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When arbitration is the best option in a dispute

By James Wanzala | Updated Mon, January 2nd 2017 at 19:38 GMT +3
[PHOTO: COURTESY]

In a country like Kenya where there is a backlog of court cases against a few magistrates, chances of getting justice fast is usually not guaranteed.

The efficiency of Kenya’s legal system and its ability to deliver swift and cost effective justice has remained on a spotlight despite reforms going on in the judiciary.

The slow litigation process leading to loss of money, relationships and time. You need an alternative way of dispute resolution to avoid all these.

In comes the alternative dispute resolution, which involves mediation, arbitration and adjudication. To some, this is the best way to go.

Alternative dispute resolution deals with many disputes that arise from domestic and commercial contractual disputes, neighbour and boundary tiffs, title deed, planning, developer/purchaser disputes among others.

It is a service that many Kenyans, however, are not aware about despite having been entrenched in our Constitution.

In other countries that have embraced ADR long ago like South Africa, it has helped reduce backlog land cases in their courts according to Indrani Govender, an accredited mediator with the African Centre for Dispute Settlement (ACDS).

Ms Indrani, who was the speaker in a one day mediation workshop in Nairobi recently organised by Royal Institution of Chartered Surveyors is also a panelist on the Lands Rights Mediation Project.

The Chartered Institute of Arbitrators, established in the 1970s in the United Kingdom and has presence in Kenya, is working to entrench this practoice here.

Gaining momentum

“We are trying to establish footprint in Africa, we have done five-day and one day training in Accra, Ghana and Lagos, Nigeria on commercial mediation programmes to their institute of quantity surveyors. We are now in Kenya and gaining momentum to impact mediation as ADR,” said Ms Indrani at the time.

The Kenya chapter is the third in Africa after one in Nigeria, Mauritius. A fourth one is coming up in Rwanda.

“I have been in land rights management since 2007 and I have impacted positive change in between white and black land owners in South Africa and trying to inform them that the right way to dispute resolution is mediation and even courts are rejecting such cases,” she said.

The perception of ADR, Indrani says, has been that outside litigation, arbitration must be the first step but it is now changing as more institutions and contracts especially in Accra, and South Africa where they are trying to have Memorandum of Understandings that emphasise that mediation should be the first in solving disputes.

Mediation, Indrani said, expedites dispute resolution and is a private affair unlike litigation since at the end of the day we need to restore relationships. “I am passionate individual in alternative dispute resolution; especially mediation, I believe it is a calling. I am meeting people and selling the gospel of mediation because I want it to be a legacy,” said Indrani, who has over 30 years in disputes resolution

Indrani says ADR is being fully embraced now in South Africa signifying shifting of priorities for the alternative dispute resolution landscape as land courts are rejecting litigation and opting to go this way.

Royal Institution of Chartered Surveyors (Rics) Sub Saharan Africa Regional Director Wafula Nabutola says the adoption of alternative dispute resolution will help reduce conflicts and disputes that have sometimes sadly resulted into bloodshed that has been witnessed in between communities and families. Rics believea through options like mediation, it will ease unease in families and communities and make people understand the Constitution.

“To us this is just the beginning, setting the skeleton and we want to partner with local institutions by offering training after every two months on ADR and dispute avoidance through capacity building using international experience to give a public service that is urgent needed in Kenya,” says Wafula.

Mediation

Mediation, Nabutola says alternative dispute resolution is about building relationships between two parties that have disputes unlike litigation.

The trainings will include a five-day training leading to certificates and a year for diploma in alternative dispute resolution.

To Nabutola, ADR should be the first line of defense, unlike now where some regard it as last resort after courts and that in any commercial contract, there should be an ADR clause so that in case of a dispute, it will be faster to be resolved through arbitration or mediation thus saving time and money.

This is supported by Dennis Dues, a city-based lawyer and land economist, who says they have inserted alternative dispute resolution clauses in their contract forms with clients spelling that the first option is ADR then finally the courts.

According to Chebet Koske, the Chief Executive Officer of Chartered Institute of Arbitrators Kenya, the Kenyan chapter has 757 expert members in alternative dispute resolution.

The highest level is chartered arbiter level with about 50 members, fellows 54 members, member level with about 200 and finally associates level with 350 members.

Challenges like lack of awareness on the public about alternative dispute resolution, Ms Koske, says is also a reason why Kenyans have not really embraced this option.

However, there is hope. University of Nairobi lecturer in the department of Real Estate and Construction Management Tom Oketch says the university has courses that lead to construction management, real estate and architecture that have units, which deal with alternative dispute resolution since 2005.

“We are also constantly reviewing our curriculum that we have so that we are up to date with the current dynamcis. Our aim is to have all-rounder professionals in the industry so that these persons will be able to deal with disputes when they go out of university,” says Oketch, who is also a quantity surveyor and chair of Institution of Construction Project Managers of Kenya.

He says an avenue like mediation is flexible and faster with some cases settlement taking even a day, adjudication should take 28 days compared to courts that can take months and years.

Oketch says the success rate of alternative dispute resolution cases is at 60 per cent.

Another challenge according to Dennis is the many appeal cases in courts after ADR settlements. “This has sometimes caused lack of confidence by Kenyans in alternative dispute resolution and loss of money and time,” he says. He has dealt with ten cases of ADR in the past two years.

According to Ms Koske, currently, the bulk of the cases the institute is dealing with are about construction, civil and commercial law and adjudication is what deals with those cases.

“Under commercial, we have cases related to joint ventures and memorandums of understanding,” she says, adding: “So far, we have over 75 cases since January, which have qualified to undergo alternative dispute resolution but in total we have received 130.”

“Unlike in litigation or courts, there is always a loser and winner when the judge or magistrate issues averdict, this may finally lead to feeling of bias or unfair judgment on one side hence ruining relationship between the two parties,” says oske.

The fact that the cost of the alternative dispute resolution is negotiated between the two parties where in mediation they pay half-half unlike in litigation where the judge can order any of the party to bear the cost of the case is another advantage.

Most arbitrators are experts in other professionals like quantity survey, engineering thus they are able to give professional advice and avoid cases where the case can be settled by a judge or several different judges, who, whilst being independent, may have limited knowledge of your dispute and therefore requires advice from expensive counsels.

Privacy is another advantage. Parties involved are guaranteed privacy of proceeding by the arbitrator, mediator or adjudicator from the public since it is just three of you unlike in litigation, where the parties are subjected to public and even media glare.

When it happens

Arbitration can happen before a case is lodged in court or after when the judge refers that the two of you to seek other options.

“It can also happen when clients disagree in the contract and did not have alternative dispute resolution clause in their contract, but they agree that the best way to solve the dispute is through ADR,” says Dennis.

“The two parties need to notify us that there is a dispute, then we are to certify that the dispute exists in the clauses and has been certified by the parties then.

The institute will then process a nomination of the arbiter who is specialised in the nature of the case and the same is communicated to the parties. The process of nomination or appointment of the arbiter is done by the chairman of the branch. If agreeable, the process starts.

Before arbitration starts, the arbitration clause provided in the contract documents offer the first initial step to solve the dispute,” says Ms Koske.

Charges, she says depend on the nature of the case but there is a scale of fees adopted at the branch to guide.

“The arbiter will continue with the process and if the case is completed, the arbiter issues an award, which is equivalent to ruling in litigation,” she explains.

An adjudicator or mediator should be a keen listener and not quick to make decisions since their role is to guide the parties to reach at a mutual understanding unlike in courts, where we must have a loser and winner.

 The Judiciary has also opened its doors to mediation since the coming into force of the Mediation (Pilot Project) Rules 2015 (Legal Notice Number 197 of 2015) under the Civil Procedure Act on April 4 2016.

It marked the beginning of the pilot phase being implemented in the Commercial and Family Divisions of the High Court at Milimani Law Courts, Nairobi.

After the pilot phase, the judiciary is keen on rolling out the project across the country.


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