National Policy on Investor–State Arbitration

Kenya has not adopted a formal policy of withdrawing from investor–state arbitration as a system. To the contrary, it has accepted investor–state arbitration through the various bilateral investment treaties (BITs) it has executed with countries. Most of these BITs contain an Investor–State Dispute Settlement (ISDS) clause, which typically requires that a dispute first be referred to arbitration, including international tribunals, for resolution. So far, Kenya has shown no reluctance to enter into treaties containing investor–state arbitration clauses.

Intention to Terminate Bilateral Investment Treaties

To date, there has been no official communication from the government of Kenya announcing an intention to denounce or termination BITs as a matter of policy. That said, Kenya has been party to at least two treaty terminations to date.

• Italy–Kenya BIT (1996) – According to the UNCTAD IIA Navigator, this treaty is listed as terminated, with a termination date of 4 August 2014 and termination type “unilaterally denounced”.
• Kenya–Netherlands BIT (1970) – This treaty was unilaterally denounced by Kenya in 2024.

These terminations reflect a broader, reassessment of older-generation BITs, which are increasingly viewed as skewed heavily in favour of the investor protections at the expense of the State’s regulatory space.

Kenya, however, has not renounced ISDS outright. It continues to negotiate newer investment agreements, generally incorporating more balanced provisions than those found in the earlier treaties. These include narrower fair and equitable treatment standards, carve-outs preserving the State’s right to regulate in public interest. Kenya has also engaged with the UNCITRAL Working Group III process on ISDS reform, indicating a preference for improving the system’s transparency, consistency and cost-effectiveness rather than abandoning it altogether.

New York Convention

Kenya acceded to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”) in 1989, given domestic legal effect through the Arbitration Act, 1995. Section 36(2) provides that an international arbitration award shall be recognised as binding and enforced in accordance with the New York Convention, or any other convention to which Kenya is a signatory.

ICSID Convention

Kenya ratified the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the “ICSID Convention”) in 1967, shortly after it opened for signature.

Other Arbitration Conventions

Kenya is also a member of the Multilateral Investment Guarantee Agency (MIGA) Convention.

Investor–state dispute resolution mechanisms exist in Kenya, but the uptake remains low. Some of the known treaty-based ISDSs include:

• Cortec Mining v Kenya (ICSID, initiated 2015) – the case was decided in favour of the State;
• Travizory Border Security SA v Republic of Kenya, ICSID Case No ARB/25/54 – commenced in 2025, pending;
• WalAm Energy Inc v Republic of Kenya, ICSID Case No ARB/15/7, award, 10 July 2020 in favour of the State; and
• World Duty Free Company v Republic of Kenya, ICSID Case No ARB/00/7, award, 4 October 2006 in favour of the State.

That said, investors do not always resort to arbitration. Litigation in Kenyan courts, or recourse to other mechanisms, is sometimes used or required, and the choice of forum depends on the nature of the dispute, the governing instrument and practical considerations.

Arbitration appeals to foreign investors for the following reasons:

• its neutrality (avoiding perceived risks of local court bias, delays or political influence);
• the enforceability of awards (particularly ICSID awards, which benefit from the Convention’s self-contained enforcement regime);
• confidentiality; and
• party autonomy over procedure.

Litigation, by contrast, may be the only option where no treaty or arbitration agreement exists, and cost, speed or public policy and transparency concerns can also make a domestic forum the more attractive, or necessary, route.

ISDS Trends by Sector

No industry in Kenya has seen high-volume or “significant” investor–state arbitration activity in recent years. Known ISDSs remain extremely limited over the past decade-plus. The few that have arisen cluster largely in the extractive industries, specifically mining (rare earths) and geothermal, along with disputes involving expropriation of proprietary rights.

Summary of Key ISDS Awards

World Duty Free Company Ltd v Republic of Kenya (ICSID Case No ARB/00/7, award, 4 October 2006)

• Facts – A UK company entered into a 1989 agreement with Kenya to develop and operate duty-free complexes at Nairobi and Mombasa airports. The company subsequently alleged contractual breaches and expropriation after the business was placed under receivership.
• Key principles – The tribunal addressed whether a contract procured through bribery of a sitting Head of State could be enforced, the treatment of corruption under international public policy, and the effect of an investor’s unlawful conduct on its treaty and contractual claims.
• Outcome – The tribunal dismissed all the claims, holding that contracts procured through bribery are unenforceable under both international public policy and the applicable domestic law. The award remains an important authority on the corruption defence in investor–state disputes.

Cortec Mining Kenya Ltd and Others v Republic of Kenya (ICSID Case No ARB/15/29, award, 22 October 2018; annulment rejected in 2021)

• Facts – British investors challenged Kenya’s 2013 revocation of a special mining licence relating to rare-earth deposits at Mrima Hill, alleging expropriation and breach of fair and equitable treatment under the UK–Kenya BIT.
• Key principles – The tribunal considered whether an investment must comply with the host State’s domestic law to qualify for treaty protection, particularly environmental and forest protection requirements. It also considered the effect of a missing mandatory environmental impact assessment on the licence’s validity.
• Outcome – The tribunal declined jurisdiction and dismissed the claims, finding the licence void from the outset for non-compliance with Kenyan environmental requirements. The subsequent annulment application was unsuccessful. The decision carries particular significance for the legality of investments in the mining sector.

WalAm Energy Inc v Republic of Kenya (ICSID Case No ARB/15/7, award, 10 July 2020)

• Facts – WalAm Energy challenged the forfeiture of its geothermal exploration licence over the Suswa fields after it failed to undertake physical work for six consecutive months.
• Key principles – The tribunal considered Kenya’s statutory and contractual powers to revoke or forfeit a resource licence for non-performance, and the distinction between lawful regulatory action and expropriation.
• Outcome – The tribunal dismissed all claims, upholding the forfeiture as lawful under the applicable geothermal legislation and licence terms, and ordered the claimant to bear most of Kenya’s costs. The subsequent annulment application was discontinued on 23 February 2022 for lack of payment of the required advances, pursuant to ICSID Administrative and Financial Regulation 14(3)(d) and (e).

Kenya has never faced an adverse investor–state arbitral award, so the question of enforcing or resisting enforcement of one has never arisen.

Kenya’s Treaty Network

Kenya has built up a sizeable and varied treaty network over the past five decades, spanning BITs, regional economic community frameworks and broader multilateral instruments. According to the latest United Nations Trade and Development (UNCTAD) data, this network comprises 21 BITs and 13 treaties with investment-related provisions, alongside Kenya’s membership in the principal multilateral instruments governing international investment.

Bilateral Investment Treaties

Of Kenya’s 21 signed BITs, 11 are currently in force. These include treaties with Singapore, Japan, the United Arab Emirates, South Korea, Kuwait, Burundi, Finland, France, Switzerland, Germany and the United Kingdom, the last of which dates back to 1999 and remains one of the oldest still in effect within Kenya’s portfolio.

A further eight BITs have been signed but have yet to enter into force, including agreements with Mauritius (concluded in both 2012 and 2019), Qatar, Turkey, Slovakia, Iran, Libya and China. Two earlier BITs, with Italy and the Netherlands, have since been terminated.

Treaties With Investment Provisions

Beyond dedicated BITs, Kenya is party to 13 broader treaties and trade agreements with investment-related provisions, nine of which are currently in force, including:

• the European Union–Kenya Economic Partnership Agreement, which entered into force in mid-2024;
• the Kenya–United Kingdom Economic Partnership Agreement, in force since 2021;
• the African Continental Free Trade Area Agreement (AfCFTA), in force since 2019;
• the East African Community (EAC)–United States Trade and Investment Framework Agreement and the COMESA–US Trade and Investment Framework Agreement, both dating to the early 2000s;
• the Cotonou Agreement with the European Union;
• the East African Community Treaty;
• the Common Market for Eastern and Central Africa (COMESA) Treaty; and
• the founding African Union Treaty.

Several further instruments remain in earlier stages:

• the AfCFTA Protocol on Investment (signed in 2023, not yet in force);
• the ACP–EU Samoa Agreement (signed, not yet operative); and
• two unratified COMESA Investment Agreements (2007, and one under negotiation since 2017).

Multilateral Instruments

Kenya is also party to the core multilateral instruments shaping global investment law, including:

• the ICSID Convention;
• the New York Convention;
• the MIGA Convention; and
• the World Trade Organization’s (WTO) TRIPS and TRIMS agreements.

Likelihood of Further Ratifications

Kenya’s treaty-making activity remains active, and several developments point to further ratifications in the near term.

• Pending BITs – Signed but not-yet-in-force agreements with Mauritius, Qatar and Turkey form a ready pipeline, since the substantive terms have already been agreed.
• The AfCFTA Protocol on Investment (POI) – A clear near-term priority given Kenya’s active role in AfCFTA’s early trading phases. Ratification would mark a significant expansion of continent-wide investment protection once the accompanying dispute settlement annex is finalised. Notably, Article 49 requires existing BITs between AfCFTA State Parties to be terminated within five years of the Protocol’s entry into force, including their survival clauses, and prohibits state parties from concluding new BITs among themselves after the Protocol’s adoption. Existing regional MITs must be reviewed and revised within five to ten years of the Protocol’s entry into force. States are also encouraged to align future international investment agreements (IIAs) with the Protocol. Disputes will be required to be resolved amicably, failing which they may be referred to the mechanisms under Annex I, which has yet to be finalised and currently exists only in draft form.
• US engagement – Kenya’s participation in the Strategic Trade and Investment Partnership, launched in 2022, signals continued momentum towards a more comprehensive bilateral investment framework with the US, though this has not yet crystallised into a binding agreement.
• Modernisation pattern – Kenya’s practice of periodically renegotiating BITs with key trading partners, illustrated by the successive Mauritius agreements concluded in 2012 and 2019, suggests a willingness to revisit and update older treaties as investment relationships evolve.

Bilateral and Multilateral Investment Treaties

Kenya’s investment treaties are substantially based on the Kenya Model BIT (2003), which sets out the standard terms Kenya uses as a starting point when negotiating BITs with individual States. Treaties concluded after 2003 draw on this template, while some earlier treaties pre-date the formal model and likely helped inform its drafting.

Key Features of BIT Practice

Kenya’s BITs generally afford foreign investors a familiar set of protections, including:

• fair and equitable treatment and full protection and security, although the scope of these standards can differ between treaties;
• national treatment and most-favoured-nation treatment, subject to the qualifications and exceptions contained in the relevant treaty;
• protection against unlawful expropriation, generally accompanied by provisions concerning compensation;
• free transfer of investment-related funds, often subject to specified exceptions; and
• protection against arbitrary or discriminatory measures affecting investments.

Multilateral Investment Instruments

Unlike Kenya’s BITs, the multinational investment instruments are the product of multilateral negotiation and therefore reflect the agreed framework of the relevant international or regional body, rather than a Kenya-specific model.

Free Trade Agreements and Regional Frameworks

Kenya belongs to overlapping trade regimes at three levels: continental (AfCFTA), regional (EAC, COMESA, COMESA–EAC–SADC Tripartite Free Trade Area) and bilateral. These layers were negotiated separately and do not always align, so each one carries its own rules on investor protection and its own forum for resolving disputes.

African Continental Free Trade Area

Kenya ratified the AfCFTA and was selected for the pilot phase of its Guided Trade Initiative. The agreement’s Investment Protocol rests on four pillars – promotion, protection, facilitation and liberalisation – but its investor–state dispute mechanism is still being finalised; for now, the Protocol points to negotiation, consultation or other alternative dispute resolution methods pending a dedicated mechanism. Crucially, AfCFTA’s general Dispute Settlement Body only hears state-to-state claims, so investors currently have no direct route to it and must wait on the Investment Protocol’s own mechanism to become operational.

Regional Level: East African Community (EAC) and Common Market for Eastern and Central Africa (COMESA)

Kenya’s regional memberships add a further layer, but a narrower one than a BIT. Article 30 of the EAC Treaty and Article 26 of the COMESA Treaty each let residents, including investors, bring claims directly before the East African Court of Justice or the COMESA Court of Justice. But both routes are limited to challenging state acts as unlawful or in breach of the Treaty itself; neither instrument contains substantive investment standards like fair and equitable treatment or protection against expropriation. Those protections still depend on a BIT, or on the dedicated investment instruments, the EAC Model Investment Treaty, and the COMESA Common Investment Area Agreement, neither of which is currently operative.

Bilateral Trade Frameworks With Investment Elements

Beyond the regional frameworks, Kenya has pursued dedicated bilateral trade partnerships that touch on investment, though these are structured differently from a traditional BIT.

• The Kenya–UK Economic Partnership Agreement, ratified in 2021, is primarily focused on trade in goods but provides for a five-year negotiation period to expand its scope to cover trade in services, competition policy, investment, and other areas. Its investment dimension therefore remains a work in progress rather than a fully realised protection regime.
• The Kenya–EU Economic Partnership Agreement, which was signed in 2023 and came into force in 2024, similarly centres on trade and sustainable development commitments, with investment flows framed primarily as a policy objective supported by co-operation initiatives rather than a standalone investor–state dispute mechanism.
• The US–Kenya Strategic Trade and Investment Partnership, launched in 2022, represents a shift away from an earlier proposal for a comprehensive free trade agreement towards a narrower, phased engagement covering trade and investment issues, without yet establishing a binding investor–state arbitration mechanism.

Publication of Interpretative Materials for Investment Treaties

Kenya does not have an established practice of publishing separate official commentaries, interpretative notes or exchanges of notes specifically for the purpose of interpreting its bilateral investment treaties. The publicly available treaty record principally consists of the treaty texts themselves and related information concerning their signature, entry into force and status. In their absence, interpretation relies on ordinary principles: text, context, object and purpose, plus travaux préparatoires (negotiating history) where available.

Accordingly, an investor or state examining the meaning of a provision should consider the individual treaty and its negotiating history. Kenya’s treaty practice has evolved considerably, with newer agreements addressing regulatory space, public policy exceptions and dispute settlement in more detail than earlier ones.

National Investment Law in Kenya

Kenya has a dedicated domestic legal framework for investment, distinct from its network of BITs. This is comprised primarily of two statutes – the Investment Promotion Act, 2004 and the Foreign Investments Protection Act (Cap 518) – alongside relevant constitutional guarantees.

Key Substantive Protections

The Foreign Investments Protection Act (FIPA) provides the core substantive guarantees available to approved foreign investments. Its central protection concerns expropriation, providing that no approved enterprise or its property may be compulsorily taken possession of, and no interest or right over it compulsorily acquired, except in accordance with the compensation provisions set out in Kenya’s Constitution.

The Constitution itself independently guarantees fair and prompt compensation for property compulsorily acquired for security or public interest reasons and gives affected investors direct access to the High Court to challenge a taking or the adequacy of compensation offered.

The Investment Promotion Act, 2004 operates alongside this framework but is oriented more towards investment facilitation than substantive protection. Its main features include:

• establishment of the Kenya Investment Authority, responsible for promoting and facilitating both local and foreign investment;
• investment certificates, mandatory before 2005, are now optional for foreign investors; and
• provisions allowing government review of applications that raise environmental, health or security concerns, with the ability to impose conditions to address these issues.

Beyond expropriation, FIPA also guarantees capital repatriation, after-tax profits, after-tax investment proceeds, and principal and interest on associated loans.

Dispute Resolution Provisions

Kenya’s domestic framework has no standalone investor-state arbitration mechanism of the kind a modern BIT provides. Instead, FIPA allows the government to formally recognise arrangements with other states for investment promotion and protection, effectively providing the legal gateway through which BITs are given domestic effect.

Absent a treaty mechanism, investors are generally left to pursue remedies through:

• the Kenyan courts, including the constitutional right of direct access to the High Court for expropriation-related claims; or
• domestic arbitration under the Arbitration Act, 1995, which is based on the UNCITRAL Model Law and is administered in practice through institutions such as the Nairobi Centre for International Arbitration, established in 2013.

Interaction Between National Law and Investment Treaties

The relationship between Kenya’s national investment law and its investment treaties is largely complementary rather than competing. FIPA’s gazetting mechanism layers treaty protections on top of domestic guarantees rather than replacing them, so an investor’s protection typically rests on several overlapping bases at once:

• the constitutional guarantee against uncompensated expropriation, which applies regardless of an investor’s nationality;
• the statutory protections under FIPA, for approved foreign investments; and
• any applicable BIT, which will typically offer additional protections such as fair and equitable treatment, full protection and security, and access to international arbitration that domestic law does not independently provide.

This layering matters in practice. In BIT arbitration, tribunals often still look to the domestic legal framework, since compliance with a state’s own constitutional and statutory expropriation procedure bears on whether an expropriation was lawful. But domestic law does not cap treaty protections: where a BIT offers more than domestic law, the treaty standard governs the investor–state relationship for both jurisdiction and substance in international arbitration.

Direct Arbitration Clauses in Investor–State Contracts

Direct arbitration clauses in contracts between investors and the Kenyan State or state-owned entities are a well-established feature of Kenya’s investment landscape, and in some respects pre-date the country’s reliance on BITs as a primary dispute resolution route. Kenya signed the ICSID Convention in 1966 and ratified it in 1967, giving contracting parties early and long-standing access to ICSID as a forum for these clauses.

Prevalence in Practice

Contract-based arbitration clauses are most common in sectors involving significant state involvement or state-owned counterparties, including mining concessions, infrastructure and construction agreements, energy projects, and services contracts with government ministries or agencies. The clearest example is World Duty Free v Kenya, a contract-based ICSID arbitration arising from a duty-free complex agreement rather than a treaty claim, showing this route has been used by investors in Kenya for decades.

In practice, disputes with Kenyan state counterparties increasingly blend contractual and treaty elements, as the same facts can often support claims on both bases where a treaty is available (see the Travizory Border Security case), which arose from underlying government contracts but were pursued under applicable treaties rather than as pure contract claims.

How Contractual Protection Compares to Treaty Protection

The protection offered by a direct arbitration clause differs from treaty protection in several important respects, and investors should not treat the two as interchangeable.

• Scope of substantive rights – Contract clauses only cover breach of the specific obligations agreed. Treaties add independent protections, such as fair and equitable treatment, full protection and security, and protection against unlawful expropriation, regardless of the contract’s terms.
• Vulnerability to host state defences – Contract claims are more vulnerable to challenges to the contract’s validity itself, such as corruption in procurement. This was decisive in the World Duty Free case, where a contract obtained through bribery was unenforceable, a defence that operates differently, and is often harder to establish, against broader treaty claims.
• Consent and standing – A contractual clause binds only the specific state entity that signed it, which can create difficulties if the actual counterparty was a state-owned company rather than the State itself, since that entity typically needs separate designation to access ICSID. Treaty claims, by contrast, are brought directly against the State as a matter of international law, avoiding this issue.
• Stability over time – Contractual protections can, in principle, be tailored precisely to the project, including bespoke stabilisation clauses. However, they remain more exposed to domestic law compliance challenges, as illustrated in the Cortec Mining case, where the tribunal found no protected investment existed under the BIT because the investor had failed to comply with domestic licensing requirements.

Investors bringing arbitration claims against Kenya tend to rely on a fairly consistent set of legal grounds, shaped largely by the sectors that attract the most foreign investment into the country.

Expropriation Claims

Expropriation is the most frequently raised complaint, typically arising when a licence, concession or contractual right is revoked, or interfered with by executive or regulatory action. Mining and extractive licences have been a particular flashpoint, especially concessions tied to natural resource discoveries that increase an asset’s perceived value after it has already been granted to an investor. (See Cortec Mining v Kenya.)

Breach of Contract Claims

A second common complaint involves the alleged breach or wrongful termination of a contract to which a government ministry, state agency or public entity is the direct counterparty. Unlike expropriation claims, these disputes concern the State acting as a contracting party rather than a regulator. Investors in construction, infrastructure and services have brought such claims after government bodies terminated agreements or failed to honour payment obligations. (See World Duty Free v Kenya.)

Treaty Standard Claims

Where a BIT applies, investors frequently plead breaches of the fair and equitable treatment standard, alongside related protections such as full protection and security, and protection against arbitrary or discriminatory treatment, often supplemented by national treatment and most-favoured-nation claims. Being broader and more flexible than a straightforward expropriation claim, these standards are especially useful where the facts do not clearly establish that an asset was taken outright.

Denial of Justice

Some investors also allege denial of justice, arguing that domestic courts or administrative bodies failed to afford a fair process when the investor sought to challenge state action through local channels. This ground is rarely the sole basis of a claim but frequently appears alongside fair and equitable treatment arguments. (See, though not a case brought against Kenya, Spentech Engineering v United Arab Emirates.)

Limits of Party Autonomy to Select Arbitrators

Section 11(1) and Section 12(1) and (2) of the Arbitration Act give parties broad autonomy to agree on the number of arbitrators, their nationality, the procedure for appointing them (including any presiding arbitrator), and any qualifications they must hold.

This autonomy is displaced only where parties fail to agree on the number of arbitrators or an appointment procedure, fail to comply with an agreed procedure, or use the process to compromise the tribunal’s independence and impartiality. In these situations, the Arbitration Act’s default mechanisms take over: the High Court may appoint an arbitrator where a party defaults (Section 12(3)–(7)), and any arbitrator, however appointed, remains subject to challenge for lack of impartiality, independence or agreed qualification (Section 13(1) and (3); Section 14).

Failure to Adhere to Agreed Procedure for Selecting Arbitrators

Under Section 12(3)–(4) of the Arbitration Act, where each of two parties is to appoint an arbitrator and one party defaults, by refusing or failing to appoint within the agreed time (or 14 days, if none is agreed), the compliant party may appoint its arbitrator and give written notice that this arbitrator will act as a sole arbitrator unless the defaulting party appoints its own within 14 days of the notice. If the defaulting party still fails to appoint and notify within that period, the compliant party’s arbitrator becomes sole arbitrator over the dispute. (See Sensei Limited v Agricultural Development Corporation [2021] KEHC 13356 (KLR).)

In Multi-Party Arbitrations

The Arbitration Act does not expressly address multi-party arbitrations, so, absent institutional rules, the parties are largely free to agree their own procedure for constituting the tribunal.

Where the parties have opted for NCIA-administered arbitration, however, the NCIA Rules, 2015 (the “NCIA Rules”) do provide a fallback. The general structure is as follows.

• Rule 7(10) – Where there are multiple claimants and/or respondents, and the dispute is to go to a three-member tribunal, the multiple claimants (jointly) and the multiple respondents (jointly) are each required to nominate an arbitrator for confirmation.
• Rule 7(12) – If this joint nomination proves impossible because the parties on one or both sides cannot agree, the arbitration agreement is deemed, for all purposes, to be an agreement by the parties for the NCIA to appoint the entire three-member tribunal. In that case, the NCIA is free to appoint each member of the tribunal and to designate one of them to act as president.

Kenyan courts may only intervene in arbitrator appointment within the limited grounds set out in Section 10 of the Arbitration Act.

• Failed appointment procedure (Section 12(5)–(9)) – If a party defaults on the agreed appointment procedure, the compliant party may apply to the High Court after giving notice. The Court may appoint a sole arbitrator if it finds no valid reason for the default, either on application or by consent (See Cubic Business Solutions v Spectre International Limited [2021] KEHC 9351 (KLR).)
• Challenge to an arbitrator (Sections 13–14) – A party may apply to court to challenge an arbitrator for lack of impartiality/independence, missing agreed qualifications, physical/mental incapacity, or justifiable doubts as to capacity, including where a party discovers these issues about an arbitrator it appointed itself.
• Termination of mandate (Section 15) – A party may apply to terminate an arbitrator’s mandate where the arbitrator is unable to perform their functions or fails to act with reasonable dispatch. (See Nancy Wangui Njuguna and Another v Nancy Njeri Gitau and Two Others [2020] KEHC 10224 (KLR) and Munene v Mentor Group Limited and Another [2023] KEHC 1266 (KLR).)
• Arbitrator withdrawal (Sections 15(1)(d), 16(A)) – On withdrawal, an arbitrator may apply to court for relief from liability and for orders on fees, expenses or repayment.

See 4.3 Court Intervention.

Impartiality or Independence

Section 13(1) and (2) of the Arbitration Act impose a duty on arbitrators to be impartial and to disclose to the parties, without delay, any circumstances likely to give rise to doubts as to their impartiality or independence. This is reiterated under Rules 14 to 19 of the Chartered Institute of Arbitrators (Kenya Branch) Rules 2020. (See Mwambao Road Parklands and Another v S&M Properties Limited [2021] KEHC 4953 (KLR).)

Section 18 of the Arbitration Act allows arbitral tribunals to grant interim measures of protection, unless the parties agree not to grant the tribunal such powers. These interim reliefs include:

• an order to any party to take such interim measure of protection necessary in respect of the subject matter of the dispute;
• an order against any party to provide security in respect of any claim or any amount in dispute; and
• an order for the claimant to provide security for costs.

However, an order for interim measures of protection can take any nature of form, depending on the circumstances of the case, hence may include status quo orders and any orders intended to preserve the subject of the arbitration. (See Futureway Limited v National Oil Corporation of Kenya [2017] KEHC 6365 (KLR).)

Granting Interim or Preliminary Reliefs

Courts in Kenya play various roles when it comes to the granting of interim measures of protection. Under Section 7 of the Arbitration Act, the High Court has the power to grant interim measures of protection before or during the arbitral proceedings. This includes the grant of injunction orders or any other interim order.

Additionally, the High Court has been conferred with the power to assist the tribunal in the exercise of its powers to grant interim measures of protection and, when doing so, the High Court can grant any of the interim orders that can be granted by an arbitral tribunal under Section 18(1) of the Arbitration Act (set out in 5.1 Types of Relief), including the grant of an order to provide security for costs. However, the Kenyan courts are normally reluctant to grant interim orders where an arbitral tribunal has been constituted. (See Equator Bottlers Limited v Kegode t/a Kirinda Distributors (Civil Misc. Application E072 of 2021) [2025] KEHC 2006 (KLR).)

Various instances have been observed where parties have sought the court’s intervention to set aside interim orders granted by tribunals. However, courts are normally reluctant to interfere with the exercise of an arbitral tribunal’s powers to issue interim measures of protection, as these orders are usually granted following the exercise of the arbitral tribunal’s discretion. (See Sprinter Real Estate Investment Limited v Diaspora Housing Management Limited; Njau and 27 Others (Proposed Interested Parties) [2023] KEELC 17718 (KLR) and Kenya Oil Company Limited and Another v Kenya Pipeline Company Limited [2008] KEHC 1849 (KLR).)

See 5.2 Role of Domestic Courts.

Third-party funding (TPF) remains relatively uncommon in Kenya, with no specific statutory framework governing or expressly prohibiting the practice. Its legal position is therefore not entirely settled, particularly in light of the common law doctrines of maintenance and champerty, which continue to form part of Kenya’s legal framework. This uncertainty may affect Kenya’s attractiveness as a seat of arbitration, particularly for parties seeking greater certainty regarding the permissibility and structure of funding arrangements. Further, the Advocates Act (Cap 16) and the rules governing professional conduct also impose obligations on advocates that could have a bearing on certain funding arrangements, particularly contingency or success-based fee arrangements, although they do not expressly prohibit TPF.

However, reforms are being considered through the Arbitration (Amendment) Bill, 2025, which proposes to introduce a framework for TPF in commercial arbitration, including international arbitrations seated in Kenya.

As a result, TPF of investor–state claims is not common in Kenya. Investors have traditionally funded such claims themselves or relied on more conventional financing arrangements.

There are no reported decisions of the Kenyan courts (or a Kenyan-seated tribunal) where the issue of TPF has directly been determined, be it legality, enforceability or treatment of a TPF arrangement.

Disclosure Rules/Practice

Kenya has no specific legal requirement for a party to disclose whether its proceedings are being financed by a third party or to identify the funder. This applies to both court proceedings and arbitration. The issue has not been extensively addressed in Kenyan practice, and there is no established expectation that parties will voluntarily disclose such arrangements.

There is, however, some experience of funding-related disclosure in investor–state arbitration involving Kenya. In WalAm, Kenya sought information concerning the claimant’s TPF arrangements, including whether the funder was liable for an adverse costs award. The request arose in the context of Kenya’s application for security for costs. The proceedings therefore demonstrate that funding-related disclosure may arise in practice, although WalAm did not establish a general disclosure requirement under Kenyan law.

Security for Costs

Kenyan jurisprudence has yet to address the relationship between TPF and security for costs, as there are no reported cases dealing with the issue. Accordingly, it remains unclear how a Kenyan court or tribunal would approach a funded party when determining whether security for costs should be ordered. International arbitral practice generally takes a cautious approach and does not regard the mere involvement of a third-party funder as sufficient, on its own, to warrant security for costs.

Before an investor can bring a formal arbitration claim against Kenya, most of Kenya’s BITs and investment agreements impose a set of preliminary procedural steps. These exist to give Kenya a chance to address the dispute before it escalates to international arbitration. However, the specifics, and even whether a formal notice is required at all, vary significantly from treaty to treaty, so the applicable instrument must always be checked directly.

Written Notification of the Dispute

Under many of Kenya’s treaties, the dispute process begins with a formal written notice, commonly referred to as a “trigger letter,” addressed to the relevant Kenyan government authority. The notice outlines the nature of the dispute and specifies the treaty provisions that the investor alleges have been breached. Where required, it formally initiates the dispute for procedural purposes, even where the parties have previously engaged in informal complaints or negotiations.

Where a notice requirement applies, its form and content depend on the applicable treaty. Generally, the notice should identify the investor and investment and specify the measure or conduct giving rise to the alleged breach. An overly general notice, or one based on a materially different legal basis from the claims later advanced, may expose the investor to objections concerning compliance with the treaty’s procedural requirements and, potentially, jurisdiction.

Notably, not all of Kenya’s treaties require formal notice. The Kenya–UK BIT, for example, has no separate written-notice requirement; its waiting period runs from the emergence of the dispute and the parties’ efforts to resolve it.

Cooling-Off or Consultation Period

Where required, investors must generally observe a waiting period after notification, during which the parties are expected to seek an amicable settlement. The waiting period varies across Kenya’s treaties: some provide for three months, others six months, while the Kenya–Singapore BIT provides for a longer 12-month period.

During this period, the parties are generally expected to seek an amicable resolution through consultation, negotiation or local remedies.

Practical Considerations for Investors

Investors should treat notice and consultation requirements as an important part of case preparation, rather than a procedural formality. Records of consultations, correspondence and settlement discussions should be retained, particularly where compliance may later be challenged.

Balancing Confidentiality and Transparency

Underlying friction

Confidentiality is a key attraction of commercial arbitration. Investor–state arbitration is different because one party is a sovereign State, disputes often involve public resources, and awards may ultimately be paid from public funds or affect government regulatory powers. This creates an inherent tension between the confidentiality of arbitral proceedings and the public interest in transparency and accountability in disputes involving the State.

Why transparency matters in Kenya

The Constitution of Kenya 2010 places transparency and accountability at the centre of public governance:

• Article 10 identifies them as national values;
• Article 35 guarantees access to information held by the State; and
• Article 69 requires public participation in environmental and natural-resource decisions.

Investment disputes involving land, mining or other public resources therefore raise legitimate public-interest concerns. In Cortec Mining Kenya Ltd, for instance, the Tribunal ruled in Kenya’s favour on grounds of non-compliance with mandatory EIA requirements, effectively vindicating a public-interest dimension of the dispute. Similarly, in World Duty Free, the central issue was corruption, a matter in which the public has an evident and direct stake.

The applicable international framework

The applicable transparency regime depends on the arbitral rules governing the dispute. Most Kenya-related disputes have proceeded under ICSID, although some treaties permit investors to pursue UNCITRAL arbitration. Under the 2022 ICSID Rules (62–66), awards, decisions and hearings are generally subject to public access, with protections for confidential information. In World Duty Free v Kenya, the tribunal held that the ICSID framework does not impose a general duty of confidentiality.

Where UNCITRAL arbitration applies, the 2014 UNCITRAL Rules on Transparency provide for publication of key submissions and awards, open hearings and participation by non-disputing parties. Their application depends on the applicable treaty, the parties’ agreement or, for certain older treaties, the United Nations Convention on Transparency in Treaty-based Investor-State Arbitration (the “Mauritius Convention”), which Kenya has not ratified. The treaty should therefore be checked at the outset to establish the applicable forum and transparency regime.

Towards a Workable Balance: Recommendations

Rather than treating confidentiality and transparency as mutually exclusive, most modern approaches attempt to calibrate the degree of openness to the sensitivity of the specific information involved. Common tools include the following.

• Adopt tiered rather than absolute transparency – Publishing procedural orders, notices of arbitration and awards while allowing redaction of trade secrets or commercially sensitive data.
• Include transparency in future treaties – Kenya should expressly incorporate the UNCITRAL Transparency Rules into new investment agreement.
• Allow public-interest participation – Affected communities, civil society organisations and other relevant groups should be able to seek amicus curiae status in disputes involving significant public interests.
• Maintain government disclosure duties – Arbitral confidentiality should not automatically override Kenya’s constitutional obligations concerning access to public information.

Kenyan arbitral tribunals have broad discretion under the Arbitration Act to grant remedies available under the applicable substantive law, provided the relief falls within the scope of the arbitration agreement and the parties’ submission. The Act does not restrict the types of remedies available, and tribunals may, in principle, grant injunctions, specific performance, declaratory relief or rectification, subject to the governing substantive law.

That said, this freedom is not unlimited. In practice, the real constraints on a tribunal’s remedial powers are the scope of the submission, arbitrability and public policy. (See Nyutu Agrovet Limited v Airtel Networks Kenya Limited; Chartered Institute of Arbitrators-Kenya Branch [2019] KESC 11 (KLR).)

Tribunals generally apply internationally recognised valuation methods:

• discounted cash flow (DCF) for going-concern or future-profit claims;
• market comparables where reliable market data or comparable transactions exist; and
• cost-based methods for early-stage, non-operating or asset-heavy claims where future cash flows are too speculative.

Kenya has no specific valuation code for such claims; the appropriate methodology is therefore fact-driven and supported by expert evidence. Speculative DCF projections, particularly those lacking a proven track record, are likely to face scrutiny, consistent with Kenyan courts’ general caution towards uncorroborated loss-of-profit claims. (See Safaricom Plc v Popote Innovations Limited [2025] KEHC 16225 (KLR).)

Interest

Parties may recover interest, whether simple or compound, under Section 32C of the Arbitration Act. The tribunal has discretion to determine the applicable rate and the date from which interest runs, including whether to award pre-award, post-award or both. (See SGS Kenya Limited v Tracer Limited [2020] KEHC 1799 (KLR).)

Legal Costs

Legal fees, expert fees and arbitral institution costs may be recovered as costs of the arbitration under Section 32B of the Arbitration Act. The general approach in Kenya is that costs follow the event, so the successful party will ordinarily recover its costs from the unsuccessful party. This is not an absolute rule, however, and tribunals retain discretion to apportion differently including where a party has only partially succeeded or its conduct has caused unnecessary costs. (See Match Electricals Company Limited v Libyan Arab African Investments Company Limited and Another [2021] KEHC 12907 (KLR).)

Duty to Mitigate Loss

Kenyan law requires a claimant, including an investor, to take reasonable steps to mitigate its loss following a breach. This established common law principle applies to both contractual and investment disputes. It does not require extraordinary or unreasonable measures, but only those a prudent party would take to minimise its loss.

The duty directly affects quantum: where a claimant fails to mitigate, a tribunal may reduce damages to reflect losses that could reasonably have been avoided. It may also affect the credibility of loss projections, including DCF assumptions based on losses that could have been mitigated. (See Jackson K. Kiptoo v Attorney General [2009] KECA 455 (KLR).)

As a general rule, domestic and international arbitral awards are recognised and enforced in Kenya pursuant to Sections 36 and 37 of the Arbitration Act. ICSID awards, however, are subject to a distinct and self-contained recognition and enforcement regime under Articles 53–55 of the ICSID Convention, which has been given domestic effect in Kenya by Section 4 of the Investment Disputes Convention Act. Under Section 4, an award rendered pursuant to the ICSID Convention, and which has not been stayed in accordance with the Convention, is binding in Kenya, and the pecuniary obligations imposed by the award may be enforced as if the award were a final decree of the High Court.

• If the investor-state arbitral award has been issued in Kenya, then the party seeking recognition of the said award is required to file an application before the High Court. The application will be accompanied by the original award or a duly certified copy; and the original arbitration agreement or a duly certified copy.
• If the investor-state arbitral award was issued in a foreign country, then it will be recognised as binding and enforceable in accordance with the provisions of the New York Convention or any other convention to which Kenya is signatory and which relates to arbitral awards. This will entail the filing of an application for recognition, accompanied by the original award or a duly certified copy; and the original arbitration agreement or a duly certified copy.
• In both instances, the Kenyan High Court will have to scrutinise the arbitral award to check if grounds for setting aside the arbitral award exist or if there is any objection or an application to set aside the said arbitral award. If such grounds do not exist, then the Court may allow the application for recognition and enforcement. (See National Oil Corporation of Kenya Limited v Prisko Petroleum Network Limited [2014] KEHC 8680 (KLR).)

Grounds for Refusal

Under Section 37(1) of the Arbitration Act, the recognition and enforcement of an arbitral award may be rejected on statutory grounds when the evidence adduced proves that:

• a party to the arbitration agreement was under some incapacity;
• the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication of that law, under the law of the state where the arbitral award was made;
• the party against whom the arbitral award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case;
• the arbitral award deals with a dispute not contemplated by or not falling within the terms of the reference to arbitration, or it contains decisions on matters beyond the scope of the reference to arbitration, provided that if the decisions on matters referred to arbitration can be separated from those not so referred, that part of the arbitral award which contains decisions on matters referred to arbitration may be recognised and enforced;
• the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, failing any agreement by the parties, was not in accordance with the law of the state where the arbitration took place;
• the arbitral award has not yet become binding on the parties or has been set aside or suspended by a court of the state in which, or under the law of which, that arbitral award was made; or
• the making of the arbitral award was induced or affected by fraud, bribery, corruption or undue influence.

Furthermore, the High Court may refuse to recognise and enforce an arbitral award if the subject matter of the dispute is incapable of being settled by arbitration under the laws of Kenya and when such recognition and enforcement will be contrary to the public policy of Kenya.

Award Set Aside by Court in Seat of Arbitration

Where an arbitral award has been set aside at the seat, it is no longer binding on the parties and therefore cannot be recognised or enforced in Kenya. Kenyan courts have no jurisdiction to set aside a foreign arbitral award; their jurisdiction is limited to determining whether the award should be recognised and enforced in Kenya. (See Royal Exchange PLC v Patrick Nyaemba Tumbo [2019] KEHC 5559 (KLR).)

Set-Aside Proceedings Ongoing Before Court in Seat of Arbitration

Where an application to set aside or suspend the award is pending before a competent court at the seat, the High Court will consider it proper to either adjourn its decision on enforcement or order the party seeking enforcement to provide an appropriate security for the grant of the recognition and enforcement orders. (See Section 37(2) of the Arbitration Act.)

Approach of Kenyan Courts to Sovereign Immunity

See 9.2 Approach of the Courts.

Recognition and Enforcement of Arbitral Awards

Kenyan courts, when handling applications for the recognition and enforcement of arbitral awards, focus on whether the procedural requirements of recognition have been met and whether the statutory grounds for refusal of recognition and enforcement set out at Section 37 of the Arbitration Act exist. The courts do not go into the merits of the award, as the court is not sitting on the appeal of an arbitral award at this stage. The courts simply ensure that the statutory criteria for enforcement have been met. (See Uzima Chicken Limited v Multiplex Enterprises Limited [2026] KEHC 1878 (KLR).)

Refusal to Recognise an Arbitral Award on Grounds of Public Policy

The landmark case guiding the definition of public policy when it comes to arbitral award is Christ for all Nations v Apollo Insurance Co Ltd [2002] EA 366, which provides that an arbitral award is inconsistent with Kenya’s public policy if it is:

• inconsistent with the constitution or other laws of Kenya, whether written or unwritten;
• inimical to the national interest of Kenya; or
• contrary to justice and morality.

Furthermore, public policy as a ground for the refusal of the enforcement of an arbitral award is wide but must have an aspect of national interest and it must be shown that the award would have a negative effect on third parties by either impacting or infringing their rights. (See Mall Developers Limited v Postal Corporation of Kenya [2014] KEHC 1464 (KLR) and Lexis International Limited v Blueline Properties Limited & another [2023] KEHC 18161 (KLR).)

Sovereign Immunity and Recovery Against State Assets

Kenyan courts generally recognise the principle of sovereign immunity and provide that state immunity means that a state is immune from being sued in its own courts without its consent or from being sued in federal court by the state’s citizens; which was also termed as government immunity. Kenyan courts ensure that a state and its assets are protected from the jurisdiction of another state based on the principle of equality of states. (See African Centre for Corrective and Preventive Action and Six Others v Lolldaiga Hills Limited and Two Others; Kenya Wildlife Service and Another (Interested Parties) (Environment & Land Petition 2 of 2021) [2022] KEELC 771 (KLR) and Ministry of Defence of the Government of the United Kingdom v Ndegwa [1983] KECA 40 (KLR).)

However, in Ministry of Defence of the Government of the United Kingdom v Ndegwa [1983] KECA 40 (KLR), the Court of Appeal held that this immunity is restrictive, not absolute, turning on whether the sovereign was acting in a governmental capacity.

Similarly, the court in Tononoka Steels Limited v Eastern and Southern Africa Trade Development Bank [1999] KECA 124 (KLR), held that where a state engages in purely commercial activities, it would be prejudicial and contrary to public policy to uphold sovereign immunity.

Identification of State Assets for Recovery Purposes

Any recoveries or enforcement to be made against the government of Kenya must be done in accordance with the provisions of the Government Proceedings Act (Cap 40) (GPA). The state is immune from execution and the attachment of its property, meaning that ordinary methods of execution are not available against it. Once the award is adopted, the successful party must obtain a Certificate of Order (and, where applicable, a Certificate of Costs) from the court, issued only after 21 days from the date the decree is entered, or after taxation of costs if later. This certificate must be served on the Attorney-General, triggering a statutory duty on the relevant accounting officer to pay the decretal amount. If payment is not made, the sole remedy is an order of mandamus compelling the accounting officer to pay. (See Republic v Government of Kiambu and Another; Ngazi Construction Ltd (Ex parte Applicant) [2023] KEHC 22800 (KLR).)

Lifting the Veil of Incorporation

Kenyan courts respect the principle of separate legal personality that was established in the case of Salomon v A Salomon & Co Ltd [1897] AC 22, which provides that a company is a separate entity from its directors and shareholders. However, there are some recognised exceptions to the doctrine of separate personality, which allow for the lifting of the corporate veil, to look behind a company to the persons or entities standing behind it, such as its shareholders or controllers. These exceptions are set out in Mugenyi & Company Advocates v The Attorney General [1999] 2 EA 199, where the court listed ten instances where the veil of incorporation may be lifted, as follows:

• where there is a holding and subsidiary relationship between companies;
• where a shareholder has become directly liable to certain creditors on the ground that business continued after the membership had dropped below the legal minimum, to the knowledge of the shareholder;
• in certain matters relating to taxation;
• in the law relating to exchange control;
• in the law relating to trading with the enemy;
• in the law of merger control in the United Kingdom;
• in competition of the European Economic Community;
• in abuse of law in certain circumstances;
• where the device of incorporation is used for some illegal or improper purpose; and
• where the private company is founded on personal relationship between the members.

Evidence must therefore be adduced to prove the existence of any of the above instances, to warrant the lifting of the corporate veil by Kenyan courts. (See Jepkemoi v Zaburi Enterprises Company Ltd and Two Others [2024] KEHC 2343 (KLR).)