Legal framework

National arbitration laws

What legislation applies to arbitration in your jurisdiction?
Arbitration in Kenya is governed by the Constitution 2010, the
Arbitration Act (Chapter 49 of the Laws of Kenya) and the Nairobi
Centre for International Arbitration Act of 2013.
Mandatory laws
Are there any mandatory laws?
No.
New York Convention
Is your country a signatory to the New York Convention? If so,
what is the date of entry into force?
Kenya is a signatory to the New York Convention, which came into force
in Kenya on May 11 1989.
Are there any reservations to the general obligations of the
convention?
Kenya

will

apply

the convention

only

to

the

recognition

and

enforcement of awards made in the territory of another contracting

state.
Treaties and conventions
What other treaties and conventions in relation to arbitration
is your jurisdiction party to?
Kenya has ratified bilateral investment treaties with Germany, Italy,
the Netherlands, Switzerland and the United Kingdom, and these are
all currently in force. These treaties provide for investor-state
arbitration either before specifically constituted arbitration centres (eg,
the International Centre for Settlement of Investment Disputes) or ad

hoc arbitral tribunals.

UNCITRAL
Has your jurisdiction adopted the UNCITRAL Model Law?
The Arbitration Act (4/1995) is modelled on the UNCITRAL Model Law.
In applying the act, the courts are in essence applying the Model Law.
Reform
Are there any impending plans to reform the arbitration laws
in your jurisdiction?
The establishment of the Nairobi Centre for International Arbitration
will result in amendments to the Arbitration Act, further minimising the
courts role in overseeing arbitration and establishing Nairobi as a
centre for international arbitration.
Arbitration agreements
Validity
What

are

the

validity

requirements

for

an

arbitration

agreement?
The requirements for the validity of an arbitration agreement are set
out in Section 4 of the Arbitration Act, which states as follows:
4. (1) An arbitration agreement may be in the form of an arbitration
clause in a contract or in the form of a separate agreement.
(2) An arbitration agreement shall be in writing.
(3) An arbitration agreement is in writing if it is contained in
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegram, facsimile, electronic mail or
other means of

telecommunications which provide a

record of the agreement; or

(c) an exchange of statements of claim and defence in which the
existence of an agreement is alleged by one party and not

denied by the other party.

(4) The reference in a contract to a document containing an arbitration
clause shall constitute an arbitration agreement if the contract is
in writing and the reference is such as to make that arbitration
clause part of the contract.
Enforcement of agreements
How are arbitration agreements enforced in your jurisdiction?
What is the attitude of the national courts towards arbitration
agreements?
Arbitration agreements can be enforced by the courts, which have the
power to refer a dispute to arbitration. International arbitration awards
are enforced in accordance with the New York Convention.
Article 159 of the Constitution provides that alternative forms of
dispute resolution - including reconciliation, mediation, arbitration and
traditional dispute resolution mechanisms - shall be promoted. The
Constitution is the supreme law of Kenya and dictates the attitudes of
the national courts.
Consolidation
Can an arbitral tribunal with its seat in your jurisdiction
consolidate separate arbitral proceedings under one or more
contracts, and, if so, in what circumstances?
The Arbitration Act does not provide for consolidation of separate
arbitral proceedings. However, this can be done with the consent of all
parties.
Choice of law
How is the substantive law of the dispute determined? Where
the substantive law is unclear, how will a tribunal determine
what it should be?

Substantive law is determined by classification of the arbitration as

either domestic or international. The laws of Kenya are applied as the
substantive law in domestic arbitration, while the juridical seat and
substantive law are determined by the arbitration agreement in
international arbitration. Section 3 of the Arbitration Act provides that
an arbitration is international if:

the parties to the agreement have their place of business in different

states;

the juridical seat or any place where a substantial part of the

obligations of the contractual contract are performed is outside Kenya;
and

the parties have expressly agreed that the subject matter of the
arbitration agreement relates to more than one state.
Separability
Are there any provisions on the separability of arbitration
agreements?
There are no explicit provisions on the separability of arbitration
agreements. However, as a matter of practice, an arbitration
agreement that forms part of a contract shall be treated as an
agreement independent of the other terms of the contract. Section 17
of the Arbitration Act recognises that the tribunal has the power to rule
on its own jurisdiction, including any objection to the existence of or
validity of

the agreement;

recognising the

arbitration agreement from the contract.

Multiparty agreements
Are multiparty agreements recognised?
Yes.
Arbitral tribunal
Criteria for arbitrators

separability

of

the

Are there any restrictions?

The criteria for arbitrators are determined by agreement of the parties.
The appointment of arbitrators can be challenged under Section 13 of
the Arbitration Act. The grounds for challenge include doubts as to
whether:

the arbitrator is impartial and independent;

the arbitrator has the necessary qualifications agreed on by the

parties; or

the arbitrator has the physical or mental capacity to conduct the

proceedings.
A party may challenge an arbitrator it has appointed, or in whose
appointment it has participated, only for reasons of which it becomes
aware after the appointment.
Contractual stipulations
What can be stipulated about the tribunal in the agreement?
The parties can agree:

on the number of members on the tribunal;

on the qualifications of the tribunal; and

to have the arbitrators appointed by the High Court.

The parties are free to constitute the tribunal in any way they see fit.
Default requirements
Are there any default legal requirements as to the selection of
a tribunal - for example, concerning the number of arbitrators
or their characteristics?
Section 12 of the Arbitration Act envisions a tribunal with either three
or two arbitrators, or a sole arbitrator. Where the tribunal comprises
three arbitrators, the parties shall each choose one arbitrator and the
two arbitrators shall select the third. Where the tribunal is made up of

two arbitrators, each party shall select one arbitrator. Parties that wish
to have a sole arbitrator must agree on who this shall be.
Where one party indicates that it is unwilling to select an arbitrator,
fails to do so within the time allowed under the arbitration agreement
or fails to do so within 14 days where the arbitration agreement does
not limit the time within which an arbitrator must be appointed, the
other party which has duly appointed an arbitrator may give notice in
writing to the party in default that it proposes to appoint its arbitrator
as sole arbitrator. Once a sole arbitrator is appointed, the defaulting
party may challenge this appointment before the High Court.
Challenging the appointment of an arbitrator
Can the appointment of an arbitrator be challenged? Can an
arbitrator be disqualified? What is the procedure for this?
Yes. A challenge is raised initially to the arbitrator, whose decision may
be appealed to the High Court. The grounds for challenge are set out
under Section 13 of the Arbitration Act.
Jurisdictional objections
How should an objection to jurisdiction be raised?
The arbitrator has the power to determine his own jurisdiction and can
determine how a challenge to his jurisdiction is raised under Section 17
of the Arbitration Act. In the absence of agreement between the
parties as to how an objection to jurisdiction is to be handled, the
arbitrator has the power to direct proceedings on the objection to
jurisdiction.
Replacement of an arbitrator
Why and how can an arbitrator be replaced?
An arbitrator can be terminated and substituted under Section 16 of
the Arbitration Act. The arbitrator may be terminated and substituted

if:

his appointment is successfully challenged (Section 14 of the

Arbitration Act);

he is unable to fulfil the functions of his office;

he withdraws from his office; or

all parties agree in writing to termination of the mandate.

Powers and obligations
What powers and obligations do arbitrators have?
The powers of the arbitral tribunal are set out in Section 18 of the
Arbitration Act. The tribunal can order interim measures of protection,
order any party to provide security in respect of any claim or any
amount in dispute and order a claimant to provide security for costs.
The arbitrator has powers over the conduct and determination of the
proceedings, and is obliged to exercise this power impartially and to
the best of his ability.
Liability of arbitrators
Are arbitrators immune from liability?
No. Arbitrators are encouraged to take out insurance in the absence of
an express stipulation of immunity from liability.
Communicating with the tribunal
How do the parties communicate with the tribunal?
In writing, copied to all other parties.
Reaching decisions
Is unanimous agreement of the tribunal required? If there is
disagreement, does the will of the majority suffice? What are
the implications of this?
No. Section 30 of the Arbitration Act states as follows:

30. (1) Unless otherwise agreed by the parties, in arbitral proceedings

with more than one arbitrator, any decision of the arbitral
tribunal shall be made by a majority of all its members.
(2) Notwithstanding subsection (1), if authorized by the parties or all
the members of the arbitral tribunal, questions of procedure
may be decided by the Chairman.
Section 30(1) of the Arbitration Act recognises the decision of the
majority. The party that convinces the majority of the panel
carries the day.
Arbitrability
Are

there

any

disputes

incapable

of

being

referred

to

arbitration?
Disputes that disclose criminal offences are incapable of being referred
to arbitration.
Can the arbitrability of a dispute be challenged?
Yes. The Arbitration Act provides instances when parties can challenge
the decision of an arbitrator or arbitral tribunal before the High Court
due to the inarbitrability of a dispute. Section 35 provides as follows:
35. (2) An arbitral award may be set aside by the High Court only if
(a) the party making the application furnishes proof
(i) that a party to the arbitration agreement was under some
incapacity; or
(ii) the arbitration agreement is not valid under the law to which the
parties have subjected it or, failing any indication of that law,
the laws of Kenya; or
(iii) the party making the application was not given proper notice of the
appointment of an arbitrator or of the arbitral proceedings or
was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not
falling within the terms of the reference to arbitration or

contains decisions on matters beyond the scope of the reference

to arbitration, provided that if the decisions on
matters referred to arbitration can be separated from those not so
referred, only that part of the arbitral award which contains
decisions on matters not referred to arbitration may be set
aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure
was not in accordance with the agreement of the parties, unless
that agreement was in conflict with a provision of this Act from
which the parties cannot derogate; or failing such agreement,
was not in accordance with this Act; or
(vi) the making of the award was induced or affected by fraud, bribery,
undue influence or corruption;
(b) the High Court finds that
(i) the subject-matter of the dispute is not capable of settlement by
arbitration under the law of Kenya; or
(ii) the award is in conflict with the public policy of Kenya.
Jurisdiction and competence-competence
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 tribunals jurisdiction and
competence?
Yes. The tribunal can rule on its own jurisdiction pursuant to Section 17
of the Arbitration Act. Where the tribunal rules that it has jurisdiction,
an aggrieved party can apply to the High Court to decide the matter.
Arbitral proceedings
Starting an arbitration proceeding
What is needed to commence arbitration?
Section 22 of the Arbitration Act provides that unless the parties agree

otherwise, the arbitral proceedings in respect of a particular dispute

shall commence on the date on which a request for the dispute to be
referred to arbitration is received by the respondent.
Limitation periods
Are there any limitation periods for the commencement of
arbitration?
Not unless dictated by the arbitration agreement.
Procedural rules
Are there any procedural rules that arbitrators must follow?
No. The parties may agree on the procedural rules to be used.
Dissenting arbitrators
Are dissenting opinions permitted under the law of your
jurisdiction?
There is no express exclusion of dissenting opinions. Section 32 of the
Arbitration Act requires only that the tribunals award be signed by the
majority of all arbitrators.
Judicial assistance
Can local courts intervene in proceedings?
Yes, but the extent of intervention is limited by Section 10 the
Arbitration Act.
Can the local courts assist in choosing arbitrators?
No.
What is the applicable law (and prevailing practice) where a
respondent fails to participate in an arbitration? Can they
compel parties to arbitrate? Can they issue subpoenas to third
parties?

Section 26 of the Arbitration Act empowers the arbitral tribunal to

continue with its proceedings and make an award on the evidence
before it. It cannot issue subpoenas to third parties.
Third parties
In what instances can third parties be bound by an arbitration
agreement or award?
Arbitration law in Kenya does not specifically provide for any instances
in which a third party may be bound by an arbitration agreement or
award.
Default language and seat
Unless agreed by the parties, what is the default language and
location for arbitrations?
The default language is English and the default location is wherever
the parties and arbitrator are located or find most convenient.
Gathering evidence
How is evidence obtained by the tribunal?
Section 25 of the Arbitration Act states that, subject to any agreement
to the contrary by the parties, the tribunal shall decide whether to hold
an oral hearing for the presentation of evidence or whether the
proceedings shall be conducted on the basis of documents.
What kinds of evidence are acceptable?
The tribunal has the power to dictate the form of evidence, request the
High

Courts

assistance

in

admissibility of the evidence.

Confidentiality
Is confidentiality ensured?

collecting

evidence

and

weigh

the

In the absence of agreement between the parties to the contrary,

confidentiality is ensured.
Can

information

in

arbitral

proceedings

be

disclosed

in

subsequent proceedings?
No.
Ethical codes
What ethical codes and other professional standards, if any,
apply to counsel and arbitrators conducting proceedings in
your jurisdiction?
Arbitration is predominantly conducted under the rules of the
Chartered Institute of Arbitrators - Kenya Chapter, which contains strict
codes of conduct for arbitrators. However, the Nairobi Centre for
Intetrnational Arbitration is in the process of coming up with a Code of
Conduct for Arbitrators.
Costs
Estimation & allocation
How are the costs of arbitration proceedings estimated and
allocated?
Unless otherwise agreed by the parties, Section 32B of the Arbitration
Act directs that the expenses of the arbitration (ie, legal and other
expenses of the tribunal, legal and other expenses of the parties and
any other expenses related to the arbitration) shall be determined and
apportioned by the tribunal in its award. This is left to the discretion of
the tribunal in the absence of an explicit agreement. However, parties
can agree that the costs should be awarded to the successful party.
Security for costs
Can the national court or tribunal order security for costs
under the law in your jurisdiction?

The tribunal may, on application of a party, order a claimant to provide

security for costs (Section 18(c) of the Arbitration Act).
The award
Requirements
What legal requirements are there for recognition of an award?
Must reasons be given for the award? Does the award need to
be reviewed by any other body?
The legal requirements are set out in Section 32 of the Arbitration Act
and require that the award be made in writing and signed by the
arbitrator(s).
In the absence of agreement between the parties, there is no
requirement that the award contain reasons.
The award will be reviewed only in the event of an appeal.
Timeframe for delivery
Are there any time limits on delivery of the award?
No.
Remedies
Does the law impose limits on the available remedies? Are
some remedies not enforceable by the court?
No. As long as the tribunal acts within its purview, the courts will
recognise the remedies it orders pursuant to its powers under Section
18 of the Arbitration Act.
What interim measures are available? Will local courts issue
interim measures pending constitution of the tribunal?
Under Section 18 of the Arbitration Act, the tribunal may order any
party to take such interim measures of protection as it considers
necessary in respect of the subject matter of the dispute.
Section 7 provides that the court can also issue interim measures of

protection before or during the arbitral proceedings.

A party can apply to the local court for interim measures of protection
before instituting arbitral proceedings.
Interest
Can interest be awarded?
Yes.
At what rate?
At the contractual rate or as stipulated by the tribunal.
Finality
Is the award final and binding?
Yes.
What if there are any mistakes?
Mistakes can be amended by way of an additional award on application
by the parties.
Can the parties exclude by agreement any right of appeal or
other recourse that the law of your jurisdiction may provide?
Yes.
Appeal
On what grounds can parties appeal an award?
Under Section 35 of the Arbitration Act, the High Court will set aside an
award if the party making the application furnishes proof that:

a party to the arbitration agreement was under some incapacity;

the arbitration agreement is invalid under the law to which the parties
have subjected it or, failing any indication of that law, the laws of
Kenya;

the party making the application was not given proper notice of the
appointment of an arbitrator or the arbitral proceedings or was
otherwise unable to present its case;

the arbitral award deals with a dispute not contemplated by or not

falling within the terms of the reference to the arbitration, or contains
decisions on matters beyond the scope of the reference to arbitration;

the composition of the tribunal or the conduct of the arbitral

proceedings did not accord with the agreement of the parties or the
act; or

the making of the award was induced or affected by fraud, bribery,

undue influence or corruption.
The High Court will further set aside the award if it finds that:

the subject matter of the dispute is incapable of settlement by

arbitration under the laws of Kenya; or

the award conflicts with the public policy of Kenya.

What is the procedure for challenging awards?
Awards can be challenged by way of an application to the High Court
under its rules (the Civil Procedure Rules 2010).
Enforcement
What steps can be taken to enforce the award if there is a
failure to comply?
On application to the High Court, the party can have the award
adopted as a judgment of the High Court and extract a decree from the
judgment, and thereafter enforce that decree.
Can awards be enforced in local courts?
Yes.
How enforceable is the award internationally?

If the country in which the party wishes to enforce the award is a

signatory to the New York Convention, the award should be enforceable
internationally.
To what extent might a state or state entity successfully raise
a defence of state or sovereign immunity at the enforcement
stage?
This is limited, as the Government Proceedings Act (Cap 40) provides
the procedure for enforcement or execution of decrees, judgments and
awards against the properties of the Kenyan government.
Are there any other bases on which an award may be
challenged, and if so, by what?
No.
How

enforceable

are

foreign

arbitral

awards

in

your

jurisdiction?
Section 36 of the Arbitration Act provides that the procedure for
recognising and enforcing foreign awards shall accord with the New
York Convention or any other convention to which Kenya is a signatory.
Will an award that has been set aside by the courts in the seat
of arbitration be enforced in your jurisdiction?
Section 37 of the Arbitration Act provides that the local courts may
refuse to recognise or enforce an award which has been set aside.
Third-party funding
Rules and restrictions
Are there rules or restrictions on third-party funders?
No, and we have seen no instances of third-party funding so far.
Class-action or group arbitration

Concept
Is there a concept in your jurisdiction providing for class-action
arbitration or group arbitration? If so, are there any limitations
to the arbitrability of such claims or requirements that must be
met before such claims may be arbitrated?
There is no provision for class action arbitration.
Hot topics
Emerging trends
Are there any hot topics or trends emerging in arbitration in
your jurisdiction?
The Nairobi Centre for International Arbitration has as its main goal the
establishment of Nairobi as a financial hub and a centre for
international arbitration. It will further limit the role of the local courts
in an attempt to promote international arbitration. The aim is to attract
foreign investors by ensuring timely and cost-effective dispute
resolution. The centre will also provide advice and assistance for the
enforcement and translation of arbitral awards, as well as procedural
and technical advice to disputants.
Under the Nairobi Centre for International Arbitration Act, 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
Arbitration 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.
TripleOKlaw Advocates - John M. Ohaga
Filed under
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Global Kenya Arbitration & ADR Litigation TripleOKlaw Advocates

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