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HC. COMM/597/2002
DAVID CHABEDA & ANOTHER Vs. FRANCIS INGANJI
RATIONALE
From the ruling, it is apparent that the court followed section 10 of the Arbitration Act which prevents courts from intervening in matters governed by the act unless otherwise provided. Under section 36 of the Act, there is no provision for the court to use their inherent powers to enforce an arbitral award where the mandatory requirements for such enforcement have not been complied with. Thus, the court could not use the inherent powers of the Court under section 3A to cure the failure of the applicant to comply with mandatory statutory requirements.
CASE RELEVANCE
Section 3A of the Civil Procedure Act allows the court to use their inherent powers to achieve the ends of justice or prevent the abuse of the court. However, these inherent powers do not allow the court to overlook mandatory statutory requirements, such as the ones enumerated under section 36 (2). Thus, a party who seeks to enforce their award but derogates from section 36 (2) by failing to produce a duly authenticated original arbitral award or a duly certified copy of it will not have their arbitral award enforced, irrespective of the inherent powers of the court.
HCCOMMMISC/792/2004
MAHICAN INVESTMENTS LIMITED & 3 OTHERS Vs. GIOVANNI GAIDA & 80 OTHERS
RATIONALE
The decision of the court rested on the importance of the Arbitration Act which is an act that seeks to bring finality to the disputes of the parties. As a result, the High Court could not act as a Court of Appeal for arbitral matters, reviewing the reasoning and decision of an arbitrator without cause. Consequently, the awards of arbitrators are also not subject to challenge unless they manifest the grounds for an application to setting aside.
CASE RELEVANCE
Section 35 (2)(a)(iv) provides that an award may be set aside where an arbitrator deals with matters that are beyond the scope of issues that the parties referred to arbitration. However, for a party to succeed in pleading this ground, they must illustrate that the arbitrator went on a frolic of their own when issuing the award.
Section 35 (2)(b)(ii) allows for a party to approach the High Court to set aside an award where it violates public policy. Nonetheless, they must prove that the award discloses at least one of the elements of violation of public policy which includes inconsistency with the Constitution of Kenya or other written or unwritten laws, harm to the national interest of Kenya or contrariety to justice and morality.
HCCOMMMISC/108/2006
MAHINDER SINGH CHANNA Vs. NELSON MUGUK AND ANOTHER
RATIONALE
The reasoning behind the court’s ruling was the principle of finality of arbitral awards. The court asserted that it would defeat the purpose of arbitration if the time of delivery of the award was determinant upon the actions of the parties. Instead, the award became final once the arbitrator published it. Even if the parties had not appraised themselves on the contents of these awards, the time for setting aside the award begun running from the time the arbitrator published the award and notified the parties of the same.
CASE RELEVANCE
Section 35 (3) provides that an application to set aside an award may not be brought 90 days after the date on which the party making the application had received the award. The date of receipt is not determined by actual delivery of the award to the party. Instead, it refers to the date of publication of the award and a notification to the parties of the same by the arbitrator. Thus, if a party fails to file a setting aside application within 90 days after being notified on the publication of the award, the application will be time barred.
HC. COMM/550/2006
MERCANTILE LIFE AND GENERAL ASSURANCE COMPANY LIMITED & ANOTHER Vs. DILIP M. SHAH & 3 OTHERS
RATIONALE
The Judge aligned himself to the decision in University of Nairobi v Multiscope Consultancy Engineers Limited in that, once the arbitrator has signed off the Award and notified the parties that it is ready for collection upon payment of fees and expenses, the act of delivery is within the power and control of the parties and that the object of the entire Act would be undermined if a contrary meaning was given to Section 35(5) of the Act. Furthermore, the Judge was of the school of thought that the act of delivery is simply making the signed copy of the Award available for collection to the parties. He was of the view that Section 332B of the Act did not require the Arbitral Tribunal to send a signed copy of the Award to the parties hence the purpose of Section 35(3) of the Act. Regarding the second issue, the Judge was of the strict view that while public policy is a broad, infinite and malleable concept, it is important to first consider the principle that parties who enter into an arbitration agreement expect a level of finality.
CASE RELEVANCE
COACAPPL/57/2006
KENYA SHELL LIMITED Vs. KOBIL PETROLEUM LIMITED
RATIONALE
The court reached its decision based on the interpretation of public policy which posits that it is in the public interest that litigation must come to an end and that this is echoed through the principle of finality of arbitral proceedings present in the Arbitration Act. The court was of the view that there was no realistic prospect of success of the intended appeal nor was there a ground of appeal that merited serious judicial consideration.
CASE RELEVANCE
The Arbitration Act came into operation in 2ndJanuary 1996. Together with the Arbitration Rules 1997, they repealed and replaced Chapter 49 Laws of Kenya and its rules which had governed arbitration matters since 1968. A comparison of the two pieces of legislation underscores an important message introduced by the latter Act: the finality of disputes and a severe limitation of access to courts. Sections 6,10,12,15,17,18,28,35 and 39 of the Act are particularly relevant in that regard. According to the court, the message is a pointer to the public policy the country takes at this stage in its development.
HC. COMM/47/2008
P.N. MASHRU LIMITED Vs. TOTAL KENYA LIMITED
RATIONALE
Regarding the second issue, the Judge was of the school of thought that “shall” may be construed to be merely directory rather than mandatory in that, the mere use of the word “shall” cannot oust the jurisdiction of the High Court because the word is not necessarily in mandatory terms. In respect of the third issue, the Judge adopted a strict interpretation of Section 35(3) of the Act. In striking out the Defendant’s/Applicant’s Application, the Judge stated as follows: – “It is therefore clear that an application for setting aside an award ought to be made within 3 months from the date of receipt of the Award or within 3 months from the date on which the request for correction or interpretation of an Award was disposed of.”
CASE RELEVANCE
COACA/8/2009
ANNE MUMBI HINGA Vs. VICTORIA NJOKI GATHARA
RATIONALE
The court’s finding was based upon the principle of finality of awards and their subsequent enforcement. Relying on American jurisprudence, the court was of the view that the finality of arbitral awards and their subsequent enforcement ought to be respected. Otherwise, arbitration would lose its core appeal of expediency and timeliness. The court’s reasoning was also based upon the role of courts in arbitration, which was unnecessary unless they were invited to intervene by the arbitration act in question. Thus, judicial review of arbitral decisions had to be very minimal.
CASE RELEVANCE
COACA/9/2012
NATIONAL CEREALS & PRODUCE BOARD Vs. ERAD SUPPLIERS & GENERAL CONTRACTS LIMITED
RATIONALE
The reasoning of the court was founded on the principle of finality of arbitral awards and their subsequent enforcement. In the court’s opinion, arbitration required courts to exercise limited functions over arbitral matters. This denoted that the High Court could not be assumed to exercise appellate jurisdiction over arbitral awards as this would open arbitral decisions to constant judicial review. Instead, parties were only allowed to apply to the High Court to set aside the award. An application for setting aside an award was narrower as it was confined to the grounds enumerated under section 35 of the Act. Further, the court declined to admit new evidence because it would lead to endless litigation. New evidence could only be admitted if it met the three principles required for admitting new evidence or if such evidence was deemed to be needful by the court.
CASE RELEVANCE
HC. COMM/695/2012
KENYA SUGAR RESEARCH FOUNDATION Vs. KENCHUAN ARCHITECTS LIMITED
RATIONALE
The Judge was of the view that the Applicant had to show that the award was made contrary to justice and morality, inimical to the national interest of Kenya and inconsistent with the Constitution or other laws whether written or unwritten. To the court’s mind, the Applicant failed to satisfy all three of the above principles in its present Application.
CASE RELEVANCE
HCCOMMMISC/26/2013
MALL DEVELOPERS LIMITED Vs. POSTAL CORPORATION OF KENYA
Regarding the decision that the court had no basis for making a finding contrary to what the Arbitrator found, the Judge placed reliance on the school of thought that while the Constitution of Kenya 2010 empowers the High Court to supervise tribunals, it could only do so within the limits of the law provided and it cannot clothe itself with jurisdiction that it does not possess at all.
CASE RELEVANCE
HCCOMMMISC/27/2014
NATIONAL OIL CORPORATION OF KENYA LIMITED Vs. PRISKO PETROLEUM NETWORK LIMITED
RATIONALE
The decision of the court was largely based upon section 10 which requires courts to refrain from interfering with matters governed by the Arbitration Act unless otherwise provided. It carefully assessed the applicable arbitration agreement before finding in favor of the arbitral award. Once the court found that the award was valid under the arbitration agreement Another guiding factor to the court was the doctrine of kompetenz-kompetenz which provides that an arbitral tribunal has the power to rule on its own jurisdiction. Unless the grounds for challenging the jurisdiction of the tribunal were present, the court stated that it was not within its power to decide on the competence of the tribunal. This signifies that arbitration is an end in itself, as the arbitrators do not need to rely on another system such as the courts to declare whether they have the requisite capacity to determine a case.
CASE RELEVANCE
HC.COMM. MISC/39/2014
KAY CONSTRUCTIONS LIMITED Vs. ATTORNEY GENERAL
RATIONALE
The court reached its decision based on a narrow and strict interpretation of the grounds for refusal of the recognition and enforcement of the arbitral awards in that any of the grounds relied upon would have to be strictly proved and established.
CASE RELEVANCE
HCCOMMMISC/213/2014
TCAT LIMITED Vs. JOSEPH ARTHUR KIBUTU
RATIONALE
The principle of pro-arbitration was the backbone of the court’s reasoning. In making a determination as to whether the award should be enforced, the court heavily relied upon section 10 of the act which asks the court to exercise a spirit of non-interference when dealing with arbitration matters. This principle can be seen in the court’s refusal to investigate matters of fact which were held to be fully within the arbitrator’s power. Intervention by the court would only be sought where a party presents questions of law.
CASE RELEVANCE
HCCOMMMISC/62/2016
CONTINENTAL HOMES LIMITED Vs. SUNCOAST INVESTMENTS LIMITED
RATIONALE
The guiding factor in the court’s decision was the test for setting aside an award on the grounds of public policy. The court noted that where an applicant claims that an award has violated public policy, the award must meet either of the elements in the disjunctive test for determining a violation of public policy. The court was also guided by the principle of finality of arbitral awards and a pro-arbitration policy in choosing to carefully examine the terms of the award without hurriedly setting it aside. After the court satisfied itself that the arbitrator was acting within the scope of their powers, it upheld the award. This demonstrates the court’s willingness to refrain from judicial review of arbitral decisions, allowing arbitration to be an end in itself.
CASE RELEVANCE
COMM MISC 548/2016
KENYA AIRFREIGHT HANDLING LTD. (KAHL) Vs. MODEL BUILDERS & CIVIL ENGINEERS (K) LTD.
RATIONALE
The Judge was of the school of thought that in determining whether an arbitral award has jurisdiction or not, the court ought to interrogate four issues:
In this case, the Judge opined that the Applicant faltered on the third ground regarding parties submitting themselves in accordance with the Arbitration Agreement. Regarding his strict interpretation of the time limits, the Judge was of the view that he had no powers to redraw the contract and extend the time limits.
CASE RELEVANCE
CA/98/2016
EZRA ODONDI OPAR Vs. INSURANCE COMPANY OF EAST AFRICA LTD
RATIONALE
The decision of the court was based upon section 35 (4) which asks the court to take such other action that will eliminate the grounds for setting aside the arbitral award. This means that where a court can distinguish between the terms of the award that are subject to being set aside from those that are not, it will then uphold that part of the award that does not disclose the grounds for a setting aside application. Section 35 (2)(a)(iv) also formed the basis of the court’s judgement because the court maintained that it would not uphold an arbitral award if the arbitrator went beyond their scope of reference when making the arbitral award.
RELEVANCE
HC. COMM/264/2017
MASON SERVICES LIMITED Vs. SAFARICOM LIMITED
RATIONALE
The decision of the court was based upon the principles of expediency and timeliness which are essential features of arbitration. Because the setting aside application was filed outside of the timelines stipulated, the court had no choice but to deny the application. The court also calculated the time window stipulated under section 35 (3) from the time the arbitrator published the award and notified the parties because any other approach would lead to unnecessary delays from the parties in the actual collection of the award. In reassessing the terms of the award, the court also favored a pro-arbitration policy which made them hesitant to interfere with the arbitrator’s decision where it complied with the terms of the arbitration agreement and the Arbitration Act.
CASE RELEVANCE
Section 35 (3) provides that an application to set aside an award may not be filed 3 months after the date of the receipt of the award. The date of receipt refers to the date on which the arbitrator notifies the parties that the award is ready for collection. However, the court may allow an exception for late filing of this application where the applicant shows that the delay in actual collection of the award to comprehend its contents was caused by the other party, or that the other party frustrated their efforts to collect the award.
This case also clarified that an arbitrator may issue general damages for breach of contract only if it is shown that the conduct of the liable party was oppressive, high handed, outrageous, insolent, or vindicative.
HC.COMM. MISC/E197/2018
PESA PRINT LIMITED Vs. ATTICON LIMITED & ANOTHER
RATIONALE
The reasoning of the court was founded on the principle of non-interference with arbitration matters as stipulated under section 10 of the Act. It refrained from re-examining the matters already canvassed by the arbitral tribunal to reinforce the finality of arbitral awards. Moreover, it was apparent that the jurisdiction of the court in this matter was confined to the grounds stipulated under section 35 and 37. Failure to prove these grounds would restrict the court from asserting its authority over the arbitral matter. The court was also keen on the swift nature of arbitration. This was because it refused the enjoinder of new parties with unnecessary delay especially after the applicant had the opportunity to enjoin them during the arbitral proceedings.
RELEVANCE
HC.COMM. MISC/E073/2018
GERICK KENYA LIMITED Vs. HUNDA MORTOCYCLE LIMITED
RATIONALE
The court arrived at its decision by considering the arbitrability of fraud. As per the tripartite disjunctive test of deciding the arbitrability of fraud, the court held that the matter was arbitrable since it did not give rise to complex issues before the tribunal. Further, it was more desirable to uphold arbitration agreements between parties to prevent an erosion of faith in arbitration as a dispute resolution mechanism in the commercial world.
CASE RELEVANCE
GLENCORE GRAIN LTD Vs. TSS GRAIN MILLERS LTD
GOLDEN HOMES (MANAGEMENT) LIMITED Vs. MOHAMMED FAKRUDDINN ABDULLAI & ANOTHER; GOLDEN HOMES LIMITED
KENFIT LIMITED Vs. CONSOLATA FATHERS