By Alfred Deya, Terry Mwango and Cecil Kuyo
The Kenyan branch of the Chartered Institute of Arbitrators (CIArb) recently unveiled its revised Arbitration Rules, 2020 (the Rules). The Rules came into force on October 1, 2020 and will apply to all cases registered after this date. The Rules provide a more comprehensive set of procedural rules as compared to the 2012 Arbitration Rules which it repeals.
We highlight below the most significant changes brought to domestic arbitration, by the Rules, as well as the key issues to look out for when drafting arbitration clauses in contracts.
Model arbitration clause
The Rules provide for a model arbitration clause that parties who desire to arbitrate may insert into their agreements. It is not mandatory to use the clause but it does provides useful guidance.
It is common to see arbitration agreements that provide for the appointing authority, but not the rules to be applied if the matter was to go to arbitration. Where parties have chosen the CIArb as the default appointing authority, we would recommend the inclusion of the Rules in the arbitration agreement.
The Rules allow for consolidation of arbitrations involving the same parties where the arbitrations may be consolidated in the interest of efficiency. The ability to consolidate claims commenced by different parties under different contracts will be useful in many commercial arrangements, for instance where disputes arise under a series of subcontractor contracts. However, it will be important to ensure that all relevant contracts contain CIArb arbitration agreements that are similar in all material respects, including with respect to the seat of arbitration and the number of arbitrators.
The expedited arbitration procedure provides for the disposal of disputes within three months from the date of the status hearing or case management conference. Any party may request for appointment of an arbitral tribunal with an additional request for expedited proceedings.
The Rules allow the parties, at any time prior to the award, to agree in writing to stay the arbitral proceedings for an agreed period, in order to explore amicable settlement. However, the period of stay is limited to 30 days with another possible 30 day extension. Should the parties reach a settlement, the tribunal is required to terminate the arbitration and may record a standard award on the agreed terms on the request of all parties. In our view, 60 days may be insufficient time to settle the dispute as settlement negotiation processes can take a considerable amount of time, usually several months, before both parties are agreeable to any offers and counteroffers.
Under the Rules, unless the parties agree otherwise, the tribunal may, on the application of either party or on its own motion, direct the conduct of a virtual and/or hybrid arbitral hearing where it is not possible to hold a face-to-face hearing or for any other acceptable reason after the parties are heard on the question.
The changes introduced in the Rules focus on increasing the efficiency and flexibility of arbitrations administered by CIArb, consistent with recent revisions introduced by other arbitration institutions. Some of the changes such as, fast track procedure, consolidation and settlement may significantly reduce time and cost spent in dispute resolution. (