PRIVITY OF CONTRACT AND ASSIGNMENT OF ARBITRATION AGREEMENTS IN KENYA

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).