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Banks, Judiciary Seek To Use Mediation To Unlock Ksh 10 Billion Locked In Litigation

Nairobi, Tuesday, July 5, 2016... The Judiciary's Commercial Division in partnership with the Kenya Bankers Association (KBA) met to explore ways through which banks can use alternative dispute resolution mechanisms. Currently over Ksh 10 billion is locked up in bank-related litigation. The meeting, whose theme was "Commercial Disputes: Creating Value through Mediation", follows the 4th April 2016 launch of the Judiciary's Court Annexed Mediation Pilot project. The Judiciary pilot commenced in both the commercial court and family court and seeks to provide a cheaper and quicker solution to dispute resolution.

Speaking at the event, Principal Judge Hon. Richard Mwongo reiterated the need for all stakeholders to embrace mediation in order to unlock economic value and offload the backlog of cases currently pending at the commercial courts. "In 2015, approximately 660 files were registered in the Commercial and Tax Division, out of this, 159 of them were bank related. The total value of the disputed amount in these matters is Kshs 8,047,880,115. By May 2016, the Commercial Division had registered an additional 249 files. The total value in these matters is Kshs 2,013,972,151. Therefore, the total value tied up in litigation in this division from last year to date is Kshs 10,061,852,266," he said. The Commercial and Tax Division Deputy Registrar at the Milimani Law Courts, Hon. Elizabeth Tanui, added that mediation reduces delays caused by complex formal procedures or inadequate court resources, adding that the process gives parties more control over the resolution of disputes and in most cases increases their satisfaction with outcomes. Also speaking at the event, KBA CEO, Mr. Habil Olaka said that the banking sector is working to ensure that more bank-related cases are resolved through mediation in order to reduce the time taken to resolve them. "Following the key learnings from our ADR Pilot Project, we are seeking to partner with the Judiciary to make the mediation project a success by bringing all stakeholders on board. The time and money involved in the bank-related cases that are going through litigation is immense and calls for a shift in the way we resolve disputes in the banking sector," he said. The meeting, attended by banks' legal representatives and those from the Judiciary Commercial Division, was sponsored by KBA and sought to create and enhance awareness of the value presented by the Court Annexed Mediation Pilot Project; to share best practices and recommendations on dispute management based on KBA's pilot exercise that was hosted by Strathmore Law School; and to propose a way forward for the banking industry and the legal fraternity to support the Judiciary's efforts to promote mediation as a viable alternative. Other speakers included Hon. Mr. Justice Alnashir Visram, of the Court of Appeal, Commercial Court Presiding Hon. Justice Fred Ochieng, Lawyer John Ohaga, KBA Director Nuru Mugambi, KBA Legal Affairs Committee Chair and Barclays Head of Legal Waweru Mathenge, Strathmore Law School's Douglas Gichuki, and Tatua Center's Hannah Karuri.

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