Small and medium-sized businesses in Rwanda are still reluctant to file formal complaints arising out of commercial disputes through the small ckaims court despite the government putting in place to support small claims.
It is almost two years since the inception of small claims procedure to help the business community solve commercial disputes without the long procedure in commercial courts and ease doing business environment.
Since April 2018, only 224 cases have been litigated under the small claims procedure and is still low, according to officials from the judiciary, private sector and Rwanda Development Board RDB (RDB).
Enforcing contracts “The increasing use of small claims procedure affects the doing business assessment because it indicates that small claims courts do exist and are operational” Karim Tushabe the legal consultant and head of of the Doing Business Unit at Rwanda Development Board (RDB) told Rwanda Today.
The entity of small claims falls under the category of enforcing contracts which examines the time and cost to resolve commercial disputes and the quality of judicial processes in the doing business assessments by the World Bank.
In the 2019 Doing Business Report for Rwanda, small claims procedure earned 1.5 points out of 16 while the whole category of enforcing contracts earned 59.54 out of a possible 100. People who opt for small claims procedure have their business disputes under Rwf5 million litigated in less than 30 days but most cases are litigated within a week.
Under small claims procedure, lawyers charge not more than five per cent of the value of the amount claimed and claims for costs of witness, for example, do not exceed five per cent of the principal.
Currently, Ruhango and Busasamana primary courts in Southern Province are the leading in the country with 64 cases received under the small claims procedure followed by Kigali and Musanze courts with 32 and 22 cases respectively.
Deus Kayitakirwa, the Director of Advocacy at PSF, attributed the small number of users of small claims procedure to the existence of other internal mechanisms of solving business disputes amicably in the business community.
“There is a chamber of seven experienced business persons who are elected by fellow business people in each district to act as mediators in commercial disputes,” he explained.
Conventional mediation Mr Kayitakirwa explained that PSF has been “hiring arbitration firms to train the dispute resolution committees on mediation and that the service is free for the business community.”
However, Mr Tushabe at RDB criticised the conventional mediation at PSF as unaccounted for. “I have never got any statistics from the private sector on how many disputes are resolved within a certain range of time,” Karim said in an interview.
Mr Kayitakirwa told this paper that there are no statistics at country level but they are available at district levels.
Rwanda Today asked Charles Nkusi the chairperson at PSF Gatsibo District who counteds even commercial disputes that ad been mediated in his district.
Use of lawyers David Furaha the Senior State Attorney at the Ministry of Justice revealed that some people suggested removing the use of lawyers in the small claims procedure to make it easier.
“That is why the use of lawyers is optional in the procedure so that we do not violate the constitutional right of representation through the court system.”
Mr Furaha concluded that the reason the business community is not making use of the small claims procedure is because it is not that widely known by those who would have use for it.
People have been calling us for clarification after a communication we sent through the private sector, co-operative agencies and the Trade ministry.
This means that the business community did not know much about the procedure and would want to use it if they had more information.”