When the country’s top business leaders graced an event by Chief Justice Willy Mutunga in Nairobi last week to launch a new justice dispensation initiative, their presence signalled a strong desire to end deep-running frustrations over winding and costly legal proceedings.
The launch of the country’s first-ever Business Court Users Committee (BCUC) followed massive lobbying by the business community that is pushing for better service delivery by the Commercial Division of the Milimani Court that was formed about 19 years ago to specifically handle business feuds.
“Indeed the Commercial Court was borne out of a big outcry from bankers and investors who had increasingly become frustrated because debt recovery and enforcement of contracts were time -consuming processes within the Kenyan justice system,” Dr Mutunga said.
READ: Judiciary to adopt mediation in civil, commercial cases
The Milimani Commercial Court was established in 1996 in response to inadequacies experienced in the general set up of the court system which was congested and lacked adequate facilities thereby aersely affecting the dispensation of justice despite the piling demands of an increasingly fast evolving economic environment in Kenya.
But years into its existence, the court continues to face numerous challenges such as backlog of cases that have over the years triggered fresh demands by the business community for further reforms.
“This year, Kenya was ranked among the third best improved economy globally but if we can improve the way in which business disputes are resolved through the court system we can rank even better next year,” Kenya Association of Manufacturers (KAM)EO, Phyllis Wakiaga, said.
Dr Mutunga however said fresh reforms have been mooted to reinvigorate the functions of the court including the creation of the BCUCs and other forms of Alternative Dispute Resolution (ADR) mechanisms such as mediation and arbitration.
“Since 2011, the Judiciary has made efforts at improving the delivery capacity and operations of the Commercial Court. I have increased the capacity of that division from three judges to six judges. Last year, I issued practice directions that are intended to simplify the rules of procedure of the commercial court,” he said.
“These rules have reduced the length of litigation significantly — in some instances from the previous three days to two hours. Indeed, this has reduced backlog and, hopefully, reduced your legal fees as lawyers should be charging you for fewer days,” he told members of the business community.
The CJ said the recently gazetted Legal Notice No. 197 on Court-Mandated Mediation Rules is expected to help reduce backlog by keeping some of the commercial disputes out of court.
Following the publication of the Mediation (Pilot Project) Rules 2015 in October, litigants filling civil cases at the family and commercial division of the Milimani Law Courts in Nairobi will from January have an alternative dispute-resolution window when a pilot project by the Judiciary starts.
Dr Mutunga last month gazetted the Mediation (Pilot Project) Rules 2015, paving the way for the rollout of the initiative targeted at clearing backlog of cases that have choked the legal system.
According to the new rules by the CJ, every civil action instituted in court will forthwith be subjected to mandatory screening by the Mediation Deputy Registrar and those found suitable may be referred for mediation.
For cases referred to mediation, the Registrar shall notify the parties within seven days of completion of screening to enable them file a case summary.
Three qualified mediators would then be nominated by the Deputy Registrar and the parties notified with a seven-day window to state their preferences of the nominees in order of priority.
The parties will not pay the mediators under the pilot project and all mediation proceedings shall not exceed 60 days from the date of commencement. The Deputy Registrar’s office will only allow a maximum 10-day extension of the proceedings in exceptional cases where parties encountered complex issues.
Some members of the business community lauded the introduction of mediation as an alternative dispute-resolution mechanism. “Arbitration becomes expensive with legal fees. If we are able to resolve disputes through mediation with half the costs we will be able to remove half the big cases in court today.
New disputes will be resolved without going the full court process, which is often very long,” industrialist Vimal Shah said. Mr James Mang’erere, president of Mediation Training Institute East Africa, said the cost of mediation is cheaper than arbitration because of the flexible work arrangement.
For instance, certified mediators charge an average Sh8, 000 to Sh10, 000 an hour within the first three years of cases and about Sh10, 000 to Sh15, 000 an hour for cases that are above five years.
In comparison, arbitrators charge between Sh20, 000 to Sh50, 000 per hour for cases handled. Some arbitrators even charge higher fees depending on the matter at hand and demand down payments of up to Sh200, 000.
“The aantage of mediation is that the costs are negotiable and cases can wind up within the shortest time possible because the parties are led to specifics. Arbitration cases are winding and can run for up to seven years and arbitrators even insist on deposit fees,” Mr Mang’erere told the Business Daily.
Justice Fred Ochieng’, the presiding judge of the Commercial and Admirality Division said the mediation scheme is on track for a launch in January.
“With mediation we are pretty much on track and the mediators’ accreditation committee is now doing the licensing of the first mediators. Once all that is completed we want to have one or two sessions with the mediators and the judges and the administrative arm which is the deputy registrar before we kick off,” he said.
The accreditation committee has already selected a team of about 50 mediators in various fields to handle the mediation cases, he said, adding that the number of selected mediators is informed by the fact that all new cases will have to undergo mediation and the mediators can only handle a few cases part time in addition to their daily duties.
During the pilot stage, parties will not be required to pay for the services of the mediator because the costs would be met by the Judiciary and some development partners.
“The accreditation team which is being chaired by judges of the Court of Appeal Alnashir R M Visram and a team comprising people like John Ohaga and Allan Gichuhi as well as people who are arbitrators but also practice as mediators,” the High Court judge said, adding that the team would slowly continue to accredit those who are interested in becoming mediators as the programme is expanded.
“For those who have gone for mediation and either failed to totally agree or failed to agree on a particular issue in dispute, they will be required to come with a certificate from the mediator saying the extent of the problem and what was settled.
“The beauty of mediation unlike arbitration is that the details discussed before the mediator cannot be repeated before court. With the arbitration process they take notes and keep records of what was said and once the dispute is brought to court the parties can refer to what was said earlier,” he said.
SOURCE: BUSINESS DAILY