The Kigali International Arbitration Centre (KIAC) launched in 2012 with the aim of being able to provide businesses in Rwanda and the wider region a new alternative for resolving disputes. Looking back, we outline some of the principal challenges faced and successes registered by KIAC.
Profile-building
KIAC initially focused on building confidence in arbitration, including increasing its profile in newspapers, radio, and television, as well as through organizing conferences and training programs. The fifth annual East Africa International Arbitration Conference, timed to coincide with the fifth anniversary of the centre, was particularly memorable and attracted over 150 delegates to Kigali as well as the Chief Justice of Rwanda.
KIAC has also gained international recognition. It signed a cooperation agreement with ICSID in 2019, and was involved with the establishment of the African Arbitration Association in 2018 and a Rwandan branch of the Chartered Institute of Arbitrators in 2020.
Challenges
Financing is one of the major challenges faced by young arbitration centres. In its early days, KIAC benefited from grants from local and international organizations, such as the Netherlands Enterprise Agency (RVO). Because KIAC has a low-fee policy aimed at making arbitration accessible to regional businesses, the policy also means that the centre has had to work on fundraising efforts, such as charging for conferences and arbitrator memberships as well as renting out the hearing centre.
Statutory and judicial support
KIAC’s development has also been aided by cooperation with legislative and judicial institutions, including judicial support from the Rwandan courts. Rwandan law is favorable towards arbitration as outlined in Law No. 005/2008 on Arbitration and Conciliation in Commercial Matters which limits the grounds on which an award can be set aside in Rwanda to those listed in the New York Convention.
An example before Rwandan courts includes a May 2021 decision that upheld an arbitral award following a set aside application from the Rwanda Revenue Authority where the revenue authority argued, among other things, that its right to defense had been breached because it had made a request to adduce witness evidence which had been rejected.
The court noted that there was no scope for it to rule on the substance of an award. Procedurally, it found that the revenue authority's request for witness evidence had been brought six months after the deadline for the submission of evidence set by the tribunal, and as such the tribunal was justified in refusing the request. Such judicial support for the arbitral process inspires confidence in potential users of arbitration.
High caseload
The financial, statutory, and judicial support received by KIAC has been a catalyst for the number of cases it has been able to register. KIAC was able to register an impressive 24 cases within three years of launching.
Its strong caseload has only continued since; a total of 192 cases have been filed since KIAC’s establishment. After a small decrease in cases from Covid-19, case numbers recovered in the second half of 2021. From 2020 to 2021, the centre registered 28 cases.
A token to the huge growth in infrastructure in Kigali and the region, the majority of arbitrations handled by KIAC are service and construction disputes. Other cases tend to relate to share ownership, sales agreements, and the supply industry. To a smaller extent, the centre has also handled cases in transport, shipping, and agriculture.
Rwandan businesses have also been receptive to arbitration. A majority of KIAC’s cases are domestic and users are principally private parties. One in ten cases involve a government entity demonstrating that government parties have confidence in the centre as an alternative to the local courts. Internationally, KIAC users have come from over 20 countries including East African countries and countries further afield such as Egypt, France, Singapore, and the U.S. The centre has even handled disputes between two Chinese entities, who were both doing business in the region.
Regional economic growth
Rwanda’s strong economic growth (currently at an average of 7%) has done a lot to assist the centre as a thriving economic community needs a choice of fora in which to resolve disputes. Rwanda is also recognized by the World Bank as a hotspot for business activities. It is currently ranked second in Africa for ease of doing business and in the top 40 countries in “ease of enforcing contracts” (ranked 32).
Economic growth has been seen widely in the region as well. East Africa attracted US$11.5 billion of foreign direct investment in 2019, a 103% increase from 2018. More generally, Sub-Saharan Africa saw economic growth of 3.3% in 2021 in spite of Covid-19, and predictions for 2022 and 2023 are even higher. Alongside this, the number of African signatories to the New York Convention has been growing steadily and now stands at 42 out of 54 states, showing the support of the arbitral process.
Looking ahead
In its ten years of existence, KIAC has made great strides. While there are now almost 100 recognized arbitration centres in Africa according to the SOAS Arbitration in Africa survey and report published in 2020. KIAC is currently one of the top five African arbitral centres.
Over the coming years, KIAC aims to continue developing arbitration across Africa. It also aims to continue working towards sustainability and diversity and equality, including a review of its arbitrator admission policy to address gender and age inequalities.
The future looks positive. With its low fees, international credibility, and growing experience, KIAC should continue to draw cases and maintain its positioning as a key arbitral center in Africa.
Authored by Thomas Kendra, Lédéa Sawadogo-Lewis, and Steph Leung.
