Rwanda is to set up an international arbitration centre, once the law that governs its establishment is okayed by cabinet and parliament.
According to availed information the Kigali International Arbitration Centre which will also target commercial disputes in the region is also intended to ease the backlog of cases in Rwandan commercial courts.
Molly Rwigamba the acting Chief Executive Officer (CEO) of Rwanda Private Sector Federation (PSF) told a gathering of the business community attending the inaugural business breakfast last week, that PSF was spear heading the process of establishing the KIAC and is awaiting parliament approval.
”There was an arbitration centre but it collapsed in 1999. PSF recommended the setting up of an arbitration centre because most cases are referred to ‘The Hague’ or to the United Kingdom,” she said.
Arbitration, a form of alternative dispute resolution (ADR), is a legal technique for the resolution of disputes outside the courts.
Members of the business community were querying whether the KIAC would also settle tax despites between the Rwanda Revenue Authority (RRA) and tax payers or whether it would settle private commercial case only.
According to Vincent Safari, the new Director of Advocacy at PSF, the KIAC will be established in June this year.
Safari also disclosed that, about $56,000 (Rwf27m) has been provided by Rwanda Investment Climate Facility Project (RICP) for the structuring of the center.
“According to the action plan we are launching the arbitration centre June this year. Implementation of the alternative dispute resolution centre depends on when the draft law will be passed by parliament,” Safari told Business Times.
“Once the arbitration centre is formed it will be independent of the commercial courts. At a small fee compared to that paid in commercial courts we shall provide an option to settle commercial cases before they appear in court,” he added.
This means that the arbitration will intercept cases before they appear in commercial courts.
According to reports, in 2005 there were intensified complaints by businessmen because of delays in solving commercial cases that had piled and directly affected their commercial activities.
In 2004, the house of legislators moved to endorse the formation of commercial courts in Kigali, Huye and Musanze. The new commercial courts eventually became operational in 2008 but had to deal with a backlog of over 3,000 commercial cases.
With the private sector having the most commercial activity in the country once the arbitration centre’s in place, an increase in the solving rate of commercial cases may be realised thus reducing the backlog and positively affecting commercial activity.
During the business breakfast at the Serena Hotel last week, some members of the private sector said that they preferred an arbitration centre to judicial proceedings arbitration because it is often faster than litigation in court and can be cheaper and more flexible for businesses.
However, others said that arbitration could cost the business sector because some agreements are sometimes contained in ancillary agreements, or in small print and consumers and employees sometimes do not know in advance that they have agreed to mandatory binding pre-dispute arbitration.