Reviving Tradition: The Role of Customary Arbitration in Commercial Disputes
By Hon. Lubia Mercyline Nafula
Across many legal systems, customary and community‑based dispute resolution remain central to how individuals and businesses resolve everyday disagreements. In commercial contexts, these practices offer fast and generally acceptable outcomes and preserve the relationship of the disputing parties, compared to the formal processes, which are often rigid, time-consuming, and adversarial. Core characteristic of customary arbitration is that it is a community-based process where disputes are resolved by respected elders or local leaders, guided by cultural norms and communal values. These processes are typically informal, consensus-driven, and focused on restoring harmony rather than assigning blame.
This analysis draws on two concise lenses: legal pluralism, which recognises the coexistence of statutory, customary, and religious norms, and access‑to‑justice principles aligned with Sustainable Development Goal (SDG) 16.3, which emphasise affordability, timeliness, and public trust. Within this broader framework, experiences from Ghana and Kenya serve as illustrative case studies for integrating community-rooted practices into contemporary commercial dispute resolution in a principled and rights-consistent manner.
Ghana’s jurisprudence offers one of the clearest articulations of customary arbitration in a modern legal system. In Budu II v. Caesar & Ors., the court elaborated key elements that anchor the legitimacy of a customary arbitral process: voluntary submission by the parties, agreement to accept the outcome, observance of a fair hearing, and publication of the award (Budu II v. Caesar & Ors., 1959). These principles were later reflected in the Alternative Dispute Resolution Act, 2010, which expressly recognizes customary arbitration, including in commercial disputes, provided fairness safeguards are met. The Ghanaian model demonstrates how statutory clarity and judicial endorsement can create a coherent interface between community‑based mechanisms and the formal commercial economy, preserving cultural legitimacy while meeting legal standards.
Kenya provides a complementary example in which constitutional design recognises traditional justice mechanisms as part of the country’s broader dispute resolution ecosystem. Article 159(2)(c) of the Constitution obliges courts to promote alternative dispute resolution, including traditional processes. The Judiciary’s AJS Framework outlines a system-level approach that provides structure for how customary processes can support the delivery of justice. Recent High Court jurisprudence, particularly decisions on interim measures in arbitration and the adoption of arbitral awards as court decrees, signals an openness to non‑court outcomes where fairness, consent, and procedural integrity are evident (Dr. Samuel Thenya Maina v. Multiple Respondents, 2021; Safaricom Ltd. v. Abiero & another, 2024). Although these cases concern formal arbitration, they reveal a judicial posture that can guide the careful recognition of awards emerging from customary processes when similar standards of voluntariness and fairness are met.
Globally, several factors explain the resilience and continued relevance of customary arbitration in commercial matters. Its accessibility and low cost help reduce barriers for small traders and micro‑enterprises that often lack the resources to pursue formal litigation. Its legitimacy is grounded in shared norms and trusted community authority, leading to higher levels of compliance and satisfaction. Its emphasis on restoring relationships is particularly valuable in markets where long‑term commercial ties matter more than short‑term victories. And because remedies may reflect local realities and expectations, customary arbitration often achieves outcomes that feel more meaningful to the parties involved, thereby advancing the intent of SDG 16.3 to expand access to justice.
At the same time, the value of customary arbitration must be balanced with an honest acknowledgment of its risks. Variability across communities can produce inconsistent standards; minimum fairness guarantees are essential. Complex commercial disputes may exceed the technical capacities of community leaders, requiring clear referral pathways to formal arbitration or the courts. Gender and power imbalances can undermine the fairness of outcomes, particularly in patriarchal contexts where women or youth face structural disadvantages. Kenyan jurisprudence has recognised the need to account for such inequities in the distribution of benefits and burdens, a principle that should inform the design of customary processes in commercial disputes (Federation of Women Lawyers Kenya [FIDA] v. Attorney General & another, 2018).
These challenges point to the need for responsible hybrid models that allow customary and formal systems to complement each other. Practical design features include clear recognition criteria grounded in consent, impartiality, fair hearing, and documentation; modular training and accreditation for community arbitrators; gender‑responsive safeguards that promote equitable participation and protect vulnerable parties; workable interfaces between customary forums and formal institutions; and anonymised documentation to support learning without compromising confidentiality. Collectively, these principles ensure that customary arbitration can support, rather than undermine, national justice systems.
Women judges play a particularly influential role in strengthening the integrity of such hybrid models. Their leadership can help embed gender‑sensitive safeguards, expand inclusive participation, and promote ethical standards among both customary neutrals and formal practitioners. Their presence at the intersection of community, court, and policy spaces helps ensure that plural justice approaches remain grounded in fairness, equality, and respect for rights.
Ultimately, when designed thoughtfully, it is a practical resource that can widen access to justice for traders and enterprises while preserving social cohesion. The comparative experiences of Ghana and Kenya suggest that principled engagement, anchored in legal pluralism and people‑centred justice, delivers outcomes that are both efficient and trusted. For judiciaries and policymakers worldwide, the path forward lies in developing hybrid models that uphold procedural fairness, protect rights, and align with national and international commitments to equal justice for all.
References
1. Budu II v. Caesar & Ors., [1959] GLR 319 (Ghana).
2. Dr. Samuel Thenya Maina v. Multiple Respondents, [2021] eKLR (H.C.K.).
3. Federation of Women Lawyers Kenya (FIDA) v. Attorney General & another, [2018] KEHC 7130 (KLR).
4. Ghana. (2010). Alternative Dispute Resolution Act, 2010 (Act No. 798).
5. Judiciary of Kenya. (2020). Alternative Justice Systems (AJS) Policy and Strategy Framework.
6. Republic of Kenya. (2010). Constitution of Kenya, 2010 (Art. 159[2][c]).
7. Safaricom Ltd. v. Abiero & another, [2024] KEHC 15743 (KLR).
8. United Nations. (2015). Transforming our world: The 2030 Agenda for Sustainable Development.