Commercial Arbitration

Last verified on Thursday 13th April 2023

Commercial Arbitration: Kenya

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1. Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?

Kenya

Kenya ratified the New York Arbitration Convention on the Recognition and Enforcement of Foreign Arbitral Awards on 10 February 1989 making it a party to the Convention. Additionally, section 26 (2) of the Arbitration Act of Kenya stipulates that an international award shall be recognised as binding and enforced in line with the provisions of the New York Convention or any other convention to which Kenya is signatory. Kenyan courts are therefore mandated to enforce foreign arbitral awards irrespective of the state in which the award was made, subject to limited exceptions provided under the New York Convention and the Arbitration Act. One of these exceptions is related to an instance where the recognition or enforcement of the arbitral award would be contrary to public policy in Kenya.

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2. Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?

Kenya

Kenya is a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted by the United Nations General Assembly in New York on 10 June 1958, which is known as the New York Convention. This has been domesticated through the Arbitration Act 1995 the Arbitration Act, which permits Kenyan courts to enforce foreign arbitral awards irrespective of the State the award was made but subject to the limitations provided by the New York Convention and the Arbitration Act.

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3. Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?

Kenya

The primary legislation governing arbitration in Kenya is the Arbitration Act (No. 4 of 1995) whose application spans both domestic and international arbitration proceeding, and enforcement of the awards. The Arbitration Act incorporated the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention) to provide for the recognition of foreign arbitral awards in Kenya. The Arbitration Act is based entirely on the UNCITRAL Model Law. Additionally, it applies to all arbitral proceedings whose seat is in the Kenyan jurisdiction.

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4. What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?

Kenya

The following constitute the widely used arbitration bodies relevant to international arbitration:

  • The Nairobi Centre for International Arbitration (NCIA), which was established by the NCIA Act (2013). The NCIA (Arbitration) Rules (2015) are used in tandem with the Act.
  • Second, the Chartered Institute of Arbitrators (CIArb), which was established in Kenya in 1984 and registered under the Societies Act Chapter 108, Laws of Kenya. It has published the CIArb Arbitration Rules (2015) now (2020 Arbitration Rules), which came into force on 1 October 2022 and apply to all arbitration cases registered after this date. The 2020 Arbitration Rules provide an in-depth set of procedural rules in comparison to the former.

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5. Can foreign arbitral providers operate in your jurisdiction?

Kenya

The International Centre for Settlement of Investment Disputes (ICSID) is usually the preferred dispute resolution institution for international investors, particularly because Kenya is party to the ICSID convention and has bilateral investment treaties (BITs) with some countries. So far, Kenya has had two ICSID arbitrations:

  • World Duty Free Company Limited v Republic of Kenya (ICSID Case No. ARB/00/7). This was concluded in 2006. The investor was incorporated in The Isle of Man.
  • Cortec Mining Kenya Limited, Cortec Pty Limited and Stirling Capital Limited v Republic of Kenya (ICSID Case No. ARB/15/29). This was concluded in 2018. The investors were incorporated both in Kenya and the United Kingdom.

International companies involved in investment and commercial disputes not involving the state use arbitration clauses providing for dispute resolution by institutions such as the London Court of Arbitration (LCIA), the United Nations Commission on International Trade Law (UNCITRAL), the International Chamber of Commerce (ICC) and the Stockholm Chamber of Commerce (SCC).

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6. Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with, and supportive of, the law and practice of international arbitration?

Kenya

There is no specialist arbitration court in Kenya. As a guiding principle, however, in exercising judicial authority, article 159(2)(c) of the Kenyan Constitution states that the court is to promote all forms of alternative dispute resolution that include arbitration, reconciliation, mediation and traditional dispute resolution mechanisms. As the foundational piece of legislative authority, the Constitution firmly establishes Kenya as a pro-arbitration country.

The courts in Kenya have had a few occasions where they have had to apply their minds to the place and practice of international arbitration in Kenya.

There is growing jurisprudence in the Kenyan courts that is indicative of the abidance to the provisions of the Arbitration Act as far as they relate to section 10. Interestingly, a bulk of this jurisprudence relates to applications to set aside arbitral awards under section 35 of the Arbitration Act. A read through these cases demonstrates that the High Court of Kenya is not willing to go beyond the scope set out under section 35 as grounds for setting aside an award, and any decision made by the court with regards to section 35 cannot be appealed in the higher courts.

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Agreement to arbitrate

7. What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?

Kenya

To be valid, an arbitration agreement must meet the requirements set out in section 4 of the Arbitration Act 1995 (as amended in 2010) that is, it must be in writing and may form a separate agreement or be included as a clause within a contract. It may be incorporated by reference to another document, may be contained in an exchange of letters, telex, telegram, facsimile, email or other means of telecommunications that provide a record of the agreement, or may be an exchange of pleadings where there is no contravention of the existence of an arbitration agreement.

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8. Are any types of dispute non-arbitrable? If so, which?

Kenya

Disputes relating to family matters such as divorce and succession are non-arbitrable; in addition, disputes arising from criminal activity are not arbitrable; it is also doubtful whether disputes in which fraud or corrupt conduct is alleged can be subjected to arbitration.

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9. Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?

Kenya

An arbitration agreement binds parties to the agreement by virtue of the privity of contract principle. Therefore, a person cannot be bound by a contract to which they are not a party and cannot in turn be joined to the arbitral proceedings. Kenyan case laws reflect this position. However, there are exceptions to this rule, as stipulated under the Arbitration Act;

  • on the death of a party, the agreement is enforceable against or by the deceased’s personal representative; and
  • in the case of bankruptcy, the trustee in bankruptcy adopts the contract and terms.

In the event of bankruptcy, the trustee in bankruptcy adopts the contract and the terms are enforceable by or against the trustee (section 38, Arbitration Act).

The Arbitration Act is silent on the position of individuals such as agents and heirs in relation to the arbitration agreement. The court in KNHA v Masosa [2015] eKLR determined that a third party is bound by the agreement where there are facts that could lead the court to conclude that the third party had either authorised the parties to the contract to join it to their contract or chosen to accept the terms of the agreement.

The court will give precedence to the rules (if any) agreed by the parties.

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10. Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?

Kenya

Consolidation of separate arbitral proceedings is endorsed in Kenya but with the parties’ consent.

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11. Is the "group of companies doctrine" recognised in your jurisdiction?

Kenya

Yes, the ‘group of companies doctrine’ is recognised in our jurisdiction.  

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12. Are arbitration clauses considered separable from the main contract?

Kenya

The Arbitration Act provides that arbitration agreements are considered separable from the underlying contract owing to the doctrine of separability (section 17). This position has been enunciated in case laws, including Nedermar Technology Ltd v Kenya Anti-Corruption Commission & Another (2006) eKLR, where the court stipulated that an arbitration agreement survives the termination of the contract. Hence, to be unenforceable, the arbitration clause itself must be challenged for: lack of intention to create a legally binding arbitration agreement; lack of consensus; legal incapacity and termination of the agreement.

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13. Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal's jurisdiction and competence?

Kenya

The Arbitration Act incorporates the principle of competence-competence in Kenyan arbitral law and practice (section 1). The courts are mandated to determine issues relating to a tribunal’s jurisdiction only when the jurisdiction is subject to challenge by the tribunal. The losing party is entitled to apply to the High Court for final determination of the issue.

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14. Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?

Kenya

  • The arbitration clause should clearly define the types of disputes that will be subject to arbitration. It should specify whether the clause covers all disputes or only certain types of disputes such as those arising out of a specific contract;
  • it should also specify the law that will govern the arbitration and the seat of arbitration. The law of the seat determines the procedural rules that will govern the arbitration while the law applicable to the dispute will determine the substantive law that will apply;
  • the clause should specify the number of arbitrators who will hear the dispute. The default is often one arbitrator, but parties may choose to have a panel of three arbitrators;
  • the clause should specify the procedure for appointment of the arbitrators, such as by mutual agreement or through a designated institution;
  • the clause should specify the language in which the arbitration will be conducted and the place where the proceedings will take place;
  • the clause should specify the rules that will govern the arbitration. This can be the rules of a designated institution such as the ICC or the LCIA or the NCIA, or ad hoc rules such as UNCITRAL arbitration rules;
  • the clause should specify the allocation of costs, including the fees of the arbitrator(s) and the costs of the arbitration institution, if any;
  • the clause should specify how the award will be enforced and the grounds on which it can be challenged; and
  • the clause may also address the issue of confidentiality, and specify whether the proceedings will be confidential.

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15. Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?

Kenya

The use of institutional arbitration is growing following the establishment of the Nairobi Centre for International Arbitration (NCIA). Most contracts will incorporate the UNCITRAL Rules but the NCIA now has its own rules.

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16. What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.

Kenya

The points to consider are:

  • the governing law and jurisdiction of the arbitration agreement. The choice of law and jurisdiction should be carefully considered to ensure that it is suitable for the parties and that their agreement will be enforceable;
  • the agreement should specify the number of arbitrators to be appointed. This will obviously depend on the complexity of the dispute and the preferences of the parties;
  • the agreement should provide for the appointment of arbitrators. This can be done in several ways including by the parties agreeing on a list of arbitrators or appointing a third party to make the appointment;
  • the agreement should specify the qualifications required for arbitrators. This can include their professional background, experience in the relevant industry and language proficiency;
  • the agreement should provide a procedure for challenging arbitrators. This is important in case one of the parties has concerns about the impartiality or independence of an arbitrator;
  • the agreement should provide for the consolidation of proceedings in case of related disputes. this will help to ensure that the arbitration process is efficient and cost effective;
  • the agreement should specify the language of the arbitration. This is important to ensure that all parties can understand and participate in the proceedings;
  • the agreement should specify the seat of arbitration. This will determine the procedural law and the supervisory court that will have jurisdiction over the arbitration; and
  • the agreement should specify the governing institutional rules, if any. Institutional rules provide a framework for the conduct of the arbitration and can help to ensure that the process is fair and efficient.

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Commencing the arbitration

17. How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?

Kenya

The Kenyan Arbitration Act 1995 provides that an arbitral proceeding commences on the date on which a request for arbitration is received by the respondent unless it is agreed otherwise (section 22). Therefore, in practice, the terms of the arbitration agreement or clause are instigated once the first step which is the appointment of the arbitrator is done (section 12(2)). In the event that there is a lack of consensus, the arbitration commences on the date the respondent receives a request to refer the matter to arbitration (section 22).

Limitation periods

The Kenyan Limitations of Actions Act, Chapter 22 of 2007, does not expressly limit bringing arbitration claims within a specified period of time. Nevertheless, it is arguable that as a commercial contract, an arbitration clause will fall within the scope of general civil matters where an action founded on a contract will be limited to six years. Furthermore, an action for the recognition and enforcement of awards cannot be brought after six years have lapsed from the date the cause of action was instigated. The arbitration agreement may equally contain a limitation period within which the arbitration is scheduled to commence, which is routinely 30 days.

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Choice of law

18. How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?

Kenya

The substantive law of the dispute shall be determined by the parties during the negotiations. In the event the parties fail to do the same, the Arbitration Act sets out guidelines regarding the procedure an arbitrator should employ when determining the substantive law of the contract (section 29(3-5)):

  • the arbitral tribunal shall apply the rules of law it deems appropriate;
  • the arbitral tribunal shall determine the substance of the dispute in line with consideration of justice and fairness; and
  • the arbitral tribunal shall make its decision in line with the terms of the contract while considering usages of trade applicable to the transaction.

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Appointing the tribunal

19. Does the law of your jurisdiction place any limitations in respect of a party's choice of arbitrator?

Kenya

Parties are afforded broad discretion to choose an arbitrator. The following factors are taken into account:

  • the parties shall choose the number of arbitrators;
  • in the event the parties fail to choose, there will be one arbitrator; and
  • in a situation where the arbitration agreement provides that there will be two arbitrators, unless a converse intention is indicated in the agreement, the two arbitrators will appoint a third after their appointment. The requisite qualifications will be determined by the parties and set out within the agreement.

The court will only impose a limitation in relation to setting aside an appointment where it is satisfied that there was good cause owing to failure or refusal by the party in default to appoint their arbitrator in due time. Subsequently, the High Court can then appoint a sole arbitrator upon grant of such an application and with the joint consent of the parties.

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20. Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?

Kenya

Non-nationals can act as arbitrators where the seat is in Kenya since they do not have to be Kenyan nationals or licensed to practice in Kenya to serve as arbitrators (section 12(1) of the Arbitration Act).

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21. How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?

Kenya

The Arbitration Act provides a default procedure to be followed where the parties fail to agree on the nomination of arbitrators (section 12). Section 12(2) provides the following:

  • in an arbitration with three arbitrators, each party will appoint one arbitrator and the other two arbitrators will appoint the third arbitrator;
  • in an arbitration with two arbitrators, each party shall appoint one arbitrator; and
  • in an arbitration with one arbitrator, both parties are mandated to agree on the appointed arbitrator.

Unless the parties have agreed otherwise, in the event that each of the two parties to an arbitration agreement are supposed to appoint an arbitrator, and one party either indicates their inability to comply or fails to do so within the required period of time, the other party (having duly appointed an arbitrator) can give a notice in writing to the defaulting party, proposing their appointed arbitrator as the sole arbitrator. In turn, if the defaulting party does not respond within 14 days of receiving the notice, the other party is free to appoint its arbitrator as the sole arbitrator. Consequently, the resulting award will be binding on both parties with the presumption that both parties consented to the appointment (section 12(5) of the Arbitration Act).

The court will grant the application when satisfied that there was good cause for the failure or refusal of the defaulting party to appoint an arbitrator in time. If the court grants this application, then the applicant may proceed to appoint a sole arbitrator (section 12(5) The court will take into account the qualifications stipulated by the parties in the agreement while regarding other key factors in order to secure the appointment of an independent and impartial tribunal (section 12(9)). Lastly, the court’s decision shall be final and binding and not subject to appeal.

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22. Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?

Kenya

Arbitrators are granted immunity from liability or acts conducted in good faith in the discharge or purported discharge of their duties as an arbitrator (section 16(B)).

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23. Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?

Kenya

Arbitrators can secure payment of their fees in Kenya since they are determined and apportioned by the arbitral tribunal in its award (section 32(B)). The Act further allows arbitrators to withhold delivery of the award to the parties until full payment of the fees and expenses of the arbitral tribunal has been received.

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Challenges to arbitrators

24. On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?

Kenya

The grounds for challenging an arbitrator emerge from circumstances that give rise to justifiable doubts as to the arbitrator’s impartiality and independence. These include:

  • failure to satisfy the qualifications agreed on by the parties that led to the arbitrator’s appointment;
  • being incapable of conducting the proceedings either physically or mentally; and
  • when there are doubts concerning the capacity to conduct the proceedings.

When parties challenge the appointment of the arbitrator, they can rely on these grounds only if they are aware of them after the appointment. In the event the challenging party was aware of them before the appointment, it will be deemed that they waived the stated grounds and agreed to the appointment (section 13 of the Arbitration Act).

Regarding the procedure, the parties can agree on the best mode for challenging the arbitrator. In case the parties have not agreed on the procedure, a challenging party may send a written statement indicating the reasons for the challenge to the tribunal within 15 days when aware of the tribunal’s composition or of the grounds for challenge. In turn, the tribunal then makes a decision regarding the challenge. If the tribunal deems the challenge unsuccessful, the challenging party can then apply to the High Court to determine the matter within 30 days of receiving the decision indicating rejection of the challenge. The decision of the High Court is not final and is subject to appeal. Parties can therefore commence, continue or conclude the arbitral tribunals while the court application is pending. However, awards shall not be issued in these proceedings until the application has been decided. The award therefore becomes void if the application is successful (section 14, Arbitration Act).

In terms of selection of arbitrators, it is common practice that in international arbitrations, parties and the court may refer to the International Bar Association (IBA) Guidelines on conflict of interests in international arbitration.

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Interim relief

25. What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?

Kenya

The Arbitration Act stipulates that a tribunal can order a party to take whatever interim protection measures it deems necessary pertaining to the subject matter of the dispute, with or without an ancillary order that requires an appropriate security be provided. The specific types of reliefs are not specified in the Arbitration Act. However, the court can grant interim orders to maintain a status quo of the subject matter of arbitration before the composition of a tribunal, these include interim injunctions, interim custody or sale of goods. The high court can equally enforce peremptory orders for protection provided by the tribunal.

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26. Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?

Kenya

The Arbitration Act permits a tribunal to order any party to provide security pertaining to any claim or any amount in dispute, or order a claimant to provide security for costs (section 18, Arbitration Act).

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Procedure

27. Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (eg, general duties of the tribunal and/or the parties)?

Kenya

The applicable procedural rules are encompassed in the Arbitration Act as follows:

  • the tribunal will follow the procedure as agreed upon by the parties;
  • in the absence of consensus between the parties, the tribunal will conduct the arbitration as it deems appropriate while affording parties a fair arbitration proceeding and while availing reasonable opportunities to be heard;
  • the power of arbitral tribunals includes the determination of the admissibility, relevance, materiality and weight of any evidence so as to determine the substantive details of the proceeding;
  • similar privileges and immunities shall be afforded to every witness and advocate giving evidence in proceedings before an arbitral tribunal as in court; and
  • the tribunal has a mandate to give directions to the effect that a party or witness shall be examined on oath and can administer or take the necessary oath or affirmation.

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28. What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?

Kenya

The Arbitration Act provides that the court may issue a summons to require a third party to attend the tribunal (section 28 Arbitration Act). This notwithstanding, the power to compel parties to arbitrate has not been provided in the Act since this would be contrary to the consensual nature of arbitration. If a party fails to participate in an arbitration following submission to the arbitral tribunal’s jurisdiction, the tribunal can issue peremptory orders requiring a party to participate. If this fails, the tribunal can then proceed with the hearing and render an award subsequently.

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29. What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Arbitration generally be taken into account?

Kenya

While there is lack of limitation as to the types of admissible evidence, the arbitral tribunal will decide the limits (if any) where the parties are unable to agree. The Arbitration Act stipulates that the tribunal is mandated to determine the admissibility, relevance, materiality and weight of any evidence and to determine the exact point an argument or submission regarding a matter has been fairly and adequately made where parties fail to agree. It is noteworthy that the Evidence Act does not apply to arbitrations.

Regarding the manner in which evidence is taken, the parties must agree on the rules and procedures to be followed (section 20). This agreement should entail how evidence is brought before the tribunal and all the rules that should be put in place to govern it. There is no requirement that mandates parties to disclose particular documents; they only need to be relevant to the arbitration.

The IBA Rules and Prague Rules are accepted as soft law and will generally be available to parties.    

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30. Will the courts in your jurisdiction play any role in the obtaining of evidence?

Kenya

The Arbitration Act provides that the arbitral tribunal may request assistance from the High Court in taking evidence. In turn, the High Court may execute the request within its competence and in line with its rules on taking evidence (section 28).

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31. What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?

Kenya

The Arbitration Act, Act No. 4 of 1995.

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32. Is it mandatory to have a final hearing on the merits?

Kenya

It is not mandatory to have a final hearing on the merits. Section 25(1) gives the arbitral tribunal discretion to decide whether or not to hold oral hearings, subject to any agreement to the contrary by the parties.      

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33. If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?

Kenya

If Nairobi is the selected jurisdiction as the seat of arbitration, hearings and procedural meetings can be conducted elsewhere since the Arbitration Act does not bar this. Section 21 of the Act provides that the parties are free to agree on the seat of the arbitration as well as the location of any hearing or meeting.  

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Award

34. Can the tribunal decide by majority?

Kenya

The Arbitration Act provides that unless otherwise agreed by the parties, any decision of the arbitral tribunal shall be made by a majority of all its members (section 30(1)).

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35. Are there any particular types of remedies or relief that an arbitral tribunal may not grant?

Kenya

The Arbitration Act does not stipulate the specifics as to the type of remedies the tribunal can prescribe to the winning party. Hence, there is no limit on the remedy a tribunal can grant. However, the remedies may be limited to the reliefs sought in the statement of claim and defence.

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36. Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?

Kenya

There is nothing to bar a dissenting opinion, However, these are not common in practice.

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37. What, if any, are the legal and formal requirements for a valid and enforceable award?

Kenya

Section 32 provides that the award shall be in writing and shall be signed by the arbitrator or arbitrators. The award must state the date on which it is made and the juridical seat of the arbitration.   

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38. What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?

Kenya

Section 34 provides a period of 30 days after receipt of the award within which the parties may request for the correction or interpretation of the award. Parties may also request the arbitral tribunal to make an additional award within 30 days of the award.

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Costs and interest

39. Are parties able to recover fees paid and costs incurred? Does the "loser pays" rule generally apply in your jurisdiction?

Kenya

An arbitrator can provide for costs under section 32B of the Arbitration Act. Costs and expenses of an arbitration include the legal and other expenses of the parties, the fees and expenses of the arbitral tribunal and other expenses related to the arbitration. Section 32(B)(1) of the Arbitration Act grants the tribunal a degree of discretion when allocating costs and expenses.

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40. Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?

Kenya

Arbitrators also have the power to award interest. Interest is awarded at a rate and with such rests as the tribunal deems fit, unless the parties have agreed otherwise. It can be simple or compound interest.

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Challenging awards

41. Are there any grounds on which an award may be appealed before the courts of your jurisdiction?

Kenya

First, recourse to appeal is dependent on whether the award was domestic or international. In the case of a domestic arbitration, a party may appeal on a point of law that arises within the arbitration or stemming from an award to the High Court (section 39 of the Arbitration Act). This recourse to the High Court is subject to the parties’ agreement. Further, the High Court’s decision can be appealed to the Court of Appeal in the event there is consensus between the parties or if the court grants leave on the basis that the matters substantially affect the rights of the parties.

In international arbitral awards, the only recourse provided to parties under section 35 of the Arbitration Act is for setting aside the arbitral award. The grounds for setting aside include:

  • incapacitation by a party to the arbitration agreement;
  • invalidity of the agreement under the law it is subject to;
  • the applicant was not given sufficient notice of appointment of the arbitrator;
  • the arbitral procedure or the composition of the tribunal or arbitral tribunal was not in line with the agreement;
  • the dispute in the award is not contemplated or does not fall within the terms of reference to arbitration;
  • the making of the award was induced by fraud, undue influence, bribery or corruption;
  • the award is in conflict with Kenyan public policy; and
  • the subject matter of the arbitration is not arbitrable.

It is equally imperative to mention that before December 2019, there was a presumption that there was no right of appeal to the Court of Appeal in the event a party that had been aggrieved by the decision of the High Court made an application seeking to set aside an award. In the case of Nyutu Agrovet Limited v Airtel Networks Limited (2019) eKLR, the Supreme Court held that where the high court in setting aside an arbitral award under section 35, goes beyond the grounds stipulated and makes a decision that is grave, manifestly wrong and in turn closes the door of justice to either of the parties, an appeal can lie from the high court to the Court of Appeal.  

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42. Are there any other bases on which an award may be challenged, and if so what?

Kenya

No other grounds are available for challenge to the award.  

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43. Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?

Kenya

This is not available to the parties.   

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Enforcement in your jurisdiction

44. Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?

Kenya

The Arbitration Act is unequivocal in this regard. It simply provides that an award set aside or suspended by a court of the state where or under the law of which the arbitral award was made will not be enforced by the high court (section 37(1)(a)(vi).

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45. What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?

Kenya

The trends pertain to recognition and enforcement of international arbitral awards where Kenyan courts have expressed their support of these awards, but, pursuant to their alignment with section 37 of the Arbitration Act to ascertain that the awards coincide with the minimum threshold of justice. Section 37 provides for grounds for refusal of recognition or enforcement of arbitral awards.

In the case of Fox Trot Charlie Inc Vs Afrike Aviation Handlers Ltd & Anor (2012) eKLR, the court made three major stipulations. First, it held that a breach in the procedure regarding an application for recognition and enforcement of an international arbitral award will result in rectification of the procedure but not necessarily precluding consideration of the application on its merits; second, where an Objector challenges the recognition and enforcement of an International Arbitral Award on grounds of public policy, the court has jurisdiction to substantively interrogate the said Award to confirm whether it is consistent with Kenyan law, justice and morality; lastly, the recognition and enforcement of the international arbitral award in this case was disapproved for the reason that the arbitral tribunal imposed the arbitration agreement upon a party who was not party to the arbitration agreement. Further, the arbitral tribunal disregarded issues of bribery and violation of rights, breach of fiduciary duty and non-disclosure of material facts on the part of the applicant. The court held that an applicant cannot benefit from illegalities.

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46. To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

Kenya

Both the New York Convention and the International Centre for Settlement of Investment Disputes allow the defence of state immunity or sovereignty. Therefore, it is always possible that this defence may be raised at an enforcement stage.

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Further considerations

47. To what extent are arbitral proceedings in your jurisdiction confidential?

Kenya

Both the New York Convention and the International Centre for Settlement of Investment Disputes allow the defence of state immunity or sovereignty. Therefore, it is always possible that this defence may be raised at an enforcement stage.

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48. What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?

Kenya

Evidence and pleadings produced in the arbitration may be relied upon in other proceedings.  

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49. What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?

Kenya

Counsel are bound by the Advocates Act in terms of representing parties within the realm of arbitration. Further, benchmark practices are imposed by, among other things, the Chartered Institute Code of Professional Conduct and Ethics and the International Bar Association Code on Representation of Parties in International Arbitration.

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50. Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?

Kenya

There are no peculiar procedural expectations.  

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51. Is third-party funding permitted in your jurisdiction? If so, are there any rules governing its use?

Kenya

Third-party funding is not yet permitted in this jurisdiction.

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