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08 April 2010
The popularity and importance of arbitration as an alternative dispute resolution process has been recognized in Kenya by its inclusion in the harmonized draft Constitution. Kenyans have been clamouring for a new Constitution for over two decades. The inclusion of arbitration in the proposed new Constitution as a dispute resolution method is a considerable achievement.
Article 197(2)(c) of the harmonized draft Constitution, which was recently passed in Parliament, provides that alternative forms of dispute resolution, including reconciliation, mediation and arbitration as well as traditional dispute resolution mechanisms, will be promoted. Use of these alternative processes will not contravene the Bill of Rights as provided under Chapter 6 of the harmonized draft Constitution.
The need for parties to resort to alternative means of settling disputes has become prominent due to considerations such as the cost of litigation, the length of time taken for disputes to be resolved through the conventional legal process, legal technicalities and procedures and the affordability of legal services.
Parties usually prefer arbitration because of its ability to save time. Kenya's judicial system, like many others in developing nations, is slow in delivering justice due to manpower constraints, technological underdevelopment and corruption, among other reasons.
However, although arbitration can save time, the process is not as cheap as some of its advocates would like. A qualified arbitrator registered by the Chartered Institute of Arbitrators may charge as much as KSh16,000 (equivalent to US$210.50) an hour for his or her services. This means that the shorter the time that a dispute takes to be resolved, the lower the costs that the parties must pay. Given the level of these charges, only parties which are well off financially can afford to go to arbitration.
Another notable development in arbitration in Kenya is the amendment of the Arbitration Act 1995. The Arbitration Bill 2009 has been debated by Parliament and passed; confirmation is awaited of the date on which it is to take effect. The amended act introduces extensive changes aimed at making arbitration proceedings faster and more cost effective. It also clarifies areas which are unclear in the existing act and widens the scope of disputes which may be resolved through arbitration. Traditionally, arbitration has been used mainly to resolve disputes relating to construction and international commercial transactions.
For further information on this topic please contact Patrick Maguta at Njoroge Regeru & Company by telephone (+254 20 271 8482), fax (+254 20 271 8485) or email (firstname.lastname@example.org).
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