By. Y. UMUHUZA MUGISHA, JadeTimes News
Arbitration in Rwanda and Developing Countries
Arbitration has been very instrumental in settling disputes in Rwanda and in developing countries at large; thus, it has been able to provide a mechanism of dispute resolution quite differently from the traditional court litigation. While economies continue to expand and gain integration into the global economy, the methods applicable in dispute resolution, which are effective, less costly, and private, gain importance. By the inherent provision of a flexible framework, democratically, arbitration embraces the complexities most common in commercial disputes, especially in jurisdictions where the judicial system is overstretched or underdeveloped.
In Rwanda, the government has shown great interest in promoting arbitration as part of a wider package related to business and investment environment reform. The creation of the Kigali International Arbitration Centre in 2012 was a big milestone in the legal framework relating to arbitration in the country. KIAC offers parties a neutral venue for the resolution of domestic and international disputes alike, taking advantage of Rwanda's geographic location and commitment to the rule of law. Proving very quickly the case, the Centre has confirmed a strong reputation of effectiveness and professionalism and has received numerous cases from around the African continent and beyond.
It is supported by the legal framework of Rwanda through Law No. 005/2008 of 14/02/2008 on Arbitration and Conciliation in Commercial Matters, which is in line with international instruments, including the UNCITRAL Model Law on International Commercial Arbitration. Conformity to these international instruments gives comfort that awards made in Rwanda will be recognized and enforced in other jurisdictions and ensures confidence in foreign investors. Even the Rwandan courts have embraced a very pro-arbitration approach and have upheld the finality of awards of arbitration and have largely left judicial interference far from the conduct of arbitration, a feature critical to maintaining the integrity and attractiveness of the process.
Valuable lessons can also be drawn from other developing nations, which are emerging on the arbitration front. E.g., Kenya and Tanzania in East Africa have already established arbitration centers and legislated to back up arbitration. At a regional level, it forms part of a wider trend towards the adoption of arbitration as the dispute resolution mechanism of choice, mainly in commercial matters. However, challenges still exist, such as raising awareness of arbitration and understanding it by businesses, legal practitioners, and the judiciary.
The efficiency of arbitration is particularly valued in many developing countries, where court systems are often related to inefficiencies such as long delays, high costs, and limited expertise in complex commercial matters. By way of arbitration, the parties are able to choose arbitrators who have particular competence relevant to the issues in their dispute, to have better judgment, and therefore to have more just decisions. In addition, the confidentiality of the arbitration proceeding is one big advantage for businesses seeking to protect sensitive information.
However, arbitration adoption and its successes in developing countries will not be free of challenges. The main challenge, besides globally, has been a lack of trained arbitrators and legal practitioners specified with a wide spectrum of knowledge in arbitration. This will lead to reliance on foreign arbitrators, which in the process may lead to an increase in cost and decrease in the perceived neutrality of the process. More sophisticated legal systems supporting arbitration, such as enforcement of arbitration agreements, or awards, may frequently be required.
In many other jurisdictions, especially in developing ones, the use of arbitration has been challenged not only by cultural aversion but also by legal resistance in which litigation is strongly entrenched in the legal culture. In such situations, it might be legal reform but also the program of education involving a range of activities that prepare, elicit, or build trust in arbitration as a legitimate and useful means of dispute resolution.
Yet all these challenges notwithstanding, the future of arbitration in Rwanda, just like any other developing country, is relatively optimistic. Just like in other developing countries, the demand for a more reliable and efficient dispute resolution mechanism in developing countries is only set to increase even more with time and further integration of the developing countries in the global economy. Investment in the development of the arbitration infrastructure, considerable training to the legal professionals, and the nurturing of a culture of arbitration among the developing countries can improve their attractiveness as an investment and business destination, thereby further promoting their economic growth and development.
In this regard, arbitration offers a useful tool of dispute resolution in Rwanda and other parts of the developing world as an alternative to traditional litigation, which often equals better efficiency, cost-effectiveness, and confidentiality. Although these problems are yet to be addressed, the current effort in dissemination of arbitration will set a solid foundation for these regions to gain massive usage and success. As arbitration becomes more and more accepted and put into use, it could potentially take part in many cases in the economic development and legal modernization process of developing countries.
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