Alternative Dispute Resolution Agreement (Kenya)
ALTERNATIVE DISPUTE RESOLUTION AGREEMENT
Arbitration Act No. 4 of 1995 (Revised 2022) | Nairobi Centre for International Arbitration Act No. 26 of 2013
THIS ALTERNATIVE DISPUTE RESOLUTION AGREEMENT ("Agreement") is made on [Agreement Date]
BETWEEN:
(1) [Party 1 Name] (BRS/NIC No: [Party 1 BRS/NIC Number]), of [Party 1 Address] ("Party 1"); and
(2) [Party 2 Name] (BRS/NIC No: [Party 2 BRS/NIC Number]), of [Party 2 Address] ("Party 2").
Party 1 and Party 2 are collectively referred to as the "Parties".
1. SCOPE AND UNDERLYING CONTRACT
1.1 Underlying contract or commercial relationship: [Underlying Contract].
1.2 This Agreement applies to the following disputes: [Dispute Scope].
1.3 This Agreement is governed by the Arbitration Act No. 4 of 1995 (revised 2022) and the Law of Contract Act (Cap. 23).
2. STEP 1 — DIRECT NEGOTIATION
2.1 Either Party wishing to invoke this Agreement shall serve written notice on the other Party specifying the nature of the dispute in reasonable detail ("Dispute Notice").
2.2 Within 14 days of the Dispute Notice, senior representatives of the Parties with authority to settle shall meet (in person or by video conference) and attempt to resolve the dispute in good faith.
2.3 If the dispute is not resolved within [Negotiation Period] from the date of the Dispute Notice, either Party may proceed to Step 2.
3. STEP 2 — MEDIATION
3.1 If the dispute is not resolved by negotiation, the Parties shall refer it to mediation conducted under the following rules / body: [Mediation Body].
3.2 The Parties shall agree on the appointment of a mediator within 14 days. If the Parties cannot agree, the mediator shall be appointed by the NCIA President or the relevant appointing authority.
3.3 Mediation shall be completed within [Mediation Period] from appointment of the mediator, unless extended by written agreement of the Parties.
3.4 All mediation communications and settlement terms shall be confidential and without prejudice. A settlement agreement reached in mediation may be adopted as a consent order of the High Court under Section 59A of the Civil Procedure Act (Cap. 21).
3.5 If the dispute is not resolved by mediation within the prescribed period, either Party may proceed to Step 3.
4. STEP 3 — BINDING ARBITRATION
4.1 Any dispute not resolved by negotiation or mediation shall be referred to and finally resolved by binding arbitration under the [Arbitration Rules], which rules are deemed incorporated by reference into this Agreement.
4.2 The arbitral tribunal shall consist of [Number of Arbitrators]. If the Parties cannot agree on the appointment of the sole arbitrator (or the presiding arbitrator in a three-member tribunal) within 21 days of a Party's written request, the arbitrator shall be appointed by the President of the NCIA or such other appointing authority as the chosen arbitration rules designate.
4.3 Seat of arbitration: [Seat of Arbitration]. The curial law of the arbitration is the Arbitration Act No. 4 of 1995 (revised 2022).
4.4 Language of proceedings: [Language].
4.5 Confidentiality: All arbitral proceedings, submissions, evidence, and awards shall be confidential under Section 29 of the Arbitration Act No. 4 of 1995.
4.6 The arbitral award shall be final, binding, and enforceable as a judgment of the High Court of Kenya under Section 36 of the Arbitration Act. An award may be challenged only on the limited grounds in Section 35 of the Arbitration Act.
4.7 Kenya is a contracting state to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958). An award rendered under this Agreement may be enforced in any New York Convention contracting state.
5. GOVERNING LAW
5.1 This Agreement is governed by and construed in accordance with the laws of Kenya.
5.2 The courts of Kenya shall have supervisory jurisdiction over arbitral proceedings seated in Kenya consistent with the Arbitration Act No. 4 of 1995 (revised 2022).
IN WITNESS WHEREOF, the Parties have signed this Agreement on the date first written above.
Authorised Signatory (Party 1)
________________
Signature
Authorised Signatory (Party 2)
________________
Signature
Witness
________________
Signature
What Is a Alternative Dispute Resolution Agreement (Kenya)?
An Alternative Dispute Resolution Agreement in Kenya documents the resolutions and proceedings of a corporate meeting for the company's records.
The Arbitration Act No. 4 of 1995 (revised 2022) is Kenya's primary statute governing arbitration. Section 6 of the Arbitration Act empowers the High Court of Kenya to stay court proceedings where the parties have a valid arbitration agreement and a party applies for a stay before taking any step in the proceedings. Section 10 confers arbitral tribunals with broad powers equivalent to those of the High Court, including the power to order interim measures, take evidence, and compel document production. Kenya acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) in 1989, enabling Kenyan arbitral awards to be enforced in over 170 countries and foreign awards to be enforced in Kenya.
The Nairobi Centre for International Arbitration (NCIA), established under the Nairobi Centre for International Arbitration Act No. 26 of 2013, is Kenya's principal institutional arbitration body. The NCIA administers both domestic Kenyan arbitration and international commercial arbitration seated in Nairobi. The NCIA Arbitration Rules (2015, revised 2020) provide a structured procedural framework including appointment of arbitrators, time limits for proceedings, emergency arbitrator procedures, and fee schedules. The NCIA sits in Nairobi and promotes Kenya as the arbitration hub for East and Central Africa.
Mediation in Kenya is governed partly by the Civil Procedure Act (Cap. 21) and the Civil Procedure Rules 2010, which allow courts to refer matters to court-connected mediation. Private commercial mediation is also conducted through the Nairobi Centre for International Arbitration Mediation Rules, the Mediation Training Institute of East Africa, and professional mediators accredited by the Chartered Institute of Arbitrators (CIArb). Section 59A of the Civil Procedure Act (as amended) provides that mediation settlements may be adopted as consent orders by the High Court, giving them the force of a court judgment.
An Alternative Dispute Resolution Agreement differs from a dispute resolution clause embedded in a commercial contract in that it is a standalone instrument, often executed after a dispute has arisen or as an overarching framework agreement covering multiple contracts between long-term commercial partners. Standalone ADR agreements allow parties to tailor the procedural rules, choice of mediator or arbitrator, seat of arbitration, governing law, language, and confidentiality obligations with greater precision than a boilerplate dispute resolution clause. Under Kenya law, Section 3 of the Companies Act 2015 (No. 17 of 2015) and Section 15 of the Employment Act 2007 (No. 11 of 2007) govern the core requirements for this type of document.
When Do You Need a Alternative Dispute Resolution Agreement (Kenya)?
An Alternative Dispute Resolution Agreement in Kenya is needed whenever parties to a commercial relationship wish to establish a clear, contractually binding mechanism for resolving disputes outside the court system — avoiding the cost, delay, and publicity of High Court or Environment and Land Court litigation.
The agreement is required when two Kenyan businesses entering a long-term commercial relationship — a supply agreement, distribution agreement, joint venture, or master service agreement — want to agree on ADR procedures at the outset rather than litigating in court if a dispute arises. Kenya's High Court commercial division in Nairobi handles a high volume of cases, and litigation from filing to judgment routinely takes two to five years, making pre-agreed ADR mechanisms commercially attractive.
An Alternative Dispute Resolution Agreement is needed when a dispute has already arisen between parties and both wish to attempt structured negotiation or mediation before committing to full arbitration or litigation. The agreement frames the escalation steps — direct negotiation first, then formal mediation through a named mediator or the NCIA Mediation Centre, and finally binding arbitration — with defined time limits at each stage.
The agreement is required when parties to a cross-border contract involving a Kenyan company and a foreign counterparty wish to designate Nairobi as the seat of arbitration and the NCIA Rules as the procedural framework. The NCIA's location in Nairobi's Upper Hill business district, its trained panel of arbitrators, and Kenya's New York Convention membership make it an attractive neutral venue for East African commercial disputes.
The agreement is needed when parties are involved in construction, infrastructure, or engineering projects governed by FIDIC (International Federation of Consulting Engineers) contract forms, which require a Dispute Adjudication Board (DAB) as the first level of dispute resolution before arbitration. The standalone ADR agreement can supplement the FIDIC contract by specifying the DAB appointment procedure, fees, and rules applicable to Kenyan projects.
An Alternative Dispute Resolution Agreement is required when parties to a public procurement contract need to comply with the Public Procurement and Asset Disposal Act No. 33 of 2015 (PPADA), which requires procurement contracts above specified thresholds to include dispute resolution mechanisms aligned with the Public Procurement Regulatory Authority (PPRA) framework.
What to Include in Your Alternative Dispute Resolution Agreement (Kenya)
A well-drafted Alternative Dispute Resolution Agreement in Kenya under the Arbitration Act No. 4 of 1995 (revised 2022) must contain the following essential provisions.
Parties and Scope: Full legal names, BRS Registration Numbers, and KRA PINs of all parties. A clear statement of the disputes covered — whether limited to disputes arising from a specified contract or covering all disputes between the parties across multiple commercial dealings.
Escalation Steps: A tiered dispute resolution structure setting out each stage in sequence with defined time limits. A typical Kenyan commercial ADR structure includes: Step 1 — written notice of dispute by the claiming party, followed by direct senior-management negotiation for 21 to 30 days; Step 2 — if unresolved, formal mediation conducted under the NCIA Mediation Rules or by a mediator agreed in writing within 7 days of the end of Step 1, with mediation to be completed within 45 to 60 days; Step 3 — if mediation fails or the parties cannot agree on a mediator within 14 days, referral to binding arbitration.
Arbitration Clause: Reference to the Arbitration Act No. 4 of 1995 (revised 2022). Choice of institutional rules (NCIA Rules, CIArb Kenya Branch Rules, or ICC Rules for international disputes). Number of arbitrators (sole arbitrator for disputes below KES 50 million; three-arbitrator tribunal for larger disputes). Seat of arbitration (typically Nairobi). Language (English). Governing law (laws of Kenya).
Arbitrator Appointment: The procedure for appointing arbitrators — direct agreement within 21 days, failing which the NCIA President or another named appointing authority makes the appointment. Grounds for challenge and removal of arbitrators consistent with Section 13 of the Arbitration Act.
Confidentiality: All ADR proceedings — negotiations, mediation sessions, arbitration hearings, submissions, evidence, and awards — shall be confidential, consistent with Section 29 of the Arbitration Act No. 4 of 1995.
Costs: Who bears the costs of mediation and arbitration (commonly the losing party in arbitration, shared equally in mediation unless the mediator recommends otherwise based on the parties' conduct).
Enforcement: Arbitral awards shall be final and binding and enforceable under the Arbitration Act No. 4 of 1995 and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) to which Kenya acceded in 1989. The High Court of Kenya may set aside an award only on the limited grounds in Section 35 of the Arbitration Act.
Governing Law: The agreement is governed by the laws of Kenya. Forms-legal.com provides this Alternative Dispute Resolution Agreement as a practical starting point for Kenyan businesses seeking to resolve disputes efficiently outside the courts. Under Kenya law, Section 135 of the Companies Act 2015 (No. 17 of 2015) and Section 15 of the Employment Act 2007 (No. 11 of 2007) govern the core requirements for this type of document. Under Kenya law, Section 10 of the Law of Contract Act (Cap 23) and Section 24 of the Land Registration Act 2012 (No. 3 of 2012) govern the core requirements for this type of document.
Additional compliance elements for a Alternative Dispute Resolution Agreement (Kenya) used in Kenya include: Under the Companies Act No. 17 of 2015, the Registrar of Companies at the Office of the Attorney General maintains the register of Kenyan companies. Section 3 of the Law of Contract Act (Cap. 23) governs contractual obligations. The Competition Authority of Kenya (CAK) enforces the Competition Act No. 12 of 2010. The Kenya Revenue Authority (KRA) administers corporate tax under the Income Tax Act (Cap. 470). The High Court of Kenya has unlimited original jurisdiction under Article 165 of the Constitution of Kenya 2010. Forms-legal.com provides this template as a starting point for Kenya-compliant documentation.
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note = {Free legal document template}
}Frequently Asked Questions
Yes. Arbitration agreements are fully enforceable in Kenya under the Arbitration Act No. 4 of 1995 (revised 2022). Section 6 of the Arbitration Act empowers the High Court of Kenya to stay court proceedings commenced in breach of a valid arbitration agreement, provided the applicant applies before taking any step in the court proceedings. A valid arbitration agreement must be in writing under Section 3 of the Arbitration Act — it may be contained in a signed document, an exchange of letters, telex, telegrams, or other means of telecommunication that provide a record of the agreement. Kenyan courts consistently uphold arbitration agreements and treat them as a strong expression of party autonomy. The Court of Appeal of Kenya has affirmed that courts should be slow to intervene in arbitral proceedings and should only do so within the narrow grounds permitted by the Arbitration Act. Kenya also acceded to the New York Convention in 1989, enabling Kenyan arbitral awards to be enforced in over 170 contracting states. Foreign arbitral awards from other New York Convention countries can be enforced in Kenya by making a High Court application under Section 36 of the Arbitration Act.
The Nairobi Centre for International Arbitration (NCIA) is Kenya's premier institutional arbitration body, established under the Nairobi Centre for International Arbitration Act No. 26 of 2013. The NCIA administers both domestic Kenyan arbitration and international commercial arbitration seated in Nairobi, positioning Kenya as the arbitration hub for East and Central Africa. The NCIA provides: a panel of qualified arbitrators and mediators; the NCIA Arbitration Rules (most recently revised in 2020) governing the conduct of proceedings from commencement to award; the NCIA Mediation Rules for structured commercial mediation; an emergency arbitrator procedure for urgent interim relief; a secretariat to manage case administration, hearing facilities in Nairobi's Upper Hill, and fee schedules. The NCIA also handles investor-state disputes under the UNCITRAL Arbitration Rules where Kenya or its parastatals are a party. Parties wishing to designate NCIA arbitration should use the standard NCIA model arbitration clause: 'Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the NCIA Arbitration Rules, which rules are deemed to be incorporated by reference into this clause.' The NCIA competes with the London Court of International Arbitration (LCIA) and the International Chamber of Commerce (ICC) for East African commercial arbitration mandates.
A Kenyan court may only refuse to enforce or set aside an arbitral award on the limited grounds set out in Section 35 of the Arbitration Act No. 4 of 1995 (revised 2022). These grounds are: (a) a party to the arbitration agreement was under some incapacity; (b) the arbitration agreement is invalid under the applicable law; (c) a party was not given proper notice of the appointment of the arbitrator or of the proceedings, or was otherwise unable to present their case; (d) the award deals with a dispute not contemplated by or not falling within the scope of the arbitration agreement; (e) the composition of the arbitral tribunal or the conduct of proceedings was not in accordance with the agreement of the parties; (f) the award has not yet become binding, or has been suspended or set aside by a court of the seat of arbitration; (g) the dispute is not capable of settlement by arbitration under Kenyan law; or (h) enforcement of the award would be contrary to the public policy of Kenya. Kenyan courts interpret the public policy ground narrowly, consistent with international practice. The Court of Appeal has held that mere legal error by an arbitral tribunal is not a ground for setting aside an award — the High Court will not act as an appellate court reviewing the merits of an arbitral decision. Applications to set aside must be made to the High Court within 3 months of receiving the award.
Mediation and arbitration are both alternative dispute resolution mechanisms used in Kenya but they differ fundamentally in their process and outcome. Mediation is a voluntary, non-binding enabled negotiation in which a neutral third party — the mediator — helps the disputing parties reach a mutually acceptable settlement. The mediator does not impose a decision. If the parties reach agreement, they sign a settlement agreement which, under Section 59A of the Civil Procedure Act (Cap. 21), can be adopted as a consent order by the High Court and enforced as a court judgment. If mediation fails, the parties remain free to pursue arbitration or litigation. Arbitration is an adjudicative process in which a neutral third party — the arbitrator or arbitral tribunal — hears evidence, considers legal arguments, and issues a final binding award that is enforceable as a court judgment under Section 36 of the Arbitration Act No. 4 of 1995. The arbitral award is final and can only be challenged on the narrow grounds in Section 35. Mediation is typically faster (45 to 60 days), cheaper, and preserves the commercial relationship between the parties. Arbitration takes longer (6 months to 2 years) and is more costly but produces a final, enforceable decision. Many Kenyan commercial ADR agreements combine both: mandatory mediation first, then binding arbitration if mediation fails within a defined period.
A standalone Alternative Dispute Resolution Agreement in Kenya does not require registration with any government body such as the Business Registration Service (BRS) or the courts. However, under the Stamp Duty Act (Cap. 480), certain instruments — including agreements that create, transfer, or extinguish legal rights in land or property — require stamping by the Kenya Revenue Authority (KRA) within 30 days of execution. A pure ADR agreement governing the resolution process for commercial disputes (without reference to land or property transactions) is generally not a stampable instrument. However, where the ADR agreement forms part of a broader commercial contract (such as a joint venture agreement, land sale agreement, or lease) that is a stampable instrument, the entire document including the ADR provisions must be stamped. An unstamped stampable instrument is inadmissible as evidence in any Kenyan court or arbitral tribunal until the applicable stamp duty and any penalty are paid to the KRA. Parties should therefore confirm the nature of their underlying commercial arrangement with an Advocate of the High Court of Kenya before concluding whether their ADR agreement requires stamping.
The duration of arbitration in Kenya varies considerably depending on the complexity of the dispute, the number of parties, the evidentiary requirements, and whether the parties choose ad hoc or institutional arbitration. A simple two-party commercial dispute with limited document disclosure and a sole arbitrator can be resolved through NCIA arbitration in 4 to 8 months from the appointment of the arbitrator to the issue of the award. Complex multi-party commercial disputes — construction claims, shareholder disputes, or joint venture disagreements — involving multiple witnesses, expert evidence, and extensive document production commonly take 12 to 24 months. Under the NCIA Arbitration Rules (2020), the tribunal is expected to render its final award within 45 days of closing the proceedings, absent exceptional circumstances. The Arbitration Act No. 4 of 1995 (revised 2022) does not prescribe a maximum duration but the High Court has power under Section 14 to remove an arbitrator who has failed to act without undue delay. By comparison, High Court commercial litigation in Nairobi from filing to final judgment routinely takes 3 to 7 years, making arbitration significantly faster for most commercial disputes. Parties can further reduce duration by agreeing to a documents-only arbitration (no oral hearing) for smaller disputes, which the NCIA Rules accommodate.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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