The choice of a seat of arbitration in an arbitration case is an important decision for parties based in Kenya, as it can affect the enforceability of the arbitration agreement, the jurisdiction of the courts, and the costs and expenses of the case.
First, the choice of a seat of arbitration can affect the enforceability of the arbitration agreement. According to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, an arbitration agreement is enforceable in a country if the country is a signatory to the Convention and if the agreement meets certain requirements. However, the Convention does not apply to all countries, and some countries may have specific requirements for the recognition and enforcement of foreign arbitral awards. Therefore, parties based in Kenya should choose a seat of arbitration that is a signatory to the Convention and that has a favorable legal framework for the recognition and enforcement of foreign arbitral awards.
Second, the choice of a seat of arbitration can affect the jurisdiction of the courts. According to the Kenyan Arbitration Act, the jurisdiction of the courts in Kenya is limited to certain matters in an arbitration case, such as the appointment of arbitrators, the enforcement of an arbitral award, and the setting aside of an arbitral award. However, the jurisdiction of the courts may differ depending on the seat of arbitration, and parties based in Kenya should choose a seat of arbitration that has a favorable legal framework for the jurisdiction of the courts.
Third, the choice of a seat of arbitration can affect the costs and expenses of the case. According to the Chartered Institute of Arbitrators , the costs and expenses of an arbitration case depend on several factors, such as the complexity of the case, the fees of the arbitrators, and the location of the arbitration. Parties based in Kenya should choose a seat of arbitration that is convenient and cost-effective for the parties, such as a location that is close to the parties or a location that has a favorable exchange rate.
Fourth, the choice of a seat of arbitration can also affect the proceedings. Parties should also consider the laws of the seat of arbitration, as it will be used to govern the proceedings. This means that the parties should choose a seat of arbitration with laws that are favorable to their case and that aligns with their interests.
In conclusion, the choice of a seat of arbitration in an arbitration case is an important decision for parties based in Kenya, as it can affect the enforceability of the arbitration agreement, the jurisdiction of the courts, and the costs and expenses of the case. Parties should choose a seat of arbitration that is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, has a favorable legal framework for the jurisdiction of the courts, and is convenient and cost-effective for the parties. Additionally, parties should also choose a seat of arbitration with laws that aligns with their interests to ensure that the proceedings are in their favor.
Shafiq Taibjee
Lawyer/Arbitrator/Mediator
Islamic Arbitrator & Expert
Honorary Fellow IICRA -UAE