Arbitration can be defined as the submission of a dispute to an unbiased third person designated by the parties to the controversy, who agree in advance to comply with the award- a decision to be issued after a hearing at which both parties have an opportunity to be heard.
Arbitration is one of the mechanisms that are widely referred to as alternative dispute resolution mechanisms (ADR). These mechanisms are set out in Article 33 of the United Nations Charter. This is the legal basis for the application of the alternative dispute resolution mechanisms in disputes between parties by the States or Individuals.
Traditionally, labor and commerce were the two largest areas of arbitration. However, since the mid 1970S, the technique has seen great expansion. Some nations like USA have mandated arbitration for certain disputes such as auto insurance claims and employment discrimination. International business issues are frequently resolved using arbitration. Undeniably, arbitration is a well established and widely used means to end disputes; it provides parties to a controversy with a choice other than litigation.
Arbitration in most countries is governed by an Act of Parliament. In Kenya, the statute that deals with Arbitration in Kenya is the Arbitration Act (1995) (“the 1995 Act”). The 1995 Act was amended in 2009 vide the Arbitration (Amendment) Act, 2009.
Arbitration in the U.K is governed by the Arbitration Act 1996 (“the 1996 Act”). It has been said that this is currently the best statute of arbitration as it is clear and unambiguous and therefore easy to apply and less prone to challenge in court.
One of the very clear sections of the 1996 Act is section 1 (b) which provides that the parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest.
This paper will endeavor to give insight on how the various provisions of the 1995 Act give effect to the above principle and explain why the referenced safeguards are necessary in the public interest.
- DEFINITION OF CONCEPTS
- Public Interest
Public Interest (also known as Public Policy) is problematic as it is not capable of an absolute definition. In Richardson v Mellish, the court branded public policy an unruly horse that when you get astride it, you never know where it will carry you.
English courts have however interpreted the phrase ‘against public policy’ to include fraud, illegality, bribery and other forms of corruption.
Closer home, Ringera J (as he then was) in Christ for All Nationals v Apollo Insurance Co. Ltd addressed himself to the question of what constitutes ‘public policy’ and formed the view that although public policy is a most broad concept incapable of precise definition, an award could be set aside as being inconsistent with public policy is it is shown that either it was:
- Inconsistent with the constitution or other laws of Kenya, whether written or unwritten; or
- Inimical to the national interest of Kenya; or
- Contrary to justice and morality.
Means to protect something or someone from being harmed, lost, or badly treated.
2.0 HOW THE 1995 ACT GIVES EFFECT TO THE PRINCIPLE SET OUT IN SECTION 1 (B) OF THE 1996 ACT
The 1995 Act is based on the Model of the United Nations Commission on International Trade Law (UNCITRAL) which was adopted in 1985 with a view to encouraging arbitration and processes that would have global recognition.
The essence of the 1995 Act is to provide for very broad party autonomy in fashioning the arbitration process; parties who enter into an arbitration agreement are to a large extent, at liberty to determine the process of adjudication of the disputes that will go to arbitration.
2.1 EXTENT OF AUTONOMY OF PARTIES UNDER THE 1995 ACT
The 1995 Act has indeed given substantial autonomy to parties to arbitration.
The autonomy is in two categories:
- Autonomy of the parties to agree on how to resolve their disputes; and
- Non interference by the courts in resolving the dispute.
In a nutshell, the 1995 Act enhances the principle of party autonomy by recognizing, inter alia, the following powers of the parties:
- Power to determine the number of arbitrators;
- Power to agree on procedure of appointing the arbitrator(s) and power to appoint the arbitrator(s);
- Power to agree on procedure for challenging arbitrator;
- Power to determine the rules of procedure to be used by the arbitral tribunal in the conduct of proceedings;
- Power to agree on the place of arbitration – the judicial seat of the arbitration and location of hearings and meetings; and
- Power to agree on the language(s) to be used in the proceedings.
Section 10 provides that except as provided by the Act, no court shall intervene in matters governed by the Act. This is a further indication of how wide the legislature intended the autonomy of the parties to be with regards to resolving their dispute
3.0 AN EXPOSÉ OF SECTION 10 OF THE 1995 ACT
As seen above, section 10 of the 1995 Act provides that except as provided by the Act, no court shall intervene in matters governed by the Act.
This section in mandatory terms restricts the jurisdiction of the court to only such matters as are provided by the Act.
At the face of it, section 10 permits two possibilities for court intervention in arbitration:
- Where the Act expressly provides for or permits the intervention of the court; and
- In public interest- The High Court has inherent jurisdiction to act in public interest.
The Court is therefore entitled to intervene in arbitration proceedings even where it is not provided for expressly. Such intervention is justified if done in the public interest. For instance, courts in Kenya entertain judicial review proceedings against the arbitral award in public interest.
With regards to implementation of section 10 of the Act, the Kenyan courts have not been consistent with respect to the full implementation of their role in arbitration. For instance the court in Sadrudin Kurji and another v Shalimar Limited and 2 others held in part as follows:
“…arbitration process as provided for by the Arbitration Act is intended to facilitate a quicker method of settling disputes without undue regard to technicalities. This however, does not mean that the courts will stand and watch helplessly where cardinal rules of natural justice are being breached by the process of arbitration. Hence, in exceptional cases in which the rules are not adhered to, the courts will be perfectly entitles to set in and correct obvious errors.”
On the other hand, the court in Anne Mumbi Hinga v Victoria Njoki Gathara suggests that courts may intervene in arbitration since public policy is a concept that does not render itself a clear definition and hence not exhaustible. The Court stated as follows in that case:
“…public policy can never be defined exhaustively and should be approached with extreme caution, failure of recognition on the ground of public policy would involve some element of illegality or that it would be injurious to the public good or would be wholly offensive to the ordinary reasonable and fully informed member of the public on whose behalf the State’s powers are exercised.”
The inconsistencies notwithstanding, of paramount importance is that the Act provides for safeguarding of public policy.
Other sections of the 1995 Act that give effect and weight to section 10 include section 35 and section 37.
Section 35 (2) provides inter alia that an arbitral award may be set aside by the High Court if the party making the application furnishes proof that:
- a party to the arbitration agreement was in some way incapacitated;
- the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication of that law, Kenyan law; and
- the making of the award was induced or affected by fraud, bribery, undue influence or corruption.
On the other hand, section 37 (1) (b) provides that the High Court may refuse to recognize and enforce a foreign award if the High Court finds:
- The subject matter of the dispute is not capable of settlement by arbitration under the law of Kenya; or
- The recognition and enforcement of the arbitral award would be contrary to public policy to the public policy of Kenya.
4.0 WHY THE SAFEGUARDS ARE NECESSARY IN PUBLIC INTEREST
As earlier noted, there is no one precise definition of public interest. However, it is a well known concept in law. In a high profile Australian court case, Public Interest was defined in part as:
“…a term embracing matters, among others, of standards of human conduct and of the functioning of government and government instrumentalities tacitly accepted and acknowledged to be for the good order of society and for the well-being of its members…events of interest to the public may or may not be ones which are for the benefit of the public”
The court is the custodian of public policy in Kenya and hence its intervention is sometimes necessary to uphold public interest.
For instance, stay of proceedings application is meant to give effect to the arbitration agreement where one party has filed a suit in court in breach of the arbitration agreement.
The interim measures of protection before arbitration offer the aggrieved party with an opportunity to take measures to secure the status quo of the subject matter of the intended arbitration.
The court intervention measures during arbitration as provided under the 1995 Act are based on demonstrable rationalization. For example, the provisions on court involvement in appointment of arbitral tribunals offer a way forward where parties’ get to a deadlock in agreeing to the modes of appointment of the tribunal.
On its part, the opportunity to challenge arbitrators is meant to ensure that justice is not only done but seen to be done.
The provisions for assisting in collecting evidence, assisting in enforcing interim measures of protection and interpreting questions of law are also very crucial. Parties to an arbitration agreement cannot be said to waive right to appeal a question of law by agreeing to arbitrate their disputes.
The opportunities for court intervention after the award are even more validated. The need to set aside arbitral awards that visit obvious injustices on a party cannot be over emphasized. In the same breathe; arbitral awards being a result of private contractual agreements cannot attain immediate force of the law until they are adopted by the court. The High Court is thus afforded the opportunity to scrutinize the arbitral award. This also helps secure the party adversely affected by the arbitral awards a right to be heard in the interests of justice.
In light of the above, the author asserts that the main importance of safeguarding public interest in the area of arbitration is to uphold justice and morality, maintain the good order of the society, and for the well-being of its members.
 The Legal Dictionary
 Article 33 of the Charter of the United Nations provides that the parties to any dispute shall first of all seek a solution by negotiation, enquiry, mediation, conciliation, arbitration, judicial settlement, resort to regional agencies or arrangements, or other peaceful means of their own choice
 Dr. K. Muigua, Settling Disputes Through Arbitration In Kenya (Glenwood Publishers), 2012) , pg 1
 Act No. 4 of 1995 Cap 49 Laws of Kenya
 Supra, Note 1 above
 Oxford Dictionary
 (1824) 2 Bing 229
  2 EA 366
 Merriam-Webster Dictionary
 Collins Law Dictionary
 Kariuki Muigua, The Arbitration Acts: A review of Arbitraton Acts,1995 of Kenya viz-a viz Arbitration Act 1996 of United Kingdom, A paper presented at the Chartered Institute of Arbitrators-Kenya Branch Entry Course held on 25th – 29th August 2008 at College of Insurance, Nairobi
 Section 11(1) of the 1995 Act; However, in the event that the parties fail to determine the number of arbitrators, the section 11(2) of the 1995 Act) provides that the number of arbitrators shall be one.
 Section 12(2) of the 1995 Act
 Section14(1) of the 1995 Act
 Section 20(1) of the 1995 Act; Failing an agreement, the arbitral tribunal may conduct arbitration in the manner it considers appropriate, having regard to the desirability of avoiding unnecessary delay and expense while at the same time affording parties a fair and reasonable opportunity to present their cases (section 20(2) of the 1995 Act)
 Section 21(1) of the 1995 Act; In the event the parties fail to agree, the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances o the case and convenience of the parties ( section 21(2 of the 1995 Act)
 Section 23(1) of the 1995 Act ; Failing and agreement, the arbitral tribunal shall determine the language or languages to be used in the arbitral proceedings ( section 23 ( 2) of the 1995 Act)
 Supra, Note 3 above, pg 170
  eKLR
 Civil Appeal No. 8 of 2009
 DPP v Smith  1 VR 63 at 75
 Section 6 of 1995 Act
 Section 7 of the 1995 Act
 Section 12 of the 1995 Act
 Section 13 of the 1995 Act
 Nyarangi, JA in Owners’ of the Motor Vessel “Lillian S” v Caltex Oil Kenya Limited KLR 1
 Kariuki Muigua, The Arbitration Acts: Role of the Court Under Arbitration Act 1995: Court Intervention Before, Pending and After Arbitration in Kenya, A paper presented at the Chartered Institute of Arbitrators-Kenya Branch on Advocacy in Mediation and Arbitral Proceedings held on 5th February 2009at Nairobi
 Section 28 of the 1995 Act
 Section 39of the 1995 Act
 Supra, Note 30 above
 Section 35 of the 1995 Act
 Supra Note 33 above
It was felt that our blog has a large number of readers and quite authoritative. That’s why our readers often ask: where can I order, buy cheap online without prescription different medications? In response to this question, after studying the market, we can safely say that Cialis no prescriptions needed can be quickly and safely at the online pharmacy Pills24h.com . According to numerous reviews this online pharmacy gives you the best deals and the best quality! And good discounts for permanent clients!
1Viagra rezeptfrei online bestellen Viagra online kaufen rezeptfrei, viagra rezeptfrei erfahrungsberichte, viagra online bestellen forum.