Mediation in Kenya: A Cost-Effective Path to Resolving Business Disputes

Mediation in Kenya is a practical way to resolve commercial disputes without the cost, delay and public exposure of litigation. A neutral mediator helps the parties negotiate a settlement but has no power to impose one, so the parties keep control of the outcome. For businesses that want to protect relationships and keep disputes private, understanding how mediation in Kenya works, and when its results can be enforced, is increasingly important.

The legal framework for mediation in Kenya

Article 159(2)(c) of the Constitution of Kenya directs courts and tribunals to promote alternative forms of dispute resolution, including reconciliation, mediation, arbitration and traditional mechanisms. The Civil Procedure Act gives that principle practical effect. Section 59A establishes the Mediation Accreditation Committee, appointed by the Chief Justice, and section 59B allows a court to refer a dispute to mediation on the request of the parties, where it considers it appropriate, or where the law requires.

Court-annexed mediation is regulated by the Civil Procedure (Court-Annexed Mediation) Rules, 2022 (Legal Notice 145 of 2022). The Rules apply to any case and to any private settlement agreement presented to court for adoption, recognition and enforcement. Parties can also ask the court, by mutual consent, to refer their case to mediation. Outside the courts, the Nairobi Centre for International Arbitration Act, 2013 mandates the Nairobi Centre for International Arbitration to develop rules for conciliation and mediation, and it has published its own Mediation Rules (Legal Notice 253 of 2015).

Voluntary and court-annexed mediation

There are two main routes. Voluntary mediation happens by agreement, before or after a dispute crystallises and without court involvement. The parties choose a mediator and rules, for example institutional rules such as those of the Nairobi Centre for International Arbitration, or procedures set out in their contract.

Court-annexed mediation happens after a case is filed. Under the 2022 Rules the court screens cases and notifies the parties and their advocates of a referral. Each party then files a case summary within seven days of receiving that notification. Mediation must be concluded within sixty days from the date the appointed mediator is notified of the appointment, and the court may extend that period by a further period not exceeding ten days, having regard to the number of parties or the complexity of the issues.

How the mediation process works

After the parties agree or are directed to mediate, a mediator is appointed. The mediator usually opens with a joint session in which each side presents its position and the issues are identified. Private sessions, often called caucuses, then follow, in which the mediator tests each side’s priorities, explores underlying interests and develops settlement options. A mediator, unlike an arbitrator or judge, cannot make a binding decision on the merits, so no outcome exists unless every party agrees to it. If the parties settle, the terms are written down in a settlement agreement that they sign.

Confidentiality in mediation

Confidentiality is one of the main commercial attractions of mediation. In court-annexed mediation, the Rules require every person taking part to sign a confidentiality agreement, and the mediation file is kept separately from the court file and treated as confidential. Parties in private mediation should include confidentiality and without-prejudice terms in their mediation agreement, because they cannot rely on court-annexed protections.

Enforceability of mediated settlements

A settlement agreement is a contract and can be enforced as one. Where the mediation is court-annexed, or a private settlement is presented to the court under the 2022 Rules, it can be adopted by the court so that it is enforceable as an order of the court. The Rules also allow a court to set aside an order or decree founded on a mediated settlement on limited grounds, including where a party lacked authority to conclude and execute a binding settlement or the agreement is invalid or incapable of enforcement under Kenyan law.

Cross-border enforcement is more limited. On the United Nations Commission on International Trade Law (UNCITRAL) status list, Kenya is not shown as a signatory or party to the Singapore Convention on Mediation, which entered into force on 12 September 2020. Businesses should not assume that a Kenyan mediated settlement will be directly enforceable abroad, and should check the law of the country where enforcement is needed. Where a binding, internationally enforceable award is essential, arbitration may be the better choice; see our guide to arbitration in Kenya.

Mediation, arbitration and litigation compared

Mediation suits disputes where the parties want to preserve an ongoing commercial relationship, keep the matter confidential and reach a negotiated rather than win-lose result. Arbitration suits disputes that need a final and binding decision, especially in cross-border contracts. Litigation is the right route where urgent injunctive relief is needed, a party will not cooperate, or a binding precedent is wanted. Many commercial contracts combine them in a stepped clause that requires mediation first, then arbitration or litigation.

Drafting a mediation clause

A good mediation clause names the appointing authority or the rules that apply, sets a time limit for the mediation, states whether mediation is a condition precedent to arbitration or litigation, and addresses confidentiality and costs. Such clauses are common in shareholders’ agreements and share purchase agreements; our guide to mergers and acquisitions in Kenya explains how those documents are usually structured. Mediator fees are agreed between the parties and the mediator in private mediation, and the 2022 Rules set the arrangements for court-annexed mediators, so agree the cost split in writing at the outset.

Frequently asked questions

This article is general information on Kenyan law as at its publication date, not legal advice. Reading it does not create an advocate and client relationship.