tribunal, Sustainable Development and Access to Justice in Kenya,” Dr. Kariuki Muigua discusses the role played by the National Environment Tribunal (NET) in promoting access to justice and enhancing the principles of sustainable development in Kenya. The paper also highlights challenges facing the tribunal and proposes recommendations towards enhancing the effectiveness of the tribunal.

Dr. Kenneth Wyne Mutuma in “Protecting Cultural Heritage in Times of War: A Case for History,” argues that cultural heritage is at the heart of human existence and its preservation even in times of war is sacrosanct. It concludes that it is thus critical for states to take positive and tangible steps to ensure environmental conservation and protection during war within the ambit of the existing international legal framework. In “The Role of Water in the attainment of Sustainable Development in Kenya,” Jack Shivugu critically evaluates the role of water in the attainment of sustainable development in Kenya and argues water plays a critical role in the attainment of the sustainable development goals both in Kenya and at the global stage. The paper interrogates some of the water and Sustainable Development concerns in Kenya including water pollution, water scarcity and climate change and suggests practical ways to enhance the role of water in the Sustainable Development agenda.

Dr. Paul Ogendi in “Collective Property Rights in Human Biological Materials in Kenya,” reflects on property rights in relation to human biological materials obtained from research participants participating in genomic research. He argues that property rights are crucial in genomic research because they can help avoid exploitation or abuse of such precious material by researchers. In “Nurturing our Wetlands for Biodiversity Conservation,” Dr. Kariuki Muigua notes that Wetlands have a vital role in not just delivering ecological services to meet human needs, but also in biodiversity conservation. Wetlands are vital habitat sites for many species and a source of water, both of which contribute to biodiversity protection. The paper examines the role of wetlands in biodiversity conservation and how these wetland resources might be managed to improve biodiversity conservation.

Oseko Louis D. Obure in “Investor-State Dispute Resolution in a Fast-Paced World,” preponderance of disputes between States or States and Investors created need for a robust, effective, and efficient mechanisms not only for the resolution of these disputes but also their prevention. He notes that developing states lead in being parties to Investor-State Disputes (ISD) particularly as respondents. He proceeds to conceptualize and problematize investor-state disputes resolution in a fast-paced world. Lilian N.S. Kong’ani and Dr. Kariuki Muigua in “Status of Participation of Women in Mediation: A case Study of Development Project Conflict in Olkaria IV, Kenya” review the status of participation of women in mediation to resolve conflicts between KenGen and the community. The paper demonstrates a need for further democratization of the mediation processes to cater for more participation of women to enhance the mediation results and offer more sustainable resolutions.

Felix Otieno Odhiambo and Melinda Lorenda Mueni in “The Business of Climate Change: An Analysis of Carbon Trading in Kenya analyses the business of carbon trading in the context of Kenya’s legal framework. The article examines the legal framework that underpins climate change into the Kenyan legal system and provides an exposition of the concept of carbon trading and its various forms. Michael Okello, in “Critical Analysis of World Trade Organisation’s Most-Favored Nation (MFN) Treatment: Prospects, Challenges and Emerging Trends in the 21st Century,” highlights the rationale behind MFN treatment and also restates the vision of multilateral trade to achieve equitable and special interventions with respect to trade in goods, services and trade related intellectual property rights in the affected states.

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