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PSF Spearheads Establishment of Kigali International Arbitration Centre—KIAC



Preparations by Private Sector Federation (PSF) are in high gear and all is set for the official lunch of the first ever international arbitration centre—dubbed Kigali International Arbitration Centre (KIAC) come February 10, 2012.

Spearheaded by PSF, the KIAC project is being supported by Investment Climate Facility for Africa (ICF)-a partnership between governments, private companies and development partners working to improve to doing business on the continent.

Over the recent years, Rwanda has performed extremely well in terms of creating a conducive business environment, featuring among the top reforming nations, only beaten by Botswana in the whole of Sub Saharan Africa. Clearly, Rwanda is open for business and now attracting a lot of Foreign Direct Investments (FDIs). More so, the country has integrated with various economic blocs. The FDIs trend is projected to go even higher. As part of investor confidence building and facilitation, efforts are being made to establish an efficient and effective commercial arbitration system.

The Rwanda Government through PSF commissioned a reputable local consultancy to conduct a comprehensive study on establishing the centre. Now, all detailed structural and operational frameworks of the Kigali International Arbitration Centre have been clearly defined. The PSF Acting CEO Mrs. Yvette Mukarwema confirmed that the Centre will soon open doors to serve both local and foreign investors operating in Rwanda.

The key partner institutions in the project are; PSF, ministry of justice, ministry of trade, the judiciary, local authority and ICF.

The Centre aims to promote arbitration and other alternative modes of commercial dispute Resolution as viable options to state- run national courts. Globally, majority of business people prefer to settle disputes outside courts—through arbitration for obvious reasons, such as; reduced costs and time, confidentiality and preservation of relationship of the disputants.

In Rwanda today, (some) business contracts provide for arbitration as an option in case of dispute in the course of contract execution but parties unnecessarily still find their way in national courts because of lack of an efficient and effective arbitration system.  Back in 1999, an arbitration centre called CAER (Centre d`arbitrage et d`Expertise du Rwanda) was created with objectives of resolving commercial disputes. However, CAER wasn’t so efficient in handling commercial cases—a situation that led to backlog of commercial cases in courts that would otherwise be solved through arbitration.

Learning from this experience, and drawing best practices from advanced economies like Singapore and Mauritius Mr Kizito Safari, a lead consultant on the project says KIAC will stimulate FDIs. “It is inevitable that the many contractual relationships between various players that arise in the course of domestic and international commercial transactions will become sources of dispute. With KIAC investors will soon find an independent centre to go to in case of a dispute”, he remarked.

In February 2011, the Rwanda Parliament enacted Law No.51/2010 of 10/01/2010 establishing the Kigali International Arbitration Centre and determining its organization, functions and jurisdiction. When it opens, it will be legally providing dispute resolution services to domestic as well as foreign parties in the fields of finance, trade, investment, insurance, construction, real estates, among other commercial related disputes, as stipulated by the law. In addition, Rwanda ratified the New York convention on recognition end enforcement of foreign arbitral award in 2008 and became the 143rd State party to the convention.

The NY convention which is one of the key instruments in international arbitration provides for a simpler and effective method of enforcement of obtaining recognition and enforcement of foreign award. Rwanda has the adequate infrastructure and legal framework for the efficient and effective conduct of both arbitration and other alternative dispute resolution processes. Once the centre is up and running, cooperation agreements will be signed with peer (arbitration centres) in the region, Africa and beyond.

In a bid to establish an efficient and effective centre (KIAC), a number of key accomplishments have been made— some of which are responding to likely operational issues. A total of  34 arbitrators were trained in July 2011 by the Nigerian Chartered Institute of Arbitrators. They will all be eligible to apply to be on the panel of Arbitrators of the KIAC since they have all been certified by a recognized Chartered Institute. For the strategic management of the centre, an influential Board of Directors has been instituted, representative of private sector federation, Kigali Bar Association, and a principal state attorney.

PSF has provided office space and a few necessary equipment to get the centre started. A complete KIAC Governance Procedures manual has also been produced. An aggressive awareness campaign is ongoing as build up to the centre official launch on January 30, 2011 and will continue even afterwards through a well studied communication strategy.

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