The government is planning to establish a world-class arbitration centre in Nairobi, Prime Cabinet Secretary Musalia Mudavadi has said.
He said the institution will help provide international commercial arbitration services.
Mudavadi said processes are underway to have a bill to support the initiative.
"My office, in close consultations with other relevant state agencies, including the office of the Attorney General are at advanced stages of developing a Bill that will ensure the establishment of viable and private international arbitration centre in Nairobi," he said.
Mudavadi said Kenya is at the moment recognised as the business capital of East Africa, and one of the leading centres for business and investment.
Therefore, there is a need to have a dispute resolution service that appeals to the regional and international business and commercial community, he said.
He spoke on Thursday during the seventh conference of the Chartered Institute of Arbitrators at the Leisure Beach and Golf Resort in Diani, Kwale county.
This year's conference theme is, “International arbitration for the 21st Century: A new era of dispute resolution in Africa”.
Mudavadi urged members to offer the required support for the legislative proposals contained in Bill when it is subjected to public participation.
He said the centre will attract and win the respect of both global arbitration practitioners and provide efficient international resolution services that support and serve international businesses seeking to settle commercial disputes.
Mudavadi said the previously established Nairobi Center for International Arbitration institution failed to function properly because it is more of a public corporation.
"The centre cannot function appropriately because it was set up in the same manner as other public statutory institutions and assigned functions similar to a state entity," he said.
Mudavadi said the new one will be reconfigured to effectively promote international arbitration services to bring more benefits to the country.
He said Kenya has the necessary legal framework required for international commercial arbitration.
Mudavadi said laws that reflect the key virtues, tenets and requirements of modern law are in place.
"Prior to 1995 our arbitration law was based on an archaic statute in England, but the Arbitration Act 1995 (Cap.49) is a law that has incorporated principles of arbitral jurisprudence applicable that’s why we are ready for international arbitration centre," he said.
Mudavadi said given the current international economic order, resulting from the effects of globalisation, the establishment of effective and reliable modes of resolving commercial disputes is desirable and invaluable.
He said arbitration remains vital in solving and managing commercial conflicts outside the judicial process hence promoting international trade and socioeconomic development.
Mudavadi said there is a need for Africa to adopt an international arbitration mechanism for the resolution of commercial disputes.
He said African states should modernise their arbitration laws and become New York Convention members.
Mudavadi said it will help in solving disputes easily without people being dragged into lengthy and protracted battles in courts.
He said for Africa to develop a conducive environment for international commercial arbitration business, the global commercial and business community must invest in countries that have modern commercial and business laws.
The Prime CS said Africa must also accept that international arbitration grows in tandem with globalisation and it has gained popularity among the business community because of the advantages it has over litigation.
