ALTERNATIVE DISPUTE RESOLUTION

Alternative Dispute Resolution (ADR) as a generic concept connotes the different procedures and systems used in resolving disputes privately as an alternative to adversarial litigation.

Constitution of Kenya 2010

Article 159 of the Constitution of Kenya 2010 provides that judicial authority is derived from the people and vests in the people and it is to be exercised by courts and tribunals established by or under the Constitution with regard to the principles of inter alia promoting the use of alternative forms of dispute resolution including reconciliation, mediation, arbitration and traditional dispute mechanisms in conflicts management.

From the reading of Article 159, the following alternative dispute resolution mechanisms are recognized in Kenya:

• Arbitration, is a private consensual process where parties in dispute agree to present their grievances to a third party for resolution.
• Negotiation, is an informal process that involves the parties meeting to identify and discuss the issues at hand so as to arrive at a mutually acceptable solution without the help of a third party.
• Mediation, is a voluntary, informal and non-adversarial process where an impartial mediator encourages and facilitates the resolution of a dispute between two or more parties, but does not include attempts made by a judge to settle a dispute within the course of judicial proceedings.
• Conciliation is a process in which a third party, called a conciliator, restores damaged relationships between disputing parties by bringing them together, clarifying perceptions and pointing out misperceptions.
• Traditional dispute resolution mechanisms refer to all those conflict management mechanisms that African communities have used since time immemorial and passed from one generation to the other. Traditional justice systems are firmly embedded in the culture and customs of African communities.

Difference between the various methods of ADR and Litigation

• ADR processes are less formal than judicial processes.
• In ADR parties have an option to choose a neutral third party that would help them resolve their disputes while in litigation the parties are not at liberty to decide who will be the magistrate/judge.
• ADR processes are private and confidential compared to litigation which is open for the public.
• ADR involves direct participation and communication between disputants while litigation participation in resolving the disputes is carried out by the advocates of the parties hence no direct participation and communication between the disputants.
• ADR produces a win-win solution for the parties involved in a dispute while litigation produces a win-lose situation.

Factors used to determine the most suitable method of ADR to use:

• Confidentiality
• Degree of the party’s control
• Flexibility of Procedure
• Preservation/fostering of relations
• Time
• Enforceability
• Cost

Southern Shield Holdings Limited v Tandala Investment Company Limited & 2 others [2018] eKLR

The plaintiff brought a suit against the defendants for specific performance governed by the Shareholders Agreement dated 28th June 2013  and collectively they owned 76% of shares in the Fidelity Insurance Company Limited. The plaintiff prayed for the defendants to pay them Kshs.676, 940,982/=. 

The defendant’s didn’t respond to the plaintiff claim but filed an application seeking the matter to be stayed pending determination of their dispute through mediation as provided for by the Shareholders Agreement under clause 20. 

The issue to be determined by the court was whether the matters raised in the suit ought to be referred to the dispute resolution mechanisms under the agreement? 

It was held that there was a dispute between the parties and that the parties should have first sought mediation as provided for by clause 20 of the Shareholders Agreement and the court was also guided by article 159 (2) (c) which requires courts to promote ADR and thus the proceedings in this suit were stayed pending the determination of their dispute in mediation.

Muriuki Samson Murithi v Kirinyaga Dairy Farmers Co-op Society Ltd & Another [2017] eKLR

It was observed that: 

“The relevant provisions governing the application of ADR other than Article 159 of the Constitution of Kenya are section 59C of the Civil Procedure Act (Cap 21) and Order 46 of the Civil Procedure Rules.  Section 59 provides, inter alia, that: 

1) A suit may be referred to any other method of alternative dispute resolution where the parties agree or where the court considers the case suitable for such referral. 

2)  Any other method of alternative dispute resolution shall be governed by such procedure as the parties themselves may agree to or as the court may, in its discretion order.”

Conclusion 

ADR offers a range of methods for resolving disputes efficiently, cost-effectively, and amicably. By focusing on collaborative solutions and preserving relationships, ADR provides an attractive alternative to traditional litigation. Understanding the key features, benefits, and challenges of each ADR method helps parties choose the most appropriate approach for their specific dispute.