Rwanda to be an arbitration hub for commercial dispute resolution
This is because Rwanda is an independent neutral third-country venue, politically stable with well-functioning institutions, rule of law and zero tolerance for corruption; 4th position in Africa region and at 1st position in East Africa region in fighting corruption as indicated the 2012 Corruption Perceptions Index (CPI).
Arbitration and other friendly ways of commercial disputes resolution are emerging as preferred choice to litigation in Courts, for foreign investors and growing companies in Rwanda.
In addition, in cross border deals, the use of international arbitration is an integral part of good business practice that Rwanda would like to promote in the region, for an integrated market.
Rwanda Private Sector Federation (PSF) commissioned a study on the Promotion of Arbitration and other Alternative Modes of Commercial Dispute Resolution in 2008. Following the adoption of the Study Report; the Rwanda Parliament enacted a law in February 2011 establishing KIAC as an independent body (Law No 51/2010 0f 10/01/2010) No.51/2010 of 10/01/2010)
There is no doubt that the operationalization of the Centre will consolidate the first generation of commercial justice reforms, improve contract enforcement and ultimately, increase investors’ confidence.
Thierry Ngoga the registrar for KIAC noted that the vision of the center is to be a regional choice for commercial dispute resolution. Currently, leading countries in arbitration services include, France, Singapore and USA.
“We also want to promote arbitration as an efficient, friendly and private justice acknowledged by the business community,” he remarked.
Disputes at KIAC are solved in three main ways such as adjudication, mediation/conciliation and arbitration.
In arbitration, the disputing parties agree on an impartial third party, who is an individual or a group assigned to hear both sides and resolve the issue. In adjudication, the decision is the responsibility of a judge, magistrate, or other legally-appointed or elected official.
Adjudication is usually a legal trial, also referred to as court-based litigation. Disputing parties appear before an appointed or elected official and plead their respective cases. Like the arbiter in arbitration, an adjudicator weighs the evidence and issues a determination in favor of one of the parties. One difference between arbitration and adjudication is that the parties in an adjudicated decision are compelled by law to comply. If the losing party refuses or is unable to fulfill the mandate of the decision, he or she may be fined or jailed.
Mediation refers to any interchange between two groups or individuals attempting to bring their respective points of view to a compromise. The major uses of the term refer to law, diplomacy and commerce. Mediation may also be used in a scientific sense to discuss the interchange between biological organisms, or in a cultural sense to refer to the exchange of ideas and practices between cultures.
Legal mediation is similar to arbitration but less binding than arbitration for legal purposes. In this process, both sides must agree fully to a settlement, rather than relying on a third-party arbiter to decide an outcome.