The success of any business heavily relies on planning, budgeting and timely execution of activities, however, in Africa, backlog in corporate disputes is proving to be an impediment.
Legislatures and business leaders convening in Nairobi for the 8th International Chamber of Commerce (ICC) Africa Conference noted that judicial backlog and pending cases continue to take a heavy financial toll on businesses across Africa.
In 2023 for instance, the ICC Court administered newly registered commercial disputes for a total aggregated value of $53 billion (Sh6.9 trillion).
“The aggregated amounts in disputes of the over 1,800 cases currently pending before the court is over $255 billion (Sh33.6 trillion) which represents more than double the GDP of Kenya,” said Diamana Diawara, the director of ICC Arbitration and ADR, Africa.
"It is on such backlogs that businesses are delayed on plan execution while incurring additional costs on prolonged traditional judicial processes."
This is amidst plans to fully implement the African Continental Free Trade Area (AfCFTA), which is poised to add more corporate disputes as a result of an increased volume of trade.
Diawara therefore stressed the need to accelerate the process of adopting Alternative Dispute Resolution (ADR) mechanisms such as arbitration in African countries to complement the traditional legislation and save the corporate sector billions that are lost as a result of prolonged judicial resolutions.
"It will also help African countries realise the full benefits that will come with the free trade area initiative."
In Kenya, according to Justice William Ouko, a total of 208 judges and about 600 magistrates are struggling to handle more than 700,000 of unresolved cases, hence push for ADRs is timely and of great importance.
Despite efforts to increase Kenya’s judicial capacity, the number of filed cases have been on the rise, increasing from 402,243 in 2017/2018 to 423,394 in 2022/2023.
According to the State of Judiciary Report (SOJAR), Kenya's judge-to-population ratio stands at one (1) to 271,189, while the magistrate-to-population ratio is one (1) to 87,037.
This shortage has significantly contributed to pending cases, resulting in a growing number of backlogs.
In the 2021/2022 financial year, 678,000 cases were pending determination.
As of June 2019, the judiciary faced 341,056 pending cases, with 34 per cent being more than three years old.
“We however have to address the key questions that surround the ADR mechanism. Concerns about corruption and cost have to be extensively addressed before moving into full adoption and implementation,” Ouko said.
“To play an active role in ADR processes, judiciaries are investing in training judges, magistrates and other ADR practitioners to improve the quality of ADR services and promote ADR in the country.”
He added that it is for this reason that six out of the seven justices of the Supreme Court of Kenya have in the last few months undergone intensive training and have managed to join the Chartered Institute of Arbitrators Kenya.
Private sector players present at the forum also rallied behind the strive to do more ADRs in addressing the issues of corporate case backlogs.
“The best out-of-court agreement is better than the best court decision. Instead of being before a judge, why don’t I be before the arbitrator and within four weeks we get judgment and it is a win-win judgment because it is arbitrated,” said James Mwangi, the Equity Group CEO.