EMERGING AREAS OF PRACTICE in the legal profession

Introduction

Legal profession encompasses various areas of practice. While some law practice areas are suffering at present, certain practice areas are thriving. Below are some areas that are gaining traction, prompting a demand for legal professionals with experience in these areas:

1.0 Oil and gas

With the recent discovery of oil deposits in Turkana, oil and gas law is an emerging practice areas for lawyers. It is a new area of law and not many lawyers have specialized in it. Lawyers are needed in the formation of contracts and agreements between the Government, the national and international oil companies. Moreover, lawyers will be needed to ensure the necessary licences are obtained and the essential regulatory requirements have been met.

2.0 Mining

Acacia Mining recently reported that they had struck gold in Western Kenya.[1] This new discovery poses an opportunity for lawyers to venture into this area of law. Lawyers will be needed in drafting the contracts and ensuring the regulatory requirements have been met by the companies carrying out the mining.

3.0 Employment and Labor Law

Article 162 of the Constitution of Kenya, 2010 establishes the Employment and Labor Relations Court that specifically deals with disputes regarding wages, hours, unlawful termination, child labor, workplace safety, workplace injury and disease, family and related leave, pension and benefit plans, the right to unionize, regulations of and negotiations with union employees, sexual harassment, discrimination based upon race, gender, age, and disabilities, and Government civil service systems. The establishment of the Court has therefore expanded the scope practice for advocates in Kenya.
4.0 Alternative Dispute Resolution:

Many individuals and corporations are now opting for alternative dispute resolution mechanisms as opposed to litigation mainly because litigation takes a long time and as a result, the cost increases. It is now a popular means for dispute resolution. Lawyers should therefore explore alternative dispute resolution mechanisms such as arbitration and mediation.

5.0 Immigration Law

This is another emerging area of practice in Kenya. The area deals with legal issues and Kenyan policies relating to foreign nationals who come to Kenya on a temporary or permanent basis, including the associated legal rights, duties, and obligations of aliens in Kenya; the application processes and procedures involved with registration of foreign nationals who wish to become Kenyan citizens; as well as dealing with legal issues relating to people who are refugees, people who cross Kenyan borders by means of fraud or other illegal means, and those who traffic or otherwise illegally transport aliens into Kenya. Specialization areas include Asylum/Refugee Law, Business Immigration Law, and Criminal and Deportation Defense Law. An advocate practicing in one of such areas may work for the Government, a law firm, a community-based organization, or in-house for a company employing foreign nationals.
6.0 Sports and Entertainment Law

This area of law is more common in other jurisdictions. It is however gaining popularity in Kenya. This is as a result of a growing entertainment scene in Kenya and informed entertainers. Artists are now more aware of their rights. This law is related to intellectual property as it involves the protection of brands and music.

7.0 Real Estate Law

This emerging area of law generally involves anything dealing with real property (land). An attorney practicing real estate law may focus on contractual issues by drafting and reviewing contracts; litigation issues, such as determining the ownership of land in Court, challenging or enforcing easements, seeking to allow the specific development of property, or trying to prevent or alter a planned development of real property.

8.0 Cyber Security

The Senate Committee on Information and Technology withdrew the Cyber Security and Protection Bill, 2016 to allow the public more time to give their views on the proposed law.[2] Cyber security law is a new area of law arising as a result of advancement in technology and concerns as to cybercrimes and privacy. This is a niche for lawyers since many lawyers are not experienced or specialized in this area.

9.0 Health/Medical Law

The practice of health law encompasses many different disciplines. Lawyers in the field representing hospitals, physician groups, health maintenance organizations and/or individual doctors, can be in the private bar or at Government agencies. Moreover, Government health lawyers can investigate fraud, deal with medicare policy and compliance, or oversee public health policy or otherwise, guide clients through intellectual property, biomedicine, bioethics, clinical ethics and telemedicine issues.

10.0 Cross-border/International transactions

The world is becoming a global village with many international commercial transactions taking place. Lawyers are needed in drafting contracts, ensuring compliance with the different laws involved and solving disputes that may arise.

11.0 Corporate and Securities Law

This is an emerging area of law in Kenya that helps corporate lawyers advise clients on proper conduct of clients’ business affairs in a manner that is efficient and consistent with the law. Moreover, it helps corporate lawyers in preparing initial articles of incorporation of a company, advising clients on formation, organization, and financing of corporations through securities such as stock, as well as mergers, acquisitions, and corporate takeovers.

12.0 Intellectual Property Law

This is an emerging area of law concerned with the protection of inventors’ rights in their discoveries, authors’ rights in their creations, and businesses’ rights in their identifying marks. Often, an intellectual property lawyer may specialize in a particular area of the law. For example, Patent Law which combines one’s scientific and legal background into one practice and Copyright Law that helps advocates to advise authors, composers and artists on the scope of their rights in their creations and personal identities; negotiates contracts; and litigates to enforce their rights. It is also focused on technological advances, particularly developments in electronic publishing. Additionally, in today's global economy, intellectual property issues are at the forefront of international trade negotiations.

13.0 Public Interest Law

This is an emerging area of law that serves low-income individuals, marginalized groups and social causes. Practitioners may work for advocacy groups, legal aid clinics and other organizations with the goal of advancing an interest of the public.

14.0 Tax Law

In the past few years, the importance and complexity of National and County imposed taxes have necessitated a specialty in this field of law. New regulations, Court decisions, and administrative rulings are issued frequently, and the tax advocate must be alert to such changes. Economic planning usually includes attention to taxes and a tax advocate often assists clients in understanding and minimizing their tax liabilities.

15.0 Maritime/Admiralty Law

This emerging area of law with a very distinctive niche covers topics such as shipping, navigation, waters, insurance, canals, marine commerce, marine salvaging, transportation of passengers and goods by sea and even piracy. Kenya, being one of the East Africa countries situated along the international waters, several legal issues i.e., breach of contracts, torts, offenses, or injuries arise in such waters which advocates need to address.

Get statistics on the state of discipline in the legal profession
Find some newspaper reports on public perceptions about the legal profession in Kenya

Below are detailed accounts highlighted in various newspapers on public perception on the legal profession in Kenya:
a)
Public complaints against lawyers in Kenya on the rise[1]-The Advocates Complainants Commission had expressed concern about the rise in the number of complaints raised by the public against advocates. Commission Chairperson Beauttah Siganga had said that the Commission received more than 600 complaints against the over 13,000 advocates practising in the country annually. The public complained that the accused advocates swindled them of their hard-earned money. The Chairperson of the Commission was however of the opinion that clients should gather enough required information regarding a lawyer before filing a case.

b) The changing face of the legal profession[2]- The homegrown legal profession in Kenya is over 50 years old. The legal education system has matured considerably with the proliferation of law faculties in Kenyan universities. Thus, it is gratifying to note that Kenya no longer relies on legal training from other commonwealth countries notably England and India. The local universities have now begun to produce high-level candidates all studying Kenyan law and jurisprudence backed by a developing and effective law reporting system.

c) Legal profession at crossroads[3]-Corruption: There are allegations in high legal quarters of advocates being conduits of such.

d) Githu Muigai strikes 20 lawyers off roll of advocates[4]:
· Thirty-two rogue lawyers were in January 2017 suspended or struck off the roll of advocates for professional misconduct following a public outcry about the rising number of rogue advocates who have continued to fleece the public while putting the legal profession in disrepute. The advocates were charged against breaching client confidentiality, misappropriating client money, undercutting than what is prescribed by law in the Advocates Remuneration Act and conviction for murder or manslaughter.

e) A case for the legal profession’s involvement in governance:[5] -Paradigm shift: Lawyers have traditionally been relied upon to provide technical advice on legal issues. However, there is now a paradigm shift in terms of what the role of a lawyer should be. The modern lawyer has a responsibility to counsel clients beyond the strictly legal challenges and provide advice about practical considerations i.e., public perceptions and reactions on a matter. This apart, lawyers are now addressing the governance problems in Kenya.

f) Nakuru lawyers under threat, ask LSK to intervene[6]
g) Dr Kagwe biography tackles modern challenges facing our lawyers[7]
h) I will endeavour to turn Judiciary into world-class institution of justice[8]-After passing the 2010 Constitution, the Judiciary, under the leadership of Dr Willy Mutunga, has been implementing an ambitious and successfully transformation agenda, which has been a benchmark for other public sector institutions.

References

[1] Robert Kiplagat, Public Complaints Against Lawyers in Kenya on the Rise, The Standard Newspaper, 14th March 2017, available at https://www.standardmedia.co.ke/article/2001232573/public-complaints-against-lawyers-in-kenya-on-the-rise.

[2]The changing face of the legal profession, The Standard Newspaper, available at https://www.standardmedia.co.ke/article/2000071108/the-changing-face-of-the-legal-profession, [accessed on 7th March 2017].

[3]Pravin Bowry, Legal Profession at Crossroads, The Standard Newspaper, 18th November 2015, available athttps://www.standardmedia.co.ke/article/2000182842/legal-profession-at-crossroads, [accessed on 7th March 2017].

[4] Peter Leftie, GithuMuigai Strikes 20 Lawyers Off Roll of Advocates, Daily Nation, Friday 20th January 2017, available athttp://allafrica.com/stories/201701200641.html, [accessed on 7th March 2017].

[5]Evans Monari, A Case for the Legal Profession’s Involvement in Governance,Friday 6 January 2017, African Regional Forum Publications, available atwww.bowmanslaw.com/insights/case-legal-professions-involvement-governance [accessed on 7th March 2017].

[6]Eric Matara, Nakuru Lawyers Under Threat, Ask LSK to Intervene, Daily Nation,Thursday 24th November 2016, available at http://www.nation.co.ke/counties/nakuru/Nakuru-lawyers-under-threat--ask-LSK-to-intervene/1183314-3462852-ax5qrez/index.html, [accessed on 7th March 2017].

[7] Dina Krigha, DrKagwe Biography Tackles Modern Challenges Facing Our Lawyers, Daily Nation, Friday 4th November 2016, available athttp://www.nation.co.ke/lifestyle/weekend/Dr-Kagwe-biography-tackles-modern-challenges-facing-our-lawyers/1220-3441130-yoyjd9/index.html, [accessed on 7th March 2017].

[8] David Maraga, I Will Endeavour to Turn Judiciary Into World-Class Institution of Justice, Daily Nation, Wednesday 19th October 2016, available at http://www.nation.co.ke/oped/Opinion/440808-3422862-10qsud1/index.html, [accessed on 7th March 2017].


[1]Jon Yeomans, Acacia Mining strikes gold in Kenya, The Telegraph, available at http://www.telegraph.co.uk/business/2017/02/27/acacia-mining-strikes-gold-kenya/.

[2]Kenneth Odero, Kenya's Cyber Security And Protection Bill Has Been Withdrawn From Debate So It Can Go For Public Consultations, Africa Digital Pvt. Ltd., available athttp://www.iafrikan.com/2016/12/21/kenyas-cyber-security-and-protection-bill-has-been-withdrawn-from-debate-for-public-consultations/.

 

Joint Ventures

  Joint Ventures (JVs)

1. What is a Joint Venture?

A JV is a legal organization that takes the form of a partnership between two or more persons by which they jointly undertake a transaction for mutual profit.

Generally each person contributes assets and share risks.

Like a partnership, JVs can involve any type of business transaction and the ‘persons' involved can be individuals, groups of individuals, companies, or corporations.

2. Nature of a Joint Venture

In order to form a JV, the parties to it must agree to create a new entity by both contributing equity, and they then share in the revenues, expenses, and control of the enterprise.

The venture can be for one specific project only, or a continuing business relationship. This is in contrast to a strategic alliance, which involves no equity stake by the participants, and is a much less rigid arrangement.

JVs are formed in the following ways:

a. Two parties, (individuals or companies), incorporate a company. Business of one party is transferred to the company and as consideration for such transfer, shares are issued by the company and subscribed by that party. The other party subscribes for the shares in cash.

b. Two parties subscribe to the shares of the joint venture company in agreed proportion, in cash, and start a new business.

c. Promoter shareholder of an existing company and a third party, who/which may be individual/company, one of them non-resident or both residents, collaborate to jointly carry on the business of that company and its shares are taken by the said third party through payment in cash.

Joint Ventures can take place between locals amongst themselves or they may involve locals and foreigners. However, they are commonly used by foreign companies to gain entrance into local markets. Foreign companies form joint ventures with domestic companies already present in markets the foreign companies would like to enter. The foreign companies generally bring new technologies and business practices into the joint venture, while the domestic companies already have the relationships and requisite governmental documents within the country along with being entrenched in the domestic industry.

3. Rationale for forming Joint Ventures

Internal reasons

a. Build on company's strengths

b. Spreading costs and risks

c. Improving access to financial resources

d. Economies of scale and advantages of size

e. Access to new technologies and customers

f. Access to innovative managerial practices

Competitive goals

a. Influencing structural evolution of the industry

b. Pre-empting competition

c. Defensive response to blurring industry boundaries

d. Creation of stronger competitive units

e. Speed to market

f. Improved agility

Strategic goals

a. Synergies

b. Transfer of technology/skills

c. Diversification

4. Form of a Joint Venture Agreement (JVA)

Joint Ventures are achieved through Joint Venture Agreements (JVAs). The Encyclopedia of Forms and Precedents (4th Edn, Vol 22) defines a ‘joint venture agreement' as being in the nature of a partnership between enterprises by which they seek to achieve, by mutual cooperation, a greater coordination of their separate activities.

5. How to enter into a Joint Venture Agreement

a. Selection of a good local partner is the key to the success of any joint venture.

b. Once a partner is selected generally a Memorandum of Understanding or a Letter of Intent is signed by the parties highlighting the basis of the future joint venture agreement.

c. Negotiation of the terms of the joint venture agreement. The terms should be thoroughly discussed and negotiated to avoid any misunderstanding at a later stage. Negotiations require an understanding of the cultural and legal background of the parties. The negotiations will focus on issues such as:

· Dispute resolution agreements (Negotiation, arbitration, conciliation etc).

· Applicable law.

· Force Majeure: (What does it mean in the context of the subject agreement?). ‘Force majeure, as used herein, shall mean acts of God, laws or regulations, industrial disturbances, acts of the public enemy, civil disturbances, explosions and any other similar cause of equivalent force not caused by, nor within the control of either party, and which neither party is able to overcome. As soon as possible after the occurrence of the force majeure and within not more than 15 days, the Supplier shall give notice and full particulars in writing to the Federation of such force majeure if the Supplier is thereby rendered unable, wholly or in part, to perform its obligations and meet its responsibilities under this Purchase Order. The Federation shall then have the right to terminate the Purchase Order by giving in writing seven days notice of termination to the Supplier, and the Supplier shall return any deposit paid by the Federation'.

· Holding shares (Percentages.

· Transfer of shares.

· Board of Directors.

· General meeting.

· CEO/MD.

· Management Committee.

· Important decisions with consent of partners.

· Dividend policy.

· Funding.

· Access.

· Change of control.

· Non-Compete.

· Confidentiality. ‘All materials prepared as well as all data collected and processed in the course of your work under the terms of this contract become the property of the International Federation to dispose of as the International Federation deems suitable. They cannot be used for any purpose without prior written permission from the Secretary General. You hereby assign to the International Federation all intellectual property rights to the material prepared in the course of your work under the terms of this contract. Any information you become aware of during this assignment must remain confidential and not be divulged outside the Federation Secretariat and its field delegations, except where such information is publicly available'.

· Indemnity. ‘The Supplier shall indemnify, hold and save harmless, and defend, at its own expense, the Federation, its officials, servants, and agents from and against all suits, claims, demands, and liability, of any nature or kind, including their costs and expenses, arising out of any acts or omissions by the Supplier, or the Supplier's employees, officers, agents, or sub-contractors, in their performance of this Purchase Order. The obligations under this provision do not lapse upon termination of this Purchase Order and do not prejudice any other remedies available to the Federation'.

· Assignment. ‘The Supplier shall not assign, transfer, pledge or make other disposition of this Purchase Order or any part thereof or of any of the Supplier's rights, claims or obligations under this Purchase Order except with the prior written consent of the Federation'.

· Break of deadlock.

· Termination. ‘Without prejudice to other remedies, either Party may cancel a Purchase Order immediately by providing written notice to the other in the event that (i) the other party commits a material breach of the Purchase Order and fails to remedy that breach after being required to do so by notice in writing from the party seeking to terminate the Purchase Order specifying the breach complained of and stating its intention to terminate the Purchase Order if such breach is not made good, (ii) the other Party becomes insolvent, (iii) termination is permitted in accordance with the specific terms hereto'.

· Legal compliance. The JV agreement should be subject to obtaining all necessary governmental approvals and licenses within specified period. ‘The Purchase Order is conditional upon the obtaining of any export license or other governmental authorization that may be required. The Supplier shall inform the Federation beforehand of such restrictions and shall obtain such license or authorization. In the event of refusal thereof, through no fault of the Supplier, the Purchase Order will be annulled and all claims between the parties automatically waived. The Supplier shall be responsible for any expenses or losses due to incorrect, incomplete or late documentation'.

6. How to Draft a Joint Venture Agreement

A good Joint Venture agreement is one which provides a comprehensive road map of the duties and obligations of both the parties. It minimizes complications when disputes arise.

Before finalizing a Joint Venture Agreement, the terms should be thoroughly discussed and negotiated to avoid any misunderstanding at a later stage. Negotiations require an understanding of the cultural and legal background of the parties.

Before signing a Joint Venture Agreement the following must be properly addressed:

· Applicable law.

· Force Majeure.

· Holding shares.

· Transfer of shares.

· Board of Directors.

· General meeting.

· CEO/MD.

· Management Committee.

· Important decisions with consent of partners.

· Dividend policy.

· Funding.

· Access.

· Change of control.

· Non-Compete.

· Confidentiality.

· Indemnity.

· Assignment.

· Break of deadlock.

· Termination.

· Security and confidentiality.

· Legal compliance.

· Fees and payment terms.

· Proprietary rights.

· Auditing rights.

· Events of Defaults and Addressing.

· Dispute Resolution Mechanism.

· Time limits.

· Location of Arbitration.

· Number of Arbitrators.

· Interim measures/Provisional Remedies.

· Privacy Agreement.

· Non-compete Agreement.

· Confidentiality Agreement.

· Rules Applicable.

· Appeal & Enforcement.

· Be aware of local peculiarities.

· Survival terms after the termination of the Joint Venture agreement. The expiry or termination of this agreement shall be without prejudice to any rights which have already accrued to either of the parties under the Agreement. Things which need to be done under it to continue as if the Contract was in force.

· The Joint Venture agreement should be subject to obtaining all necessary governmental approvals and licenses within specified period.

· Every Joint Venture agreement should be modified as applicable under different circumstances. One brush should not paint all the painting.

7. International Joint Venture Agreements

Joint Venture Agreements structured with in-country partners will be different from those meant for international partnership.

The greatest risks for International Joint Venture come from some emerging countries that are early entrants into Joint Venture, or those that have limited governmental support, ineffective legal enforcement, immature infrastructure, limited or nonexistent intellectual property protection or lack an understanding of foreign laws.

The most important areas to protect through an international Joint Venture agreement are security and confidentiality, legal compliance, fees and payment terms, proprietary rights, auditing rights and dispute resolution process. The legal systems in some countries might claim jurisdiction over any agreement regardless of which system the agreement specifies, and that other legal systems might have little respect for intellectual property rights.

Types and Registration process of the companies

 

TYPES OF COMPANIES

i.                    Statutory;

1.      capital is raised by borrowing guaranteed by treasury,

2.      When it is indebted it can be sued, and even its property attached

3.      But it cannot be wound up for indebtedness.

ii.                  State corporations (parastatals)

iii.               Registered companies.

N/B-one natural person may incorporate a company

Types of Registered Companies

a)     LIMITED COMPANIES.

·         Section 5 to 10 of CA a company is a limited company if it is limited by shares or by guarantee.

·         Section 6 provides that a company is limited by shares if the liability of its members is limited by the company’s articles to any amount unpaid on the shares held by the members.

·         The members in these companies contribute money into a joint stock (capital) and share profits arising from the venture

·         The proportion of the capital to which each member is entitled is his shares. The liability of the members for the debts of the company is limited to the extent that they have contributed.

·         suitable companies for industry and commerce because they raise their working funds

b)     UNLIMITED COMPANY

Section 8

·         there being no limit on the liability of its members

·         its certificate of incorporation states that the liability of its members is unlimited

DOCUMENTS NECESSARY FOR REGISTRATION OF COMPANIES

A person who wishes to register a company is required to lodge with the Registrar of Companies ;

A. section 13(1)(a). an application for registration of the company,

must state ;

i.        the name of the company,

ii.      the proposed locationof the registered office of the company

iii.    whether the liability of the members is to be limited, and if so whether by shares or guarantee, and

iv.    whether the company is a private or public company.

v.      Section 14a statement of capital and initial shareholding where the company is to have a share capital.

·         Must state the number of shares to be taken on formation by the subscribers to the memorandum and articles.

·         the aggregate nominal value of the shares

·         for each class of shares, the particulars of the rights attached to the shares

·         the amount to be paid up, and the amount to be unpaid for each share

vi.     if it is a company that is to be limited by guarantee, a statement of guarantee; and (iii) a statement of the company’s proposed officers.

vii.  a statement of the company’s proposed officers ;first directors, first secretaries or joint secretaries(public co); authorized signatory of the company.

B. s. 13(1)(b). A memorandum of association of the company

must state that ;

i)        the subscribers wish to form a company under the Act,

ii)      and agree to become members of the company.

iii)    in the case of a company that is to have a share capital, to take at least one share each

iv)    s.12must also be in the prescribed form, and

v)      s.12 (2)authenticated by each subscriber

C. section 13(1)(c) a copy of the articles of association

s.21When articles are not registered, the relevant model is deemed to form part of the company’s articles.

Articles are required to be contained in a single document, be printed, and divided into paragraphs numbered consecutively, dated and signed by each subscriber

Section 17 provides that when the Registrar is satisfied that the application complies with the requirements of the Act he registers the company

The Registrar then issues a certificate of incorporation signed by him and authenticated by the official seal.

Requirements for Company & Branch Registration in Kenya

There are three ways for you can register your entity,

·         one as an independent limited company, or

·         as a Subsidiary of your Company registered in Kenya or

·         any other Jurisdiction or as a Branch Company registered in another Jurisdiction

Registering a limited Company (LLC) / Subsidiary

The requirements for registering a Limited Company (LLC) / Subsidiary include the following,

The new procedures now allow a single person to register a limited Company as a Foreigner; this means you do not need a Kenyan director to co-own the company with you. You can own the company solely.

Next is to conduct a Name Search to ensure that the name is available for registration.

·         Copy of your valid Travel Passport or Kenyan ID Card

·         Passport size Photo

·         Telephone Number, Physical, email and Postal Addresses of the Directors and Shareholders

·         Occupation of the Shareholders and Directors

·         Shares apportionment percentage in case the company has More than 1 Director.

Once you have all the requirements proceed and fill in the CR1, CR2, CR8 and the statement of nominal capital, which you are required to sign. If the process is successful you will be issued with a Certificate of Incorporation and CR12.

You shall then process the Company PIN and also open Company Bank account.

Registering a Branch Company

Requirements for Registering a Branch Company includes the following;

A Branch Company is an Entity that is not any Different from the Parent Company with a Name and Activities Exactly as the Parent Company and its Liabilities extends to the Parent Company. In Short, A branch is just an Extension of the Parent Company.

The process of Registration is similar to the limited Company mentioned above however you would need to avail the following documentations:

·         Certified copies of the parent Company’s Certificate of Incorporation

·         Certified copies of the Charter, Statutes or Memorandum and Articles of Association of the parent Company

·         List of the Directors of the Parent Company giving the following particulars: Full Names, Postal address, Nationality, and Business Occupation

·         Name(s) and Postal Address of one or more persons resident in Kenya authorized to accept service on behalf of the company.

·         The full address of the Registered or Principal office of the parent company.

·         The full address of the place of business in Kenya.

If the process is successful you will be issued with a Compliance Certificate.

Thereafter, process the Company PIN And also open Company Bank account.