It is a fundamental requirement of justice in deciding a dispute between two or more parties,
1. Firstly that the arbitrator or the tribunal must be and must be seen to be disinterested and unbiased.
2. Secondly, every party must be given a fair opportunity to present his case and to answer the case of his opponent.
The first principle is embodied in section 13 of the Arbitration Act (cap 4 of 1995) which
provides that when a person is approached for appointment as an
arbitrator he must disclose any circumstances likely to give rise to
justifiable doubts as to his impartiality or independence. That duty on
the part of the arbitrator is a continuing duty right from the time that
he is approached through to the time he accepts appointment, conducts
the reference, and renders his award.
So under section 13(2) the arbitrator is obliged through the arbitral proceedings to disclose without delay such circumstances.
The
arbitrator must be on his guard with respect to connections with a
party or connections in the subject matter of dispute or connections
with the nature of the dispute. And the test that the arbitrator must
always bear in mind is whether a reasonable person not being a party to
the dispute would think that the connection was close enough to cause
the arbitrator to be biased.
So there are three elements there of connections.-
--party
--subject matter
--nature of the dispute
The
arbitrator under Kenya law has an obligation to conduct the reference impartially in
both actions and words and to decide each issue put before him fairly
and impartially. And whatever the provocation, each decision must be
made impartially. There is therefore an overriding duty to work fairly
and dispassionately even if one of the parties, for example, provokes
the arbitrator by making the wildest of accusations.
The
arbitrator should also take pains not to associate with one party of
his representative more than with the other. He should, for example,
never have lunch with one party during a hearing or in the course of the
reference in the absence of the other party. He should also try to
avoid even casual conversation with one side in the absence of the
other. For his confidence in his own probity may not be shared by a
party who does not know him.
Each
party must also be given a fair opportunity to present their case and
to know the opposing case and to meet the opposing case.
Under
section 19 of the Arbitration Act, for example, parties must be treated
with equality and each party given full opportunity of presenting their
case.
Section 21
is perhaps also relevant in this regard in that if parties have not
agreed on the place of arbitration, the tribunal must determine the
place having regard to the circumstances of the case and the convenience
of the parties. The arbitrator is doing a balancing act.
Under Section 21 the parties have the right to agree on the venue, failing which section 21 (b) intervenes.
Section 24
provides for exchange of statements of claim and statements of defence:
To inform parties of the case they are to meet: natural justice.
Section 25 provides that the arbitral tribunal must hold oral hearings unless the parties have agreed that no hearing shall be held. For
the same reason an arbitrator should not receive oral evidence or
arguments from one party in the absence of the other. Neither should the
arbitrator receive any document from one party without ensuring that
the other party receives a copy. It is important to make
it clear to the parties that all correspondence with the arbitrator must
be copied to the other party. This should be in the agenda of the
preliminary meeting.
The arbitrator, if there is to be a hearing, must fix hearing dates so far as practicable convenient to both parties.
Other provisions in the Arbitration Act that you may want to look at:
Section 27,
where a tribunal appoints an expert if it has the power to do so. The
report must be available to the parties and they must have the
opportunity to examine that expert and to present their own expert on
the subject.
Section 29: obligation on the part of the tribunal to decide the dispute in accordance with the rules agreed upon by the parties
What
happens when an arbitrator uses his knowledge and experience to
determine the matter? Should the parties have right to influence the
judge’s mind? That is where the arbitrator is empowered by the parties
to use his own expertise, he should grant the parties an opportunity to
comment on his views and so on.
Section 35
deals with the setting aside of an award. If a party was not afforded
an opportunity to be heard, notice not served, appointment of
arbitrator, etc.
Under section 26
an arbitrator has powers to decide on a hearing date unless otherwise
agreed by the parties. Any party that fails to attend a hearing, the
hearing could go on, etc.
In summary, the principles of natural justice must be observed in the arbitral process.
Go through the Arbitration Act in your own time and see what sections have a bearing on natural justice.
When
drafting the substantive contract it is important to point out that in
case of any dispute the matter is to go before arbitration. This can be part of the substantive contract or just a clause.
Invariably almost all insurance companies include arbitration clauses in all their policies.
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