East African Lawyer Magazine

CONTENTS

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Future-proofing the Legal Profession: Council Adopts New Strategy

EALS PRESIDENT............................... 4 My experience at the helm The rise of EALS President

CORRUPTION....................................24 Combating corruption through legal education

REGIONAL MARKET..........................8 Trends in the East African legal services market

INFORMATION TECHNOLOGY....27 Artificial intelligence and the future of the legal profession

CROSS BORDER PRACTICE.........10 Embracing cross border legal practice

TREATY DISPUTES......................... 28 Tanzania’s rise in investment treaty disputes

LEGAL PROFESSION.......................14 Future-proofing the Legal Profession: Council Adopts New Strategy COMMERCIAL LAW.........................16 Understanding Blockchain, Cryptocurrencies in East Africa EXTRACTIVE INDUSTRY...............18 Oil & Gas: The place of legal practitioners in the local content policies and legal regime governing the oil and gas sector within Eastern Africa PRECEDENCE................................... 20 How the Supreme Court of Kenya set global standards ARBITRAL AWARDS........................22 Enforcement of foreign money judgments and arbitral awards in East Africa

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LEGAL PRACTICE............................ 30 Building leading legal brands in East Africa TAX LAW..............................................32 Exchange of tax information: Challenges and prospects ALTERNATIVE DISPUTE RESOLUTION.................................... 36 A case for Alternative Dispute Resolution mechanisms COMPETITION LAW .......................37 Enforcing cross-border competition law REGIONAL INTEGRATION........... 38 • Corporates’ role in regional integration • Embracing infrastructure towards regional development

• •

Why the EU-EAC Economic Partnership Agreement undermines regional integration East African Integration: Lessons from Europe

REGIONAL TRADE............................45 Economic Partnership Agreement between the European Union and the East Africa Community: Feasibility, Opportunities and Challenges LEGAL ETHICS.................................. 46 Reflections on cross-border legal practice GENDER EQUITY............................. 48 Closing the global gender pay gap LEGAL PROFESSION...................... 49 Lawyers are the Last bastion of the Rule of Law FINANCIAL LAW.............................. 50 Agency banking takes root in Uganda LEGAL JOKES.....................................52 ESSAY PRIZE......................................54 The East Africa Law Society young lawyers essay prize competition PROFILE...............................................55 Icon of Courage: An introduction to Tundu Lissu

ONE STEP FORWARD - TEAM EXECUTIVE EDITOR Hanningtone Amol

MANAGING EDITOR Harold Ayodo

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Future-proofing the Legal Profession

he Council of the East Africa Law Society (EALS) is honoured to publish this magazine with a cocktail of incisive articles by members from every corner of the region. This is the first edition of our rebranded flagship publication, The East African Lawyer, which will be coming to your bi-annually.

The publication seeks to educate, entertain, inform members on emerging areas of law and also offer an opportunity to members who have a flair for writing.

We are overwhelmed by the response you made to our call for articles. We may have missed to publish your article but that does not mean it wasn’t fit for publication.

This edition couldn’t have come at a better time. We are celebrating our 22nd birthday as a regional bar and will be hosting the EALS 22nd Annual Conference and Annual General Meeting in Entebbe Uganda this month. It is therefore not a coincidence that a majority of the articles in this edition are in line with the Conference theme “Future Proofing the Legal Profession”.

Every article in this publication has gone through a process of careful editing and cross-checking to ensure that we deliver thought provoking commentaries which are current to our members’ needs. We hope that the articles will generate a healthy discourse towards realizing the objectives of both the regional bar and our respective national bars.

We appreciate the role that the national Bars and the regional Bar play in branding the legal profession in East Africa.

We are continually striving to foster relationships with each Bar to ensure that our members are marketed and branded with a view to promoting the profession.

We believe this publication is a step towards branding the legal profession in East Africa and making it globally competitive. We will be rolling out other publications soon and looking forward to your usual cooperation.

We appreciate our contributors, sponsors, editors and advertisers for their esteemed contributions. To the indefatigable team of David Sigano, Harold Ayodo and Arnold Odhiambo (Moland Communications (EA) Limited), hats off for exemplary contributions towards making this publication a reality.

Enjoy your reading.

PUBLISHER Moland Communications (EA) Ltd

GRAPHIC DESIGN Sam Morara

CONTRIBUTORS

Hanningtone Amol, Dr. Wilbert Kapinga, Dr. Charles Khamala, Dr. Simeon P. Sungi, James Aggrey Mwamu, Alice Blazevic, Neil Blazevic, Vellah Kedogo Kigwiru, Mary Wangui Waititu, Provia Akinyi Odhiambo, Jean Claude Mutabazi Abayo, Mugabi Mathew, Lumumba Fleming Omondi, Dorcas Wamaitha, David Sigano, Barbara Kitui, Elias Kibathi, Deborah Nyokabi, Harold Ayodo, Paul Kamau, Beth Michoma, Ally Possi, Pooja M. Karia, Philip Karubaga, Deborah Nyokabi, Madeline C. Kimei, Jill Obuchunju, George Oraro SC, Chacha Odera, Walter Amoko and Olivia Kiratu.

CARTOONIST

Stanislaus Olonde

••• The East African Lawyer Magazine may not be copied, transmitted or stored in any way electronically or otherwise without the prior and written consent of the Council of the East Africa Law Society.

All correspondence to the Editor is assumed to be intended for publication.

No part of this publication may be reproduced, stored in any retrieval systems or transmitted in any form by any means without prior written permission of the East Africa Law Society.

HANNINGTONE AMOL

Chief Executive Officer

www.ealawsociety.org

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EALS PRESIDENT

By Harold Ayodo

MY EXPERIENCE AT THE HELM

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or Mr. Richard Mugisha, being President of the East Africa Law Society is not a walk in the park.

“It is a great honour and privilege to serve as President of the East Africa Law Society (EALS). As with all privileges, this comes with responsibility. I am committed to discharging the responsibility to the best of my ability”, says Mugisha.

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The desire to improve service delivery to a legal professional organisation with over 12,000 members from East Africa inspired him to gun for the top seat.

“I acknowledged the work done in promoting human rights, the Rule of Law and democracy in the EAC region but thought that individual members’ interests were not well served,” says the President who is an ardent supporter of Liverpool Football Club.

EALS PRESIDENT

According to the President, the regional professional organisation has a huge positive impact on National Bars.

“It advocates for the independence of the legal profession and has supported National Bars whenever under threat,” Mr. Mugisha whose favourite dish is Matooke says.

The President says that in addition, EALS provides services which complement those of the National Bars.

“We engage in capacity building of members in areas of the law which are non-jurisdiction specific but critical for the legal practitioners across the region.

“We will be soon launching the ALSF Academy which is an initiative of the Africa Legal Support Facility of the African Development Bank in conjunction with EALS and other regional Bars. It is through such initiatives that the EALS im-

pacts the National Bars and by extension our mutual members,” he says.

National Bars According to the President, National Bar Associations in the region are doing a lot to support the regional professional organisation.

“They (National Bars) just have to keep doing what they are doing as we are only able to reach out to our vast members through them,” he says.

The President lauds the organisation for striving to uphold the Rule of Law within the region over the years.

“Defence of the Rule of Law is one of the main objectives of EALS. Over the years, we have initiated interventions across the region where we felt the Rule of Law was undermined or about to be undermined,” he says.

He explains that its approach involves high-level advocacy to persuade policy makers to take or not to take certain measures, education of members and the public, public statements as well as strategic litigation where desirable.

“We have a strategic litigation team which provides legal support in our quest for a just society. We recently filed a case against the Republic of Uganda at the East African Court of Justice where we felt democracy had been undermined by an official order that the Leader of Opposition could not enjoy freedom of movement without police authorization,” he says.

The President says that the EALS has also made statements condemning attempted assassination of Tanzania’s Opposition leader and Advocate, Hon. Tundu Lissu.

“When Willie Kimani, an Advocate in Kenya, was brutally murdered together with

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EALS PRESIDENT his clients, EALS was at the forefront in demanding justice. These are just some of the interventions we make regularly to ensure that rule of law, human rights and good governance ideals are upheld by the States,” explains the President.

According to the President, National Bars in the region are doing an excellent job of upholding the Rule of Law. “The profession is well regulated across the region and the Bar Associations have been at the vanguard of the defense Rule of Laweven under difficult circumstances. They also provide legal advice to the public on matters of the Rule of Law. The contexts in the different countries differ and so do the challenges but overall they are all doing a great job,” he says.

The Bench According to Mr. Mugisha, the Judiciary among member States is commendable in dispensing justice.

Mr. Mugisha is optimistic that the EALS provides a platform for sharing of experiences and for peer review.

“Defence of the Rule of Law is one of the main objectives of EALS. Over the years, we have initiated interventions across the region where we felt the Rule of Law was undermined or about to be undermined,” - Mr. Richard Mugisha

“There is always room for improvement. It is impossible to achieve perfection. What matters is the commitment to improve, to reform where necessary in order to perform better,” he says.

The rise of EALS President Mr. Richard Mugisha is the Managing partner of Trust Law Chambers. He holds a Bachelor of Arts degree (BA), a Bachelor of Laws degree (LLB) from the University of Lesotho and Master of Laws (LLM) from New York University.

Prior to establishing the firm in 2004, he was the Manager, Procurement Policy and Legal affairs at the Rwanda National Tender Board for over five years. He has led numerous Mergers and Acquisitions assignments, including transactional advice during most privatization exercises in Rwanda. His specialty is Banking and Finance, and Energy.

He is former Chairman of the Business Law Reform Commission which reviewed all legislation affecting the commercial environment in Rwanda and serves on various National Committees, foundations and Company Boards in Rwanda. In the academic domain, he has taught and conducted tutorials at the National University of Rwanda and Kigali Institute of Management, Science and Technology.

He is a native speaker of Kinyarwanda, has excellent command of English and a working knowledge of French. He is a member of the Rwanda Bar Association and the East African Law Society. He is also a fellow of the Africa Leadership Initiative and the Aspen Global Leadership Network.

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In addition, he quips that the Judiciary is not an island - it will thrive where overall good governance is prevalent.

“As EAC countries progress in building capable and transparent states, the Judiciary will also be in a better place to execute its critical mandate,” he says.

The President views the EALS as having the twin objectives of promoting democracy and the Rule of Law as well as serving its members in the professional development and welfare spheres.

“I hope to lay a firm foundation for an organization that effectively works towards these objectives. When we assumed office, the EALS did not have a strategic plan, the last one having expired in 2012.

The Governing Council has just approved a five-year Strategic Plan which focuses on the twin objectives which I have just outlined,” he explains.

The President who loves traveling, listening to music and reading for leisure admits that being President of the regional body is not a walk in the park.

“The challenges I face as President are mainly an underfunded organization and an aggrieved membership. These keep me awake at night. I knew that I would meet these challenges and I am facing them with determination. So far, I am pleased with the progress the Governing Council and I are making,” he says.

As for the successes, the President whose favourite author is Malcolm Gladwell, leaves it to the wider membership to judge his deeds but pledges his determination to give it his all.

Harold Ayodo is an Advocate of the High Court of Kenya and Managing Editor of The East African Lawyer Magazine

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REGIONAL MARKET

By George Oraro SC, Chacha Odera, Walter Amoko and Olivia Kiratu

Trends in the East African LEGAL SERVICES MARKET

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irection and particularly the direction in which legal practice in the region is moving towards is the gist of this article. But before diving into the discussion, the question as to what constitutes legal practice must be addressed. The answer is highly subjective and differences in firm culture and legal markets make it tough to find one-size fits all label/answer for this. One of the best references (in our opinion) for this is the Lexcel England and Wales v6 Standard for legal practices by the Law Society, a must read for every law firm regardless of size and specialization. The document among other things covers some core aspects of legal practice to which we have added our own to come up with the following components of legal practice - client care, culture, marketing, financial management, information and technology management, leadership and succession, people management, risk management, structure and strategy.

Firstly, there have been fundamental shifts in the legal services market driven by among other things, a greater demand for value for money by clients and more aggressive legal service providers. The growth and penetration of technology is another important factor affecting client care. Technology provides a means of both evaluating whether there is value for money as well as helping firms respond to the challenges mentioned above. Using technology clients can give instructions in real time, operate in virtual teams and therefore, it is not surprising that they sometimes even expect law firms to meet certain “virtual client care” requirements, for instance, some large corporates now require law firms on their panels to make a formal application on an e-supplier portal. This, therefore, causes the firms to need to comply with not only their own file-opening requirements but with those of each of such clients. Due to the interconnected nature of business communication, there is a huge pressure on lawyers

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to be as responsive, something evident in the terms of many corporate-law firm SLAs in which clients set out their expectations on communication timelines. On a related note, there have been a few cases where clients express their dissatisfaction with a law firm’s client care (or lack of) on social media channels, presenting a huge reputational risk not only to the law firms in question but to the profession. Adaptability is another emerging issue as clients want to know that law firms will not just provide legal services but practice in adherence to the client’s values, case in point certain large local corporates now often ask in their pre-qualification forms for among other things, a firm’s environmental and diversity policies. A new buzzword in practice is value-added-services, essentially clients preferring that advocates go beyond paid work and give other services such as client-based secondments, training and publications. While these are the emerging trends, what remains constant is that for most East African firms, local cli-

ents are still their bread and butter. That is, however, changing as we see the rise and rise of Pan-African firms and networks within the region. These firms seem to have a tight hold on the cross-border work of multi-national African companies and international investors. In addition to increased client pressure, East African firms who want to get a piece of that “pie” must meet the standards required by international law firms (who are often the originating lawyers of such work); standards which are usually more exerting than those offered by the local average firm; to meet these demands medium and large law firms are now hiring dedicated client care personnel in their firms.

Unique Culture As the number of non–lawyers in firms increases, firms need to grapple with how to create a culture of inclusion for such personnel. On the side of inculcating and transmissions of a firm’s unique culture and values technology and greater work-

REGIONAL MARKET

ues to grow, lateral hires are increasingly becoming the norm with attendant challenges. Firms have to deal with cultural changes and cultural conflicts associated with lateral hires. This is particularly important as most firms make these additions at senior levels of senior associates to partners – a time where it is more difficult to “assimilate” the hire into a culture.

High profile senior lawyer exits have happened recently to the extent that entire departments have been poached; begging the question on whether our leadership and succession systems are the problem or maybe it could just be the prospect of fatter paychecks. Though firms which have relied exclusively on the promise of greater financial rewards as a means of growth maybe building foundations on quicksand. This, however, does not eliminate the real and almost “desperate” need to institutionalize local firms to ensure they survive their founders and to ensure continuity and succession. It is therefore, quite interesting and encouraging that a few older and established firms are now working on deliberately institutionalizing their firms to ensure this longevity. Diversity in age and gender at the partnership level seems to be increasing, but yes more can be done here.

The truth is that law firms are labour-intensive outfits and to remain profitable, law firms must put in deliberate efforts to have measurements of performance and productivity. Firms have always had to address these career progression issues, the key difference in East Africa now is that firms are finally moving away from mom and pop operations to much bigger, sophisticated and more established firms.

The point here is that law firms must learn to develop and retain talent - if they want to remain competitive i.e. having an associate for one or two years who then leave to set up his/her operation is no longer a viable option in the long run. Many firms are adopting evaluation/assessment tools which help facilitate an objective policy on career progression. Related to the theme of

ICT is the use of social media by employees in the workplace to share information and documents - a point that deserves attention as few firms cover it in their HR policies.

Litigation Firms On marketing, the pressure on firms to create compelling written and visual content for audiences is growing as the use of digital media grows. In addition, litigation firms also need to be prudent on how they

The truth is that law firms are labourintensive outfits and to remain profitable, law firms must put in deliberate efforts to have measurements of performance and productivity.

load pressure have forced senior lawyers to have less time to spend on mentoring younger lawyers – a sad state that needs to be checked as mentoring has always been a cornerstone of career development and succession in the profession. Such mentoring also helps the seniors be responsive to dynamism that the best of the young inevitable bring. It used to be that often partners were “grown” organically from pupilage but as the competitive pressure in the regional legal services markets contin-

deal with media relations in this digital age as the reach of traditional media has significantly multiplied, not to mention the speed.

In matters financial management, there is sadly little use of budgeting systems to consistently manage firms’ income and expenditure. Having their fair share of economic pressures, clients are pressing for more pricing transparency and lower costs on fees from lawyers. This and the need to manage complex financial processes are causing firms to increasingly look to the use of IT to manage to bill. It is positive to note that there is now embracing of ICT to address diverse areas of practice including disbursements and to increase higher levels of accountability and to control costs.

ICT and its growth have presented “one” of the most disruptive changes; while it presents great opportunities for the profession it also presents a great risk, particularly that of cybersecurity. A good illustration of how damaging a cyber-attack can be, is the recent WannaCry ransomware which locks computer systems and demands USD 300 per file in Bitcoin. The attack which hit over 200,000 computers in early 2017 is now one of many to garner worldwide attention. In this respect, one thing that lawyers must be vigilant about is the potential cyber threat involving the hacking of active files, especially as it relates to advocate – client confidentiality one of the oldest rules of the profession.

Firms are finding themselves outsourcing more activities. Corruption is a big risk particularly through some of the institutions; lawyers must work with and some clients. The challenge here is to integrate a strong culture of integrity, responsibility and values in firms. Another major risk is the breach of ICT systems. In addition, it is noteworthy that while professional indemnity is essential it is costly to smaller firms.

Also of note here is the Kenyan Bribery Act, 2016 and the interesting recent English case of (Clyde & Co. versus Bales van

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CROSS BORDER PRACTICE

By Jean Claude Mutabazi Abayo

EMBRACING CROSS BORDER LEGAL PRACTICE

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ach country sets out conditions of admissibility to the legal profession, depending on legal culture or system of the country. With advanced economic integration into regional organizations, conditions of admissibility to the profession of lawyers may be standardized in concerned regions. An attorney meeting all those conditions can be allowed to practice law in any country in the region without restrictions. In this paper, we try to analyze opportunities available for litigation lawyers in the EAC, challenges to exploiting those opportunities and recommendations on how those challenges can be addressed.

Litigation Opportunities

The East African Community (EAC) - as other economic integration blocs - can be understood as an economic arrangement between member States (Kenya, Uganda, Tanzania, Rwanda, Burundi and South Sudan) marked by the reduction or elimination of trade barriers and the coordination of monetary and fiscal policies in the region. The treaty for re-establishment of

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the EAC was signed in 2000 between three founding member States (Uganda, Tanzania and Kenya). Rwanda and Burundi acceded to the EAC Treaty on 18th June 2007 and became members from 1st July 2007 while South Soudan was admitted to accede to the Treaty in the Summit of Heads of States in 2016.

For achieving their objectives, EAC countries established a Customs Union in 2005,

a Common Market by 2010 in the protocol that entered into force on 20/11/2011 and other subsequent protocols which, had been signed inter alia those relating to cross border trade in services and recognition of qualifications (2012).

Cross-border Transactions The protocols prompted increase of cross border commercial transactions where business people and organizations started to move business from country to country in the region following the process of removal of tariff and non-tariff barriers. That business migration means something big to practicing lawyers, their home clients started to demonstrate need of beyond one border judicial and extra-judicial services.

For commercial transactions requiring legal assistance in negotiation, conclusion

CROSS BORDER PRACTICE

and drafting of deals, an agreement between a client and his attorney is enough to provide that service but for litigation, the competence of a lawyer in a jurisdiction, especially that in a country other than his home, where he/she is admitted to practice law requires enrollment and admission to a local regulation authority (Law Society).

Practicing as a litigation lawyer requires a legal oath before being admitted to the Bar and that oath comes after fulfilling a number of conditions which, has been the biggest barrier for lawyers to administer cross border cases. Opportunities are many but clients are forced by laws to work with new lawyers of the land where they immigrate business.

Practice Hurdles In principle, migration of business would imply migration of legal services for legal practitioners having long and permanent partnership with clients. New clients would also prefer to import expertise in some domains of law in the region but that is hampered by a number of legal challenges emanating from restrictions set out in the laws regulating the profession.

In principle, migration of business would imply migration of legal services for legal practitioners having long and permanent partnership with clients. member States who had not been trained in that system or legal tradition.

Non-systemic barriers are numerous and include but are not limited to court language, whereby generally Kenya and Uganda use English as court language but specifically in some countries, the applicant needs to satisfy a court language capacity before being admitted. In Rwanda and Burundi where the majority of players in the justice sector (judges, prosecutors and advocates) have been trained in French, but use mother tongues (Kirundi and Kinyarwanda) as court languages. In Tanzania, the court language is dominantly Swahili but local dialects may be used in lower courts and English can be used in the High Court. The difference in legal tra-

ditions is another challenge by which some member States have common law tradition with adversarial procedures (Kenya, Uganda and Tanzania) while others have a civil law tradition using inquisitorial procedures (Rwanda and Burundi) with differences in sources of law, procedures and administration of Justice. Rwanda’s system can be seen currently, as hybrid in the course of adapting to common law features while abandoning some aspects of civil law system. Recognition of degrees in Law is another issue as laws in some countries require education in Common Law system as a condition of admissibility (for example in Kenya, which, recognizes degrees from recognized universities, most of which are of Common Law system).

Challenges faced by litigation lawyers in attempts to litigate cases beyond their respective home jurisdictions in the region are two-fold - some are systemic while others are non-systemic. Systemic barriers are linked to the legal and institutional framework of the legal profession in EAC member States, the differences in eligibility criteria is the biggest challenge as some countries restrict some nationals from being admitted to the profession of lawyers (for example in Tanzania: where nationals of Tanzania, Kenya and Uganda can be admitted and this excludes lawyers from other member States). Having been trained in a certain legal system is a precondition to some systems (Uganda and Kenya who require training in Common Law System) and that excludes applicants from other

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CROSS BORDER PRACTICE

Regardless of the tight conditions of admissibility for nationals from other member States, court language and difference in legal traditions and legal training is proofsthat even if being a national of a member State holding a degree in law and meeting other standardized conditions should be satisfactory for admissibility in another country, litigation lawyers will always face a hindrance of litigating cases in a court of a country which they are not accustomed to speaking the language.

Overcoming Challenges Chapter 24 of the EAC Treaty provides for the scope of cooperation in judicial and legal affairs. Paragraph 1 of Article 126 reads that “In order to promote the achievement of the objectives of the Community as set out in Article 5 of this Treaty, the Partner States shall take steps to harmonize their legal training and certification; and shall encourage the standardization of the judgments of courts within the Community�.

Harmonization of university programs is one aspect that can help future generations of the region who may follow a similar program and be able after training, to practice law in any of the member States, but a mechanism should be established to facilitate integration of actors who are already in the practice around whom the system is built.

In the East African Community Gazette, No. 1 of 3rd January 2014, the Community published the East African Community Cross Border Legal Practice Bill establishing the East African Law Counsel who has among other mandates, regulation of cross border practice and advice on harmonization of legal policies in the region. This goal is not easy to reach and requires time to produce effect as harmonization of legal systems should take considerable steps to be effective.

To conclude, we may say that considering treaty arrangements made by the Community and persistent legal restrictions in member States, especially in regulation of the regal profession, we can say that

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Harmonization of university programs is one aspect that can help future generations of the region who may follow a similar program and be able after training, to practice law in any of the member States Member States are steadfastly resisting the EAC’s successive efforts at creating a cross-border legal practice. Therefore, to facilitate the free movement of litigation lawyers within States, the EAC should pass a series of directives facilitating lawyers to enroll and practice regionally following legal training to guarantee protection of beneficiaries of the services.

In addition, member States should put in place policies aimed at harmonizing legal systems and continuous training to practicing lawyers like the Institute of Legal Practice and Development (ILPD) in Rwanda, headed by Counsel Dr. Didas M. Kayihura recently appointed by the Cabinet of Rwanda as new Rector of the Institute. By appointing a practicing lawyer, and one experienced in EAC matters (being a commissioner of EAC Competition Authority), this is a promising step that legal practitioners trained at ILPD will

consider and address cross border legal practice aspects.

Moreover, the member States need to make a concerted effort to streamline their educational institutions and honor legal training completed in other member States and remove barriers attached to nationality and language.

Further, individual lawyers and law firms across the region, through their umbrella, the East African Law Society (EALS) or private arrangements should enter into regional partnerships to maintain or gain trust of their clients and boost peer-learning which, will put pressure to member States to recognize their ability to serve beyond their home jurisdictions. Furthermore, training in legal English should be considered, being a dominant and majority language in the region, as it is likely to be the common court language of the Community in future.

Jean Claude Mutabazi Abayo is an Advocate and member of the Rwanda Bar Association www.m-abayolawfirm.com

CROSS BORDER PRACTICE

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The law firm offers high quality legal services to a wide range of clients including private individuals, local and international business entities, non-governmental organizations and public institutions. Our office is located in the City of Kigali, Rwanda.

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Litigation & Alternative Dispute Resolution, Legal Advisory and Consultancy, Real Estate, Infrastructure & Energy, Intellectual Property & Technology Corporate, Banking & Commercial Transactions.

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LEGAL PROFESSION Hanningtone Amol

Future-proofing the Legal Profession: Council Adopts New Strategy

E

ast Africa Law Society (EALS), in existence since 1995, has actively advocated for respect to the Rule of Law, human rights and good governance in the region. While the democratic space in East Africa has expanded remarkably over the years, the gains made may be eroded if lawyers in the region do not sustain their role as the drivers of good society initiatives. Recent activities across the region provide empirical evidence that the governments must be kept on check lest they roll back gains already made. At East Africa Law Society, we are alive to the fact that lawyers can only provide effective leadership in this front if they are empowered. This is why the Governing Council embarked on an ambitious strategy of designing member-focused products which aim at empowering individual members as well as paving the practice environment. The strategy also aims at making the legal profession in East Africa competitive and at par with their colleagues from around the world.

Strong Institutions East Africa Law Society, and the national Bars, will only be responsive to needs of members if they are financially stable and adopt good corporate governance practices. The strategy aims at realizing strong institutions by diversifying revenue sources while delivering innovative products to members at the least costs possible. While

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the regional Bar as well as national Bars rely mainly on membership subscriptions to sustain their activities, the need to future-proof the legal profession means that new and innovative sources of revenues must be sought to sustain expanding budgets and new products being developed.

In the coming year, we shall establish a strong consultancy in the areas of region-

al integration, human rights, legal aid and good governance. We seek to partner with international civil societies to offer cutting-edge consultancy services for institutions in the named areas. While we have over the years supported integration processes in East Africa, we have not made steps towards realizing revenues from emerging consultancy opportunities which more often go unnoticed. We are

LEGAL PROFESSION now partnering with other regional bodies to seek grants and other opportunities aimed at building capacities of regional organizations. We are trusted as the name to champion integration processes and will surely ride on this reputation to strengthen financial capacity of not only the regional bar but also the national bars.

Revolutionary Member-focused Products We have assessed needs of our members while designing the new strategy. With a growing demography of young lawyers and increasing economic challenges, we are keen on creating products which respond to emerging needs of our members.

Among the products in the pipeline are membership cards with benefits, commonly known as affinity cards. Members are set to enjoy exclusive discounts in almost every sphere of their shopping, be it at the pump station, bookshop, hotel, airline or neighborhood store. This new way of shopping is also meant to distinguish the learned friends. How does it feel to walk into an executive airport lounge during your journey without paying a cent more? Regardless of your level of experience in the profession, the affinity card is set to redefine the landscape of practice in East Africa.

member by their set of skills thus providing easy opportunity for clients to identify and reach specialists. This will be possible if members cooperate and provide their skills set promptly. The tool will enable listed members to access their accounts from the comfort of their offices or homes to update their profiles and manage their accounts.

Online Resources The place of continuous professional development in guaranteeing a competitive profession is not lost on us. We are working with our partners globally to establish online resources which are otherwise not easy to access by our members. This will be made available through online learning as well as online library accessible to our members through their accounts.

Our members from every corner generate publications and commentaries on various practice areas. These materials, sadly, do not reach wide audiences due to limited reach. Our strategy aims at reaching our members to share these materials which shall form part of the online resource. Apart from enabling our members to publish and share their resources with others, we consider this an opportunity to advance the EAC integration agenda by

enabling easy sharing of information by members.

Creative and Affordable Trainings Our members yearn to achieve world-class training in various sectors of practice. We desire to respond to this need in a sustainable manner. We have rolled out the first of the product in the form of Lecture Series.

Our inaugural lecture was held in Kigali with the generous support of Rwanda Bar Association and Bowmans Advocates. The lecture was delivered by Philip Coulson, a partner at Bowmans (Kenya), and focused on ‘A to Z of Complex Cross-border Commercial Transactions.’ It is intended that the lecture series be conducted across our membership regularly and on various areas of practice. The lecture series is designed in a manner aimed at promoting regional integration by sharing resources from one bar to another. Other lectures are scheduled to take place in Tanzania, Kenya, Burundi, Zanzibar and Uganda in the coming months. We are inviting members with specific expertise to volunteer to join our faculty to offer the lectures.

We are actively seeking out partnership

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We are also set to launch East African-wide innovative insurance products for our members. The first in line is a revolutionary professional indemnity cover which provides flexible payment spread over several installments, incredibly low premiums, easy paperless applications and instant benefits. Within the next year we shall be establishing other products like death benefits, medical cover and life insurance. We are carrying out studies to ensure that every product is uniquely designed to respond to members’ needs.

Membership Skills Listing While we aim to ensure the legal profession achieves global competitiveness, the role of marketing is not lost on us. We are developing a marketing tool for our members, both at organizational and at individual levels. Our new skills listing tool, set to be unveiled in 2018, will identify each

Inaugural Lecture: PHILIP COULSON (Bowmans, Kenya) delivers EALS Inaugural Lecture

in Kigali on 27th POctober 2017. The Lecture,Kenya) the first in a series of our innovative Inaugural Lecture: HILIP COULSON (Bowmans, delivers EALS Inaugural Lecture in training Kigali on 27th products, was titled “A to Z of Complex Cross-border Commercial Transactions” and was October 2017. The Lecture, the first in a series of our innovative training products, was titled “A to Z of conducted in partnership with Bowmans and aRwanda Association.

Complex Cross-­‐border Commercial Transactions” nd was cBar onducted in partnership with Bowmans and Rwanda Bar Association

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COMMERCIAL LAW

By Alice Namuli Blazevic and Neil Blazevic

Understanding Blockchain, CRYPTOCURRENCIES IN EAST AFRICA Client: “Hello, we are in early stages of a highly lucrative startup and we need legal services. Can you walk us through the regulatory implications of issuing ERC20 tokens to our customers as part of East Africa’s first ICO (Initial Coin Offering)? And what is the taxation exposure on digital currencies generally?”

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Lawyer: “Well, ummm…”

Client: “And because this startup is blockchain-based all transactions are immutable, irreversible, and public. But we only know our customers by their public key hash. How can we deal with govern-

COMMERCIAL LAW

mental authorities requests for information and for changes to the blockchain?”

Lawyer: “I, uhh…”

Client: “And what kind of liability do we have to the miners who are maintaining the network?”

Lawyer (relieved): “Oh! Well all mining sector regulations are clearly spelt out in the Mining and Natural Resources Act of 1947…”

Client: (Quite frustrated moves on to another lawyer/ law firm) Scenes like this may soon be (or are already) playing out across the region as blockchain and cryptocurrency technologies and products enter into the East Africa market. And if lawyers are unable to understand the technology driving this rapidly growing global sector, we will miss out on shaping their arrival and ensuring a friendly operating environment in this new wave of high-tech business and banking.

Economic Systems The Harvard Business Review described blockchain as a “foundational technology” which “has the potential to create new foundations for our economic and social systems.” This is because it upturns the basic requirement of trust that we have in our current computing platforms and computing operators.

Blockchain introduces the category of trustless computing (no trust required as everything is in plain sight and auditable on a distributed ledger: the blockchain).

Trustless computing has applications we would never allow to run on traditional computing platforms run by third parties and the ubiquitous ‘IT Guy’.

In the monetary realm, blockchain is the underpinning of all cryptocurrencies, including Bitcoin, a now $95 Billion anarcho-libertarian invention turned Wall Street day traders’ fantasy. Bitcoin’s market

East African lawyers should begin work today to face down the risks and seize the opportunities enabled by blockchain technologies. capitalisation is larger than the national currency circulation of Indonesia and Israel. But it is not a national currency, it is a transnational one, without any central banks, settlement authority, or monetary policy outside of what is coded in Bitcoin’s software repository.

Cryptocurrency is revolutionary, but blockchain does not stop there. New blockchain applications enable crowd ownership and investment of assets, blockchain-based titling of assets, insurance, trusts, transparent and secure voting, and autonomous decisions.

Software Contracts Most of these novelties are made possible by smart contracts, an evolution of the blockchain built on new platforms such as Ethereum. Rather than just recording financial transactions, the blockchain can include any arbitrary information, such as software-based contracts, ownership information, or official document references.

Non-lawyers always complain that legal documents are incomprehensible jargon.

Just as lawyers have the soft skills required to write and understand legally-coded documents, in the future, law firms will have CTO’s (Chief Technology Officers)

and Coding Partners for smart contracts who will work hand-in-hand with non-technical lawyers to ensure watertight legal code both on paper and on the blockchain.

Imagine your client enters into a smart contract with a Zambian supplier for delivery of refrigerated goods. The smart contract takes the required amount of your client’s Bitcoin into escrow. As the supplier ships their goods from Zambia to Uganda, IOT (internet-of-things) connected sensors attached to the goods detect that the agreed refrigeration temperature is not maintained during transport.

Luckily you had a good Coding Partner on team and this was already considered in the smart contract. A penalty is applied against your client’s payment. If a dispute can not be handled by the smart contract, a pre-agreed mediator will serve as an “oracle”, informing the smart contract of his/ her mediation decision and it will disburse funds from escrow accordingly.

Leaders in the legal field have already recognized the need to stay ahead of the curve in this emerging sector. Firms such as Hogan Lovells, Morrison Foerster, Cooley, Shearman & Sterling and Jones Day among others have already joined the Legal Industry Working Group of the Enterprise Ethereum Alliance. The Alliance recently held a strategic meeting with members from around the world, however, not a single African firm attended.

Harvard Business Review noted that it will take decades for blockchain to seep into our economic and social infrastructure.

Therefore, East African lawyers should begin work today to face down the risks and seize the opportunities enabled by blockchain technologies.

Ms. Alice is a Partner at Katende Ssempebwa & Co Advocates in Kampala, Uganda and also the Vice President, Uganda Law Society while Neil Blazevic is a Digital Security Technologist at DefendDefenders and a Blockchain Consultant.

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EXTRACTIVE INDUSTRY

By Ally Possi and Pooja M. Karia

OIL & GAS The place of legal practitioners in the local content policies and legal regime governing the oil and gas sector within Eastern Africa

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awyers across the East African region have a great opportunity in utilizing the promising legal practice plain field in the Oil and Gas sector that can only be realized on unifying the partner States’ legislation. A good example of such an opportunity is the East African Crude Oil Pipeline (EACOP) Project.

In the Recent years, exploration activities in the East African region have led to significant discoveries of proven oil reserves in Kenya and Uganda respectively, and lately natural gas reserves in Tanzania.

Governments and citizens of the respective East African countries have been eager to secure themselves of all the possible benefits by designing policies to achieve this goal. Amongst such policies are ‘Local Content Policies’ (LCPs), which are types of the Productive Development Policies (PDPs). LCPs entail guaranteeing deliberate utilization of local or national human and material resources and services on the petroleum value-chain activities, so as to

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stimulate development of individual capabilities and encourage local investment and participation.

Subsidiary Legislation Indeed, each of these countries have taken a step ahead and enacted principal and subsidiary legislation to implement the LCPs. They have also found a place for the local content policies in the contracts with the International Oil Companies. For instance, Tanzania has incorporated local content provisions in its Petroleum Act, 2015 and has enacted specific regulations on local content: The Petroleum (Local Content) Regulations, 2017 that will be

in force from November 2017. Uganda on the other hand enacted national content provisions in the Petroleum (Exploration, Development and Production) Act, 2013 and the Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act, 2013 and also has specific national content regulations: Petroleum (Exploration, Development and Production) (National Content) Regulations, 2016 and Petroleum (Refining, Conversion, Transmission and Midstream Storage) (National Content) Regulations, 2016.

The Tanzanian local content regulations specifically oblige licensees, contractors and sub-contractors to engage local legal services. On the other hand, the Ugandan regulations do not envision legal services in their lists of goods and services to be provided by Ugandan companies and citi-

EXTRACTIVE INDUSTRY

For the legal service providers across East Africa to fully be able to grasp this opportunity, harmonization of the local content legislations of the Partner States has to be in place. zens. Fortunately, they do not preclude unlisted service providers to provide services to licensees, contractors and sub-contractors. It is thus time for the local or national legal companies, firms and individuals to grasp this welcoming opportunity.

Common Market However, some challenges are spotted out: The definition of the word “local” or “national” does not consider sub-national stakeholders who work or reside around the field. There is no guarantee of the competiveness and quality of the services of the local or national service providers and the local content obligations conflict with the obligations under the World Trade Organization.

Further, under the East African Common Market, free movement of goods, services, capital and persons is guaranteed in the East African region as provided for under the Treaty for the Establishment of the East African Community and the Protocol on the Establishment of the EAC Common Market. The EAC Common Market is guided by the implementation of principles of ‘non-discrimination’ and ‘most favoured nation’ as found under Article 3 of the Protocol that need to be adhered to in relation to the Partner States’ commitments for liberalization of goods and services across the region. For this reason, the Local content policies conflict with the partner states’ obligations under the East African Common Market, since Local Content Policies hinder free movement of goods, services and labour by giving deliberate preference to citizens or nationals of the respective countries, thus an impediment. This becomes of vital consideration whilst implementing local or national content obligations in the East African Crude Oil Pipeline (EACOP) Project.

For the legal service providers across East Africa to fully be able to grasp this opportunity, harmonization of the local content legislations of the Partner States has to be in place. Preferably, a model in which ‘Local Content’ to mean ‘East African Content’ should be devised. To balance the equation, first priority should be given to legal service providers of Partner State in which the service is required. Where there is a gap, the next chance should be given to the rest of the Partner States of the East African Community than non- member states.

Dr. Ally Possi LL.B. (Mzumbe); LL.M. (UCT); PGD Legal Practice (LST); LL.D. Visiting Researcher - Max Planck Institute of Comparative Public and International Law; Lecturer- Law School of Tanzania; Advocate of the High Court of Tanzania ally.possi@ hotmail.com

Ms. Pooja Mahendra Karia LL.B. (UDSM); LL.M. (TanzaniaGerman Centre for Eastern African Legal Studies, UDSM); PGD Legal Practice (LST) poojakaria_21@yahoo.com

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with global content providers in the areas of international arbitration, contracts management, international commerce, human rights and others to ensure our members access these products at affordable costs. We intend to conduct regular trainings on these areas to our members at the least costs possible.

Rebranding the Legal Profession We appreciate the role that the national Bars and the regional Bar play in branding the legal profession in East Africa. We will strive to foster relationships with each bar to ensure that our members are marketed and branded with a view to promoting the profession. This will entail cross-border exchanges by members, cross-border trainings, sourcing for partnership opportunities for members as well as sponsoring policies and high-level advocacies aimed at creating a conducive environment for legal practice for our members.

We believe that the above products will strengthen the legal profession in East Africa as well as make it responsive to clients and public needs. A strong and independent legal profession is a necessary ingredient of a just society which respects the rule of law. We hope our members will feel emboldened to continue championing for just causes even as we strive to address their challenges.

Mr Hanningtone Amol who is an Advocate of the High Court of Kenya is the CEO of the East Africa Law Society

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PRECEDENCE

By James Aggrey Mwamu

How the Supreme Court of Kenya set global standards

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he seismic decision by the Supreme Court of Kenya in overturning the Presidential Elections held on the 8th August 2017 did not only send shockwaves across Africa but the entire world. The world was shocked because it was never believed that a Court in Africa would be bold enough to invalidate the election of a sitting President.

But anybody who is familiar with the history of Kenya after the promulgation of a new Constitution knew that it was just a matter of time before this happened. That the Judiciary saved the country not just from bad laws passed by Parliament but illegal acts of the Executive who still lived in the past thinking that the Presidential Powers under the new Constitution is intact.

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Needless to say, history demonstrates that the other branches of Government, Parliament and the King for instance, did not willingly accept the proposition that Judges were not subject to their control.

Judges were induced to rule in accord with the desires of the King, who would remove them if they did not, or in accordance with Parliament’s predispositions, who would decrease or eliminate their salary other-

wise. For example in 1610, in the case of Dr. Bonham, a graduate of Cambridge University brought a suit against the Board of Censors of the Royal College of Physicians. The doctor was imprisoned for failing to submit to competency tests. A Statute authorized the Board upon a finding of incompetency, to imprison and fine the doctor - one half of the fine would go to the college.

The matter eventually landed on the desk of Chief Justice Lord Coke who upon reviewing the case found the Medical Board heavily conflicted and set the doctor free on the Principle of nemo judex ri sua (A man cannot be a Judge in his course. King

PRECEDENCE

Let’s get together, let’s hold hands and let us dance, Let’s unite and give ourselves another chance,... And in the sun or the rain or the sweet or the pain, we still dey here together, because (Let Africans be great!)

James I who had an interest in the matter removed Lord Coke from his office and appointed a new Chief Justice.

King’s Pleasure This Impunity by Kings in Britain was brought to an end in 1688. The Revolution led to the deposing of King James II and the appointment of Judges for periods of good behavior rather than at the King’s pleasure. As a corollary, their salaries were fixed by Parliament.

Our leaders must stop living in the 16th Century when judicial officers used to work at their pleasure. We are in a new era and the Judiciary must be lauded for restoring our pride - not just in Africa but in the World.

Chief Justice John Marshall of the Unit-

ed States of America while Addressing a Virginia convention on a new Constitution said, “I have always thought, from my earliest youth till now, that the greatest scourge an angry Heaven ever inflicted upon an ungrateful and sinning people was an ignorant, a corrupt, or a dependent Judiciary.”

That our Judiciary must not just be independent and jurisprudentially sound it must also be beyond reproach like the Caesars wife.

The decision by the Supreme Court of Kenya required courage and determination. The decision affected a wide variety of issues, many of which form the core of those values that prompted the new Constitution - the right to life, liberty, and the pursuit of happiness. The decision impacted labour, housing, employment, human rights, transportation, mental health, the environment, the core of every person’s existence. There is no more essential place for the exercise of judicial courage, for the

demonstration of judicial independence than in the Supreme Court of the Republic of Kenya where issues at the heart of the values we hold most dear are determined. There is no more essential person to demonstrate that courage, to exercise that independence than the Judges of the Supreme Court.

In 1997 South National African Congress Party developed a paper on African renaissance on the recovery of the African Continent as a whole and the establishment of political democracy in the continent.

Others included the mobilization of the people of Africa to take the destiny of the Continent into their hands thus preventing the it from being seen as a place for the attainment of geo-political and strategic interests of the world most powerful countries and make Africa a powerhouse.

The Supreme Court of Kenya decision is going to lead to an African renaissance and reawakening. The rise of Africa will be complete when the judicial institutions stand for the rights of the downtrodden, a truly and impartial arbiter of political disputes and the last bastion, bulwark and pillar against oppression and bad governance of our leaders who would want to take us back to the reign of King James I. Finally with Sarkodie of the ‘Africa Rising” fame we will be able to sing “I’m so happy to be a part of this continent, call your sisters and your brothers and your friends, let’s get together, let’s hold hands and let us dance, let’s unite and give ourselves another chance,…… And in the sun or the rain or the sweet or the pain, we still dey here together, because (Let Africans be great!)

Mr. James Aggrey Mwamu is Advocate of the High Court of Kenya and former President of the East African Law Society (EALS).

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ARBITRAL AWARDS

By Dr. Wilbert B. Kapinga

Enforcement of foreign money judgments

and arbitral awards in East Africa

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enya, Uganda, Tanzania and Rwanda have in place legislation for reciprocal enforcement of foreign money judgments. Once registered in their respective High Courts, execution of such judgement proceeds in accordance with the civil procedure legislation of those countries.

While Kenya has enacted legislation to which they are parties to treaties concerning the enforcement of foreign money judgments, Uganda, Tanzania, South Sudan and Rwanda are not a party to those treaties. Uganda and Tanzania permit certain designated countries for reciprocal enforcement in terms of the relevant reciprocity legislation. Burundi, South Sudan proceeds on the principle of comity and reciprocity to enforce foreign money judgments. In Rwanda, foreign judgements are enforced even without reciprocity.

Final and Conclusive The requirements for enforcement in East African countries are principally that the foreign judgement must have been final and conclusive between the parties. The exceptions to this finality are that registration of the foreign judgements should

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not offend the law including prior decrees, public policy or morality and customs of the enforcing jurisdictions. In addition, the foreign court must have had international competence or jurisdiction over the defendant; the defendant must have received notice of the proceedings in the foreign court. The foreign judgment must be authenticated by the court of its origin and apostilled in that country.

Certified Translator Foreign judgments in a language other than English must be translated into English by a certified translator before enforcement takes place in East Africa except for Burundi where the judgement other than French must be translated into French.

As enforcement can only take place after

all appeals in the foreign jurisdiction have been exhausted, the courts in East Africa will not review the merits of the case giving rise to the foreign judgment. Enforcement of foreign judgements in East Africa primarily proceeds ex parte by summons to a High Court Judge.

In Kenya, Uganda and Tanzania, the limitation period for enforcement of the foreign judgements is six years from the date the award was made. In Kenya, the time that it takes to enforce a foreign judgement is one to two years. The practice in South Sudan, Rwanda and Uganda ranges between five to twelve months to enforce foreign judgements.

Arbitral Awards While Burundi, South Sudan and Tanzania have not given effect to the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards, Rwanda, Kenya and Uganda have done so. Tanzania continues to rely on the Geneva Convention on Recognition and Enforcement of

ARBITRAL AWARDS Foreign Arbitral Awards which it domesticated by legislation.

Foreign awards will be enforceable in East Africa if they are made pursuant to valid arbitration agreements. The awards are final in the countries of origin and the concerned matters which may lawfully be referred to arbitration under the laws of the East African countries. Like in the case of enforcement of foreign judgements, the enforcement of the foreign award must not be contrary to public policy, morality and custom of the respective East African countries or the laws of those countries.

Set Aside

High Courts Enforcement of foreign awards is by petitioning the High Courts of the East African countries. The original award or a certified copy of it in English language must be filed by the arbitrator, or a person nominated by the arbitrator. The reason for this is to secure the sanctity of the award and guard against tampering with the award.

country to country in East Africa. In the case of Tanzania and Uganda, a plaintiff in whose favour an award has been made has a period of six months from the date that the arbitrator filed the award in court to have it enforced.

The time that the enforcement of foreign award may take differs from each of the East African countries. In practice, this may take between three to seven months depending on how aggressive and diligent the award holders are in following up with the courts.

Dr Wilbert Kapinga is the Managing Partner of Bowman’s Tanzania office.

He is also former President of the East Africa Law Society (EALS).

The limitation period for enforcement of the foreign arbitral award differs from

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The courts in East Africa will refuse to enforce a foreign award if the award has been set aside in the country in which it was made, the party against whom enforcement is sought was not given notice

of the arbitration proceedings in sufficient time to enable him to present his case, or if he/she was under some legal incapacity or was not properly represented. If the award does not deal with all the questions referred to by arbitration or contains decisions on matters beyond the scope of the agreement to arbitrate.

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CORRUPTION

By Dr. Charles Khamala

COMBATING CORRUPTION THROUGH LEGAL EDUCATION

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2016 survey on prevalence of economic crimes ranks Kenya, with 62 percent at third in the world corruption, behind South Africa (69 per cent), while France notwithstanding being a developed country with 68 per cent came second.

Notably, all these countries have culturally diverse populations and are porous to immigration. It is possible that the conditions of globalization contribute not only to xenophobia or terrorism, but also fertilize conditions of white collar crime.

Reckoning with globalization’s discontents, Marcelo Suarez-Orozco in Learning in the Global Era: International Perspectives on Globalization and Education (2007) opines that: “All global citizens are

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now implicated in the struggle to create better integrated, more egalitarian and just societies.” Given tensions generated by globalization, e.g. assault on sovereignty, foreign competition, etc., responding to transnational corruption requires pressure to compel African governments to build a spirit of self-correction into the governmental process (to change institutions from within). Problematizing the global dimension, Carlos Alberto Torres’s

Education and Neoliberal Globalization (2009) observes that: “There has been an increasing recognition that critical educational studies must turn to the issues of global, of colonial imagination, and to the postcolonial approaches in order to come to grips with the complex and at times contradictory synchronic and diachronic relations between knowledge and power, between state and education, and between civil society and the political imaginary.”

Thus the role of critical legal education is key in sensitizing the citizenry about the rising corruption scourge which accrues from globalization.

CORRUPTION

State Failure Following David Saunders’ Anti-Lawyers: Religion and the Critics of Law and State (1997), it is possible to demonstrate the link between the philosophy faculty and three key professions, namely theology, medicine and law. My objective is to emphasize the post-colonial state’s failure to encourage critical thinking about authoritarian laws, policies and practices inherited from colonial rule. Africa’s “second liberation” democratic reforms which introduced “autonomous” laws suitable for modern states were insufficiently responsive to transform the professions to serve African populations. Ideally, the function of professions is to support ordinary people to receive basic goods and services.

Take Kenya’s 2010 Constitution. Article 43 promises to equalize provision of basic services through guaranteeing socio-economic rights to, inter alia, “the highest attainable standard of health” and “education.” More emphatically, under Article 48: “The State shall ensure access to justice for all persons and, if any fee is required, it shall be reasonable and shall not impede access to justice.” Yet hiding behind complex laws to obfuscate bureaucracy, the public sector fails to support profession-

als to provide these, and other, essential services. That is why our public hospital doctors undertook 100-day industrial action earlier this year, and our nurses’ strike has exceeded four months. Ritualistically, public university lecturers lay down their tools annually. Poor patients and students are collateral damage. Clearly, under globalization, liberal democracy systemically fails to distribute public goods to least advantaged groups. Compounded by conspicuous consumption by corrupt elites, relative deprivation causes ordinary people to engage in supply-side corruption themselves.

edge of human physiology, but to conduct procedures according to prescribed regulations. Neither do theologians derive their status from their natural ability to communicate with God or perform miracles. Nowadays, notwithstanding claims that missionaries pre-dated the republics, pastorate classes increasingly attract state regulation. That post-colonial centralized African states have failed to redistribute professional services equitably has escaped criticism by the education system, courtesy of intellectual corruption. Why haven’t legal professionals protested inaccessibility?

In Conflict of the Faculties (1798), Immanuel Kant demonstrates the primary role of the philosophy faculty. By engaging in critical thinking, philosophers are able to highlight obsolete practices by the secondary faculties of theology, medicine and law. The latter professions are established by the government as tools to facilitate public purposes. Their effective performance is necessarily in the public interest and is always paramount in social well-being. Just as lawyers are public officials who interpret the law “as it is,” the function of medical professionals is not to treat patients according to their personal knowl-

Jurgen Renn and Malcolm Hyman, in the Globalization of Knowledge in History (2012) explain the central problem that “just as there is only one history of life on this planet, there is also only one history of knowledge. Science in the 21st century represents globalized knowledge and the benefits from the creation and exploitation of new social and technological structures which enable the global free flow of knowledge and expertise.” Due to this knowledge gap, “recent discussions about globalization processes emphasize two apparently contradictory characteristics of such processes: homogenization and universalization, on one hand, and their contribution to an ever more complex and uncontrollable world on the other.” In their view, these polar trends perpetuate “divide and rule” since “due to the unequal distribution of wealth, among other factors, the same pressures of homogenization provoke an increasingly diverse spectrum of strategies to cope with these pressures, which leads to an increasingly complex patchwork of social networks.”

By engaging in critical thinking, philosophers are able to highlight obsolete practices by the secondary faculties of theology, medicine and law.

Intellectual Class Thus this article is justified in interrogating whether Africa’s intellectual classes, particularly the philosophy faculties, are

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CORRUPTION

encouraged to exploit their capacity for critical reason. Legal scholars with dual powers to perceive not only what regulations require, but also normative standards which are possible, are able to both criticize and evaluate government policy.

Our critical legal philosophers should dispense civic education to explicate the interrelation connecting a government’s misdirected expenditure, failed policies and the resultant impact on well-being or suffering. An exposition is required of the paralyzing impact of maintaining socalled “neoliberal democratic” professionals who in reality frustrate provision of public goods.

Torres laments that: “The canon of ‘official knowledge’ had much of its history in a conscious attempt to ‘civilize’ both the working class and the ‘natives’ of the expanding empire…the fear of the working class and ‘peasant’ literacy was visible.” He observes that: “Changes in how education and literacy were thought about…were (and are) the result of struggles over who has the right to be called a person over what it means to be educated, over what counts as official or legitimate knowledge, and over who has the authority to speak to these issues. And these struggles need to be thought about using a range of critical tools, among them analyses based on theories of the state, globalization, of the post-colonial and much more.” Over a decade ago, Kolawole Olanian, in “The African Union Convention on Preventing and Combating Corruption: A Critical Appraisal” (2004) AHRLJ, 4(1), 74-92, argued that the African Union Convention on Preventing and Combating Corruption (2003) fails to sufficiently emphasize the strong link between grand corruption and human rights. Not only does the Convention suffer from severe claw back clauses,

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Our critical legal philosophers should dispense civic education to explicate the interrelation connecting a government’s misdirected expenditure, failed policies and the resultant impact on well-being or suffering. but it also fails to hold state parties accountable. Nowadays, African leaders are increasingly apprehensive about the International Criminal Court, hence collective withdrawal, and also about “universal jurisdiction” usurped by Western courts. In response, the 2014 Malabo Protocol confers jurisdiction upon the African Court of Justice and Human Rights to try 14 international crimes. They include corruption and corporate offences, thus complementing domestic authorities who fail or are unable to fight impunity. Yet without effective police to investigate and arrest suspects, the regional prosecutor and judges remain constrained and ineffective. If Af-

rican citizens deserve corruption free societies, we must first be emancipated from ethnicity and parochialism which endorse the neopatrimonial state.

Arab Spring As the Arab Spring shows, notwithstanding poverty, homogeneous populations can jettison illegitimate leaders. Thus educating the masses future-proofs both laws and legal professionals.

Torres, concludes that struggles over education and literacy “imply a conscious process of repositioning, of ‘turning the world upside down.’” Unfortunately, examples of corruption in Kenya’s higher education sector, whether secondary school national examination cheating or skewed tertiary institution admission policies, unfair administrative punitive or reward malpractices, tend to retard critical thinking.

Recent threats have emerged to restructure the humanities and social sciences by reducing research funding and salaries.

These suggest that the philosophy faculty, particularly legal educationists, should strive to retain a wider licence to critically analyze existing laws, rules and regulations by erecting a higher moral or normative standard against which to evaluate the current performance of the professions.

Regional civil society networks can dispense civic education to shatter irrational sub-regional graft values.

Dr. Khamala is a Member of the EALS Professional Development Committee, Advocate of the High Court of Kenya and Senior Lecturer, Africa Nazarene University Law School.

INFORMATION TECHNOLOGY

By Beth Michoma

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ARTIFICIAL INTELLIGENCE and the future of the legal profession

s lawyers we pride ourselves on our archaic way of solving legal issues. For example, it is not uncommon to meet a colleague weighed down by tonnes of books in the name of research to maintain a lawyerly appearance. It has taken us centuries to drop the use of legalese and most alarming decades to accept technology in our space. Resisting change has however, ensured that lawyers are not at the forefront of technological advancements and are reacting to technology taking over rather than driving the technological boom.

Having conversed with esteemed colleagues it is clear that in our profession technology is summed up in two words a computer and Google. This misconception has stagnated our profession as the main drivers in legal technology in the 21st century is artificial intelligence.

Artificial intelligence is defined as machines thinking like humans and performing tasks normally preserved for the human race. In our profession this technology would perform the functions of lawyers and paralegals.

However, the goal of artificial intelligence in the legal profession is not to replace lawyers but to ensure that we concentrate on more important tasks such as developing arguments rather than drafting.

So far, only about one percent of law firms in East Africa and in house legal departments have embraced artificial intelligence technology. Moreover, the one percent have used this technology to increase their productivity and reduce costs. Artificial intelligence implemented by this firms has been used for the following tasks:

Reviewing Documents Artificial intelligence technology is being used to areas that require perusal of numerous documents this include case research, due diligence, fraud investigations on companies and legal compliance. The technology ensures that review is at a faster rate and saves both time and money.

Lawyers should understand the importance of artificial intelligence in performing this task as evidenced in a case in the chancery division in the UK Pyrrho Investments v MWB Business Exchange where using ar-

tificial intelligence predictive coding was backed by the court.

Case Predictions The technology predicts the outcome of legal disputes and proceedings. Predictions are made via the analysis of past cases to forecast outcomes. This artificial intelligence application significantly aids lawyers in managing cases, by enabling them to make decisions based on the likelihood of a certain outcome taking place.

Advisory Services Another use of artificial intelligence in our legal sphere is its application to simple advisory services.

For in as much as this technology cannot provide a personalised consultation a client can receive a professional direction to their matter by leading them from one question to another until the question is answered.

Artificial intelligence technology analyses cases, documents and legislation therefore providing supporting references to its answers.

So far, only about one percent of law firms in East Africa and in house legal departments have embraced artificial intelligence technology

For the rest of the law firms and in house counsel in East Africa who are not up to speed, it is important to become artificial intelligence technology ready. This can be done by establishing a department and appointing members of the organisation who will serve as experts in the field. They should be provided with training opportunities so that they can serve us excellent resource to fellow colleagues and clients.

Further, lawyers should endeavour to learn about artificial intelligence, we should note that this technology will continue to evolve and develop. Invest the time and energy to understand the basics and learn how we can use it as a tool to provide high-quality legal services. Collaborations with fellow lawyers at law firms and in-house legal departments should be done to understand how they are using artificial intelligence in their delivery of legal support.

In addition, actively use social media resources like LinkedIn, You Tube and Twitter to follow and keep abreast of developments in the AI space. Further, our respective Law Societies should organise professional development programs and conferences to further enhance our knowledge.

It is my belief that lawyers will always be resistant to change, but by showing them that it benefits them they will be open to adopting the advancements and being innovative in this area.

Ms. Beth Michoma is an Advocate of the High Court of Kenya who has authored various legal articles published in legal journals and also runs a legal blog www. legalmindsonline.com.

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TREATY DISPUTES

By Madeline C. Kimei

Tanzania’s rise in INVESTMENT TREATY DISPUTES

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anzania is witnessing a shift in investment policy approaches with changes in laws affecting enterprises like the extractives sector. As a result, there is interest in how investment treaties function, whether they achieve their goals, and at what cost. The Government is now facing an increasing number of arbitration claims by foreign investors relating to important public policies or seeking substantial damages, and many Governments are taking a greater joint interest in how such cases are resolved in Investor-State Dispute Settlement (ISDS). The unpredictability of international arbitration is a major concern and may impede further Governmental intervention in the economy. In looking at the recently enacted extractive industry laws in 2017, it seems that domestic legislation might replace Bilateral Investment Treaties (BITs) to appropriately balance investor protection with other public interest goals, including the promotion of development and redress.

A prominent feature of BITs as a tool for investment protection is its self-contained dispute settlement mechanism which is a flexible approach and typically includes allowing for investment dispute to be resolved by international arbitration, most often under the auspices of the International Centre for the Settlement of Investment Disputes (ICSID).

To date, Tanzania has signed a total of 20 BITs with countries amongst which half have entered into force. There is only 12 enforceable BITs and there are eight BITs which have been signed by Tanzania but are yet to be enforced. Since the coming into effect of the ICSID Convention, Tanzania has been a Respondent to only six different ICSID arbitration proceedings instituted by foreign investors. In commencing these proceedings, the investors respectively invoked a contract, the UK - Tanzania BIT of 1994/7 and the Sweden –Tanzania BIT of 1999 and two (2) of the cases eventually being concluded and four still pending including the annulment proceedings of the SCB (Hong Kong) Limited v. TANESCO.

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...it seems that domestic legislation might replace Bilateral Investment Treaties (BITs) to appropriately balance investor protection with other public interest goals, including the promotion of development and redress.

International Arbitration The investor-State dispute resolution clause under the BITs that are currently in force (for example the BIT Tanzania – Canada and BIT Tanzania – Denmark)

generally cover a broad range of disputes that can be submitted to international arbitration and make reference to ICSID. All of the BITs stipulate a two-tier dispute settlement. The first tier is an obligation to settle the dispute amicably through negotiations or consultations. Most of the BITs require a six-month waiting period for the amicable settlement efforts. Upon the satisfaction of the first-tier obligation, an investor may submit the dispute for adjudication. There are two approaches used in these BITs, some of the BITs prefer a folk-in-the-road-provision approach in which an investor has to choose either the court of the host state or an international arbitration for submitting the dispute. The others provide exclusive recourse to investment arbitration. The majority of the BITs offer options, at the investor’s choice, between arbitration under ICSID Arbitration Rules and ad hoc UNCITRAL Arbitration Rules. The TZ-Denmark and the TZ-Canada BITs further include the International Court of Justice (ICJ) in these options. In the Demark Model BIT, Article 9 and 10 provides for arbitration under ICSID, or the International Court of Justice

TREATY DISPUTES

or the ad hoc arbitration under arbitration rules of UNCITRAL. This type of dispute settlement clause is usually described as a “cafeteria style” approach where the investor has a choice between a range of different dispute settlement fora.

None of the BITs require the exhaustion of local remedies as a precondition for arbitration. The TZ-China BIT is the exception that provides limited recourse to investment arbitration. The TZ-China BIT(2013)is the latest China-Africa BIT signed and provides a limited scope for recourse to international arbitration. It is quite remarkable, that the TZ-China BIT introduces pertains to the unusually elaborate and extraordinary level of detail on the investor-state dispute settlement provision. The BIT favors the adjudication of investment disputes by the court of the host state under Article 13 (2)of the BIT with China.

Protected Investment It can be concluded that Tanzania’s BITs that are currently in force generally provide a favorable condition for an investor to initiate investment arbitration for disputes arising out of a protected investment. With the exception of the TZ-China BIT, there is no complicated procedure, such as the exhaustion of local remedies, for submitting a dispute to an arbitral tribunal, or any limitation on the type of disputes that can be arbitrated.

Section 11 of the National Wealth and Resources (Permanent Sovereignty) Act, 2017) prohibits proceedings in foreign courts or tribunals. By abolishing the investor-state dispute mechanism and encouraging resort to national state legal systems (with state-state dispute mechanisms remaining available) could enhance existing legal institutions in unanticipated ways, even in legal systems other than those of constitutional democracies.

In the absence of BITs, international investors, not least in the mining sector, are likely to have significantly less protection against resource nationalist measures. The

intervention by the Tanzanian Government in the form of regulations aims to balance the requirements of investors and the need to ensure that investments make a positive contribution to the sustainable development of the host State. Worth noting is the approach Tanzania has initiated towards handling investor-state disputes.

The Government has limited the applicability of agreements and statutes to investors with substantial business interests in both the host and its claimed home State or otherwise limit investor access to ISDS to specific agreements or protections. By way of example, Ecuador is currently involved in efforts to withdraw particular categories of disputes (namely oil and mining) from investment treaty dispute resolution at the ICSID. However, as Tanzania is already a party to these BITs, the new legislation does not remove the right to international arbitration under the pre-existing treaties. For instance, existing investors may consider bringing an arbitral claim to preclude the Tanzanian Government from renegotiating or dissolving an existing mining agreement, or bring an arbitration claim to recover damages after the Tanzanian Government has renegotiated an agreement and increased taxes on the investment.

Tanzania has already been challenged by two mining corporations in light of the new Mining Act. As food for thought, firstly, though BITs are intended to be flexible in the use of treaty language and availability of exceptions, there simply is little assurance to those making and implementing policy that treaties will be interpreted in predictable ways. Secondly, the available empirical evidence suggests that little is gained, in terms of new inward foreign investment, by guaranteeing access to dispute mechanisms directly to investors. These first four considerations apply to the case of inward direct investment. The case of Brazil lends credence to this view. Brazil is one of the largest magnets for inward FDI in Latin America, yet Brazil has not

one BIT presently in force. A third reason speaks specifically to outward investment and this has to do with enhancing the development of legal institutions within host States that can benefit both nationals and foreign investors. Thus, it is my view that greater emphasis should be placed on host State legal reform (overhaul of the outdated arbitration laws) and, to the extent necessary, capacity-building within the system of the administration of justice, rather than on international investment arbitration.

In conclusion, the ISDS regime has been under fire, among other reasons, due to its impact on States’ right to regulate in the public interest and therefore it will be interesting to see if Tanzania will use a different approach for investor-State dispute settlement in its future BITs. Several developing countries appear to be leading this shift in approach as stated above, South Africa has begun to terminate some of the investment treaties it had concluded previously and has introduced legislation to modernize its investment protection regime and ensure that all investors are treated consistently. Tanzania could also learn from the manner in which South Africa terminated its BITs. In recent years, India and Indonesia have declared that they are seeking to amend some of their investment agreements. Bolivia, Ecuador and Venezuela have withdrawn from the ICSID Convention in the past decade. Given the actions of these and other countries, and the growing criticism of ISDS mechanisms, it seems inevitable that the traditional approach to ISDS will change. In its 2015 annual report on international investment, UNCTAD stated that maintaining the status quo hardly remains an option, given the degree of criticism aimed at the current system. In my opinion, the ongoing review and adjustments to the extractive industry legislation in Tanzania necessitate a need for review and pause in BIT negotiations.

The writer is an Advocate of the High Court of Tanzania and Council Member of Tanganyika Law Society

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LEGAL PRACTICE

By David Sigano

Building leading legal brands in East Africa

F

or some time now I have been the convener of the East Africa Law Society Leading Law Firms’ Forum. This exclusive forum brings together East Africa’s best performing law firms, the International Bar Association, the European Lawyers Foundation, International Global Law Firms and Leading Global Business Executives under one roof to exchange ideas, network, create partnerships and generally take advantage of the illimitable benefits of globalization. It seeks to propel what were once medium sized law firms into the regional and global limelight. Laced with high quality entertainment, this interactive event sets itself apart as it creates the perfect balance between work and pleasure for delegates.

But what does it take to join this high table? My travels across East Africa, meetings with the Managing Partners and Business Development Managers of numerous law firms has given me an insight on what it really takes to run a successful legal practice and a leading law firm for that matter in the region.

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Most of the legal business leaders I met will tell you that in the modern legal environment it is not enough to be a good legal practitioner. The optimistic assumption that good legal practice skills will automatically attract clients and grow a legal practice is nothing less than a mirage.

To build a successful and reputable legal practice, you need to know the intricacies

of running a business, something that is never taught in law school. It is business acumen that will enable you to spot trends and react to them before the market, acquire and retain clients through a proper cocktail of interventions to their problems, manage staff properly and of course be an efficient controller of your firms’ finances.

LEGAL PRACTICE

Boutique Firms The first real step towards legal practice success is to lose the fear and ego factor.

Most small and medium sized boutique law firms pride themselves and are notoriously protective of their independence and autonomy in decision making. They never let anyone in; partners are carefully selected and areas to venture into are firmly debated upon before a decision is taken.

They restrict themselves and their ability to grow. Refusal by many law firms to enter into strategic alliances, consortiums or even mergers has in more instances than one led to the ultimate negative tale of client loss. The belief by lawyers that they are the best at what they do and that their ways are the best has led to many firms lagging behind in the scramble for the legal market share. To be truly successful, the ‘egotistical prick’ stance has to be thrown off the window and law firms have to accept to give up a measure of their independence in order to play in the global legal market place.

My experience also shows that most lawyers do not know how to market their businesses. They may be good at use of social media platforms, attend numerous networking events or run adverts in select publications; but this does not always translate into clients and there is a simple reason for it. They do not take time to get the right message in front of the right audience. They do not sufficiently demonstrate to the client why they need their products or service and why the client should really go for their particular law firm. Successful marketing is not the end of the road; the ultimate fulfillment comes if enquiries are turned into paying clients.

Owing to the effects of globalization, a firm may grow in leaps and bounds; however, if it does not re-engineer itself to take advantage of the global legal marketplace, then it may never truly attain regional

Owing to the effects of globalization, a firm may grow in leaps and bounds; however, if it does not re-engineer itself to take advantage of the global legal marketplace, then it may never truly attain regional and global appeal

and global appeal. Statistics point out that there is tremendous investment by companies outside their jurisdiction in the region. The same is true of multinationals and corporates moving in and setting foot in the attractive East African market.

Should East African Law Firms not have sufficient appeal to these corporates, then they risk losing out big time to international law firms who will fly in their experts to tie down deals that would otherwise have been undertaken by local law firms. The question then in the minds of most advocates would be how do I take advantage of globalization? How do I follow clients setting shop outside of my jurisdiction? What

about being front in the mind of global multinationals expanding into East Africa?

The best option here would be expansion beyond borders through establishing consortiums, strategic alliances and mergers with law firms outside one’s jurisdiction. In determining who to align themselves with, Law Firms should consider factors like the core values of the allied firm as well as organizational culture.

Once expansion is attained firms must then build strategies for sustenance. This will include communication and learning how to handle differences of opinion and ego clashes in the now large firm. Channels of communication must be clear to allow teams in different jurisdictions to easily communicate, exchange ideas and discuss new opportunities. Partners retreat, new partners orientation forums and team building exercises must be consistently undertaken to ensure operational harmony.

Taking advantage of modern ICT infrastructure, for instance mobile IT platforms that allows lawyers easy access and exchange of information from wherever they are is a plus.

Proper client management systems and provision of continuous training opportunities are also concepts that cannot be ignored by any firm aspiring to have true professionalism and attainment of best performing status in the region.

The East Africa Law Society Leading Law Firms Forum is an annual event that seeks to build world class practice amongst East African Law Firms and thrust them into the global market by giving them a competitive edge and placing them in front of the queue in the minds of both local and international clients that are moving in or out of East Africa.

David M. Sigano is an Advocate of the High Court of Kenya and convener of the East Africa Law Society Leading Law Firms’ Forum

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TAX LAW

By Mugabi Matthew

Exchange of tax information: Challenges and prospects

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he East African Community EAC tax to Gross Domestic Product average stood at 13.1 per cent in 2014. According to the East African Community Facts and Figures (2016) Report released in November 2016 by the EAC (East African Community (EAC) Secretariat, this can be broken down as Burundi (12.3 percent), Tanzania (12.4 per cent), and Uganda (12.4 per cent) Kenya (16.5 percent) and Rwanda (15 per cent) respectively.

The same report ranks Kenya top of the intra-EAC trade in 2015 at USD 1,291.3M in exports and USD 409.5M in imports overall. Uganda ranks second at USD 909.9 and USD 673.9M, Tanzania, Rwanda and Burundi follow in that order.

This demonstrates the tremendous potential revenue in form of direct and indirect taxes that can be harnessed from the East African region. Sustaining and consolidating the gains made in the region will only possible if countries put in place mechanisms to ensure that taxes are levied where income is generated and value is created.

However, with the continued proliferation of aggressive tax avoidance and evasion schemes, the progress made by the EAC revenue administrations still remains under threat.

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Tax Evasion The solution to this is for the regional Governments, Revenue Authorities together with their mother Finance Ministries to do everything within their means both within their respective borders but more importantly as a regional block to join the global fight against tax evasion and illicit financial flows by strengthening cooperation on tax matters within the EAC. This cooperation can only be achieved through sharing tax-related information on taxpayers within the region.

Exchange of Information on tax matters is one of the most effective keys to protect any country’s tax base from erosion through the plagues of evasion and avoidance schemes. This is because informa-

tion gathering powers of the country are restricted to the geographical boundaries of the country. This limits the information available to Revenue Authorities about the taxpayer at the different stages of the taxpayer life cycle.

Modern day taxpayer planning approaches necessitate Exchange of Information as an ever-present and impactful tool in understanding taxpayer operations at different stages of the taxpayer life cycle.

The EAC is not short of the mechanisms through which, sharing of information on tax related matters can be achieved. Rather what remains a challenge for the EAC and its effective integration is the effective use of the existing mechanisms for Exchange of Information.

TAX LAW

The existing legal framework within the EAC necessary to facilitate Exchange of Information are embodied in the; þþMultilateral Convention on Mutual Administrative Assistance in Tax Matters. þþEast African Community Double Taxation Agreement. þþEast African Community Customs Management Act 2004 The EAC Countries are under a Customs Union and adopted the East African Community Customs Management Act 2004 in the administration of their customs matters. Within this Act, there is a provision for exchange of information to ensure prevention, investigation and prosecution of Customs-related offences.

This provides an opportunity for EAC countries to strengthen their border controls through sharing crucial information on schemes that present a risk to Customs revenue mobilization. With an effective mechanism that can track these information requests, and use of information, this ensures value-chain for this undertaking.

Gains Made The gains realized through co-operation within the EAC on customs matters are proof that there is need for a corresponding initiative on matters of domestic tax within the region. Within different countries’ domestic tax legislation, there is a provision that allows them to enter into international tax agreements. These may be in the form of Double Tax Agreements (DTAs), Multilateral Mutual Administrative Assistance Agreements (MAAs) or Tax Information Exchange Agreements (TIEAs).

The EAC Secretariat in partnership with GIZ - the development arm of Germany, have been working towards furthering the Exchange of Information mechanism in the region.

Through this partnership, the model EAC DTA was developed. This model provides for exchange of information. EoI Templates have been finalized and staff from

Modern day taxpayer planning approaches necessitate Exchange of Information as an ever-present and impactful tool in understanding taxpayer operations at different stages of the taxpayer life cycle.

jurisdictions. Also, Kenya has signed onto the MAC although the country is yet to complete the ratification of the agreement for it to come into force.

The other EAC member countries are on course to achieve the same status. Tanzania is already a member of the Global Forum and has undergone her Peer Review by the Global Forum member countries.

Other members will follow suit.

This shows that gaps that exist within the EAC both in terms of exchange on the international platforms but also with the fellow EAC partner States. However, it also presents an opportunity for EAC countries to draw lessons from each other regarding progress made in terms of implementation of an effective EOI mechanism that is up to the international standard.

Future Prediction

the EoI Units within the different tax administrations have been engaged and trained in this subject matter. What remains is to have the EAC DTA ratified by the remaining partner states to enable this initiative reach fruition.

Double Tax Within the EAC, Uganda has the largest treaty network for tax information sharing having signed onto nine Double Taxation Agreements (DTAs), two Multilateral Mutual Administrative Assistance Agreements that allow it to exchange information with 113 countries around the world and the EAC DTA that once operationalized will lead to exchange of information with the EAC. Kenya has signed 20 DTAs of which only 10 are in force according to the OECD GF Country Peer Review report, Phase 2 Implementation of the standard in practice of 2015. This means that Kenya can exchange tax-related information with 10

There are alternative avenues through which EAC member countries can grow their information sharing platforms and achieve a similar effect without necessarily restricting themselves to the EAC-DTA. This is through the ratification of the ATAF Mutual Administrative Assistance in Tax Matters (AMAATM) as well as the MAC. These agreements are already operational pending admission of more members.

Exchange of information for tax purposes has the potential to provide the crucial information to feed the tax compliance models of Revenue Authorities within the EAC and to grow the revenue baskets of the EAC exponentially. This initiative makes a case for cooperation on other tax initiatives like assistance in recovery of taxes and other joint tax initiatives to strengthen voluntary tax compliance.

Mr. Mugabi Mathew is an Advocate and Assistant Commissioner (Tax Investigations) at the Uganda Revenue Authority

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ADVERTORIAL

EAZZYBANKING APP:

A REVOLUTION IN HOW WE DO BANKING

I

t’s all in your hands… The EazzyBanking App is your Bank anywhere, anytime. Everything you do at the bank is now on EazzyBanking App.

Since its launch in October 2016, the EazzyBanking App has been a formidable player in the Kenyan mobile apps space – consistently ranking in the top 5 financial apps on Google Play Store since November 2016, and avails over 64 banking services to its customers.

Today, The App has over 300,000 downloads and transacted over 47B KES with over 30,000 daily active users securely sending money, buying airtime, opening Hapo Hapo accounts, paying bills and experiencing the convenient way of banking.

Equity Bank recently made a leap with the biggest EazzyBanking App update which is available for all to use and download on Android. Here are some features that are now new in the upgraded App; The App is open to download, install and activate for customers in Kenya, Rwanda and Uganda Improvements in speed and performance i.e. Favou-

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rites, Loans and Pay Bill being the biggest improvements.

Referral Programme - You can now recommend the app to a friend and also share your invite code for them to download.

You can now change account background and select from more options through a simple tap i.e. you can now update your profile photo before you log into the app, change your account background to a photo from your gallery, as well as view custom images based on your location – Kisumu, Nairobi, Mombasa for Equity Kenyan customers and Uganda or Rwanda for subsidiaries users Design improvements that give you a more personalized experience.

You can Register for PesaLink & make payments to your friends/family using PesaLink Has Improved security features

ADVERTORIAL

You can use your APP to securely view accounts, transfer funds, and check your statements, transactions, and summary in a graphical and intuitive way

Through the App, one can: MANAGE BANK ACCOUNT(S): You can use your APP to securely view accounts, transfer funds, and check your statements, transactions, and summary in a graphical and intuitive way. If one really needs cash just go the nearest Equity ATM or Equity Agent or an EazzyPay merchant offering cashback services and using the App withdraw cash.

TRANSFER FUNDS The App is interoperable allowing you to send money to other banks, and other mobile banking platforms like Airtel money and MPESA. You can also send a maximum of KES 1,000,000 a day to any Equity Bank, and a maximum of KES 500,000 per day to other banks.

MAKE PAYMENTS Customers can now pay for goods & services bills – Zuku, DSTV, eCitizen, KQ & JamboJet ticket purchase, electricity, water

etc. straight from the App. Simply look out for outlets with an EazzyPay sign at shops, supermarkets, airlines, petrol stations, hotels and online. The App ‘remembers’ your recent payments and you do not have to write numbers down. You can also look up the billers or merchants from the phone directory.

LOANS You can instantly apply and get an EazzyLoan (from 100 to 3M KES). If you are not sure of your limit, you can check your loan limit instantly as well as repay back your loan within the applied period.

SAVE Save for your future goals and much more

Uniqueness of the EazzyBanking App

þþFirst & only Banking App in Kenya to allow customizations of themes and personalisation þþFirst & only Banking app to have a direct integration between Telco SIM services and an App þþFirst & only Banking app with integrated ‘pay for goods and services’ using EazzyPay with nearly 30,000 merchants supported Download the EazzyBanking App from Google Play Store or the App Store today from any mobile network. If you do not have an Equity account, open one on the EazzyBanking App or dial *247# on your current line and open one hapo hapo/ instantly.

The EazzyBanking APP is revolutionizing banking. You need to download and use it to appreciate it. For more information, log onto http://ke.equitybankgroup.com/ eazzybanking/

þþThe App is a first in many respects: þþFirst & only Banking App in Kenya to use social media payments such as Facebook, Twitter and WhatsApp

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ALTERNATIVE DISPUTE RESOLUTION

By Barbara Kitui

A case for Alternative

DISPUTE RESOLUTION mechanisms

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f late, it is increasingly challenging to obtain expeditious justice using the formal justice system. This is greatly attributed to the legal animal called case backlog. Webster defines backlog as ‘an accumulation of tasks unperformed...’ We can safely define case backlog as the accumulation of incomplete suits in the formal justice system.

Why should I care about case backlog?

All I want is my case lodged in the formal justice system so that I can ‘teach my opponent a lesson!’ Wait a minute! Counsel, you need to care!

cates, corruption in the justice system, ‘disappearance’ of files, misplacement of files, litigious nature of society and limited number of judicial officers – the list is endless.

According to the Case Backlog Reduction Committee (CBRC) in Uganda, there are over 155, 400 incomplete cases in Uganda’s system. Of the 155,400 cases, 7,837 have spent more than two years in the court system. Case disaggregation includes: criminal (44 percent) civil (33 percent) land (14 percent) family (three percent), and commercial (two percent) - according to the CBRC Report, 29 March 2017.

It is against this background that I campaign for the use of Alternative Dispute Resolution mechanisms (ADR). ADR is a non-litigious method of resolving conflicts. There are several types of ADR including; mediation, conciliation, arbitration, and reconciliation. If lawyers in East Africa emphasised the use of ADR, the legal profession’s longevity will be guaranteed.

The case backlog situation is of great concern in East Africa. With additional evidence from Kenya and Tanzania, it is undoubted that case back log is a huge animal that needs to be tamed in East Africa.

In Kenya, by January 2017, case backlog stood at 490,000 cases. In Tanzania, it was revealed that there are over 2,807 old cases in the system and 575 cases were pending for over 10 years while the remaining 2, 292 cases were in court for over five years.

The benefits of ADR are numerous. The first being good health. Yes. Good health!

When lawyers employ ADR, the yokes that accompany litigation are unshackled.

ADR saves time and money, gives parties to the suit a chance to be heard, it is the quickest way to access justice and it also gives advocates the opportunity to create room for more business.

Backlog Causes Several factors cause case backlog. They include: endless adjournments by advo-

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During ADR, parties should ensure that they desist from, corruption, promote respect, be truthful and maintain confidentiality.

Going forward, we need to embrace ADR

and welcome Government interventions to address the case backlog animal. The legal framework is sufficient in most of our East African countries to promote ADR - where it is insufficient, lawyers should propose reforms.

In Uganda there have been interventions like case backlog programme, session system, mediation, small claims procedure, plea bargaining and the creation of new High Court Circuits, Divisions and Magisterial Areas (CBRC Report, 29 March 2017). These are lessons which can be replicated in East Africa – if they have not been. The discussion on ADR should not stop.

Now is the time to stop doing business as usual – do business unusual! ‘Discourage litigation. Persuade your neighbours to compromise whenever you can. As a peacemaker, the lawyer has superior opportunity of being a good man. There will still be business enough!’ (Abraham Lincoln).

Ms. Barbara Kitui is an Advocate. She holds a LLM (Human Rights and Democratisation in Africa), PGD (Legal Practise), and LLB(MUK).

COMPETITION LAW

By Vellah Kedogo Kigwiru

Enforcing

CROSS-BORDER competition law

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n 2006, the East African Community (EAC) Competition Act (Act) was enacted to promote and protect fair competition in the Community, provide for consumer welfare and establish the East African Community Competition Authority (EACCA). More than a decade later, the EACCA is not yet fully operational. However, during the swearing in of five commissioners of the EACCA in November 2016, it was recognized that given the high percentage of competition cases with a significant regional and international ramification, the need for establishment of EACCA was overdue.

Cross Border Competition As EAC takes steps to operationalize EACCA, it presents cross-border competition enforcement as an international focus area for legal practitioners within the region. The establishment of EACCA under the EAC Competition Act 2006, was informed by regional integration in increasing the geographical scope of doing business. However, regional trade agreements and establishment of regional markets can only be effective if the effects of anti-competitive conduct such as restraint trade practices, abuse of dominant position, abuse of buyer power and anti-competitive mergers and acquisition are taken into consideration.

As an international focus area, cross-border competition enforcement within the EAC presents a number of issues that legal practitioners will likely face in merger regulation and advising their clients on anti-competitive conduct that may lead to investigation. These issues include the likelihood of jurisdictional conflicts, conflicts of laws and conflicts that arise due to the absence of competition law or regime within its member states. While cross-border competition enforcement by the EACCA is seen as a tool to enhance

Issues include the likelihood of jurisdictional conflicts, conflicts of laws and conflicts that arise due to the absence of competition law or regime within its member states.

competition within the common market and enhance consumer welfare, potential jurisdictional conflicts between EACCA and its member States on one hand, and nested regional regimes such as Common Market for Eastern and Southern Africa (COMESA) and Southern African Development Community (SADC) on the other hand may undermine such a realization.

For instance, Kenya, Uganda, Burundi and Rwanda are members of both COME-

SA and EAC. Tanzania is a member of the SADC and EAC. This calls for the legal practitioners within the EAC especially on cross-border merger regulation to play a key role in determining what would happen in the presence of partly overlapping and nested legal regimes, even in the absence of divergence in laws.

There is need for EACCA to determine how it will address jurisdictional conflicts between EACCA and CCC. This can be done through cooperation and mutual agreement. EACCA should learn from the challenges that CCC has faced since it became operational in 2013. For instance whereas it was anticipated that CCC would be a one-stop shop as its counterpart the European Union Competition Commission, the lack of clarity on whether CCC has exclusive jurisdiction has led to dual notification of mergers. The end result is increased merger costs such as filing fees, legal fees and costs of applications. It also increases time for assessing and approving mergers. There are risks that contradictory decisions have been issued by different competition regimes which makes investment less attractive.

Continue on page 44...

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REGIONAL INTEGRATION

By Mary Wangui Waititu

Corporates’ role in REGIONAL INTEGRATION

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he history of the East African Community (EAC) can be traced back to the construction of the Lunatic Express in 1896. The Lunatic Express, also known as the Kenya-Uganda railway, was a railway line that cost over GBP five million to construct and claimed the lives of over 2,500 men. The Lunatic Express was also the vehicle through which the British felt they could strategically position Kenya, Uganda and eventually Tanganyika to the rest of the world. The Lunatic Express, when completed, formed the socio-economic backbone of the entire East African region.

“It is not uncommon for a country to create a railway, but it is uncommon for a railway to create a country.” Sir Charles Elliot After the completion of the Lunatic Express, the British and eventually the citizens of Kenya, Tanzania and Uganda saw the benefit of working together as a community. The countries began laying the foundation of the ‘original’ East African Community (EAC).

Upon its formation in 1967, the EAC was lauded world over and most regional entities around the world, including the EU, modelled their entities around the EAC. “If you want to go fast, go alone. If you want to go far, go together.” African Proverb Although the benefits that could be associated with the integration of the EAC were rather obvious, the three countries dissolved the Community in 1977. The main reason given for the dissolution was lack of political goodwill. Despite this, many people still enjoyed benefits associated with the East African countries working together which, far outweighed the negatives and they rallied to ensure the revival of the EAC in 1999. The EAC currently comprises of Burundi, Kenya, Rwanda, South Sudan, Tanzania and Uganda.

Some proponents argue that despite the revival of the EAC, the common citizen is yet to feel it’s positive effects. They believe that the integration has been more theoretical than practical. What then can be done to ensure the positive effects of the EAC integration are being felt by the common mwananchi on the ground?

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In my opinion, corporates can play this crucial role.

lation and revolutionized the entire financial service sector.

There are two schools of thoughts on how corporates can do this. First, and current practice is that corporates depend on the respective Government agencies to provide business laws and regulations before investing. However, I am for the second school of thought which, opines that corporates should expand their investment across the EAC first as they engage respective governmental agencies in legislative drafting.

Individual Governments and existing EAC structures should adapt a similar approach to that of the CBK. By providing corporates with a regional platform to freely experiment and innovate within the existing legal framework, they could potentially come up with unique and innovative business models that will lead to the creation of new jobs, increased income and improvement of the economy of the region.

“Regulation needs to catch up with innovation.” Henry Paulson

There is a popular legal aphorism that states, “not only must justice be done; it must also be seen to be done.” In the same vein for the EAC – not only must EAC integration be done, it must also be seen to be done. Once the citizens of the EAC start feeling the positive effects of integration (creation of jobs, increased trade and/or income etc.) it will spill over and lead to the urgency in not only passing but ratifying and implementing laws and regulations that will govern the region.

A study by Deloitte titled, Innovation Leads, Regulation Follows highlights how policies and innovations being adopted by corporates are moving at rapid pace and also driving the regulatory agenda. Corporates no longer have the luxury of waiting for Governments to implement laws and policies. They must adapt faster to improve the delivery of products and/or services to their consumers.

When Safaricom Limited launched its mobile phone based money transfer service M-Pesa in Kenya in 2007, the Central Bank of Kenya (CBK) had no regulations governing mobile money transfer. The CBK adapted an ‘experiment first, then regulate’ stance and this helped M-Pesa grow and thrive. As of December 2016, M-Pesa had over 19 million active users who transacted over USD 10 billion (15 percent of Kenya’s GDP). As a result of CBK’s stance, M-Pesa was able to reach 31 percent of Kenya’s unbanked popu-

With a combined population and GDP of approximately 169 million and USD 439 billion respectively and growing, corporates should jump at this opportunity.

Mary Wangui Waititu, is an Advocate of the High Court of Kenya specialising in commercial law. Her practice mainly focuses on employment law, intellectual property law and corporate law.

REGIONAL INTEGRATION

By Provia Akinyi Odhiambo

EMBRACING infrastructure towards REGIONAL DEVELOPMENT

I

nfrastructure forms a pillar of every economic growth and most Governments invest heavily on infrastructural projects. In an effort to realise the objectives of establishing a sound economy, developed economies like China listed as key the development of infrastructure projects such as transport even in remotest of rural areas. Within the East African Community (EAC), infrastructure has remained a significant tool in deepening, integrating and mainstreaming domestic markets into a global trading space. This is enshrined in the Treaty for the Establishment of East African Community (EAC Treaty) which sets as an operational principles establishment of sound infrastructure within the EAC. Within the EAC, partner States (Kenya, Uganda, Tanzania, Rwanda and Burundi) have shown commitment to having functioning infrastructure projects such as the Standard Gauge Railway Project (the SGR Project) and the Lamu Port, South Sudan, Ethiopia Transport Corridor Projects (the LAPSSET Project.

Underlying the implementation of infrastructure projects within the EAC is the principle of variable geometry set out under the EAC Treaty. This principle is derived from the European Union’s (EU) principle of enhanced cooperation which, permits EU member States to use its systems to realize their development objectives through cooperation in the implementation of specific projects - even where such projects do not involve all member States provided that they leave room for other members to be part of the projects in future.

While there exists several infrastructure projects within the EAC, there are also challenges that paralyze implementation. Notably, while the SGR Project was a Northern Corridor Project, the modalities of its implementation require each partner State to fund its own line. Kenya has completed a large part of its line, while Uganda is yet to commence. Rwanda on the other hand is reportedly toying with the idea of pulling out of the project. Disputes over infrastructure projects have also been reported among the States with the most recent being the battle

Sound legislative and institutional frameworks are core to the successful implementation of infrastructure projects. on construction of the oil pipeline among Kenya, Uganda and Tanzania which resulted in Kenya being left out of the deal. The implementation of the LAPSSET Project hangs in the balance with uncertainties on the commitment of partner States to the successful implementation of the project. Rwanda has also on several occasions expressed reservations in dealing with Kenya.

Sealing loopholes Sound legislative and institutional frameworks are core to the successful implementation of infrastructure projects. While EAC partner States have signed pieces of legislation on infrastructure projects to include the SGR Protocol, 2013, the Northern Corridor Transit Agreement, 1986, the EAC Model Investment Code and the LAPSSET Corridor Agreement, these laws are lacking in comprehensiveness in relation to implementation mechanisms.

The other challenge in the implementation of EAC infrastructure legislation is the principle of respect for sovereign rights which, demands a reliance on the goodwill of partner States on compliance with obligations under regional instruments. This approach places in the hands of States extensive discretionary powers to choose whether or not to comply as a result of which compliance is only realized when it is convenient.

Financial Implications Importantly, infrastructure projects by their nature are large scale projects with huge financial implications that ought to carry a high level of commitment. To realize commitment, there is need for a comprehensive legislative framework that sets out mechanisms of implementation of infrastructure projects with compliance requirements and repercussions for failure. Secondly, an independent regional monitoring authority with guaranteed statutory powers should be instituted to undertake and oversee implementation.

Provia Akinyi Odhiambo is an Advocate of the High Court of Kenya who holds an LL.M in Regional Integration and EAC Law.

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REGIONAL INTEGRATION Lumumba Fleming Omondi

Why the EU-EAC Economic Partnership AGREEMENT UNDERMINES REGIONAL INTEGRATION

T

he EU-EAC Economic Partnership Agreement (EU-EAC/EPA) is a legally enforceable bilateral agreement between the European Union (EU) and EAC partner States. Once executed, EU-EAC/EPA warrants that partner States’ market should be open to EU goods and services gradually. In the EPA negotiations, the EAC partner States have excluded many agricultural products and sensitive industries from the adverse effects of EPA’s market liberalization. However, the opening of EAC market prematurely will affect the partner States’ agricultural and non-agricultural products as they will find it difficult to compete with the most likely cheaper, and perhaps better quality goods and services from EU member States. In the recent months, EAC partner States remain hard-pressed to sign the EPA or risk withdrawal of preferences that they presently enjoy.

Negotiation Issues The EU is keen on concluding a fair and balanced EPA with EAC. However, important issues to this trade relationship neither addresses how EU-EAC/EPA affects intra-trade nor global trade. In its place, the EU-EPA/EPA is limited; only having direct signifi-

40

cance to the trade and investment regimes of the partner States engaged in negotiation. Such negotiations focuses on market liberalization levels which do not impend the prevailing activity or improvement of new pursuits. In this instance, EAC partner States, especially, Tanzania, Uganda and Burundi must be lauded for efficacy at defending their own interests in the absence of

REGIONAL INTEGRATION

a countervailing force to repel European flatteries. Other EAC partner States have been made to believe that they have no alternative other than signing the EPA or face withdrawal of preferential access to the EU market - for instance, Kenya and Rwanda. In resorting to this, the EU has gradually fastened the bolts; frightening to not only withdraw special least developed countries’ preferences available under EUACP programmes, but also withholding generalised system of preferences benefits from more advanced EAC partner States economies like Kenya.

Under the conditions, partner States holding-on to more mutually beneficial agreements deserve special credit. Regularly, what both EAC and her trading partners ought to have given prominence is the outstanding obligations by the Most Favoured Nation principle (MFN), that require EPA parties to confer on the EU any trade concessions negotiated with EAC’s other major trading allies; to negotiate trade agreements with other trading allies unless the provided trade concessions are not included in the EU-EAC/EPA. Even so ,EPA benefits do not provide the necessary structural protection measures required to cushion EAC Partner States’ economies from the negative impacts of trade concessions.

Fundamental Flaws Notwithstanding the prevailing individual partner States’ economic status, EAC partner States continue with EPA negotiations on a temporary basis. To date, individual EAC partner States have negotiated and executed EPA with the EU but with minimal or no coordination but to the exclusion of other partner States. It was expected that the negotiations were to be conducted as a trading bloc. This therefore, leaves many unresolved issues amongst the partner States and the EAC as a trading bloc. Such unresolved issues include the reciprocity demanded in the EU-EAC/EPA which, flies in the face of non-reciprocal Least Developed Country provisions in the World Trade Organisation (WTO).

To date, individual EAC partner States have negotiated and executed EPA with the EU but with minimal or no coordination but to the exclusion of other partner States.

Broadly, the application of different rules within each EPA as well as to the different EU trade regimes governing non-signatories [Everything But Arms (EBAs), and GSP among others) generate insurmountable impediments to the achievement of regional economic integration, which is even now, an arduous task undertaken by the African Economic Communities (AECs) such as the Tripartite Agreement between COMESA, the EAC and SADC as central partners.

It is also important to emphasize that the above-mentioned impact on third parties desiring similar access to EAC market as may be afforded to the European Union under the EU-EAC/EPA. It is glaringly clear that there is absence of collegial discourse amongst the EAC partner States on EU-EAC/EPA. This is evident as the Agreement has only been signed by Rwanda and Kenya. The rest of the partner States are yet to sign, preferring further

negotiations. Worse still, an agreement has not been reached as to how EAC partner States should deal with EU and other EAC’s major trading allies. Other than the EU, some of the major EAC trading allies are increasingly becoming important, for instance, China, Asia and USA, as they not only trade with various partner States but also offer development assistance. This is even becoming difficult in the face of Brexit negotiations. This clearly go against the spirit of the Treaty Establishing the East African Community and its enabling Protocols on Trade, in particular, Articles 5 (1), and 75 (k), which require a coordinated approach and cooperation in the trade policies of the EAC partner States especially when engaging with third countries for the purpose of negotiating preferential trade agreements.

While focusing on the EU-EAC/EPA, the EAC must be worry of the region becoming increasingly vulnerable to comparable pressure from the very third parties to the EU-EAC/EPA, who would not deem it in their national interest to allow their exporters to be competitively disadvantaged by the said Agreement. For instance, the first EU-EAC/EPA ‘casualty’ could, in effect, be augmentation of the Africa Growth Opportunities Act (AGOA). Prior to the extension of the AGOA, the U.S government had been called upon to proactively work on thwarting EPAs from discriminating against her exports.

Way Forward With support from other AECs, the EAC should put concerted efforts in obtaining the extension of the arbitrary deadlines set by the EU. In most instances, the arbitrary deadlines as set by the EU do not take into consideration the peculiar circumstances and challenges faced by each EAC Partner State. In fact, the EU-EAC/EPA deadlines do not take the requirements for genuine negotiations nor progress being made within the trading bloc towards creating the necessary business environment for mutual beneficial outcomes into consid-

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REGIONAL INTEGRATION

By Paul Kamau

East African Integration:

LESSONS FROM EUROPE

T

he story of the successes and challenges of the European Union is a rich repository of ideas that can be helpful in charting a firm and secure path for East African integration. Though other examples such as COMESA exist, the success story of the European Union (EU), from a Customs Union to a ring-fenced Internal Market offers the best learning experience by far.

The journey to a European Single Market began with a desire to realise the benefits of the economies of scale in the manufacturing and marketing of goods. That initial endeavour has, with time transcended its parochial objective and become both an economic and socio-political engine of mutual development in most of Europe.

The European single market was founded on four concepts: the free movement of persons, services, goods and capital as guaranteed under Article 3 of the Treaty for the Functioning of the European Union (hereinafter TFEU) and the freedom of establishment under Article 49 TFEU. These concepts are now found also in the preamble to the Charter of Fundamental Rights of the European Union.

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Single Market According to Craig and De Burca (2011), the inception of the single market primarily aimed at the optimal allocation of resources for the EU by allowing the factors of production to move to the area where they are most valued.

Though those five concepts are essential for the proper functioning of the internal market, they would be worthless without the necessary regulation to ensure that national regulations accord with EU legislation. This must be what Pelkmans had in mind when he said that together with the five freedoms, regulation is the core business of the Internal Market.

Pre-1986 integration efforts were concentrated around legislative and judicial in-

tervention. The former entailed harmonisation of laws, but it faced two formidable hurdles: the requirement of unanimity

by Member States to pass directives and technical development. This meant that achievement of unanimity for directives drawn in great detail was difficult, and yet directives were quickly outpaced by technological development. This meant that the European Commission (the Commission) was involved in a game of ‘catch-up’ with technological advancement. To stem this tide, the European Court of Justice (ECJ) stepped in by Article 258 of the TFEU and direct effect, interpreting the Treaty so as to promote the single market.

In the Cassis De Dijon case for instance, the Court held that trade barriers were invalid even if they were not discrimi-

REGIONAL INTEGRATION

natory, unless they could be justified on certain limited grounds. This way, the ECJ borrows heavily from the commonwealth tradition, which affords flexibility and obviates a situation where Member States would engage the commission in a legal rollercoaster of sorts.

White Paper In 1985, the Commission came up with a White Paper, which recommended departure from harmonisation to mutual recognition and equivalence. It further recommended that Article 100 on harmonisation be limited to laying down of essential health and safety requirements, which would be obligatory in all Member States.

Another key pre-1986 development was the passing of the Single European Act (SEA) in 1985, which contained new procedures designed to facilitate legislation to complete the internal market.

In the period leading up to 2009, single market completion was predicated upon mutual recognition through the Cassis de Dijon principle and the Provision of Information Directive, which obliged a Member State to inform the commission before adopting any legally binding regulation setting a technical specification. In the CIA case, the ECJ held that a national measure that had not been notified in accordance with the directive was invalid.

It would appear that it is immaterial that the Member in question is unlikely to be affected by such impediment.

On the other hand, both the Commission and the ECJ have used mutual recognition as a strategy for attainment of market integration. The principle basically provides that a product lawfully manufactured in a Member State should be capable of being sold in any other Member State.

Though the completion of the internal market so far has largely succeeded in

achieving the objectives behind its inception, recent times have witnessed erosion of those gains. As Mario Monti points out, the cause of this has been the increasing political and social apathy to market integration.

The European Single Market is a model example of not only the benefits of integration but also the complexities of the mechanics that make it work. It is a model that the East African Community can borrow from to ensure that it offers complete integration as opposed to the love-hate relationship that existed between Member States in the defunct East African Community.

Mr. Paul Kamau is an Advocate of the High Court of Kenya practising in Nairobi. LLM (Liverpool), LLB (Nairobi), CPM (MTI- Africa).

... continued from page 41 eration. It is important that the negotiation deadlines be in tandem with EACs integration objectives. This will accord AECs adequate time and opportunity to conclude Continental Free Trade Area (CFTA) and African Customs Union as envisaged in the Abuja Treaty.

Enlisting support and services of its important trade allies who are likely to be disadvantaged by preferential access afforded to EU products at the expense of its own products, is an option for the EAC partner States. In any case, developed and developing countries are bound to mutually profit from economic groupings which are not burdened by customs regulations as various multinational company can operate optimally.

Its noteworthy that if other partner States were to accede to the EU-EAC/EPA in its current state, not only will the EAC’s integration agenda be threatened , but also,

the economic growth of EAC’s small and landlocked countries.

The threats by EU of withdrawal of preferences must be seen for what it is. Even though, its intention is to arm-twist EAC partner States into signing the Agreement, it will undermine EAC’s economic stability while hurting the European investors, producers as well as consumers. It is incumbent upon the EAC partner States to spearhead efforts of gaining approval among its trade allies to ensure that its Partner States are treated as one unit when it comes to trade preferences. This is the essence of a trading bloc.

Since the extension of AGOA has been realised, LDC preferential programmes should be rationalised. Alternatively, the African Union’s (AU’s) ultimate goal for a Common and Enhanced Trade Preference System for Least Developed Countries (LDCs),and Low Income Countries (LICs) ought to be ratified. Each will lead the EAC Partner States on a much more solid pathway to regional integration without the negative consequences of premature EU-EAC/EPA. In the long run, the EU-EAC/EPA is fatally flawed since it uses a divide and rule tactic with EAC Partner States.

Mr. Lumumba Fleming Omondi is a Partner, Lumumba & Ayieko Advocates, Nairobi, LL.M (UDSM), Dip. In Law (KSL), LL.B (Hons) (KU), Advocate of the High Court of Kenya, Adjunct Lecturer, International Law Department, Kenyatta University, School of Law.

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REGIONAL MARKET

... continued from page 9 Winkelhof) on whistleblowing by partners in law firms. Both developments raise important issues on the anti-bribery and corruption policies of firms. Still looking at risk management there is an increased use of LLP’s as a business vehicle and this presents another “novel” way to manage liability. Hiring strategic consultants often non-lawyers presents a new risk as these consultants are often exposed to a firm’s data and few firms have even basic requirements for such consultants to sign an NDA for instance. Internal communication in firms is still top heavy at the partnership level which means that there are groups in firms that have little knowledge of firms’ values and policies – leaving a gray area on how this group presents or deals with risk.

Globalisation is a reality and it would seem East African practitioners are not prepared for it. From a purely Kenyan focus, the present statutory framework

regulating practice in Kenya can no longer address the changes occasioned by globalisation. There is a strong need for local firms to become globally competitive and to start working at a local and regional level with Bar Associations to respond fast to the challenges and opportunities of a world without borders. It is useful here to look at the East, particularly in China where many international firms have downsized or moved out altogether due to competitive challenges and restrictions on branding. Further afield in India – a 2009 ruling issued by the Bombay High Court prohibits U.S and other foreign law firms from establishing offices in India. It is the responsibility for each country to empower its citizenry (whether by naturalization or birth) to acquire sufficient skills to meet the country’s demands and the expectation of their roles in interacting with other countries. Firstly, we need to first address the proverbial “elephant in the room” -

... continued from page 37 Legal Conflicts Conflicts of laws occur where laws and principles differ. Due to the varied motives of adopting competition law within the EAC, contents will likely differ. For instance, Kenya is the only country not only in EAC but also in Africa which has prohibited abuse of buyer power informed by challenges facing its retail sector. It is notable that, enforcement of regional competition law can only be effective in the presence of a strong domestic competition law and institution framework. In addition to jurisdictional conflicts and conflict of laws, Uganda and South Sudan do not have in place competition law and agency.

The need for legal practitioners to focus on cross-border competition enforcement

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is now inevitable. The increase in globalization, technological advancement, trade liberalization and inward foreign investment continue to internationalize competition within Africa. The absence of a global competition regime, means that regional competition regimes shall be a key medium in enforcing cross border competition. Legal practitioners will play a key role in the enforcement of regional and national competition law within the EAC through provision of legal advice to clients, Government and EACCA. In addition, they provide technical expertise and advice on adoption and harmonization of competition laws and regimes.

Jurisprudence Legal practitioners need to understand the

even with increased international law firm activity, we are still not opening legal practice within the regional economic blocs with a view of African countries being capable of allowing their professionals to operate within the continent and beyond.

This is as a means of driving commercial relationships if ever the expectations of the continent in the future growth areas are to be achieved. It is noteworthy to point out however that some international clients are beginning to instruct local firms directly, a positive trend indeed.

In conclusion, a notable quote from Abraham Lincoln goes, “If you are absolutely determined to make a lawyer of yourself, the thing is more than half done already.”

Similarly, it is only by sheer determination that East African firms can respond to these and other trends while working hard to stay relevant and build profitable and resilient practices, in and out of season.

Mr. Oraro SC is a Senior Partner,Mr. Odera a Managing Partner, Mr. Walter Amoko a Partner while Ms. Olivia Kiratu a Business Development Consultant at Oraro & Company Advocates

laws, gaps, shortcomings and how to apply regional law visa vis national law. There is need to develop jurisprudence in competition regulation and enforcement. Regional competition regimes should enhance information sharing and confidentiality.

While the discussions on full operationalisation of EACCA are ongoing, legal practitioners must be at the forefront addressing likely challenges that would arise.

EACCA and CCC must have in place actual agreement on how they will cooperate and have in place a simplified process of a one-stop shop.

Vella Kedogo is a Young Professional at Competition Authority of Kenya and Advocate of the High Court of Kenya. Holds LLB and LLM (UON).

REGIONAL TRADE Dorcas Wamaitha

Economic Partnership Agreement between the European Union and the East Africa Community:

FEASIBILITY, OPPORTUNITIES AND CHALLENGES

A

ccording to the European Commission’s Directorate-General for Trade, the East Africa Community (the EAC) and European Union (the EU) share strong trade links. Notably, the EU is the EAC’s first trade partner for exports and third partner for imports. Recognizing that substantial investment is required to foster the smooth and gradual integration of the African, Caribbean and Pacific States (ACP) into the world economy, the EAC and the EU finalised negotiations for a comprehensive region-to-region Economic Partnership Agreement (EPA) on 16th October 2014. As at June 2017, all EU member States and the EU had signed the EPA. However, for the EAC member States, only Kenya and Rwanda had signed the EPA, with the other EAC Partner States being engaged in negotiations with the EU as late as September 2017, led by the current EAC Chair, Ugandan President Yoweri Museveni.

Economic Growth

Export Subsidies

The EPA seeks inter alia to contribute to economic growth and development through the establishment of a strategic trade and development partnership consistent with the objective of sustainable development. It is largely regarded as balanced and fully in line with the EAC Common External Tariff, which sets out the rates for specific goods as agreed by the EAC’s Customs Union Partner States. The EAC reckons that the EPA seeks to ban unjustified or discriminatory restrictions on imports and exports, which contributes to the EAC’s efforts to eradicate non-tariff barriers in intra-EAC trade. In addition, the EPA supports the EAC’s regional integration agenda and with significant measures aimed at fostering development.

It has also been noted that while the EU has committed to remove export subsidies, there are numerous domestic measures applied by EU countries that unfairly advantage their goods in the global market, particularly in relation to EAC goods. For example, the EU is often accused of following very protectionist trade policies in agriculture, where developing countries have most of their comparative advantage. Accordingly, from an EAC perspective, the competition on price is lost as soon as the buzzer sounds, as EAC countries are unable to offer comparable domestic support.

However, the EAC bloc has been of the view that the EPAs as currently drafted, will not foster strategic industrial development in the EAC. It has been noted that at present, approximately 65 per cent of EU imports to the EAC are zero rated for duty purposes.

This offers a stiff challenge to local EAC industries wishing to compete with these imported machinery. Further, the EAC is negotiating for any commitment by the EU to support structural and infrastructural development to be of a binding nature to the EU for EAC Partner States to pivot this key advantage over the 25-year EPA term.

In April 2017, The East African reported that the United Nations Economic Commission for Africa (UNECA) had opined that if the EPA is signed, local industries will struggle to withstand competitive pressure from EU firms while the region will be stuck in its position as a low value-added commodity exporter.

Free Access In 2015, the EU continued to grant 100 per cent duty free, quota free access (DFQF) to its market for all imports from EAC member States pending signature, ratification and application of the EPA. It was EU’s intention that once the EPA enters into force, DFQF access would be granted under the EPA with immediate effect. However, in October 2016, the Market Access Regulation’s benefits, to

those countries that had not taken the necessary steps towards ratification of the EPAs concluded with the EU, were withdrawn. To this end, the EAC region has in the recent passed experienced concerted diplomatic tactics from the EU pushing for a signature of the interim EPA. In fact, it has been opined that the EU should withdraw its threat to limit access for exports from the region so that the discussions can be held in good faith. Secondly, the region must ensure it has the capacity to persuasively bargain for its own interests bearing in mind the economic strategies that each region is in pursuit of. Moreover, the competitiveness of the EAC industry is much more complex and lies in the ability of the local producers and the governments to address the multidimensional challenges including; barriers to trade, lower transport and communication costs, more value addition for products so as to remain competitive with other producers accessing the EU market without preferences.

In summary, whilst the EPA provides the basics, its full potential can only be realised through the private sector’s ability to adjust and adopt new approaches to foster competitiveness and Governments’ readiness to implement strong, coherent and ambitious economic and social policies.

-Ms. Dorcas Wamaitha is a lawyer at Anjarwalla & Khanna Advocates. She advises on Kenyan corporate and tax law.

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LEGAL ETHICS

By Dr. Simeon P. Sungi

Reflections on

CROSS-BORDER LEGAL PRACTICE “…Staying with your principles even if holding on to your principles won’t promote your advancement or at times may bring your grief and make you unpopular … holding on to who you are and being yourself at all times as best you can … strikes me as being at the heart of integrity …”

John D. Feerick, Professor of Law and former Dean, Fordham University School of Law (2003).

T

he debate about the viability of cross-border legal practice in East Africa has overly focused on the arrangements of the practice, such as admission of advocates requirements, academic credentials, to mention a few, at the expense of the most important aspect of legal practice – legal ethics and professional responsibility. Legal ethics is a term that is used to describe a code of conduct governing professional behavior. These rules establish the nature and obligations due to persons and to the society as a whole. The East African Community Cross Border Legal Practice Bill, 2014 defines the term cross border legal practice to mean “professional activities of an advocate enrolled in one Partner State that are rendered in another Partner State, whether or not the advocate is physically present in that other Partner State.”

Since the legal profession is the gatekeeper of a free and democratic society upon which justice grounded on the Rule of Law should thrive, where respect for the dignity of individuals is realized, legal ethics should be the blueprint in guiding a lawyer as s/he performs his or her duties to society.

This essay emphasizes on the importance

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of legal ethics and professional responsibility and the risks associated with placing legal ethics in the back burner on the debate relating to cross-border practice in East Africa.

The reality is that each Bar Association in the East African Community Partner States has developed its own set of ethical codes that regulate the conduct of ad-

vocates. The question arising out of cross border legal practice is what ethical rules and whose ethical rules would be applicable in the event there is a breach of legal ethics. The essay highlights three broad areas of consideration where clear guidelines must be developed: conflict of interest rules, confidentiality rules and solicitation and advertising rules.

LEGAL ETHICS

Conflict of Interest Rules The legal principle that an advocate should not act for two or more clients whose interests may potentially conflict is a known ethical principle. This is an area that could potentially raise a panoply of ethical legal issues as it relates cross border legal practice. Since cross border legal practice entails practicing law in multiple jurisdictions the representation of clients may potentially raise concurrent conflict of interest issues. There are two schools of thought as it relates to how issues of conflict of interests in legal practice should be responded to: one, advocates could be prevented from acting where a conflict of interest arises and two, issues of conflict could be controlled by appropriate rules.

The International Bar Association (IBA) International Principles on Conduct for the Legal Profession (2011) states that a conflict of interest exists if “there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client, a third person or by a personal interest of the lawyer.” Comment 3.3 observes: The differences in national rules on conflicts of interest will have to be taken into account in any case of cross-border practice. Every lawyer is called upon to observe the relevant rules of conflicts of interest when engaging in the practice of law outside the jurisdiction in which the lawyer is admitted to practice. Every international law firm will have to examine whether its entire organization complies with such rules in every jurisdiction.

Confidentiality Issues The differences in national rules governing issues of privilege and/or confidentiality between parties and their advocates may carry different expectations of what infor-

Every lawyer is called upon to observe the relevant rules of conflicts of interest when engaging in the practice of law outside the jurisdiction in which the lawyer is admitted to practice mation should be considered privileged or confidential. A good example is when a multination company is represented by advocates licensed to practice in different jurisdictions. Some authors have suggested that it may be difficult to promote universal or transnational rules governing legal privilege and confidentiality because it may be challenging to enforce binding transnational rules (Heitzmann, 2008).

Solicitation & Advertising Rules The Advocates’ Acts of the majority of the Partner States prohibit some or any form of advertising. However, advertising by advocates in other jurisdictions that allow the practice, provides the public with essential information about the availability of legal services. Whereas, solicitation (ambulance chasing) is a prohibited practice in most jurisdictions, advertising by advocates remains a practice that bar associations in the East African Communi-

ty have been debating. Cross border legal practice with the East Africa and the anticipated legal service may necessitate such rules to be contemplated.

Conclusion The train has already left the station, in my view, as it relates to the importance and the significance of cross border legal practice in East Africa. Some jurisdictions within the Partner States are attempting to hold back this reality, but they won’t be able to for a long time. The realities of global trends such as the closer economic and political ties between countries and the information communication technology revolution that has allowed the transfer of goods, capital and services across the world makes cross border legal practice a reality. What is imperative is to think about how we can deal with ethical legal issues that arise from cross border legal practice.

Dr. Simeon P. Sungi (PhD, MA, LLM, LLB (Hons) is an Associate Professor in Criminal Justice at the United States International University-Africa. He is also an Advocate of the High Court of Tanzania and the High Court of Kenya. E-mail: ssungi@usiu.ac.ke

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GENDER EQUITY Elias Kibathi

Closing the global

GENDER PAY GAP A

rticle 121 of the EAC Treaty obligates member States to take such measures that shall eliminate prejudices against women and promote the equality of the female gender with that of the male gender in every respect. It is against this background that all member States have legislated progressive labour laws promoting non-discrimination at the work place and indeed equal remuneration for work equal value irrespective of gender.

Equal Opportunity

The Kenyan Employment Act, 2007 provides the basic standards of Employment in Kenya. On matters of discrimination in employment, Section 5 (2) provides that an employer shall promote equal opportunity in employment and strive to eliminate discrimination in any employment policy or practice. It further unambiguously provides that an employer shall pay his employees equal remuneration for work of equal value.

Similar provisions can be found in Section 6 of the Ugandan Employment Act, 2006.

The Employment and Labour Relations Act of the United Republic of Tanzania goes further to stipulate that it shall be an offence to discriminate an employee on the basis of sex, gender, pregnancy, marital status and more. For the avoidance of doubt, the both Acts require employers to guarantee equal remuneration for men and women for work of equal value. The Labour Code of the Republic of Rwanda, at Article 84, also requires employers to pay employees equal salaries irrespective of sex. Burundi has constitutionally prohibited discrimination on the basis of gender.

Equal Remuneration Indeed, all East African member States have ratified the International Labour Organisation Convention No. 100. Convention Concerning Equal Remuneration for men and women workers for work of Equal Value, 1951. According to the ILO, the principle of equal remuneration for work of equal value is intended to address the undervaluing, and subsequent lower pay, of jobs undertaken primarily by women, when those jobs are found to be as demanding as the different

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jobs undertaken by men.The principle thus contemplates the comparison of different jobs on the basis of their content. Accordingly, it is much broader than the notion of “equal pay for equal work”.

It would seem apt at this point to conclude that the law has spoken and thus the case is closed. But as with other issues of gender, the

Gender pay parity advocates ought first to create awareness and improve understanding on why closing gender gaps is important and then develop strategies to close them. law is rarely enough. It must be conceded that discrimination is not the only reason for the gender pay gap. Among the aspects that have been usually attributed to explain the gender pay disparities are the personal and job characteristics of women (age, education, experience, occupation, working time, job status, type of contract), the labor market structure (occupational segregation by gender, level of formality), and institutional, cultural and social norms and traditions.

According to one economic study, discrimination was only responsible 25% of the gender pay disparities. Longstanding Government efforts for instance in education will

also go a long way in bridging the gap.

Pay Disparity According to the World Economic Forum, it could take 170 years to eradicate the disparity in pay and employment opportunities for men and women. We cannot wait that long.

On average, women’s employment ratio is 25 per cent lower than for men, respectively at 53 per cent and nearly 70 per cent in most Sub-Saharan countries. Women’s’ earnings are a fraction of their male counterpart’s incomes in several African countries. Another report shows that women in employment is at under 40 per cent in Kenya, behind countries like Burkina Faso, Burundi, the Gambia, Ghana, Guinea and Sierra Leone where women engagement is over 80 per cent.

Gender pay parity advocates ought first to create awareness and improve understanding on why closing gender gaps is important and then develop strategies to close them. Focus should be made to increase the number of organizations committed to achieving gender parityand to come up with benchmarking tools, best practice exchange, multi-stakeholder collaboration and other solutions to accelerate this transformation.

National Human Rights Commissions also ought to monitor progress and issue reports on the gender pay parity issue.

As one international law firm put it, “gender parity is not a women’s issue, it is a business issue.”

Mr. Elias Kibathi is an Advocate of the High Court of Kenya and a member of the Law Society of Kenya.

LEGAL PROFESSION

By Deborah Nyokabi

Lawyers are the Last

BASTION OF THE RULE OF LAW

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he epitaph on the tombstone of constitutionalism in East Africa reads “Rest in Peace Rule of Law”. The Rule of Law is being killed by the rule of rulers. Commanders in Chief have become commanders in mischief devising extra constitutional mechanisms to water down democracy so as to irrigate autocracy. “Which of East Africa’s leaders will win the most repressive leader award for 2017?” asks Kenyan thinker Keguro Macharia. Suppression, oppression, and repression are the buzzwords amongst East Africa’s leaders in their quest to obliterate the rule of law and entrench the divine right of Kings.

Will of the People The Rule of Law dictates that the people are supreme while the rulers are subordinate. Current political dynamics in East Africa paint a picture where the will of the people is trounced by the will of rulers. In Kenya, the nullification of the Presidential Election by the Supreme Court has resulted in unprecedented attacks on the independence of the Judiciary. Police brutality has been meted to quell picketing and expression of divergent opinions resulting in the loss of lives including those of children. The incumbent is using a Parliamentary super majority to enact legislation to neuter the credibility of an already disputed electoral process.

Legislative Majority In Uganda, the Executive is using its Legislative majority to force a constitutional amendment to do away with the constitutional age limit culminating in brawls in Parliament. Opposition legislators who have expressed reservations to the amendment have been subjected to suspensions from the House, police harassment, arbitrary arrests, threats on their lives, and destruction of personal property.

Fatally Shot In Tanzania, Opposition leader and President of the Tanganyika Law Society, Tundu Lissu was fatally shot by unknown gunmen. There has been a crackdown on freedom of expression. Citizens are there to be seen not to be heard. In Rwanda, Diane Rwigara and her family have been sub-

jected to state harassment for what is seen in many quarters as daring to vie against the reigning president. Suppression of political opposition and independent media is the order of the day. In Burundi, impugned President Pierre Nkurunziza continues to cling to power resulting in anarchy and despair.

Power corrupts and absolute power corrupts absolutely. Clinging to power through abhorrent term extensions or rigged elections is the staple diet of East Africa’s rulers. One wonders why mortal beings think they can sustain immortal regimes. The Rule of Law irks them because there is no room for their ilk in constitutional democracies. Muzzling the Rule of

Law through instilling fear amongst the populace becomes the only way of holding onto power.

The doctrine of the Rule of Law asserts that every citizen including leaders is equally subject to the law and that individual and institutional behavior is constrained by the authority and influence of the law in society. Executive arms of Government in East Africa have clearly conspired to make the rule of law an exceedingly elusive concept. Legislatures mate with the executive to conceive unconstitutional laws. Judicial arms are threatened, intimidated, or paid off to participate in the threesome of impunity.

Continue on page 51...

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FINANCIAL LAW

By Phillip Karugaba and Tracy Kakongi

AGENCY BANKING TAKES ROOT IN UGANDA

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he Bank of Uganda recently released the Financial Institutions (Agent Banking) Regulations, 2017, effecting the 2016 amendments to the Financial Institutions Act, 2004 that introduced agent banking as a new delivery channel for offering banking services. The Regulations provide a framework for offering agent banking services.

Agent banking is the conduct, by an approved person, of financial institution business on behalf of a financial institution.

the Central Bank that the proposed technology platform to run agent banking is capable of processing instructions issued electronically in real time.

Under the Regulations, a financial institution is required to obtain approval from the Central Bank to provide agent banking services. The financial institution must furnish the Central Bank with the strategy for agent banking, including the number of agents per district for a 12-month period, the services intended to be provided through the agents, and the draft agency agreement between the financial institution and the agent.

Due Diligence

The financial institution must have structures in place to support agent banking.

These include a management policy of the agent network, an agent training and supervision policy, and a liquidity management and risk management framework.

The financial institution must also satisfy

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Financial institutions offering the service are required to conduct due diligence on every person appointed as an agent and also have agent selection due diligence policies and procedures in place. The Regulations prescribe the form for a financial institution to conduct a suitability assessment for its agents. The agent is required to have operated an account in a financial institution licensed by the Central Bank. It must have a licensed business, a physical address, and adequate and secure premises, and must have been engaged in the business for at least 12 months.

The agents are prohibited from using in their name the words “bank”, “financial

institution”, “financial intermediary” or any of their derivatives, unless permitted by law.

The Regulations set out prohibited activities. These include an agent offering financial institution business on its own accord, except where it is the agent’s principal business at the time of the engagement or rendering services not stipulated under the agent agreement. Others include carrying out a transaction where the system is down or in the customer’s absence; charging fees directly to customers, undertaking cheque deposits or encashment of cheques and distributing cheque books, debit cards and credit cards.

The Agreement The Regulations prescribe certain provisions that must be included in the agency agreement. One of the most significant is the requirement for a provision stating

FINANCIAL LAW

Continued from page 49... that the Central Bank can direct the termination of the agreement as it deems appropriate, despite it not being a party to the contract. The agent principal relationship is non-exclusive and under the Regulations the agent cannot be prohibited from conducting agency banking with other financial institutions.

Agent Eligibility Sole proprietorships, partnerships, companies, cooperative societies, microfinance institutions, and any other entity approved by the Central Bank are eligible to act as agents for financial institutions.

The Regulations prohibit financial institutions’ employees, affiliates or associates from conducting agent banking.

The Central Bank is required to vet and approve each person selected by a financial institution to act as its agent for purposes of conducting agent banking. Although the financial institution is required to ensure that its agents comply with the Regulations, the Central Bank maintains a supervisory role over the agents and has the power to request any information from an agent at any time where it deems it necessary, as well as the power to carry out an examination of the agent, conduct a special audit of the service, direct the termination of an agency agreement or direct the institution to take measures against the agent. The Central Bank also has the power to impose any remedial or administrative measures where a financial institution fails to comply with the Regulations. This includes, but is not limited to, suspension

and prohibition from engaging in any further agent banking.

Consumer Protection The Regulations provide for consumer protection mechanisms by setting minimum standards of customer protection and risk management for the identification of a customer. These include the requirements to issue a receipt or acknowledgment of the transaction, put in place proper signage indicating the parent bank, a list of services offered and a written notice that no charges or fees are levied at the agent location.

Anti-Money Laundering The Regulations require financial institutions to train their agents on anti-money laundering and combating of financing of terrorism, as provided for under the Anti-Money Laundering Act, 2013 and the Anti-Terrorism Act, 2002. It also sets limits for this purpose, which the Central Bank has the power to revise. In addition, the agency agreement should set out the anti-money laundering and counter-financing of terrorism arrangements, including a requirement to report suspicious transactions to the financial institution.

Branch network expansion in brick and mortar is currently a huge cost to financial institutions. The Agent Banking Regulations nearly offload branch expansion costs from the financial institutions onto willing third parties to serve as agents. If the success in Kenya is anything to go by, Uganda is set on a new, dynamic path in its quest for financial inclusion.

Mr. Phillip Karugaba is the head of ENSafrica Advocates in Uganda (pkarugaba@ENSafrica.com) while Tracy Kakongi is a legal assistant at ENSafrica

Role of Lawyers The connivance of Government branches in killing the Rule of Law begs the question: Who will rise to defend the Rule of Law in East Africa? The answer lies in Article 14 of the United Nations Basic Principles on the Role of lawyers. The Article stipulates that lawyers must uphold human rights and freedoms recognized by national and international law in promotion of the cause of justice. It is time for East African lawyers to step up and play their role as the last bastion for the rule of law.

State Excesses East African lawyers have to be at the forefront in condemning and quashing arbitrary executive action; challenging the constitutionality of rogue legislation, defending the independence of the Judiciary, and representing victims of state excesses. The call to defend the Rule of Law must be answered in a tripartite approach. It has to be taken up by individual lawyers, national Bar associations, and the umbrella regional East Africa Law Society.

No lawyer or Bar association can afford to be an island at this critical juncture. If we do not rise and defend the rule of law together, it will be too late for the rule of law to defend us. The Rule of Law cannot breathe its last when lawyers are still alive. If lawyers rise up to the occasion, the assassination of the Rule of Law in East Africa will just be an attempted murder.

Deborah Nyokabi is an advocate of the High Court of Kenya whose primary interests are human rights, constitutional litigation, advocacy, and legal reform.

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LEGAL JOKES

A

doctor and a lawyer were attending a cocktail party in Nairobi when a man approached the medic for advice on his persistent cough. The doctor prescribed syrup before asking the lawyer “I never know how to handle the situation when asked for medical advice during a social function. Is it acceptable to send a bill for such advice?”

The lawyer said that it was certainly acceptable before the doctor sent the man a bill. The next day, the lawyer also slapped the doctor with a fee note.

Two days later, the watchman finds a fee note from the lawyer demanding 350 dollars for consultation.

***

A recently admitted young Advocate who had taken over his old father’s practice in Bujumbura rushed home elated and found his dad reading the East Africa Law Society Magazine.

A lawyer’s dog broke loose and ran out of her manicured compound in Kigali and bit the neighbor’s watchman. The following morning, the watchman went to the lawyer’s up market office and asked, “If a dog running unleashed bites a man in a neighbourhood does the man has a right to demand compensation?” “Absolutely,” answered the lawyer.

“Then you owe me 100 dollars . Your dog unleashed and ran out of your compound and bit my leg,” the watchman said.

The lawyer writes an open cheque and hands it over to the complainant who dashes out of his office.

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***

“Dad, listen, you will not believe it. I have finally settled that old succession suit that bothered you for the past 35 years.” Shouted the young lawyer.

“Settled it!” “Why, you fool! We have been living off of that suit comfortably for 35 years!” *** A middle-aged man sat at a bar in Kampala, looked into his shirt pocket, and ordered a double scotch whiskey.

A few minutes later, he peeked into his pocket again and ordered another double.

This routine continued until after looking into his pocket, he told the bar man that he’s had enough.

The bartender said, “I’ve got to ask you what’s with the pocket business?”

The man replied, “I have my lawyer’s picture in there. When he starts to look honest, I’ve had enough.” *** A young lawyer who set up his private practice at the Central Business District in Arusha was anxious to impress potential clients. He picked up his landline phone when a visitor walked in and spoke into it,” Yes, I managed to transfer the property and have the title deed. I will complete the other conveyance after filing a case for the Cabinet Minister,” The young lawyer then turned to the visitor in his office and asked “What can I do for you?”

“Nothing,” replied the man. “I am from the Telecommunications Department and here to fix your disconnected landline phone.”

LEGAL JOKES

*** A day after a Judgment had been entered against his client, the lawyer rushed to the Judge’s Chambers panting and demanded that the matter be reopened, arguing: “I have fresh evidence that makes a huge difference in my client’s defence.”

The Judge asked, “What new evidence could you have?”

The lawyer replied, “My client has an extra 500 dollars and I just found out about it!” *** After winning a succession dispute, a lawyer had a bit too much to drink and on his way home rammed into the rear of a Mercedes Benz in Zanzibar. The lawyer got out of his car, staggered to the other driver, and said, “Boy are you in big trouble! I’m a lawyer!” The driver looked puzzled and replied, “No, you’re the one in trouble. I’m a High Court Judge.”

A couple of minutes later, his eyes fluttered open and he said, “You’re cute!” Well, the wife was disappointed because instead of “beautiful,” it was “cute.” She asked, “What happened to ‘beautiful’?” His reply was “The drugs are wearing off!”

***

***

Two litigation lawyers walked into a restaurant and ordered tea before the hearing of their matter shortly after 11am in Nairobi. They opened their brief cases, produced sandwiches and started eating as they discussed the mood of the court. The restaurant manager became concerned, strolled over and told them, “You can’t eat your own sandwiches in here!” The lawyers looked at each other, shrugged their shoulders and then exchanged sandwiches.

A woman was arrested for shop lifting.

When she went before the Judge, he asked her, “What did you steal?” She replied: “a can of peaches.” The Judge asked her why she had stolen them and she replied that she was hungry. The Judge then asked her how many peaches were in the can. She replied Five. The judge then said, “I will give you five days in jail.”

*** A lawyer was just waking up from anesthesia after surgery at a private hospital in Nairobi, and his wife was sitting by his side. His eyes fluttered open and he said, “You’re beautiful!” and then he fell asleep again. His wife had never heard him say that so she stayed by his side.

Before the Judge could actually pronounce the punishment the woman’s husband spoke up and asked the Judge if he could say something. The Judge said, “What is it?”

son is called an accomplice. When a person assists a criminal in breaking the law after he gets arrested, the person is called a criminal defense lawyer. *** A lawyer sat near the back at a funeral.

Another mourner arrived late and asked the lawyer, “Where are they in the service?” The lawyer gestured to toward the priest and replied, “He’s just opening for the defense.” *** Three women appeared in court, each accusing the others of causing the trouble that they were having in an apartment in Kileleshwa where they all lived.

The Judge, with Solomon-like wisdom decreed, “Okay, I’m ready to hear the evidence...I’ll hear the oldest first.”

The husband said, “She also stole a can of peas.”

The case was dismissed for lack of testimony.

***

****

When a person assists a criminal in breaking the law before he gets arrested, the per-

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ESSAY PRIZE

By Jill Obuchunju and David Sigano

THE EAST AFRICA LAW SOCIETY YOUNG LAWYERS ESSAY PRIZE COMPETITION

F

ollowing the success of the inaugural East Africa Law Society Young Lawyers Conference held in Dar es Salaam on 24th November 2016, the East Africa Law Society Young Lawyers Committee (EAYLC) sought to reinvigorate subsequent East Africa Society Young Lawyers Conferences by making them more participatory through innovative ways such as the 2017 Young Lawyers Conference Best Essay Prize Competition (the Essay Competition).

The purpose of the Essay Competition was to foster intellectual exchange of knowledge on legal issues affecting the East African region in addition to strengthening and revolutionizing the East African Law Society (EALS) by inviting young lawyers to provide innovative and home grown solutions to problems faced by EALS. The EAYLC Essay Committee consisting of representatives from the EALS member countries commenced work in June this year and wrapped up the process in October.

The Essay Committee selected two optional topics. One on the opportunities and challenges posed by the East African Community Cross Border Legal Practice Bill 2014 and the other on the merits and demerits of the proposal for non-payment of EALS membership fees and the implication of the proposal to the participants’ respective Bar associations.

The incentives for the winners of the competition comprise of travel costs, 2 (two) nights on full board accommodation and conference fee waiver for participation in the 2017 East African Young Lawyers Conference (EAYLC).

As a dealmaker, the top essays will be published on both the EALS website and blog.

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The Essay Committee was excited to receive such brilliant essays that it was spoilt for choice on who to select as the winners.

The Essay Competition further sparked great interest from many law students in various campuses across the EALS member countries.

For the inaugural Essay Competition, team Rwanda shone all through. Among the contestants, Geoffrey Kakuru, Musiimire Amanda Leah and Pius Ntazinda emerged tops!

With the awe-inspiring interest shown in this inaugural Essay Competition, the EAYLC is here to stay, and subsequent competitions can only grow bigger and better. The Essay Committee encourages

young lawyers to keep their ears etched to the ground for next year’s essay competition and not be left behind in this exhilarating journey!

It is the Essay’s Committee hope that the exciting array of ideas generated from the brilliant essays will be useful to the EALS and the larger East African Community for implementation.

The members of the Essay Committee are lauded for their conscientious work under the time constraints. Congratulations to our three winners from Rwanda!

• Geofrey Kakuru • Musiimire Amanda Leah • Pius Ntazinda

The Winners

Geofrey Kakuru

Geofrey Kakuru

Geofrey Kakuru

Musiimire Amanda Leah

Pius Ntazinda

PROFILE

By Isaac E.N. Okero and David Sigano

Icon of Courage:

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AN INTRODUCTION TO TUNDU LISSU

hen the history of modern-day Tanzania is finally written, it will be incomplete if there is no footnote about one man who has consistently stood against wishes of the authorities and in the process elevated himself to levels of a martyr amongst a youthful population of emerging leaders in the region. Hon. Tundu Antiphas Mughwai Lissu is to the Tanzanian Government what Martin Luther King was to merchants of impunity in the United States of America.

In Africa, good governance is rarely bestowed. It is demanded and defended by all well-meaning citizens’ through active participation in democratic processes as well as creation of decision making structures with acclaimed standards of laws and rules. If the culture of the Rule of Law is not cultivated and entrenched or is tempered with impunity and avarice, then democracy is reduced to an appendage of impunity and power-play. Hon. Lissu has emerged as a modern day defender of ideals of good governance and has curved himself out as an institution to keep the Government on check in a society where being outspoken is still seen as an act of courage.

As a patriotic citizen, lawyer and Member of Parliament from the opposition, Hon. Lissu has been at the forefront in championing for good and accountable governance in Tanzania. He has through unbending courage and irrepressible commitment put up a spirited fight against any perceived excesses of the use of State power and repression of the people. He has, using his position as an opposition Member of Parliament and President of the Tanganyika Law Society (TLS) continually spoken against blatant violation of political and civil rights.

Arrests and Detentions His outspoken nature has landed him in “trouble” more than once. In 2017 alone he has been arrested and detained a record six times. He has been accused of inter alia insulting the president and disturbing public order. On 23 August 2017 for instance,

Hon. Tundu Lissu with his wife recuperating in a Nairobi Hospital his home was searched by the police after he was arrested and questioned over allegations of sedition and insulting the Tanzanian President. This came after he publicly declared that a plane bought for the national carrier had been impounded in Canada over an unpaid government debt.

To Lissu, threats and intimidation are the fodder that converted into the driving force for the demand for change. Even after noticing people trailing him and a threat to his life, Lissu did not cower or run away. According to him, “we will only be quiet when we are dead.”His motto is, you can detain, torture or kill a reformer but you cannot detain their minds or ideas. This was exemplified by the likes of Patrice Lumumba, Kwame Nkrumah, Thomas Sankara, Julius Nyerere, Nelson Mandela, Tom Mboya among other vi-

sionaries who are all dead but their ideas are still alive and flourishing.

On the 7th of September 2017, there was an attempt on the life of this democracy and human rights icon. Lissu, a maverick in political and legal circles, was shot at and grievously injured by multiple gunshots to his mortal flesh. Just like his life in an ordinary day, he miraculously cheated death with tens of bullets pumped into his huge frame. He has since been subjected to a myriad medical procedures all aimed at giving him a chance at survival. If Lissu was already a well-defined oppositionist in the spheres of the United Republic of Tanzania, the September incident elevated him ten thousand feet high to the East African and continental platform. He has become a household name across the region.

Who is this man Lissu anyway?

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PROFILE

Formative Life Hon. Lissu was born on January 20, 1968 in Ikungi District, Singida Tanzania. He studied at Mahambe Primary School in Singida between 1976 and 1982 before proceeding to Ilboru Secondary School in Arusha. Endowed with intelligence several bars above average, Lissu was always an outstanding student. He joined Galanosi Secondary School in Tanga between 1987 and 1989 for his A-levels. He, predictably, qualified to join the University and was admitted for a Bachelor of Laws (LL.B) degree at the University of Dar es Salaam between 1991 and 1994. Upon completion he got admission to study for his Master of Laws (LL.M) degree at the University of Warwick in the United Kingdom.

Work Life and Beginning of his Political Career Upon completion of his Master’s Degree, Lissu was employed as an advocate at D’Souza Chambers where he worked for two years. Between 1999 and 2002, he was a researcher at the World Resources Institute (WRI) in the United States of America. It is here that his interest in passionately championing for societal causes was nurtured. He started off as a proponent of clean environment. Between 2002 and 2009, Lissu was a senior legal researcher at the Lawyers Environmental Action Team (LEAT) where he advanced the agenda of clean development mechanisms, sustainable development and safe use of natural resources.

Lissu’s early political activities began while he was still a law student at the University of Dar es Salaam. In 1992, Lissu joined and became a member of the National Convention for Construction and Reform (NCCR-MAGEUZI). An avid human rights defender, Lissu marked his entry into competitive politics with an unsuccessful stab at the Singida East parliamentary seat on the NCCR-MAGEUZI ticket in the year 1995 elections.

He continued with activism elsewhere, championing environmental conservation. He became a force to reckon with and a thorn in the flesh of then exploitative

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multinationals in the extractive industry in the early 2000s. In 2001 for instance, Lissu and a colleague were subjected to threats and intimidation for pursuing allegations that a group of artisanal miners had been buried alive to pave way for a multinational to carry out mining activities.

legal profession in a catch twenty-two situation as it is being perceived as a permanent opposition to the Government.

Through his work, Mr. Lissu has built a reputation as a prominent lawyer, fierce opposition figure and outspoken Government critic. His daily tirades and fierce stances against policies of President Magufuli have become a trade mark across news channels in Tanzania. Lissu has opened up opposition politics and redefined the role of opposition like never before experienced in Tanzania. It is possible to see why the Government of the day is increasingly agitated whenever he motions towards the press.

In recent times, the Government of Tanzania has come up with ambitious plans to tame the independence of the legal profession. While such attempts have been made in the past, recent events following the election of Lissu to head the Bar have shown that the Government’s plans can no longer be wished away. The Government has, for instance, proposed to scrap off the Tanganyika Law Society (TLS) in its present form and replace it with a Lawyers Registration Board (LRB) which shall be a department under a line ministry. In short, the regulation of the legal profession shall be a function of the Executive as opposed to the universal norm of self-regulation. According to a Government circular “Bango Kitita”, stakeholders have been invited to submit opinions in relation to the Government’s intention to table before the Legislature. a Bill for enactment of a law to regulate the legal profession in Tanzania.

Luckily, for the Bar in Tanzania, Lissu lives to continue fighting for an independent Bar

Legal Profession

Rebellious Life

Lissu has been an astute defender of the independence of the legal profession in Tanzania just as he has defended other public causes. It leaves no guess why a section of the public felt that his recent predicament could be related to his work in this area. It is without doubt that there has been interference with the independence of the legal profession in Tanzania in recent times which, Lissu has unequivocally spoken against. Lissu was elected by an historical majority of the members of the Bar to be their leader and has lived to their expectations.

Lissu’s “rebellious” life is a lesson and haunting rebuke to society’s demand of towing the line. It is a clear illustration of what society makes of those who place people above power, principle above profit and commitment above calculation. The story of Lissu’s unbending courage, irrepressible commitment and vision and putting up a spirited fight against power excesses and repression should inspire advocates in East Africa to now more than ever join hands in protecting this noble profession and remaining true to their oath.

His continued critical stance against government policies he perceives to be draconian has led to many asking where the line should be drawn between Lissu’s actions as opposition chief whip and actions relating to the bar association. It seems this warped dichotomy has at times placed the

We wish you a quick recovery Hon. Lissu.

In the year 2004, Lissu became the Chief Legal Officer of the Chama cha Demokrasia na Maendeleo (CHADEMA) Party.

His persistence in serving the party causes saw him elected to Parliament in 2010 representing Singida East. He was easily re-elected in the General Elections in 2015 where he also rose to the position of Opposition Chief Whip in Parliament.

Mr. Isaac E.N. Okero is the President of the Law Society of Kenya (LSK) while Mr. David Sigano is an Advocate of the High Court of Kenya and convener of the East Africa Law Society Leading Law Firms’ Forum.

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