PRIVITY OF CONTRACT AND ASSIGNMENT OF ARBITRATION AGREEMENTS IN KENYA

Cedric Kadima

Abstract

The assignability of contractual rights has more often than not been
discussed in terms of the privity of contract. It is widely accepted that
contractual rights can freely be assigned. However, there are exceptions to
this rule, which are non-assignability clauses in the contracts and personal
nature of contractual rights. Consequently, there are discussions on whether
the arbitration agreement in the contract is also freely transferrable through
assignment of contractual rights. In intuitu personae contracts (where the
relationship and confidence of parties resulted in the arbitration agreement),
it is argued that the arbitration agreement is not transferrable, but different
jurisdictions conclude differently. This paper exposes Kenya’s stand on
assignability of arbitration agreements as rendered by the High Court of
Kenya in Kampala International University v Housing Finance Company Limited
(Miscellaneous Cause E564 of 2019) [2021] KEHC 105 (KLR) (Commercial and
Tax) (16 September 2021) (Ruling).