Private sector seeks drop in legal costs

Kenya’s private sector is banking on new reforms in the Judiciary to streamline the process of resolving commercial disputes and save billions of shillings in legal costs.

Increased economic activity and stricter legislation have led to a surge in the number of boardroom wrangles and tender disputes over the last five years.

The private sector now wants the Judiciary to develop mechanisms that cater to issues specific to the business community and shorten the legal process.

“Both internal and external investors look very closely at the judicial system before committing their investments, and a solid rule of law reduces the cost of doing business,” said Vimal Shah, CEO of manufacturer Bidco Oil.

He was speaking at the launch of the Business Court Users Committee, a partnership between the Judiciary and the private sector through the Kenya Association of Manufacturers (KAM) and Kenya Private Sector Alliance (Kepsa).

The committee, which will have a presence in all major court stations across the country, will be tasked with providing an avenue for the private sector to air their concerns on the judicial process.

According to the latest cost of doing business report, Kenya registered several gains in terms of reducing the cost and bureaucracy involved in setting up a business and registering property.

“If we know that we can go to court and get efficient dispute resolution then there is an incentive to invest, because it creates a forum for accountability,” said KAM Chief Executive Phyllis Wakiaga.

Mr Shah added: “When we were setting up Nema [National Environment Management Agency], we came up with resolutions, like if Nema does not respond to your application within 90 days, you proceed with construction. We need to have the same for court cases, where we are proposing a one-year time limit for the resolution of cases.”

Chief Justice Willy Mutunga asked the business community to pull its weight to streamline the judicial system.

“A clean and efficient justice system is good for business and the Government alike, and the private sector can’t remain mute in ongoing corruption perpetrated by its members,” he said.

“What is the private sector doing to its members who supply the Government with goods at inflated costs?”