How small claim procedure promotes doing business

Last week, the Supreme Court spearheaded a ‘Judicial Week’ themed: “Twubake ubutabera buvomwe mu muco n’umurage w’u Rwanda hatabangamiwe Itegeko Nshinga n’amahame mpuzamahanga”.

It can be loosely translated as “let’s build justice based on Rwandan culture and heritage without contravening the Constitution and international (legal) principles.”

During the Judicial Week, a wide range of issues were thoroughly discussed with the aim of coming up with solutions to the challenging issues in Commercial Court.

 Indeed, it was a platform to discuss various legal issues, including auctioning of mortgages, insurance-related claims, tax-related claims et cetera.

Among the interesting point was the elaboration of small claim procedure, provided by Law no 22/2018 of 29/04/2018 relating to the civil, commercial, labour and administrative procedure, which is paramount in ease of doing business.

From the perspective of Rwandan society, the ideal of quick administration of justice is to promote social cohesion. Rwandan culture embraces prosociality—that is, behaviour which is positive, helpful and intended to promote social acceptance and friendship, and community cohesion.

Given Rwanda’s past experience, everyone knows very well the effects of divisions and injustices. So it is in this context that the judiciary commits to improve administering justice with the goal of enhancing social cohesion. At any rate, quick administration of justice would vastly impact ease of doing business.

 Fundamental to the rule of law is an effective system in each nation state. The rule of law is a glorious tradition that the judiciary has the supreme responsibility to uphold. 

The small claim procedure, under law no 22/2018 of 29/04/2018 relating to the civil, commercial, labour and administrative procedure, is quite important in ease doing business. Article 196 of the this law states that “….a small claim case is that whose main subject-matter’s value is of Rwf5,000,000 maximum excluding interests of this value and procedural fees”.

This provision stipulates that the subject-matter value should not exceed 5 million Rwandan Francs.

However, the litigants have the latitude to either refer the matter to Primary Court or Commercial Court. But, in principle, the small claim procedure is exclusively under jurisdiction of Primary Court.

However, Article 201 of the foregoing law says that “Primary Tribunals have jurisdiction on civil claims related to movable or immoveable property which does not fall within the jurisdiction of Abunzi Committees and on commercial cases whose subject-matter value does not exceed Rwf5,000,000”.

Under the Law no.37/2016 of 08/09/2016 determining organisation, jurisdiction, competence and functioning of an Abunzi committee, especially in Article 10, the Mediation Committee can entertain cases of movable and immovable assets and succession thereto where their value does not exceed three million Rwanda Francs.

Equally, the Primary Court entertains a case concerning a breach of contract between individuals, if the value doesn’t exceed Rwf3 million.

For a commercial matter whose value that doesn’t exceed five million of Rwandan Francs falls in the jurisdiction of Primary Court as opposed to the powers of Mediation Committee. In ease of doing business, this is the best procedure for dispute settlement precisely because of certain advantages.

First, the small claim procedure is specially designed to minimize commercial-or-business-related matters that are ordinarily referred to Commercial Court, which is only one today in the country. Second, nobody can oppose the court ruling while claiming that there is a pending criminal case in order to avoid the proceedings on asset recovery.

Third, any person given a bouncing cheque or any other negotiable instrument whose value does not exceed five million Rwandan francs can institute a claim before the Primary Court.

Fourth, filing legal action under small claim procedure the court fees is Rwf10,000 whereas in the Commercial Court Rwf20,000. Arguably, the cost of court is marginally small that anyone can afford.

Once a case is filed in Court, the defendant/respondent is required to reply to the claimant pleadings within fifteen days. However, the law provides a room for amicable settlement of the dispute in 15 days after filing a legal action. Once that period lapses, without amicable settlement, the court adjudicates the matter and delivers judgement in five days.

Under small claim procedure, the tenet of being assisted or represented is fully respected. Therefore, it rests upon the parties to opt for assistance or representation while bearing in mind to incur the related costs.

Like in normal procedure, once the judgement is handed down, it takes 30 days to be executed and, more interestingly, the decision is non-appealable. And the maximum procedural fees that would be awarded to the winning party cannot exceed 5 per cent of the value of the subject-matter.

The spirit of Mediation Committee and the use of small claim procedure is twofold: to promote social cohesion and ease of doing business. The small claim procedure is, however, not the only procedure for ease of doing business, but also arbitration, which is currently administered by the Kigali International Arbitration Center (KIAC). The goal is to promote efficient arbitration services.

The writer is a law expert.

The views expressed in this article are of the author.