KENYA Trends and Developments Contributed by: Ahmednasir Abdullahi, Asli Osman, Peter Muchoki and Elizabeth Wangui Mungai, Ahmednasir Abdullahi Advocates LLP
Arbitration in Kenya: The Promise Versus the Practical Feasibility Introduction Arbitration has emerged as a powerful panacea to the persistent challenges of traditional court litigation by offering a dynamic and efficient alternative that allevi- ates the burdens of chronic judicial backlogs, proce- dural inflexibility and protracted delays. It is perceived as fostering a more accessible and equitable resolu- tion process. The Arbitration Act, Cap. 49 of the Laws of Kenya, was enacted in 1995 with much optimism, aligning Kenya with the UNCITRAL Model Law and giving effect to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. In prin- ciple, arbitration promised speed, cost-effectiveness, confidentiality, neutrality and, above all, finality. For an economy seeking to attract investment and enhance commercial certainty, these features seemed indis- pensable. Yet, nearly three decades on, the promise has not trans- lated into reality. The Kenyan arbitration experience is sobering, as it remains plagued by three interlinked challenges: excessive costs, limited accessibility and an erosion of finality through judicial intervention. Over three decades of jurisprudence have exposed the uneasy relationship between arbitral tribunals and the courts, with judges having immense, but limited, power to revisit the merits of awards despite the statu- tory limits under Section 10 of the Act. In the end, the alternative dispute resolution system also often mirrors the litigation it was meant to replace, with Kenya continually grappling with balancing party autonomy against judicial oversight. This article inter- rogates why arbitration in Kenya has fallen short of its initial promise, drawing from statutes, case law, and practical experience, and it proposes reforms that could realign arbitration with its founding promises. The legal framework The principal legislation governing arbitration in Kenya is the Arbitration Act, 1995 (Cap. 49), as amended in 2009. The Act was deliberately modelled on the UNCI- TRAL Model Law, underscoring parliament’s intention to harmonise domestic practice with international
standards. Kenya is also a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which obliges Kenyan courts to recognise and enforce foreign arbitral awards sub- ject only to limited exceptions. At the core of the Act is a strong policy of non-inter- vention and finality. Section 10 provides in categorical terms: “Except as provided in this Act, no court shall intervene in matters governed by this Act.” Section 32A goes further, declaring that “an arbitral award shall be final and binding upon the parties and no recourse is available against the award [other] than in the manner provided by this Act.” Together, these provisions reflect the legislature’s intent to assure commercial parties of certainty and closure. At the same time, the Act provides defined gateways for court oversight. Section 35 permits a party to apply to the High Court to set aside an arbitral award on enumerated grounds such as incapacity, invalidity of the arbitration agreement, lack of jurisdiction, proce- dural irregularity or conflict with public policy. Section 39 allows parties, where they so agree, to appeal to the High Court “on any question of law arising out of the award.” In practice, this provision is primar- ily invoked in domestic arbitrations where the parties prefer judicial scrutiny of legal interpretation. The result is a framework that on its face balances arbitral autonomy with limited judicial safeguards. On paper, Kenya’s statutory scheme mirrors interna- tional best practice: robust party autonomy, finality of awards, and narrow, defined recourse to the courts. The difficulties lie not in the statutory text, but in how courts and practitioners have interpreted and opera- tionalised these provisions in practice. As we shall see, the lived practice under the Act has diverged sharply from the ideal. Judicial attitudes and case law While the Arbitration Act, 1995 embodies the principle of finality, Kenyan jurisprudence has steadily expand- ed judicial oversight, eroding the finality that parties expect when they opt for arbitration. Kenyan jurispru- dence has evolved along a trajectory that begins with judicial restraint, moves towards gradual expansion and now rests in a fragile and unsettled balance.
580 CHAMBERS.COM
Powered by FlippingBook