The Rwanda Bankers Association (RBA) has reiterated the importance of alternative dispute resolution (ADR) mechanisms, particularly arbitration and mediation, in handling disputes involving financial institutions in Rwanda.

Speaking on behalf of bankers during a consultative meeting between the Judiciary and heads of banks and financial institutions on May 26 at the Supreme Court, Padua Angela Mutesi, Chairperson of the Legal Committee of the Rwanda Bankers Association, said disputes in the banking sector often extend beyond legal processes, affecting businesses, livelihoods, investor confidence, and involving substantial financial exposure.

"Behind these disputes are not merely legal files. They often involve businesses, livelihoods, investor confidence, and in many cases substantial financial exposures involving millions or even billions of Rwandan francs,” she said.

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Mutesi noted that litigation management has increasingly become a strategic responsibility for financial institutions, with some banks handling between 60 and 100 active cases at any given time while balancing regulatory obligations, commercial realities, and institutional risk management.

"Given this context, the banking sector places great value on a justice and dispute resolution system that delivers predictability, timely decision-making, technical competence, professionalism, and commercial awareness. These elements are essential not only for the confidence of financial institutions but also for strengthening Rwanda’s reputation as a credible and investor-friendly economy,” she added.

While acknowledging that litigation remains an important pillar of justice, Mutesi emphasised the growing importance of ADR mechanisms, especially arbitration and mediation, in preserving commercial relationships between banks and their customers.

According to her, mediation offers several benefits to financial institutions, including reduced costs and delays, confidentiality, and commercially practical resolutions.

She added that the banking sector remains committed to promoting responsible and constructive dispute resolution practices, supporting the integration of effective ADR frameworks within financial agreements, and encouraging early resolution of disputes where appropriate.

Deputy Chief Justice Alphonse Hitiyaremye described the financial sector as a key pillar of national development because of its role in promoting investment, trade, and citizens’ welfare.

He stressed the importance of resolving disputes involving financial institutions quickly, fairly, and in a manner that builds confidence among all parties.

Hitiyaremye encouraged banks and microfinance institutions to actively embrace mediation, noting that it helps parties reach constructive agreements, speeds up justice delivery, reduces losses associated with prolonged litigation, and preserves relationships between disputing parties.

He pointed to recent successes achieved through mediation, citing a case involving about 45 insurance companies and their clients. The disputes were resolved through mediation within one month following a similar meeting convened by the Supreme Court in April this year.

"We continue to encourage parties in dispute to use mediation so they can focus on productive activities instead of spending long periods in court,” he said.

Meanwhile, the President of the Commercial High Court, Clotilde Mukamurera, said statistics show that the use of ADR in the financial sector remains low despite its benefits.

She said that since 2023, commercial courts have registered 549 pending cases involving banks, including 451 at the Commercial Court and 98 appeals at the Commercial High Court. Financial institutions accounted for 84 cases, with 63 handled by lower courts and 21 by the higher court.

Mukamurera noted that only 157 cases involving banks were resolved through mediation over the past three years, describing the figure as low compared to the total number of disputes recorded.

"If only 157 cases have been resolved through ADR in three years, it means more effort is needed to increase these numbers in the coming years,” she said.

Mukamurera urged banks, microfinance institutions, and other financial sector players to more actively embrace ADR mechanisms to improve efficiency in dispute resolution and reduce the number of cases that go through litigation.