Cross-border commercial disputes frequently result in judgments or arbitral awards obtained in one jurisdiction that need to be enforced against assets in another. Kenya has a developed framework for recognition and enforcement of foreign judgments and international arbitral awards.
Court Judgments: Two Routes
Kenya’s Foreign Judgments (Reciprocal Enforcement) Act (Cap 43) provides a streamlined registration and enforcement procedure for judgments from countries with which Kenya has declared a reciprocal arrangement. A registered judgment has the same effect as a Kenyan court judgment. Countries covered include the UK and several Commonwealth states.
For countries not covered by Cap 43, a fresh action must be commenced in the Kenyan courts, pleading the foreign judgment as the cause of action. The foreign judgment creates a debt that can be sued upon in Kenya. Defences available include lack of jurisdiction by the foreign court, fraud, public policy, and breach of natural justice.
Arbitral Awards: The New York Convention
Kenya acceded to the New York Convention in 1989. Enforcement is under the Arbitration Act No. 4 of 1995. To enforce a foreign arbitral award, the creditor files an application in the High Court with the original award, a certified copy, and the arbitration agreement. The court will enforce the award unless the debtor proves one of the limited grounds for refusal in Section 37 of the Act.
Asset Tracing and Enforcement Mechanisms
Whether enforcing a foreign court judgment or an arbitral award, asset tracing is the essential preliminary step. Kenyan courts can order the debtor to disclose assets, and garnishee orders can attach bank accounts. Charging orders can be placed on real property. Receivers can be appointed over businesses.
Public Policy: The Common Defence
Public policy remains the most commonly raised defence against foreign judgment enforcement. Courts have used the exception to refuse enforcement where the foreign proceedings violated natural justice, the foreign law applied is contrary to Kenyan law, or enforcement would be unconscionable. The exception is raised rarely but successfully in appropriate cases.
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