News & Analysis

Book Review: Settling Disputes Through Arbitration in Kenya, 4th Edition

Published

1 year ago

March 20, 2022

Admin

In March 2022, Dr. Kariuki Muigua, PhD released the 4^th Edition of the book that has become the most authoritative reference book on arbitration in Kenya: Settling Disputes Through Arbitration in Kenya. The release of the 4^th Edition of this foremost arbitration textbook and practitioners guide in Kenya and the larger East Africa region is a continuation of what is proving to be a seminal year for Dr. Kariuki Muigua. It comes just after Dr. Muigua was ranked in Band 1 among the Top 5 Arbitrators in Kenya by Chambers and Partners in 2022. It also follows after Dr. Kariuki Muigua was awarded the prestigious Chartered Institute of Arbitrators (Kenya) Inaugural ADR Lifetime Achievement Award 2021. Dr. Kariuki Muigua was also the Law Society of Kenya (Nairobi Branch) ADR Practitioner of the Year Award and ADR Publisher of the Year Award Winner 2021.

In terms of context, “Settling Disputes Through Arbitration in Kenya,” was first published after the Constitution of Kenya 2010 entrenched and widened the application of ADR and arbitration by requiring the incorporation of ADR mechanisms, including negotiation, mediation and arbitration in the settlement of disputes of disputes, it became necessary to encourage students and professionals to acquire skills and expertise in ADR. Dr. Kariuki Muigua, at the time of the 1^st Edition, the Chairperson of the Chartered Institute of Arbitrators (Kenya) at the time, took up the challenge to write the book that takes readers through the process of arbitration in a simplified, yet comprehensive manner, along with highlights of the latest key amendments and case law on arbitration in Kenya. It is remarkable to note that the 4^th Edition is a 407 Pages book from 247 Pages, marking 160 Page expansion.

Dr. Kariuki Muigua has offered this 4th Edition of his book for free download in his law firm Kariuki Muigua & Co. Advocates website here for limited duration in a quest to realize the key objective of its publication, promoting knowledge on key aspects of arbitration. Dr. Muigua noted in the Author’s Note to the current edition: “I recommend this book to ADR students, teachers and tutors of ADR, ADR practitioners and to the general public interested in acquiring knowledge on the various ADR mechanisms in Kenya and their role in resolving or settling disputes occurring in everyday life…. In addition, this book has a place as a core textbook for the popular Entry Course in Arbitration, offered by Chartered Institute of Arbitrators-Kenya around East Africa and for postgraduate students of international commercial arbitration, to whom it will offer basic foundational knowledge.”

Chapter One – Introduction to Arbitration

This chapter introduces arbitration as one of the mechanisms that are commonly referred to as Alternative Dispute Resolution mechanisms (ADR) as set out in Article 33 of the Charter of the United Nations. The Chapter also explores attributes of arbitration which make it ideal mode of dispute resolution and the different types of arbitration which include: ad hoc, institutional, statutory, look-sniff, flip-flop, documents–only, domestic and international and how to determine which type of arbitration is appropriate or relevant for the given case. Arbitration in Kenya Kenyan context is also explored as recognized under the Constitution under Article 159 and entrenched under the Arbitration Act 1995, the Arbitration Rules, Civil Procedure Act and the Civil Procedure Rules 2010. The Chapter also juxtaposes arbitration and other modes of dispute resolution to unearth the occasions when it is the most fitting mode of dispute resolution.

Chapter Two – Arbitration Agreement

The second chapter discusses the arbitration agreement as the basis of arbitration. The chapter makes an introduction to arbitration agreements and clauses and critically examines their salient features. The Chapter includes a general overview of arbitration agreement, arbitration clauses, contractual requirements in arbitration agreements, formal requirements of an arbitration agreement and gives guidance on drafting effective arbitration agreements to avoid ambiguity and non-recognition or non-enforcement of the arbitration clause.

Chapter Three – Stay of Legal Proceedings for Arbitration

This chapter deals with instances where Stay of Legal Proceedings for Arbitration occurs and how to deal with it both as a party and as counsel or party representative and how to avoid recourse to it in drafting arbitration clause. The Chapter discusses grounds for stay of proceedings for arbitration addresses issues and procedure for application of stay of proceedings.

Chapter Four – Commencing an Arbitration and the Appointment of an Arbitral Tribunal

The fourth chapter addresses commencing an arbitration and the appointment of an Arbitral Tribunal from communication of a notice of arbitration up to commencement of arbitration. The various modes of appointing arbitrators and the relevant legal provisions are discussed as well as the factors to be considered in choosing an arbitrator and issues incidental to the appointment of arbitrators such as challenge of arbitral tribunal, immunity of arbitrators, withdrawal of arbitrators, termination of arbitrators and the aftermath of challenge and termination of arbitrators.

Chapter Five – Jurisdiction and powers of an arbitrator

This chapter discusses issues touching on the “jurisdiction and powers of an arbitrator” under the laws of Kenya. It defines the jurisdiction of the arbitrator, discusses types of jurisdiction, jurisdiction of the courts in arbitration, Prerequisites of Jurisdiction of an Arbitrator, Sources of Jurisdiction and Powers generally and under Arbitration Act, 1995, and limitations on the jurisdiction and powers of the Arbitrator.

Chapter Six – Modes of opposing and challenging arbitration reference

It deals with “Modes of opposing and challenging arbitration reference” including issues relevant and related to opposing arbitration references. In particular, Dr. Muigua discusses at length issues relating to challenging the appointment of the arbitral tribunal and the jurisdiction of the arbitral tribunal, the teething issues that may come about before and after commencement of the arbitration process. The chapter also explores the objections that may be raised including allegation as to lack of binding arbitration agreement between parties, objection on whether the dispute is within the scope of the arbitration agreement, objection that the reference is time-barred, challenges to the appointment of arbitrators and challenges to the jurisdiction of the arbitral tribunal. As it is, the arbitral tribunal has two options open to it when the question of jurisdiction is raised by a party. It may rule on the matter as a preliminary question or wait to address it in an arbitral award on the merits. The ruling of the arbitral tribunal in the former instance may be challenged by the aggrieved party by way of an application to the High Court.

Chapter Seven – Preparation for arbitration proceedings

The seventh chapter tackles issues that relate to “preparation for arbitration proceedings.” The chapter discusses what the arbitrator does upon appointment, in preparation for commencement of the arbitral proceedings, namely, convening a preliminary meeting and issuing directions pursuant to the meeting. Issues relating to pleadings in arbitration are also explored including the various types of pleadings used in arbitration and the relevant legal provisions touching on them. The chapter also deals with pre-hearing procedures that are related to pleadings in that they are used to enhance documentation in arbitration. Here, issues relating to seeking further (and better) particulars, discovery (disclosure and inspection) and amendment of pleadings are examined. Finally, interlocutory proceedings in arbitration and the steps taken under Section 7 and Section 18 of the Act and application for security of costs are examined as they constitute steps that are taken mainly to compliment or augment the arbitral process.

Chapter Eight – Arbitration Hearing

This chapter describes generally what takes place in an arbitration hearing. In particular, the chapter entails a description of the procedure that is usually followed from the opening to the closing of the arbitration proceedings to give a picture of what transpires in arbitration hearing. The Chapter also discusses the key aspects of arbitration proceedings which contrast it with litigation and other methods of dispute management.

Chapter Nine – Arbitral Awards, Costs and Interest

Chapter Nine discusses what an arbitral award is, the statutory requirements concerning arbitral awards as well as the provisions of the Arbitration Act, 1995 on arbitration costs and interest. The chapter also outlines the law and the contemporary issues relating to arbitral awards and to costs and interest in arbitration relevant to the Kenyan scenario.

Chapter Ten – Role of the Court in Arbitration

Chapter Ten revisits the role of the court in arbitration in Kenya as stipulated under the Arbitration Act of 1995. The analysis centres on the provisions for court intervention before, during and after arbitration hearing in Kenya. In addition, Dr. Kariuki Muigua proposes necessary reforms as far as court intervention is concerned are proposed. The principle of court intervention in arbitration in Kenya as enunciated in the Arbitration Act, 1995 and the specific legal provisions in the Arbitration Act, 1995 which give the court power to intervene in arbitration are discussed in the context of the Kenyan case law and legal practice. A critical analysis of the role of the court in arbitration in Kenya is also done as part of the debate whether court intervention is a friend or a foe to the expeditious and fair determination of arbitral matters.

Chapter Eleven – Post Hearing Steps in Arbitration

This Chapter is on “Post-Hearing Steps in Arbitration” discusses the steps that take place after the conclusion of the arbitration hearing and the publishing of the arbitration award. The focus is on the applications that may be made to the court for the purpose of enforcing or setting aside or appealing against the arbitral award and applications for setting aside of the award (if any) as well as recognition and enforcement of arbitral awards. The chapter also discusses cases where a party may also apply to a court to determine a question of law arising in the cause of the arbitration and appeal against arbitral award.

Chapter Twelve – Arbitration Practice in Kenya

Chapter Twelve explores the practice of arbitration in Kenya and discusses the contemporary issues surrounding professional arbitration practice in the country, what it takes for one to qualify as an arbitrator in Kenya, the nature of arbitration as a profession and the future of arbitration in Kenya and around the world. This is the perfect primer for anyone seeking a career as an arbitration practitioner in Kenya and East Africa in general.

Chapter Thirteen – Promoting International Commercial Arbitration

This is one of the most outstanding out additions in this fourth Edition of the Book is Chapter 13 of the book which deals with promoting International Commercial Arbitration. In this chapter, Dr. Kariuki Muigua, PhD offers a critical examination of the extent to which international commercial arbitration has taken root in Kenya. In particular, the discourse looks at the legal framework governing arbitration and identifies the challenges therein, hindering the prosperity of international commercial arbitration in Kenya. The challenges and opportunities in the practice of international commercial arbitration in Kenya are explored in view of the need to nurture the same in the context of Kenya. The author identifies the main problems facing international commercial arbitration in Kenya and proposes certain measures that would make it flourish in Kenya.

Chapter Fourteen – Trade and International Treaty Arbitration

Further, Dr. Muigua has added a Chapter in the 4^th Edition on Trade and Investments Treaty Arbitration. The chapter offers a critical discussion of trade and investments arbitration in the context of Africa. It also looks at the growth trends, challenges and prospects of investor state arbitration in the context of Africa. Notably, Africa has been lagging behind the rest of the world as far as trade and investments arbitration is concerned even as most developing world countries have been pushing for reforms in the 1965 Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention) system. The Chapter explores dispute resolution under African Continental Free Trade Area Agreement (“the AfCFTA”) and the various regional trade arrangements including COMESA, ECOWAS, EAC and SADC as alternatives to ICSID and other international commercial arbitration forums.

Chapter Fifteen – Contemporary Issues in Dispute Settlement

This chapter critically discusses the emerging issues and the trends in arbitration practice, across all the thematic areas of arbitration. The Constitution of Kenya enshrines the fundamental right of access to justice and mandates the state to ensure access to justice for all persons. Notably, the issues highlighted are neither limited to domestic arbitration nor international arbitration but also touch on other modes of access to justice. With the ever growing globalisation and international trade and investments, territorial boundaries have increasingly become irrelevant as far as businesses are concerned. However, it is noted that with the ever present commercial disputes, international arbitration has continued to play a critical role in their management.

Chapter Sixteen – Conclusion and Way Forward

Finally, Dr. Kariuki Muigua has added a conclusion and way forward chapter of the book. It notes that the book offers critical discussions around the current law and practice of both domestic and international arbitration in Kenya as well as investment treaty arbitration within the context of the African continent. The book heavily relies on current case law in Kenya in order to appreciate the current trends in the country as far as the relationship between domestic courts and practice of arbitration is concerned. It appeals to policy makers, arbitration practitioners and students who wish to pursue the dispute resolution sector more effectively and professionally to work towards achieving the recommendations in this book, both at personal levels and sectoral level.

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News & Analysis

The Roles of the Three Parts of the Permanent Court of Arbitration

Published

2 days ago

May 30, 2023

Admin

H.E. Amb. Marcin Czepelak, the Fourteenth Secretary-General of the Permanent Court of Arbitration (PCA)

(more…)

News & Analysis

Brief History of the Permanent Court of Arbitration (PCA)

Published

7 days ago

May 26, 2023

Admin

By Dr. Kariuki Muigua, PhD, C.Arb, Current Member of Permanent Court of Arbitration (PCA) Representing the Republic of Kenya.

The Permanent Court of Arbitration (PCA) is a 124 Years Old Intergovernmental Organization currently with 122 contracting states. It was established at the turn of 20^th Century during the first Hague Peace Conference held between 18^th May and 29^th July 1899. The conference was an initiative of then Russian Czar Nicholas II to discuss peace and disarmament and specifically with the object of “seeking the most effective means of ensuring to all peoples the benefits of a real and lasting peace, and, above all, of limiting the progressive development of existing armaments.” The culmination of the conference was the adoption of a Convention on the Pacific Settlement of International Disputes, which dealt not only with arbitration but also with other methods of pacific settlement, such as good offices and mediation.

The aim of the conference was to “strengthen systems of international dispute resolution” especially international arbitration which in the last century had proven effective for the purpose with number of successful international arbitrations being concluded among Nations. The Alabama arbitration of 1871-1872 between the United Kingdom (UK) and the United States (US) under the Treaty of Washington of 1871 culminating in the arbitral tribunal’s award that the UK pay the US compensation for breach of neutrality during American Civil War which it did had demonstrated the effectiveness of arbitration in settling of international disputes and piqued interest of many practitioners in it as a mode of dispute resolution during the latter years of the nineteenth century.

The Institut de Droit International adopted a code of procedure for arbitration in 1875 to answer the need for a general law of arbitration governing for countries and parties wishing to have recourse to international arbitration. The growth of arbitration as a mode of international dispute resolution formed the background of the 1899 conference and informed its most enduring achievement, namely, the establishment of the PCA as the first global mechanism for the settlement of disputes between states. Article 16 of the 1899 Convention recognized that “in questions of a legal nature, and especially in the interpretation or application of International Conventions” arbitration is the “most effective, and at the same time the most equitable, means of settling disputes which diplomacy has failed to settle.”

In turn, the 1899 Convention provided for the creation of permanent machinery to enable the setting up of arbitral tribunals as necessary and to facilitate their work under the auspices of the institution it named as the Permanent Court of Arbitration (PCA). In particular, Article 20 of the 1899 Convention stated that “[w]ith the object of facilitating an immediate recourse to arbitration for international differences which it has not been possible to settle by diplomacy, the signatory Powers undertake to organize a Permanent Court of Arbitration, accessible at all times and operating, unless otherwise stipulated by the parties, in accordance with the rules of procedure inserted in the present Convention.” In effect, the Convention set up a permanent system of international arbitration and institutionalized the law and practice of arbitration in a definite and acceptable way.

As a result, the Permanent Court of Arbitration (PCA) was established in 1900 and began operating in 1902. The PCA as established consisted of a panel of jurists designated by each country acceding to the Convention with each country being entitled to designate up to four from among whom the members of each arbitral tribunal might be chosen. In addition, the Convention created a permanent Bureau, located in The Hague, with functions similar to those of a court registry or secretariat. The 1899 Convention also laid down a set of rules of procedure to govern the conduct of arbitrations under the PCA framework.

The second Hague Peace Conference in 1907 saw a revision of the 1899 Convention and improvement of the rules governing arbitral proceedings. Today, the PCA has developed into a modern, multi-faceted arbitral institution perfectly situated to meet the evolving dispute resolution needs of the international community. The Permanent Court of Arbitration has also diversified its service offering alongside those contemplated by the Conventions. For instance, today the International Bureau of the Permanent Court of Arbitration serves as a registry in important international arbitrations. In 1993, the Permanent Court of Arbitration adopted new “Optional Rules for Arbitrating Disputes between Two Parties of Which Only One Is a State” and, in 2001, “Optional Rules for Arbitration of Disputes Relating to Natural Resources and/or the Environment”.

Reference

PCA Website: https://pca-cpa.org/en/about/introduction/history/ (accessed on 25^th May 2023).

News & Analysis

Former KCB Company Secretary Sues Over Unlawful Dismissal

Published

4 months ago

January 19, 2023

Admin

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.