Introduction
When a man buys a drill, he is not just buying a drill for the sake of it; it is because he wants to make a hole in the wall. In the same way, there are many ways that parties can use to avoid, manage and resolve disputes.
Alternative Dispute Resolution (ADR) is not a watered-down form of litigation. It refers to any method of resolving a dispute as an alternative to going to court.
ADR is able to adapt and flex to meet the needs of the market and the parties involved in disputed matters.
Arbitration is one of these methods. It is particularly useful where parties want an independent third party to determine their dispute and make a decision that is generally binding on them.
Arbitration: 6 facts
1. Arbitration is an agreement to use a private judge
This is where two contracting parties agree that, in the event of a dispute, they will refer the matter to a private judge (an arbitrator) instead of resolving the substantive dispute through ordinary court proceedings.
They also agree on how the private judge or judges will be appointed. There may be one arbitrator or a panel of arbitrators, depending on the arbitration agreement.
In Kenya, an arbitration agreement must be in writing. It can be included as a clause in a contract or contained in a separate agreement.
2. Arbitration can be domestic or international
If an arbitration is domestic, it is generally connected to one country and falls within the relevant domestic legal framework.
International arbitration involves a cross-border element eg parties’ places of business, where substantial contractual obligations are performed, and the countries to which the subject matter of the dispute relates.
This distinction is important because international arbitration may involve different national laws, procedural rules and arrangements for recognising and enforcing arbitral awards.
3. Arbitration is private, and confidentiality is one of its attractions
Unlike ordinary court proceedings, arbitration is generally conducted privately. This is one of the reasons why contracting parties prefer it.
Businesses and individuals may not want their commercial disagreements, financial information or other sensitive matters exposed to the public.
You will therefore not ordinarily find the full details of an arbitration published in the Kenya Law Reports. However, where a party approaches the courts to challenge or enforce an award, some information may become part of the public court record.
4. The arbitrator makes a final and binding decision
At the end of the proceedings, the independent arbitrator makes a decision known as an arbitral award which is final and binding
The award is based on the evidence, arguments, applicable law and the issues that the parties have referred to arbitration.
There are limited grounds on which an award may be challenged or its enforcement resisted. These are not the same as an ordinary appeal simply because one party is unhappy with the outcome.
The finality of the award is one of the attractions of arbitration, particularly for parties who want to avoid prolonged litigation.
5. Evidence is important, and this is where a valuation report may become useful
An arbitrator is expected to determine the dispute based on the evidence and arguments properly presented by the parties and the applicable procedural rules. They may appoint an independent expert to report on specific issues. The parties may also question that expert and present their own expert witnesses.
This is particularly important in disputes involving technical matters that may fall outside the arbitrator’s professional expertise.
For example, where a dispute concerns the market value of a property, loss of value, compensation or the financial implications of a property transaction, the parties may need to submit a valuation report prepared by a suitably qualified registered valuer.
The report should provide an objective, reasoned and evidence-based opinion addressing the specific issue in dispute.
A valuation report does not automatically determine the outcome of the arbitration. It is evidence that assists the arbitrator in understanding and determining the matter. The arbitrator ultimately decides what weight to attach to that evidence.
6. The qualifications of the valuer matter, but the requirements are not identical everywhere
For domestic matters involving the valuation of property in Kenya, the valuer should be a Registered Valuer with a valid practicing license.
For international arbitration, RICS qualifications and professional standards can provide valuable international professional recognition. Best practice is to get a valuation report from a RICS Registered Valuer.
Do you need a valuation report for an arbitration or property dispute?
If you are involved in an arbitration, litigation or succession matter in Kenya where the value of land or property is in dispute, an independent valuation is an important piece of evidence.
At Valuer Kariuki & Company, we provide professional property valuation services and expert valuation support for court, arbitration (domestic and international), litigation, divorce and inheritance matters.
Let’s discuss your property valuation needs.
Valuer Kariuki Waweru, MRICS, invites you to book a free, no-obligation 15-minute consultation via WhatsApp on +254 720 204 074.
We can discuss your particular circumstances, the property involved and the valuation support you may need, and help you identify the appropriate next step.
Please note that the consultation is an initial discussion and does not include a formal valuation report or legal advice.
