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*
A number of mechanisms and forums are provided for within the Kenyan law and adopted international legal instruments for the management of commercial disputes. The Arbitration Act, 1995 provides for domestic arbitration and international arbitration of mainly commercial nature. The Investment Disputes Convention Act was enacted to give legal sanction to the provisions of the Convention on the Settlement of Investment Disputes between States and Nationals of other States. Section 1 of the Act adopts Article 1 of the ICSID Convention which established the International Centre for Settlement of Investment Disputes whose purpose is provide facilities for conciliation and arbitration of investment disputes between Contracting States and nationals of other Contracting States in accordance with the provisions of the Convention.
The Consumer Protection Act, 2012 was enacted to provide for the protection of the consumer prevent unfair trade practices in consumer transactions and to provide for matters connected with and incidental thereto. One of the purposes of this Act is to promote and advance the social and economic welfare of consumers in Kenya by providing a consistent, accessible and efficient system of consensual resolution of disputes arising from consumer transactions. The Consumer Protection Act also provides for class proceedings and states that a consumer may commence a proceeding on behalf of a class of persons or may become a member of such class of persons in a proceeding in respect of a dispute arising out of a consumer agreement despite any term or acknowledgment in the consumer agreement or other agreement that purports to prevent or has the effect of preventing the consumer from commencing or becoming a member of a class proceeding.
In addition, when a dispute that may result in a class proceeding arises, the consumer, the supplier and any other person involved in it may agree to resolve the dispute using any procedure that is available in law. A settlement or decision that results from the procedure agreed to under subsection (2) should be binding on the parties. The Consumer Protection Act 2012 however provides that ‘any term or acknowledgment in a consumer agreement or a related agreement that requires or has the effect of requiring that disputes arising out of the consumer agreement be submitted to arbitration is invalid insofar as it prevents a consumer from exercising a right to commence an action in the High Court given under this Act.’
It also provides that ‘despite subsection (1), after a dispute over which a consumer may commence an action in the High Court arises, the consumer, the supplier and any other person involved in the dispute may agree to resolve the dispute using any procedure that is available in law’. ‘A settlement or decision that results from the procedure agreed to under subsection (2) is as binding on the parties as such a settlement or decision would be if it were reached in respect of a dispute concerning an agreement to which this Act does not apply.’ The Act also established the Kenya Consumers Protection Advisory Committee whose functions include, inter alia: creating or facilitating the establishment of conflict resolution mechanisms on consumer issues, investigation of any complaints received regarding consumer issues, and where appropriate, referring the complaint to the appropriate competent authority and ensuring that action has been taken by the competent authority to whom the complaint has been referred; and working in consultation with the Chief Justice, County governors and other relevant institutions on the establishment of dispute resolution mechanisms.
The Tax Procedures Act, 2015 was enacted to harmonize and consolidate the procedural rules for the administration of tax laws in Kenya, and for connected proposes. The Act allows out of court or tribunal settlement of tax disputes and provides that ‘where a Court or the Tribunal permits the parties to settle a dispute out of Court or the Tribunal, as the case may be, the settlement shall be made within ninety days from the date the Court or the Tribunal permits the settlement.’ Where parties fail to settle the dispute within the period specified in subsection (1), the dispute should be referred back to the Court or the Tribunal that permitted the settlement. These are some of the statutes that govern domestic commercial matters in the country and they demonstrate that they envisage the use of both litigation and ADR mechanisms in addressing commercial disputes and related matters. However, in Kenya, access to justice has been greatly hampered by the fact that most disputes, especially those of commercial nature take a long time to be resolved by the court system.
*This article is an extract from published article “Utilising Alternative Dispute Resolution Mechanisms to Manage Commercial Disputes,” 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., “Utilising Alternative Dispute Resolution Mechanisms to Manage Commercial Disputes,” Available at: http://kmco.co.ke/wp-content/uploads/2018/09/Utilising-Alternative-Dispute-Resolution-Mechanisms-to-Manage-Commercial-Disputes-Kariuki-Muigua-7th-September-2018.pdf (accessed 09 July 2022).