Since Kenya pursues ambitious infrastructure plans, we cannot afford how we deal with disputes in the construction sector. Differences of opinion, especially in relation to payments and cash flow, remain the most important reasons why projects are slowing down or are complete.
We all know that the construction plays an important role in economic development. However, if disputes attract themselves, each from contractors loses to customers, investors and ultimately to the public. Traditional methods such as arbitration or litigation can be expensive and take months, even years. They also tend to burden relationships and cause unnecessary risk in projects in which the cooperation is of crucial importance. We need a better way and the decision could be.
The decision is a faster and more practical alternative. It is a process in which a neutral third party decides on the dispute after checking the facts. This usually happens within a few weeks, so that work with minimal disorder can continue. It is already used in parts of the world to protect the cash flow – the life elixir of the construction industry.
The decision is allowed in Kenya, but only if the contract contains it. This means that every party has to agree on whether and how they will use them. While this contract -based approach brings a certain flexibility, he also has problems. There is no standard process, no guaranteed access for smaller players and no legal teeth to enforce decisions. Even if the decision is used, it may not offer the needs of security or speed companies.
However, some construction contracts in Kenya contain a decision. For example, the international FIDIC contracts allow representatives whose decisions are binding, unless the arbitration proceedings are initiated. The Green Book of the Joint Building Council (JBCC) does not provide directly for the decision on site, but instead relies on the project architect or the arbitration. Although both systems can be tailored, the lack of a clear legal framework remains too much of chance.
We can search for inspiration to other countries. The decision has been written in the law in Great Britain since 1996. Your system gives everyone who is involved in a construction contract, the right to make a dispute to decide at any time, even if the contract does not allow this. The entire process is quickly designed: it starts within a week and is usually over in 28 days. The most important thing is that the courts in Great Britain enforce the decisions and make the results sensible and directly. If necessary, the parties can later go to the arbitration process or to the court. It is a fair, balanced approach that has contributed to keeping projects in motion and at the same time protecting the interests of everyone.
Register for free allafrica newsletters
Get the latest African News that are delivered directly to your inbox
Kenya could benefit from something similar. The General Prosecutor's office has already taken a step in the right direction with the proposed session paper No. 4 from 2024 in the guideline of the national alternative dispute settlement. A draft law on construction control was introduced as part of it. If this is adopted, this would create a legal basis for the decision – determine clear schedules and ensure that decisions such as an arrangement of the High Court can be enforced. At the same time, the JBCC is considering updating the green book in order to conclude the decision before the arbitration disputes.
A legal framework would compensate for the field. It would eliminate uncertainty, shorten the time and the costs of solving problems and give all (large or small) contractors access to fast and fair solutions. It would also strengthen the trust of local and international investors and know that there is a reliable way to deal with challenges if they occur.
When the construction industry grows in Kenya, it raises the question: Is it sufficient to assess private contracts, or is it time to make it part of our legal system? A legal approach could at least help to ensure that disputes do not derail our development goals, but dissolve in a way that keeps progress.
Odhiambo is a partner in the dispute settlement practice at Cliffe Dekker Hofmeyr (CDH) Kenya