The article was written by Prof. Wyne Kenneth Mutuma and Sarah Nashati.
Arbitration, by design, is intended to be a party-driven and final dispute resolution mechanism. Parties choose arbitration for its efficiency, cost-effectiveness, and flexibility. The process is founded on the core principle of party autonomy, which allows parties to determine how their disputes will be resolved. This includes, among others, the freedom to choose arbitration as their preferred method of dispute resolution, define the scope of the arbitration agreement, determine the applicable rules, and select the arbitral tribunal. However, despite this autonomy, arbitration does not function in a vacuum. It exists within a broader legal framework that necessitates a degree of judicial oversight.
Judicial oversight plays a crucial role in ensuring that arbitration remains fair and just without becoming an avenue for injustice. The role of the courts is limited to exercising oversight, stepping in only to safeguard fairness, legality, and due process while respecting the foundational principles of arbitration, such as party autonomy. Excessive court interference undermines the purpose and efficiency of arbitration, leading to the abuse of the process. Judicial intervention is necessary when arbitration proceedings are compromised by procedural irregularities, bias, or violations of due process. In such cases, courts must intervene to maintain the credibility of the arbitral process and not override it. Balancing party autonomy and judicial intervention can be challenging, especially when there is a tendency for courts to abuse the process. Therefore, the rationale for judicial interference should be based on upholding party autonomy and ensuring that arbitration remains a fair and effective means of dispute resolution.
One of the key legal provisions shaping the scope of judicial intervention is Section 35 of the Arbitration Act, which outlines the grounds for setting aside an arbitral award. Its application, however, sparks considerable debate among professionals. Some argue that judicial review should be tightly limited to preserve party autonomy, while others contend that an overly rigid interpretation could lead to injustice, particularly in cases where arbitrators act beyond their mandate. This ongoing debate underscores the challenge of finding the right balance between deference to arbitral decisions and ensuring adherence to legal standards. Additionally, the role of appellate courts in arbitration is a critical aspect.
A landmark decision that clarified this delicate balance is Nyutu Agrovets Limited v Airtel Networks Kenya Limited [2024] KECA 523 (KLR). In its 2024 ruling, the Court of Appeal upheld the High Court’s ruling, finding that the arbitrator had exceeded jurisdiction by awarding damages for negligence beyond the terms of the contract. The appellate court reaffirmed the principle of minimal judicial intervention and the importance of maintaining arbitration integrity, stressing that arbitral awards should only be interfered with on limited and clearly defined grounds. The court reaffirmed the foundational principle of party autonomy, stating that it must be exercised within the framework of the parties’ agreement. While arbitration must remain independent, there must be safeguards to prevent its misuse, particularly when awards contravene public policy or exceed the jurisdictional scope.
A sustainable arbitration system relies on the collaboration of three key stakeholders: the judiciary, arbitrators, and disputing parties. Arbitration is part of a broader legal framework, not a separate entity. While arbitration aims to reduce reliance on courts, it is often the parties themselves who invoke judicial intervention, whether to challenge or enforce arbitral awards. The future of arbitration hinges on maintaining a delicate balance between judicial oversight and party autonomy. Arbitration must be protected from excessive court interference while remaining subject to necessary judicial safeguards. Courts should support arbitration by enforcing awards promptly, upholding party autonomy, and intervening only when necessary to prevent injustice.
Ultimately, arbitration and litigation should not be seen as adversaries but as complementary pillars of justice. Arbitration’s effectiveness depends not on complete judicial abstinence but on respectful collaboration rooted in foundational principles.
