Case No.
HCCOMMMISC/E084/2021
Rationale & Relevance
The Judge adopted a very narrow interpretation of the public policy ground that could be relied upon to set aside an arbitral award. He stated as follows:-
“Thus, in my view, the scope of the public policy ground of refusal applies only to the fundamental core questions of morality and justice which enliven this particular statutory exception to enforcement. The public policy ground does not reserve to the enforcement court a broad discretion and should not be seen as a catch-all defense of last resort. It should not be used to give effect to parochial and idiosyncratic tendencies. This approach also ensures that due respect is given to contract-based awards as an aspect of the product of freely negotiated arbitration agreements entered into willingly between parties.”
Regarding, the Arbitrator’s decision itself, the Judge was of the school of thought that it is insufficient to render an arbitral award reviewable just because an Arbitrator committed a factual error which led them to a wrong decision. According to the Judge, only where the mistake is so gross or manifest as to evidence misconduct, mala fides or partiality on the part of the arbitrator will the award be reviewable in terms of Section 35 of the Arbitration Act.
CASE RELEVANCE
• Section 10 of the Arbitration Act provides that except as provided in the Act, no court shall intervene in matters governed by the Act. It restricts the jurisdiction of the court to only such matters as are provided for by the Act. The Section articulates the need to restrict the court’s role in arbitration so as to give effect to the principle of party autonomy.
• Section 10 of the Act permits two possibilities where the court can intervene in arbitration. First is where the Act expressly provides for or permits the intervention of the court. Second, in public interest where substantial injustice is likely to be occasioned even though a matter is not provided for in the Act. However, the Act cannot reasonably be construed as ousting the inherent power of the court to do justice especially.
• Section 10 of the Act was enacted to ensure predictability and certainty of arbitration proceedings by specifically providing instances where a court may intervene. It follows that parties who resort to arbitration, must know with certainty instances when the jurisdiction of the courts may be invoked. Under the Act, such instances include, applications for setting aside the award, determination of the question of the appointment of an arbitrator and recognition and enforcement of arbitral awards amongst other specified grounds.
• Section 35(2) of the Arbitration Act sets out the grounds upon which the High Court will set aside an arbitral award.
• By agreeing to arbitration, parties to a dispute necessarily agree that the fairness of the hearing will be determined by the provisions of the Act and nothing else. Typically, they agree to waive the right of appeal, which in context means that they waive the right to have the merits of their dispute re-litigated or reconsidered. Parties entering into an arbitration agreement must be aware that the arbitration award will be final, except in limited
circumstances. If parties want the option of appealing the award, such right of appeal must be set out in the arbitration agreement itself.
• The basic tenet of the provision on public policy is to protect the fundamental moral beliefs and social order of the country where recognition and enforcement of the award is sought from being harmed by such recognition and enforcement. A violation of public policy may render an agreement “in-arbitrable.”
• If the court feels that an issue falls in the scope of public policy, the court may intervene only, to protect the benefit of the public
Links
9-HCCOMMMISC E084.2021-SUMMARY
9-HCCOMMMISC E084 2021 LAND LAYBY KENYA LIMITED VS WILFRED OGOT LUSI- RULING