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What is ESG (Environmental, Social and Governance)?

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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*

Nairobi Stock Exchange (NSE) became the Fourth Exchange in Africa to issue ESG Disclosure Guidance Manual (ESG Manual) to help in guiding listed companies on measuring and reporting ESG matters on 29th November 2021. The ESG Manual gives Listed companies until 29 November 2022 to comply with ESG disclosure requirements. The NSE ESG Manual followed a Central Bank of Kenya (CBK) Guideline to banks on climate-related risk management issued on October 2021. Hence, there is need for the Boards and Management of listed companies, banks and related businesses in Kenya to move with speed to upraise their general understanding of what ESG entails and application of the ESG disclosure requirements to their business to ensure readiness to comply by 29 November 2022.[1] In this article, we shall offer a general introduction of ESG and lay a background for detailed discussion of the ESG Manual and the CBK Guidelines on climate-related risk management in this series.

The growing threat of climate change and climate crisis has forced many investors to embrace sustainability as a key factor in investment decision-making. At the same time, social concerns touching on issues such as human rights, diversity, consumer protection and welfare and protection of animals especially endangered species have led to many companies taking their social responsibilities and especially impact of their commercial activities on the local communities where they operate more seriously than ever. The growth of social media has also increased the public risks associated with socially irresponsible behavior due to more scrutiny on companies and the emergence of socially conscious consumers. Further, there has been growing corporate governance awareness since the 2008 recession which has led to increase shareholder and stakeholder activism in demanding more responsive management structure, better employee relations, and reasonable executive compensation in companies.[2]

As a result, how companies handle environmental, social and governance issues has increasingly become a major concern especially for investors investing money solicited from the public. ESG simply an acronym for Environmental, Social and (Corporate) Governance, the key aspects of sustainable, responsible or ethical investment. The Financial Times defines ESG as “a generic term used in capital markets and used by investors to evaluate corporate behaviour and to determine the future financial performance of companies.”[3] It adds that ESG “is a subset of non-financial performance indicators which include sustainable, ethical and corporate governance issues such as managing a company’s carbon footprint and ensuring there are systems in place to ensure accountability.”[4] ESG has also been defined as standing for the three broad categories, or areas, of interest for “socially responsible investors” who consider it important to incorporate their values and concerns (such as environmental concerns) into their selection of investments instead of simply considering the potential profitability and/or risk presented by an investment opportunity.[5]

Globally, the importance of environmental, social and governance (ESG) issues is evidenced by the change in the legal and regulatory landscape to reflect the expectations of investors, customers, employees and other stakeholders. Increasingly, the investment decisions including assessment and valuation are incorporating ESG criteria with companies that are rated as having strong sustainability programs enjoying more preference from investors. Issues touching on climate change and sustainability dominate current ESG focus. In addition, human rights and especially the rights of indigenous peoples and governance structures of companies are enjoying prominent attention. Many projects investors and sponsors are also demanding more detailed identification and mitigation of environmental and social impacts of investment projects before making commitment or funding.[6]

According to OECD, the growth of ESG approaches by investors has been driven by private and public sector initiatives to reach the objectives of the Paris Agreement and the Sustainable Development Goals (SDGs). This has seen the incorporation of climate transition factors into investment decisions and the growth of what has come to be known as ESG investing as a leading form of sustainable finance for long-term value and alignment with societal values. OECD defines ECG investing as generally refering to the process of considering environmental, social and governance (ESG) factors when making investment decisions.[7] Bloomberg estimates that the value of ESG investing around the world has risen to almost USD 40 trillion in 2021. At the same time, as at 2020 ESG ratings were being applied to companies representing around 80% of market capitalization.

At the same time, the environmental ‘E’ pillar score of ESG rating is being increasingly used as a tool to align investments and capital flows with a low-carbon transition and to unlock valuable forward-looking information on firms’ climate transition risks and opportunities.[8] The environmental considerations in areas such as climate risk, water scarcity, extreme temperatures and carbon emissions are now considered as key issues that can impact competitive positioning for businesses. Companies are expected to appreciate their role as stewards of the natural or physical environment and to take into account the utilisation of natural resources and the impact of their overall operations on the environment, both locally and across its global supply chains. Companies are now required to take precautions against environmental incidents such as oil spills or pollution from mining operations as safeguards against damage to their reputation and shareholder value.[9] At the same time, more than 13,000 companies and 3,000 non-business signatories in 160 countries that are signatories of the United Nations Global Compact (UNGC), which helps businesses contribute positively toward some or all of the 17 United Nations (UN) sustainable development goals (SDGs) by 2030.[10]

The COVID-19 pandemic, and its diverse implications including healthcare access, workplace safety, cybersecurity and other issues related to the communities that businesses , have proven to be a watershed moment for the often-underappreciated ‘S’ pillar of environmental, social and governance (ESG) considerations with the need to tackle the inequalities exposed and exacerbated by the pandemic becoming a key reason for investors to make allocations for socially conscious investments despite intangibility of social facts.[11] Companies are beginning to appreciate the role taking social responsibility can play in mitigating issues such data theft, worker strikes, litigation, workplace accidents and other people-related disruptions that can hurt a business reputation and finances. The repercussions of work-related injuries and deaths on families including on their financial security are also acknowledged as having a bearing on the United Nations Sustainable Development Goals (SDGs) of no poverty, zero hunger, good health and well-being, decent work and economic growth even as many investors are aligned with these goals.[12]

The “G” Pillar in ESG is the oldest as governance has been an integral part of robust investment for ages. However, what is considered effective governance keeps evolving and the speed of evolution has quickened as institutional investors’ definition of stakeholders continues to broaden beyond shareholders.[13] While older forms of G focused on serving and protecting shareholders, the newer approaches stretch beyond basic dimensions related to financial and accounting misconduct as well as legal and regulatory non-compliance, such as transparency, corporate structures and ethics. Investors are also aligning G with the 17 United Nations Sustainability Development Goals (SDGs), where governance issues include industry, innovation and infrastructure (Goal 9); peace, justice and strong institutions (Goal 16); and partnerships with public and private institutions (Goal 17).[14]

*This article is part of an ongoing series on ESG (Environmental, Social and Governance) in Kenya 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. 

[1] Nairobi Stock Exchange (NSE), “ESG Disclosures Guidance Manual,” November 2021, Available at: https://sseinitiative.org/wp-content/uploads/2021/12/NSE-ESG-Disclosures-Guidance.pdf (accessed on 04/02/2022).

[2] Ibid.

[3] The Financial Times Lexicon, Available at: https://markets.ft.com/glossary/searchLetter.asp?letter=E 04/02/2022).

[4] The Financial Times Lexicon, quoted in: ADEC, “What is ESG,” Available at: https://www.adecesg.com/resources/ faq/what-is-esg/ (accessed on 04/02/2022).

[5] CFI, ESG (Environmental, Social and Governance), Available at: https://corporatefinanceinstitute.com/resources/ knowledge/other/esg-environmental-social-governance/

[6] Norton Rose Fulbright, “Environmental, Social and Governance,” Available at: https://www.nortonrosefulbright. com/en-ke/services/203f40d1/environmental-social-and-governance-esg (accessed on 04/02/2022)

[7] OECD (2021), OECD Business and Finance Outlook 2020: Sustainable and Resilient Finance, OECD Publishing, Paris, Available at: https://dx.doi.org/10.1787/eb61fd29-en (accessed on 04/02/2022).

[8] OECD (2021), ESG Investing and Climate Transition: Market Practices, Issues and Policy Considerations, OECD Paris, https://www.oecd.org/finance/ESG-investing-and-climatetransition-Market-practices-issues-and-policy-considerations.pdf (accessed on 04/02/2022).

[9] Standard Chartered, “The E in ESG: Environmental Stewards,” Available at: https://www.sc.com/sg/wealth/ insights/e-in-esg/ (accessed on 04/02/2022).

[10] Ojiambo, S., “Leadership of the UN Global Compact: Message of CEO and Executive Director,” Available at: https://www.unglobalcompact.org/about/governance/executive-director(accessed on 04/02/2022).

[11] Create Research, “Passive Investing 2021: Rise of the social pillar of ESG,” Available at: https://cdn.e-fundresearch.com/files/RcfPdrQdAaVI9tiBgrgLq4baO7Wciz6eepZTODEO.pdf (accessed on 04/02/2022).

[12] Standard Chartered Singapore, “The S in ESG,” Available at: https://www.sc.com/sg/wealth/insights/the-s-in-esg/ (accessed on 04/02/2022).

[13] RL360, “Governance-The G in ESG,” Available at: https://www.rl360.com/row/funds/investment-definitions/g-in-esg.htm(accessed on 04/02/2022).

[14] Standard Chartered (Singapore), “The G in ESG,” Available at: https://www.sc.com/sg/wealth/insights/the-g-in-esg/(accessed on 04/02/2022).

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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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Dr. Kariuki Muigua: The Making of Top Arbitrator in Africa

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African Arbitrator of the Year 2022 Dr. Kariuki Muigua's Journey to the Top of ADR in Africa is a Case Study of Excellence

The journey of Dr. Kariuki Muigua to becoming the African Arbitrator of the Year 2022 has seen him painstakingly and consistently research, teach, write, edit, publish, train, mentor and practice arbitration, alternative dispute resolution (ADR), conflict management and dispute resolution for the last 30 years with excellence as a leading lawyer, authoritative scholar and ADR expert. Today, Dr. Kariuki Muigua, Phd, C.Arb is a Chartered Arbitrator and the African Trustee of the Chartered Institute of Arbitrators and the African Arbitrator of the Year 2022. He is an advocate of 33 years standing and the Managing Partner of Kariuki Muigua & Co. Advocates. He is also the author of the Leading Textbooks on ADR, Mediation and Arbitration including the seminal Settling Disputes Through Arbitration in Kenya, now in 4th Edition. Dr. Kariuki Muigua is ranked at Band 1 by Chambers & Partners among the leading Arbitrators in Kenya noting that “He has been involved in several ground-breaking arbitrations,” “has an astute understanding of arbitration” and “is respected for litigation.”

Dr. Kariuki Muigua is also both the founder, publisher and editor of Africa’s leading Conflict Management Journal as well as one of the PhD Academics who majored in resolution of Natural Resources and Environmental Conflicts using mediation. Dr. Kariuki Muigua is also a leading author in the area of conflict management and has published several books on the topic including Resolving Conflicts through Mediation and Natural Resources and Environmental Justice in Kenya. It is these exploits that have left many of his admirers convinced that his next stop would be Professorship and admission to the Rank of Senior Counsel.

As an ADR Practitioner, Dr. Muigua was declared the first ever winner of the Chartered Institute of Arbitrators (Kenya Branch) ADR Lifetime Achievement Award, the highest honour given by the Institute to one member every year for his immense contribution to the growth of practice, research and scholarship of ADR in Kenya and across Africa. The award came barely a week after Dr. Muigua had won the coveted Law Society of Kenya ADR Practitioner of the Year Award at the 4th Edition of the Nairobi Legal Awards. LSK recognized Dr. Muigua for his outstanding practice in ADR and especially arbitration and his role as mentor to many lawyers venturing into the area. Dr. Kariuki Muigua was also awarded the ADR Publisher of the Year for his scholarship, authorship and editorship of leading research and publications on ADR in Africa including the Journal of Conflict Management and Sustainable Development and Alternative Dispute Resolution, the Official Journal of the CIArb (Kenya).

The tripartite awards have been hailed by many of Dr. Kariuki Muigua’s peers in the ADR and Arbitration fraternity as a fitting tributes to his made immense contribution to mainstreaming of alternative dispute resolution (ADR) and especially arbitration as way of resolving disputes in Kenya, East Africa and across Africa in the last two (2) decades. Indeed, starting in 2002 when Dr. Muigua took the Special Member Course leading to membership to the Chartered Institute of Arbitrators (MCIArb), Dr. Muigua one of the staunchest advocates of ADR in Africa in addition to becoming the foremost intellectual voice shaping ADR practitioners and scholars of the future. The contribution of Dr. Kariuki Muigua to the alternative dispute resolution (ADR) sector has taken many shapes and forms including as a practitioner, leader, policy maker, scholar, author, trainer, mentor and trailblazer among others.

Dr. Muigua is a leading Alternative Dispute Resolution (ADR) practitioner in Kenya, Africa and the world at large who has been recognized nationally and globally by peers. The world leading peer-reviewed lawyers’ directory, Chambers and Partners, rates Dr. Kariuki Muigua as one of the best alternative dispute resolution experts in the country. It describes as ‘a highly respected arbitrator and mediator with a sterling background in commercial and constitutional cases, as well as matters relating to the environment and natural resources.’ The most recent ranking adds: “Kariuki Muigua of Kariuki Muigua & Co is held in high regard by market commentators for his role in the Kenyan arbitration sphere. He possesses stellar experience in commercial and constitutional disputes, as well as environmental matters and those relating to the extractive industries. In addition to being “a big noise in the arbitration association,” he is widely recognized for his academic work.”

Dr. Muigua has served in many panels as an arbitrator appointed by the Chartered Institute of Arbitrators (CIArb)-Kenya, the Law Society of Kenya (LSK), the Nairobi Centre for International Arbitration (NCIA), the London Court Of International Arbitration (LCIA) and the International Court of Arbitration under the auspices of the International Chamber of Commerce (ICC) on several occasions as a sole arbitrator and a member of arbitral tribunals in arbitrations involving commercial disputes. He has vast experience and expertise in adjudication and has sat as both as a panel member and a chairperson in various adjudication Boards both locally and internationally. He is also an accomplished mediator and has successfully presided over numerous matters both as a private mediator and a court appointed mediator under the Court-Annexed Mediation program in Kenya.

Dr Muigua was elected (unopposed) to the Chartered Institute of Arbitrators (CIArb) Board of Trustees as the Regional Trustee for Africa, for the term beginning 1 January 2019. Previously, he served as the Branch Chairman of CIArb-Kenya from 2012 to 2015. He also served CIArb as Member and past Chairperson of the Sub-committee on Information Technology (IT), CIArb and as Member of the Legal Committee Chartered Institute of Arbitrators (CIArb) – Kenya chapter. He is a Fellow of Chartered Institute of Arbitrators (CIArb)-Kenya chapter. He is also a member of the London Court of International Arbitration (LCIA), Chartered Institute of Arbitrators (UK) and Kenya Branch. He is also a Member of Kigali International Arbitration Centre (KIAC) and Nairobi Centre for International Arbitration (NCIA). For his contributions, he was awarded Chartered Institute of Arbitrators Chairman’s Medal with a citation for exemplary service in December, 2015.

In policy-making, Dr. Kariuki Muigua is currently a member of the National Steering Committee for Formulation of the Alternative Dispute Resolution Policy representing the Academia since 2020. The team is providing guidance and overseeing the process for formulation of a national policy and institutional framework on Alternative Dispute Resolution (ADR) in Kenya. He has also served as Member of the Meditation Accreditation Committee Panel of Mediators Accredited for Commercial Mediation under the Judiciary of Kenya. Recently, he led negotiations that achieved partnership with Chartered Institute of Arbitrators UK on GPR 625 (International Commercial Arbitration) for University of Nairobi LLM students to achieve membership status without further tests, 2020 to 2023.

On ADR Scholarship, Dr. Muigua is the author of the leading textbook on Arbitration in Kenya, namely, Settling Disputes through Arbitration in Kenya, now in its 4th Edition (2022) and available for free download, Alternative Dispute Resolution and Access to Justice in Kenya (2015) and Resolving Conflicts through Mediation in Kenya (2013). He has been cited hundreds of times as an ADR Scholar, contributed at least 3 chapters of published books, authored dozens of peer-reviewed articles in the areas of arbitration and alternative dispute resolution and presented over two dozen papers on ADR in diverse fora. Dr. Muigua has also facilitated numerous trainings, workshops and conferences on ADR. He has supervised and supervised at least two (2) completed PhD thesis on ADR, Dozens of Masters Thesis and is supervising three (3) PhDs in the area as a lecturer and mentor in ADR practice and scholarship. Dr. Muigua is a lecturer in International Commercial Arbitration at the University of Nairobi and tutor, trainer and assessor at the Chartered Institute of Arbitrators (Kenya Branch).

Dr. Kariuki Muigua is a Chartered Arbitrator (since January 2015) and Fellow of the Chartered Institute of Arbitrators (since October 2010) and Member of the Chartered Institute of Arbitrators (since 2002). He holds a Diploma in Arbitration (2012) and became Accredited as a Mediator by the Mediation Training Institute in 2015. He is also a renowned consultant on ADR Law and Practice and has authored reports whose recommendations had far reaching impact on the sector. As a professional who strives to attain excellence in the legal and ADR arenas, Dr. Muigua has gone out of his way to put ADR in the frontline as one of the leading modes of dispute resolution in Kenya, Africa and at global stage. Dr. Muigua is a holder of a Ph. D in law from the University of Nairobi and has widespread training and experience in both international and national commercial arbitration and mediation. Previously, he served as the chairperson, Department of Private Law of the University of Nairobi School of Law 2020-2021.

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Overcoming Hindrances to International Commercial Arbitration in Kenya

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By Dr. Kariuki Muigua, PhD (Leading Environmental Law Scholar, Sustainable Development Policy Advisor, Natural Resources Lawyer and Dispute Resolution Expert from Kenya), The African Arbitrator of the Year 2022, Kenya’s ADR Practitioner of the Year 2021, CIArb (Kenya) Lifetime Achievement Award 2021 and ADR Publisher of the Year 2021*

In the face of globalisation, it is important that international trade and investment take place with minimal interference by territorial barriers such as unnecessary domestic courts’ intervention. It has been asserted that the settlement of disputes between parties to an international transaction, arbitration has clear advantages over litigation in national courts. The foreign court can be an alien environment for a businessman because of his unfamiliarity with the procedure which may be followed, the laws to be applied, and even the mentality of the foreign judges.

In contrast, with international commercial arbitration parties coming from different legal systems can provide for a procedure which is mutually acceptable. They can anticipate which law shall be applied: a particular law or even a lex mercatoria of a trade. They can also appoint a person of their choice having expert knowledge in the field. Thus, it is argued that these and other advantages are only potential until the necessary legal framework can be internationally secured, at least providing that the commitment to arbitrate is enforceable and that the arbitral decision can be executed in many countries, precluding the possibility that a national court review the merits of the decision.

There is a need to employ mechanisms that will help nurture and demonstrate Kenya to the outside world as a place with international commercial arbitrators with sufficient knowledge and expertise to be appointed to arbitrate international arbitrators. There is also the need to put in place adequate legal regimes and infrastructure for the efficient and effective organization and conduct of international commercial arbitration in Africa. This ranges from legislating comprehensive law on international commercial arbitration as well as setting up world class arbitration centres in Kenya to complement the Nairobi Centre for International Arbitration (NCIA).

There is also the Centre for Alternative Dispute Resolution (CADR) which is an initiative by the Chartered Institute of Arbitrators, Kenya and was incorporated in May, 2013. Its objective is to establish and maintain a regional Dispute Resolution Centre in the country. The CADR is a positive step towards nurturing international commercial arbitration in Kenya. This will afford the local international commercial arbitrators the fora to showcase their skills and expertise in international commercial arbitration and will also attract international clients from outside Africa. It has been noted that there should be basic minimum standards for international commercial arbitration centres or institutions. These include: modern arbitration rules; modern and efficient administrative and technological facilities; Security and safety of documents; Expertise within its staff; and some serious degree of permanence. There is a need to set up more regional centres for training of international commercial arbitrators in Africa and Kenya.

The Kenyan Chapter of Chartered Institute of Arbitrators trains arbitrators across Africa and has trained arbitrators in countries like Nigeria, Zambia, Uganda and even Malawi. Kenya can indeed play a pivotal role in nurturing international commercial arbitration, not only in Kenya but also across the African continent. There is also need for the existing institutions to seek collaboration with more international commercial arbitration institutions since this will work as an effective marketing tool for the exiting institutions. For instance, the Kenyan Chartered Institute of Arbitrators Branch maintains a close relationship with the International Law Institute (ILI) Kampala and the Centre for Africa Peace and Conflict Resolution (CAPCR) of California State University to conduct Courses in Mediation and other forms of ADR both locally and internationally.

There is need for all African centres and institutions to do the same to promote international commercial arbitration in Africa. The Kenyan law on arbitration appreciates the need to limit court intervention in arbitration to a basic minimum. It has been argued that the relationship between the courts and the arbitral process can be made much closer, both practically and psychologically. The psychological link can be strengthened by encouraging all or at least a good number of the commercial judges and advocates to take up training in arbitration and consequently ensuring that they benefit from having prior experience of arbitration either as representative advocates or actual arbitrators. This will subsequently boost the confidence of foreigners in the African Arbitration institutions as well as the role of courts. Effective and reliable application of international commercial arbitration in Kenya has the capacity to encourage investors to carry on business with confidence knowing their disputes will be settled expeditiously.

In essence, there is need to develop a clear framework in Kenya within which international commercial arbitration can be further nurtured. There are arbitral institutions already in place in Kenya as highlighted in this paper. The presence of such institutions in the country points to an acceptance of alternative dispute resolution modes as well as the need to nurture the practice of international commercial arbitration other than exporting commercial disputes to foreign countries for settlement. With the right frameworks in place, Kenya indeed has the capacity to conduct successful international commercial arbitration. Nurturing international commercial arbitration in Kenya is a necessity whose time has come.

*This article is an extract from published article Nurturing International Commercial Arbitration in Kenya,” by Dr. Kariuki Muigua, PhD, the African Arbitrator of the Year 2022, Kenya’s ADR Practitioner of the Year 2021 (Nairobi Legal Awards), CIArb (Kenya) ADR Lifetime Achievement Award 2021 and ADR Publisher of the Year 2021. Dr. Kariuki Muigua is a Foremost Dispute Resolution Expert in Africa ranked among Top 6 Arbitrators in Kenya by Chambers and Partners, Leading Environmental Law and Natural Resources Lawyer and Scholar, Sustainable Development Advocate and Conflict Management Expert. 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 and is ranked among the Top 5 Arbitrators in Kenya in 2022 by The Lawyer Africa. 

References

Muigua, K., “Nurturing International Commercial Arbitration in Kenya,” Available at: http://kmco.co.ke/wp-content/uploads/2021/10/Nurturing-International-Commercial-Arbitration-in-Kenya.pdf (accessed 15 July 2022).

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