Business in Kenya is exciting, but let us face it; It is not always as easy, lovey-dovey, and all good business things. You can have your fair share of disputes that can set you back or, worse, be detrimental to your business.
However, these disagreements amongst business disputes in Kenya are more common than we imagine.
As your friend and a professional, we will walk you through common types of business disputes in Kenya, why they happen and how you can solve them amicably.
What are Business Disputes in Kenya
Business disputes in Kenya are any disagreement that arises in the course of running a business.
It may be among business partners, a company and its clients, or suppliers and employees. These battles often involve either money, contracts, or ownership.
An issue can escalate and become a significant source of stress, could cause financial loss due to neglect or imperception or even lead to a lawsuit or several business disputes in Kenya.
There are options, whether you need a business dispute lawyer like Chepchieng and Company Advocates, a commercial dispute lawyer, or just some handy steps to use in court.
Here are some of the most common Kenyan business disputes and how they can be handled:
Types of Business Disputes in Kenya
1. Contract Disputes
Every business revolves around contracts, but managing business disputes is a problem many companies share, rather than just a few acute cases in Kenya.
A contract dispute arises when a party believes the other has violated the agreement. For instance, a vendor could fail to supply goods on time, or a customer might refuse payment for services.
These could be about written contracts, down to verbal agreements.
Why it happens: incorrect interpretation of contract terms, lack of communication or one party failing to live up to their promise
How to resolve it:
Negotiation: Discuss the matter assertively with the other side and devise a solution. A settlement is usually the fastest and least expensive way to resolve a commercial dispute in Kenya.
Mediation: In mediation, a neutral third party (mediator) gets in the middle to assist parties in reaching an agreement if negotiation is unsuccessful. Mediation helps with company dispute resolution, as it is more relaxed than a federal court.
Being embroiled in a commercial disagreement is complex, constituting hiring a business dispute lawyer to review the contract, negotiate and represent you in court cases.
2. Partnership Disputes
Having a partner to run your business with can be excellent, and one of the reasons for many business disputes in Kenya is disagreement between partners.
Family business disputes or in partnerships, where roles and responsibilities or profits are not spelled out, generally give rise to these kinds of issues.
For example, one might think that they are doing more of the work or not earning a fair share of the profit.
Why It Happens- Poor Partnership Agreement, Different Goals Or Financial Disagreements
How to resolve it:
Review the Partnership Agreement: The written agreement will express each partner’s rights and duties. If you do not, it is worth working with a business partnership lawyer to create one.
Mediation or arbitration: This means resolving issues directly together, without going to court. Arbitration is more formal than mediation; it usually involves a binding decision by an arbitrator.
Corporate Dispute Resolution: Larger partnerships or companies may have to deal with complex Commercial Disputes. A Commercial Dispute Solicitor could provide the best guidance to protect your interests and resolve the situation.
3. Shareholder Disputes
If you own a company with several shareholders, conflicts may arise. In Kenya, business disputes might be between shareholders about how to share profits, decision-making, or the company’s direction. Small or big, these fights usually happen in businesses.
Why it happens: Some shareholders might feel left behind in disagreeing on the company’s management, while others might not be consulted with great importance.
How to resolve it:
Call a meeting: Hold a shareholders’ meeting to discuss the situation openly.
Corporate Dispute Resolution: Whether a commercial dispute lawyer can help you draft shareholder agreements or represent you in disputes.
Court action: This might mean going to court to resolve the dispute, if nothing else works. This is where a business dispute lawyer in Kenya, like Chepchieng and Company Advocates, can help you.
4. Employment Disputes
In Kenya, disputes between employers and employees are another regular business conflict. It might be low or unpaid wages, being sacked unfairly, or being harassed in the workplace. The workforce feels neglected, and employers are saddled with underperforming staff.
Why this happens: Unclear employment contracts, poor communication, or a lack of compliance with labour laws.
How to resolve it:
Action internally: Handle inside the company, working by HR polices. The most innocent explanation is that the employee felt s/he was in a meeting with you the whole time.
Mediation: A mutually acceptable mediator can assist in navigating the process to an equitable solution.
Get help from a business dispute attorney: In the event of such serious issues as wrongful termination claims, a commercial dispute lawyer can ensure that you comply with Kenyan labour laws.
5. Property and Land Disputes
In Kenya, land and property disputes are serious for businesses that need real estate to operate in the country, retail shops or factories. In a Kenyan business dispute, one of the issues is a lack of ownership, leasing or boundary disputes.
How it happens: Missing title deeds, fake sales or landlord disputes
How to resolve it:
Check documents: Get an appointment with a lawyer to verify the owner of the property and leases.
Arbitration or mediation: These procedures are much quicker and cheaper than litigating to resolve provider disagreements.
Commercial Litigation Solicitors: A lawyer specialising in property law can resolve land-related, complicated disputes.
6. Family Business Disputes in Kenya
It is also not uncommon to find families running a business in Kenya, often resulting in peculiar family business disputes. Many of these battles include a toxic combination of personal and business issues, everything from siblings fighting over who should take the helm to valuations, profit sharing, roles within the company, etc.
Why it happens: Undefined roles, emotional conflicts and organisational apathy
How to resolve it:
Family meetings: Talk openly about the challenges with everyone in the family who works on the business.
Mediation: A neutral mediator can help keep the emotions in check and work on solutions.
Work with a business partnership attorney: A lawyer will assist in drafting agreements that start a deal off on the right foot and avoid future business disputes in Kenya.
How to Resolve Business Disputes in Kenya
Having equipped you with the basic information on the types of business disputes in Kenya, it is essential to address what would work best when handling such conflicts. Save time, money, and relationships with a proven solution. The following are the primary ways of company dispute resolution;
1. Negotiation
When you and the other party schmooze and try to reach an agreement, sans third-party interference. The cheapest and fastest way of settling a Kenyan business Dispute.
How it works: You raise awareness of the issue, identify your concerns and problems and find a solution that benefits both parties. This can be as simple as agreeing to a payment plan with a client who hasn’t paid you.
Tips:
- Stay calm and professional.
- Start on the right foot- Be crystal clear about what you want.
- Always, with any agreement, ensure it is in writing to avoid future disputes.
2. Mediation
This practice involves a neutral third party that acts as a mediator to help both sides agree. Less formal than a courtroom, and suitable for family business disputes or partner disputes
How it works: the mediator listens to both sides of the story and proposes a method, but chooses no side. You are the ultimate decider on the other side.
Why it works: Mediation is a confidential process that can be less costly and faster, and helps maintain business relationships.
Where to get mediators: You can employ a commercial dispute lawyer or link with bodies like the Mediation Training Institute of Kenya.
3. Arbitration
This is an intermediate between the formality of the Court and that of mediation. It is a well-sought-after method for business disputes in Kenya and is very common among contract or shareholder issues.
If you choose this route, an arbitrator, typically a lawyer or subject-matter expert, hears both sides and renders a binding decision. It means that you have to adhere to whatever the arbitrator decides.
Why it’s good: It’s faster than court and preserves the privacy of disputes. A commercial dispute solicitor can represent you in arbitration.
4. Litigation
If that doesn’t work, you may need to take legal action. In layperson’s terms, against whom you knock on the door of a Judge for deciding your case. Dispute resolution in Kenya ends with a court of law, the last remedy usually sought by business owners, since it is expensive and time-consuming.
How It Works: You take your case to court, and a corporate dispute resolution lawyer represents you. The judge decides how the evidence applies in your case.
Tips:
- Commercial dispute lawyer with local knowledge of Kenyan commercial laws
- Court cases can last for months or even years.
- Think about saving time and money by settling before court.
Tips to Avoid Business Disputes in Kenya
An ounce of prevention is worth a pound of cure, right? That is why you need practical tips on how to avoid business disputes in Kenya.
Establish Clear Contracts
Ensure agreements with a partner, supplier, or employee are always written. With the help of a business partnership lawyer, you can make sure that your contracts are in tip-top shape.
Be Clear
Usually, disputes arise due to misunderstandings. Keep your business above board and honest.
Record Everything
Document all transactions, agreements and communications. This can be the proof you need in case of any business disputes in Kenya.
Take Legal Advice Early
Do not allow a minor issue to escalate to a business dispute in Kenya. Get help from a commercial dispute lawyer before things get out of hand.
Incorporate clauses in contracts detailing Dispute Resolution, Such as settling the dispute by mediation or arbitration.
When Should You Hire A Business Dispute Lawyer?
There are instances where one may not be able to solve business disputes in Kenya on their own. This is when you call a business dispute lawyer or a commercial dispute solicitor to help you, based on:
- The dispute concerns sophisticated legal matters such as real estate or stockholder contracts.
- You are being sued, or you need to sue someone.
- Talks or mediation have not been successful.
- You try to protect your business from future disputes with good contracts.
Whether you are negotiating or going to court, an arbitrator, a business partnership lawyer, or a commercial dispute lawyer can help. This includes things like the Companies Act or the Employment Act in Kenya.
Final Thoughts
It has never been more hopeless to face a business dispute in Kenya; however, with plenty of possibilities these days, you do not need to. Contracts, business partnerships, and family versus business can dissolve everything you have ever worked for, but there are always ways around the court.
This post should inform you about some of the types of business disputes in Kenya and help you be proactive enough to know your options for protecting and keeping your business on track.
Get in touch with a commercial dispute lawyer like Chepchieng and Company Advocates or a business partnership lawyer if you have any doubts.
They exist to assist you in dealing with legal matters and connect you with a top business dispute resolution lawyer, and like all legal issues, it is always easier to avoid them than to pull the filth out of business disputes in Kenya, so try to invest in a good contract and communication from the start.
