Judiciary reforms ought to drive business growth

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Ideas & Debate

Judiciary reforms ought to drive business growth


koome

Justice Martha Koome during the CJ position interview on April 14, 2021. PHOTO | JEFF ANGOTE | NMG

Summary

  • The Judiciary plays a critical role in the management and resolution of disputes and enforcement of contracts.
  • This has a direct impact on the ease and cost of doing business for both local and international investors.

The Judiciary plays a critical role in the management and resolution of disputes and enforcement of contracts. This has a direct impact on the ease and cost of doing business for both local and international investors.

As such, if Justice Martha Koome is confirmed as Chief Justice and President of the Supreme Court, it presents an opportunity for the business community to reflect on its relationship with the Judiciary and its leadership.

Such reflection will inform and reshape future engagements between the business community – particularly members of the Kenya Private Sector Alliance – and the Judiciary.

This is not the first time these two will be working together. Indeed, they have made major contributions to judicial processes through the National Council on the Administration of Justice.

This has in the past ensured that all stakeholders consult in the administration of justice as well as in driving reforms in the justice system. Going forward, there is an even greater need to strengthen these ties for better results.

A seamless working relationship between these two critical economic stakeholders will go a long way in making Kenya competitive in attracting foreign investment and driving creation of quality jobs.

SOLID RULINGS

The legal profession has made important reforms over the years, particularly since the passing of the 2010 Constitution.

The journey is ongoing and Kenya’s business community acknowledges play in ensuring that these gains are entrenched in legal practice and jurisprudence.

For instance, at the commercial courts, between 2009 and 2010, the speedy conclusion of cases and precedent-setting rulings that judges made with regard to insolvency of companies, taxation, copyright and other commercial matters comes to mind.

It is not lost on the business community that only a small fraction of these cases — less than five percent — were overturned by higher courts.

That can only mean that a majority of these rulings were solid and unimpeachable, which means that Kenya is increasingly viewed as a place where commercial law is enforced robustly.

This tradition ought, in our view, to be extended to other court divisions so that the gains made in the commercial division can be replicated throughout the judicial ecosystem.

This is the challenge that Kepsa will be looking at the new leadership of the courts to implement going forward so that we can improve the total business environment.

One of the areas that calls for immediate focus is the cases that have remained unresolved for a long time.

CASES BACKLOG

Some of these involve business disputes while others involve various forms of property and ownership rights.

The business community is keen to see what plan the Judiciary has to conclude these cases expeditiously as many of these have an impact on creation and expansion of wealth and other opportunities.

Our expectations is that reducing the backlog will also improve the efficiency of the courts.

Efficient courts, by their nature, create a reliable business environment, foster the building of strong judicial systems and processes which, in turn, are pivotal to the rule of law and the attendant economic transformation that fuels growth in emerging economies such as Kenya.

Well-functioning courts are also critical to holding government institutions accountable, especially where they find themselves in conflict with business organisations on matters like taxation, fair competition, and protection of social and economic rights.

As Kenya makes progress in reforming its legal and regulatory environment, a reformed Judiciary — which the business community anticipates — will be a major plank in pushing forward specific reform indicators that improve the country’s ranking in the ease of doing business rankings, making it more attractive as an investment destination.

INSOLVENCY PROCEEDINGS

Indeed, the business community is encouraged by the strides made so far, such as the rulings on business insolvency, which have made it possible to facilitate the continuation of a debtor’s business during insolvency proceedings, providing for equal treatment of creditors in re-organisation proceedings.

This is expected to improve the business environment by ensuring that all affected stakeholders have a fair chance of securing their interests, be they debtors, workers or creditors.

We have also noted that Kenya has made significant strides in contract enforcements, and the development of a robust and well-coordinated Alternative Dispute Resolution (ADR) framework through the work done by both the Judiciary and the Nairobi Centre for International Arbitration.

We expect the new leadership of the courts, therefore, to power these far-reaching reforms consistently in both the medium and long-term and build on the successes so far achieved to improve the business environment for economic growth.

What the country — and the business community — need going forward is an assurance that the new leadership of the Judiciary will foster a legal regime that promotes investment and, ultimately, contribute to economic growth and development.

The writer is the CEO, Kenya Private Sector Alliance.

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