Firms Told to Seek Mediation to Avoid Lengthy Court Cases

THE judiciary plans to start rejecting commercial cases that have not exhausted Alternative Dispute Resolution process from September, as part of government’s efforts to improve the country’s business environment.

Presiding judge at commercial division of the High Court Fred Ochieng said the initiative, already applied in Uganda and Nigeria, will be piloted at Nairobi’s Milimani High Court before being rolled out to other courts countrywide.

He said the “faster and cheaper” court-mandated ADR process will reduce prolonged backlog of cases, some spanning 10 years, which have discouraged foreign investors.

The cumulative value of business locked in unresolved court disputes is estimated at hundreds of billions of shillings.

“Investors cannot come in when disputes drag and are not resolved in a faster, efficient and cost-effective manner,” Ochieng told a meeting on ease of doing business in Nairobi yesterday. “When the case drags, businessman suffers, business environment suffers.”

The Judiciary worked with the Kenya Bankers Association, Association of Kenya Credit Providers and Strathmore University in drafting the ADR practice rules, in a process that started June last year.

Most of the cases being filed in courts, the judge said, have many issues with only “one or two” requiring determination of the court, further increasing the backlog.

“The first question you will now have to answer is have you tried ADR? If you haven’t, we will send you away,” he said.

Arbitrators and mediators, he said, have already been accredited and will have 30 days to resolve the cases, with the court only determining specific issues not resolved under the ADR framework.

The judiciary however anticipates resistance from lawyers on ground of losing business as mediation charges are lower than the court process.

“Although you will charge your clients less, you make more money because you will be finishing more cases,” Ochieng said. “So it is a win-win situation for everybody.”

He however called for increased capacity building in the office of the Director of Public Prosecutions and State Law office to ensure easier resolution of cases towards a target of not more than two years from the present 10 years.

“We should not have the Judiciary walking faster when the twin brothers are lagging behind,” he said.

Faster resolution of court dispute is part of government’s 18-month ease of doing business strategy that started last October.

Other parameters covered include business registration, property transaction, issuance of construction permits, faster taxation process, cross-border trade, access to affordable electricity and credit.

Industrialisation and Enterprise Development Cabinet secretary Adan Mohamed said the ongoing reforms will not only better service delivery to the private sector private sector but also improve Kenya’s ranking in World Bank’s Ease of Doing Business indicator from 136 to 50 out of 189 countries by the year 2020.

“We are equally interested in attracting global capital and investors who are willing and are looking for opportunities to invest,” Mohamed said. “Today, investors have such a wide choice in terms of where to throw their capital, and so part of this is to make sure that we are ready and are the preferred destination of choice for investments.”