The RECENT DEVELOPMENTS IN COMMERCIAL JUSTICE IN KENYA: THE COMMERCIAL JUSTICE COURT USER COMMITTEE

Abstract

Introduction: The Commercial Justice Environment in Kenya
Background and significance
There is widespread consensus not just in the economic literature but also among lawyers and legal scholars that the judiciary is a vital factor in the Rule of Law and more broadly in economic development. Increased investment, commerce and trade are considered essential in reducing poverty and raising standards of living in any country. Pursuing better standards of justice for
business is considered a priority on the path to better public services and more accountable government through increased tax revenues and lower levels of unemployment. These in turn help poor countries enhance their prospects for economic development.
Conversely, ambiguous laws and poor law enforcement discourage legitimate business investment and can facilitate the theft of public and private resources. Kenya has been through significant legislative reform including a robust constitutional reform process yielding a document that has received acclaim nationally and internationally. However, the country is increasingly appreciating that even the best substantive law will not bring the rule of law without effective enforcement by a sound judiciary.
A judicial system characterised by huge commercial case backlogs, complex legal procedures, manufactured delays and low clearance rates adversely affects the enforcement of commercial contracts and therefore private investments. Moreover, protection against the state itself is made easier when the judiciary can resolve a controversy raised by a private party against the state based on constitutional provisions or parliamentary legislation. Therefore a significant positive correlation exists between a robust, impartial commercial justice system and a conducive business environment. This safeguards the players’ matters as well as shields them from the excesses of the bigger market players and the regulator (i.e. the government). The economic benefits of a strong judiciary in positively impacting commerce in turn mean that the government benefits through increased collection of revenue through taxation. This is particularly important at the time of writing this paper when Kenya’s government is in dire financial straits and is exploring all possible revenue-generation mechanisms.
During the 1990s there was an outcry from the local business community as well as international firms represented locally that the enforcement of contracts and the recovery of debt took an inordinately long amount of time in the Kenyan justice system. Aggravating this issue was the ensuing uncertainty. Indeed businessmen have been heard to say that they are not so much concerned with the outcome of the case in their favour or otherwise, as with a decision being reached in a timely manner. This was not happening. The Commercial Division of the High Court at Milimani was therefore established with a view to having a specialized court that could better address these matters.