A momentous step: Kenya establishes international arbitration centre

International Arbitration Newsletter

By:
  • Kamau Karori*

Earlier this year, legislators in Kenya established the Nairobi Centre for International Arbitration (NCIA) by passing the Nairobi Centre for International Arbitration Act No. 26 of 2013.  The main objective of the NCIA is to facilitate the establishment of an independent and nonprofit centre with a broad mandate necessary to administer domestic and international arbitration in Kenya.

The centre is expected to create and maintain proactive cooperation with other regional and international institutions in the field of alternative dispute resolution.

Arbitration in Kenya before the Centre

Historically, arbitration in Kenya was of a purely domestic nature, with principles substantially drawn from the English Arbitration Act 1996.  In the absence of specific provisions for regional and international arbitration, major multinational entities setting up in Kenya generally opted to include clauses for the resolution of disputes through arbitration in other international seats, such as London or Mauritius, which have well-established international arbitration mechanisms.

From around 2010, the Kenyan business community started to push for the creation of a legal and institutional framework for international arbitration. This arose from the rapid growth in foreign investment in the various sectors of the economy and the de facto establishment of Nairobi as the regional commercial hub. To facilitate the penetration of arbitration and other forms of alternative dispute resolution, the drafters of the 2010 Constitution of Kenya gave the courts a wide latitude to utilize alternative dispute resolution mechanisms.  In line with that thinking, the NCIA was established under the Nairobi Centre for International Arbitration Act No. 26 of 2013.

The NCIA

It is expected that the centre will draw heavily from the experiences of the more established institutions such as the International Chamber of Commerce and the London Court of International Arbitration. To ensure the centre is well funded, provision has been made for the centre to receive funds from the government as well as monies donated or otherwise made available to the centre from other sources.

Under the statute establishing it, the centre will have an Arbitral Court comprised of a president, two deputy presidents, the registrar and 15 other members, all of whom are to be leading international arbitrators from countries in the region. The Arbitral Court will have exclusive original and appellate jurisdiction to hear and determine all disputes referred to it in accordance with the Act or any other written law. The board appointed under the governing statute will have the power to make rules for the recognition and enforcement of arbitral awards.

Expected impact of the NCIA

The establishment of the NCIA is a momentous step towards having a well institutionalized and better co-ordinated arbitration centre for international arbitration in Kenya. The centre has placed Nairobi on the path to being on a par with other major financial hubs that are highly attractive to international investors due to their capacity for speedy commercial dispute resolution. It is expected that Kenya’s international arbitration centre will quickly commence its dispute resolution functions and offer a new platform with the capacity and goodwill to serve the region’s ever-increasing international arbitration needs.

For any further information about dispute resolution in Kenya, please contact Kamau Karori.

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*Kamau Karori  is a partner with Iseme, Kamau & Maema Advocates, Nairobi