The new Constitution 2010 ushered with it a paradigm shift towards the concept of access to justice. Article 159 (2) (c) provides that in exercising judicial authority, the Courts and tribunals shall be guided by a set of principles, among them, promoting the use of alternative dispute resolution, including; arbitration, reconciliation, mediation and traditional dispute resolution mechanisms.
In choosing arbitration as an alternative form of access to justice, the disputing parties opt for a private dispute resolution procedure rather than mainstream litigation. Arbitration as a process is subject to statutory controls and regulations. In Kenya, the arbitration framework is fundamentally governed by the Arbitration Act 1995 (as amended in 2010).
In arbitral proceedings, formal disputes are determined by an arbitral tribunal of the parties’ choosing, in what is commonly known as the exercise of party autonomy.
This paper seeks to demystify the doctrines of; finality of Arbitral Awards, the functus officio nature of the arbitral tribunal post the arbitral award, and the power of the tribunal to issue an additional award once it has been rendered functus officio.
The finality of Arbitral Awards
Ideally, an arbitration award is deemed final and binding upon the parties, with very limited grounds for appeal to set aside the award. Section 35(2) of the Arbitration Act provides for the grounds upon which an arbitral award may be set aside through recourse to the High Court.
Some of these grounds include where; a party was under incapacitated; an invalid arbitration agreement; failure to give prior notice to the other party of the appointment of the arbitral tribunal; the arbitral award deals with a dispute not contemplated by or not falling within the terms of the reference to arbitration; the tribunal acting beyond its powers; composition of the tribunal not in accordance with the agreement of the parties, and the making of the award was induced or affected by fraud, bribery, undue influence or corruption.
The doctrine of finality of arbitral awards has been dealt with by the courts in several cases. For instance, the Supreme Court in the case Nyutu Agrovet Limited -vs- Airtel Networks Kenya Limited held that an appeal may lie to the Court of Appeal against a decision of the High Court made pursuant to Section 35 of the Arbitration Act upon grant of leave in exceptional cases (emphasis added). That same view of the finality of High Court decisions is evident in other Court of Appeal decisions such as Anne Mumbi Hinga v Victoria Njoki Gathara; Micro-House Technologies Limited v Co-operative College of Kenya, and Synergy Industrial Credit Ltd v Cape Holdings Ltd.
Pursuant to Section 35(3) of the Act, an application to vacate an arbitral award must be lodged within three months of the petitioner receiving the award. If the application is submitted in response to a request for award acknowledgment, it must be submitted within three months of the award.
Further, a suspension of the setting-aside proceedings may be requested by a party to the arbitral proceedings whose award is being challenged. In such circumstances, the High Court has the option to stop such proceedings if it believes it necessary, and if a party requests it. A suspension is usually for the specified period of time and for the purpose of allowing the tribunal to restart the arbitral procedures or to take corrective action to remove the grounds for setting aside the arbitral judgment.
From the above, it can be established that there are very limited instances with very strict conditions upon which an arbitral award will be set aside.
Correction and interpretation of arbitral award, additional awards vis-à-vis the functus officio nature of the arbitral tribunal post the arbitral award
Section 34 of the Act provides that the tribunal has the power to correct and interpret an award upon application of the parties. Section 34(4) further provides that a party may request the tribunal to make an additional award as to claims presented in the arbitral proceedings but omitted from the arbitral award.
This provision presents a challenge in that it is a commonly and legally accepted doctrine that once a Court of law, or by extension, a tribunal makes its determination on a matter, the said judicial or quasi-judicial body becomes functus officio.
The functus officio doctrine is a Latin term that means “having performed their office.” It holds that once an arbitrator/judge renders a decision regarding the issues submitted, they lack any power to reexamine that decision. This principle is well established in international arbitration and is accepted in many national laws. Therefore, the question that begs an answer is under what circumstances will Section 34 of the Act be invoked.
As a documentary instrument that has a legal effect, there are both formal and substantive requirements that an arbitral award should meet, as stipulated under Section 32 of the Act. In giving effect to this provision, the Court of Appeal in the case of Nyutu Agrovet Limited v Airtel Networks Limited observed that though not restricted to a specific format, for an arbitral award to be
acceptable, it is required to be cogent, complete, certain, final, consistent and enforceable. Cogency in this respect would mean that the award must be compelling and convincing in its reasoning; complete in the sense that all issues submitted for determination to the arbitrator have been dealt with; certainty in that it must be clear and not ambivalent, ambiguous or not capable of being performed.
The general rule is that a cogent, complete, certain, final, consistent and enforceable decision of a court or a quasi-judicial body cannot be reversed as was held by Sopinka J. in the case of Chandler v. Alberta Association of Architects. It was further held that this rule only applied after the formal judgment had been drawn up, issued, and entered. However, this requirement is subject to two exceptions: where there had been a slip in drawing it up, and where there had been an error in expressing the manifest intention of the court or quasi-judicia body.
In view of this paper, this is where the exception to the functus officio doctrine comes in. To buttress this argument, this paper seeks refuge in the case of ICEA Lion General Insurance Co. Ltd v Julius Nyaga Chomba where Meoli J. held that:
“a court is functus when it has performed all its duties in a particular case. The doctrine does not prevent the court
from correcting clerical errors nor does it prevent a judicial change of mind even when a decision has been
communicated to the parties. Proceedings are only fully concluded, and the court functus, when its judgment or
order has been perfected. The purpose of the doctrine is to provide finality. Once proceedings are finally concluded,
the court cannot review or alter its decision; any challenge to its ruling on adjudication must be taken to a higher
court if that right is available.”
In concurring with the above arguments, this paper advances for following arguments in supporting the provisions of Section 34 of the Act as an exception to the functus officio doctrine. First, for an award/decision to be deemed as “cogent, complete and certain,” it must be free of clerical or typographical errors so as to communicate the true mind of the decision-maker, without having any ambiguities.
Secondly, bearing in mind the finality of the award and the limited scope within which a party may appeal to set aside an arbitral award, every effort must be made to ensure that the award is judicially sound and airtight, in order to prevent any room from which a party may seek to have that award set aside. This is best dealt with through the fulfilment of the requirements of Section 34 of the Act.
Lastly, despite the restrictive and binding nature of the arbitral award, the party autonomy doctrine is an indication that arbitration as a process is not cast on stone. This doctrine by its very nature dictates that arbitration should be flexible and allow parties to exercise their rights in a conscionable manner.
It is the position of this paper that one such act of party autonomy is expressed through Section 34. This is based on the fact that Section 34 cannot be independently invoked by the arbitral tribunal without being moved by the parties to the arbitration proceedings.
Arbitration as a form of access to justice is subject to several fundamental doctrines which must be contemporaneously weighed and balanced, in order for the arbitration process to be deemed fair, just, expeditious and for the parties to actually feel that they have received the justice they so much wanted. This forms the basis for the finality of the arbitral award.
This finality can only be realized if the arbitrator-as the master of procedure- involves the parties to the process, who by the virtue of their involvement in the arbitral proceedings have a wide role to play, as espoused under the party autonomy doctrine. This paper is of the view that the ability of the parties to request the arbitrator to conform the award to certain standards (with a view of the parties to b bound) is an exception to the functus officio doctrine, and the ultimate test for the exercise of the doctrine of party autonomy both during arbitral proceedings and even at the arbitral award stage.