7 " A! |E NO.81 OF 201: SMELC MAH ESTHER WANE . 1" APPLICANT/RESPONDENT Gu. .28® APPLICANT/RESPONDENT -VERSUS- THE LIQUIDATOR TRANGOR WIND PARK LEASES LTD.. WATER HOUSE COOPERS LIMITED. THE LAND REGISTRAR, ” NYANDARUA/NYANDARUA COUNTY. 18? RESPONDENT/APPLICANT 2" RESPONDENT/APPLICANT .3°° RESPONDENT ST _g gND 15"_& 2"? RESPONDENTS’ WRITTEN SUBMISSIONS FO THE APPLICATIONS DATED 20,09,2021 AND 18, 21, You're Honor, The applicants vide the Application dated 22.9.2021 seeks for the removal of the 1* & 2™ Respondents/ Applicants (herein afrter referred (o as “ the Applicants” where the context so admits) as parties to this suit; a prayer that matter to be referred to arbitration and the costs of the Application. The second application dated 18.10.2021 resurrection of the aforesaid application dated 22.9.2021 which was overtaken by events after the applicants failed to prosecute it before the court set the matter for judgment due to the secks to stay proceedings to allow for the Applicants lack of vigilance and diligence. are vehemently opposed by the 1* & 2"! Respondents ( hereinafter referred where the contexts so admits , as being incompetent, without merit, ‘expeditious Both Applications to as “the Respondents” anabuse of the court process and merely intend to delay the just and misconceived, g this dispute, At the determination of this suit and solely intended to inflate cost of litigatin foremost, the applicants are challenging the jurisdiction of this court on the basis of an nt dated 17.8,2013 between the Applicants arbitration clause contained in the lease agreeme ference of any disputes between the parties an and the Respondents which provided for r arbitrator. frustrated in 2016 and the 1* applicant went into liquidation. ‘The said lease agreements were Its noteworthy that the Applicants entered appearance of 07.8.2019 but did not challenge the jurisdiction of the honorable court until 22.9.2021 after the matter had been set down for judgement. No reasonable explanation has been offered for the TWO YEAR indolence. Scanned with CamScannerI ‘S8Ue for determination: q ) Whether the court ‘has jurtediction to hear this mattor;, 4) Whether there should ‘be a stay of proceeding: ©) Joinder and misjoinder of parties in this sult, @ Who should bear the costs of this Application, I. Whether the court has jurisdiction to hear this Suit, ‘The Applicants are relying on Section 6 and 10 of the Arbitration Act to oust the jurisdiction of this court. It's the Respondents humble submission that this court has jurisdiction for reasons hereunder:- a) Where a party intends to invoke the arbitration clause to oust the jurisdiction of the trial court is implored to do so at the very earliest stage of the trial. In Adrec Limited versus Nation Media Group Limited [2017] Ekir while echoing the dicta by Nyarangi JA the learned judge was entitled to deal as a matter of priority with the issue of stay as it related to jurisdiction. “...jurisdiction is court of law everything. Without it, a Court has no power to make one more step. downs tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction.” ‘The rationale being to save the precious judicial time to cut the cost of litigation. In Adrec Limited versus Nation Media Group Limited [2001] eKLR, the court added that: vantage of the arbitration clause in a contract “Any party who wishes to take a should either at the time of entering appearance or before the entry of appearance make the application for reference to arbitration” ‘The Applicants entered appearance of 07.08.2019. The applicants never challenged the jurisdiction of this court until 22.0.2021 after the cot judgment. No reasonable explanation was tendered for the wi urt had already issued a date for reasonable delay. a Scanned with CamScannerThe © explanation offered by the appli able to effect service of plead Splits that the reason he aplcanis were neve leadings upon the = : not have the ipon the respondents on tim = 1 was because they di ne ‘spondents address of service is not true as the court me ee : 0 applicants’ counsels on record filed and aie and served the Memorandum of Appearance dated 7.08. wit it .08.2019 upon the respondents’ counsel on record with the said Memorani dum of Appearance on 7.08.2019, It's the Respondents’ humble submission that the h os ‘onorable court should not allow the Applicants to benefit from the indolence contemptuously attempting to mislead the court through false sworn statements. b) The obligation of the court upon being moved under section 6 has been crystalized by case law, Inthe case of Niazsons(K) Ltd versus China Road & Bridge (supra) the court held inter alia that: ‘The court will then be obligated to consider the threshold things: (a) Whether the applicant has taken any step in the proceedings other than the steps allowed by the section; (6) Whether there are any legal impediments on the validity, operation or performance of the arbitration agreement; and (c) Whether the suit intended concerned a matter agreed to be referred to arbitration” ‘The gravamen of this dispute is that the Applicants continue to maintain encumbrances lodged against the Respondents’ parcels of land based on the aforementioned frustrated lease agreement which was the basis for lodging the said encumbrances to protect the applicants interests during the pendency of the said tenancy. The Applicants nonetheless have neglected and or refused to direct the 34 Respondents to 44 encumbrances for no good cause necessitating d infinitum which thas occasioned them remove the sai this suit as the respondents cannot freely use nor deal with their parcels of land a great psychological harm and financial hardship. will occasion the respondents ndents humble submission clothed with the: requisite matter referred to Arbitration ancial hardship. It's the Respo the honorable court finds that its Astay of proceedings to have this further psychological harm and fin that it isin the interest of justice that jurisdiction to hear to expeditiously determine this matter. Scanned with CamScannerI, Whether there should be a Stay of Proc. ding: referred to Arbitration. At any rate, this Court is enjoined under. Article 23 and 159 of the Constitution of Kenya to uphold and protect the principles and purposes of the Constitution including the right to enjoyment of property and the a right a fair hearing which also encompass the Tight to fast, Just and expedient determination of disputes. MI. — Joinder and Misjoinder of parties. ‘The Applicant contend that joinder and misjoinder of parties is a substantive issue to warrant the stay of proceedings, It's the Respondents humble submissions that issues of joinder and misjoinder are procedural issues. Order 1 Rule 9 of Civil Procedure Rules (2010) provides joinder and misjoinder cannot be a basis to defeat a suit. In addition, Article 126 of the Constitution of Kenya (2010_ enjoins courts to administer justice without undue regard to procedural technicalities. IV. Who should bear the cost of the Applications. From the onset, it's the Respondent's humble submission that the Applications are incompetent, without merit, misconceived, an abuse of the court process and intend to delay the fast and just " determination of this suit and increase the cost of litigation and should be struck out with costs. i Scanned with CamScannerIt's trite law that costs follo w the event and Applicants shoul: id bear the cost of this Appii ipplications, Conclusion: The Applicants’ counsel on record in his Affidavit dated 10.01.2022 swore that the reason the Applicant was unable to serve pleadings upon the Respondents on time was that the Applicants did not have the Respondents’ address of service yet they had previously served the Memorandum of Appearance upon the Respondents! counsel on record on 1.8.2019, This coupled with many other falsehoods and sharp practices renders the Applicant's unworthy of this honorable court's discretion. ‘The mere fact that an Officer of the Court can knowingly give false sworn statements in an attempt to mislead the court is a sordid habit that has no place in the practice of law and should be condemned and reprimanded harshly with the disgust it deserves by dismissing the Applications with costs, Thank your honor, Dated at Nyahururu this. Muchangi Patrick & Co. Advocates for the Respondents. Drawn & Filed by:- Muchangi Patrick & Co. Avocates. at ‘Mwanjo Arcade Building (Next to Equity Bank, Nyahururu) Post Office Box number 1565-20300; Scanned with CamScannerTo be served Upon: Walker Kontos Advocates Hakika house , Bishops road, P.O. Box 60880 NAIROBI, Scanned with CamScanner‘Adroc Limited v Nation Media Group Limited [2017] eKLR GIKENYA LAW (Wevlngl MorckoiaRatckeshl COURT OF APPEAL OF KENYA AT NYERI ‘SITTING IN NAKURU APPELLANT AND .RESPONDENT NATION MEDIA GROUP LIMITEt (Being an Appeal from the Ruling of the High Court of Kenya at Nairobi (Nzioka, J.) dated and delivered on 19th January 2017 in H.C.C.C NO, 448 of 2016) JUDGMENT OF THE COURT 1. The appellant, Adrec Limited, is described in this appeal as a Limited Liability Company in Kenya. It was aggrieved by a decision made by the High Court (G. L. Nzioka J.) sitting in Nairobi in Civil ‘Suit No.448 of 2016, It has appealed against it in this appeal. ia Group Limited, 2, In Nbi H.C.C.C. No.448 of 2016, the appellant sued the respondent, Nation M described as a limited liability company carrying on business in Kenya allegedly for breach of terms of a distribution agreement. 3. The record of appeal shows that, the appellant entered into a Distributorship Agreement with the respondent. The terms and conditions in the Distributorship Agreement included an arbitration clause to the effect that disputes between the parties would be settled through arbitration. 4, Contemporaneously with the institution of the said (No.448 of 2016), the appellant fled an ‘application by way of a notice of mation dated 4th November 2016 seeking inter alia orders for injunction t tp: kenyalew.og - Page 15 _ Scanned with CamScanner‘Ado Limited v Nation Media Group Limited (2017] eKLR to restrain the respondent from calling for oF realizin 01 19 the Bank guarantee against it pending the determination of the application and the determination of the sult net 1 (arpa) §. The respondent's advocates did not fle a defence to the sult : rm but they flied a notice of appointment ‘of advocates on 7th November 2016 and an application dated 16th November 2016 toetng| edo fr say ‘of the proceedings and reference of the matter to arbitration in accordance with clause 16 contained 6 The High Court (Nzioka J) after considering the application by the appellant and the application by the respondent came to the conclusion that the appellant and the respondent were bound by the terms ff the Distributorship Agreement that enjolned them to refer the dispute to arbitration and consequently made a finding that it was bound by the provisions of section 6 of the Arbitration Act to stay the proceedings in the High Court. Accordingly, the High Court Issued an ordor staying tho sult and referred the dispute to arbitration in tine with the arbitral clause tn the Distributorship Agreement. This is the decision that provoked this appeal by the appellant, 7.1nits memorandum of appeal, the appellant impugns the High Court decision on 15 grounds which we find unnecessary to set out here as they can be summarized. The appellant contends the said {grounds thatthe learned judge erred in not hearing the appellant's application for injuncion and instead Froceeding to hoar and determine the respondent's application for stay: thatthe respondent argued 8 preliminary ebjection before the laamed judge and not an application asthe eared judge hel at of ® result the appellant was denied hs right to be heard contrary tothe principles of natural justice; hal he Teamed judge did nat correctly interpret section 6(t) ofthe Arbitration Act that the leamed judge ovat 1 have found that a step had been taken inthe sut and the court had jurisdiction to hear the matter and that the order for stay was made in error. 8. When this appeal came up for hearing before us on 13th November 2017, Mr. Kimandy Gichohi, teamed counsel forthe appellant, urged thatthe leamed Judge misdirected herself 0 the impugned rperton by ruling on the application for stay Instead of the preliminary objection. Was counsel's veccon that the application for stay was not before the leamed judge and paris did not opt for caorenjen, Counsel urged the court to allow the appeal and set aside he impugned ming. 9, on her part, Miss Ogula, leamed counsel for the respondent urged that he application for stay by the respondent was on record and as It related to the issue of jurisdiction, it took priority. It was the respondent's counsel's submission thatthe learned judge cannot tbe faulted as the issue of jurisdiction ‘came first. 40, This being a frst appeal, we have a duty to give the patios a etal DY re-evaluating the evidence and making our own findings and conclusions on the basis of he evidence ‘adduced at the trial, in this appeal, no oral evidence was tendered. The facts and ‘evidence were contained in the pleadings and Gepostions placed before the tial cour. The facts net in contest are that the parties had a Distributorship Agreement that contained an arbitral clause that ‘enjoined the parties to refer to arbitration taputes between them arising from the Distributorship ‘Agreement, When, according to the appellant, Treeched the Distibutorship Agreement by, allegedly arbitrary changing the sales ‘altering the geogrephical area in which the eppelant Wis entitled under the ‘agreement to sell the respondent's goods, to wit newspapers) the appeliant took the matter to the High Court by fling the sald sult against the respondent ‘seeking, inter alia, injunction to restrain the pts E tte Scanned with CamScannerarbitrator shall be agreed ‘Adrec Limited v Nation Media Group Limited [2017] ekLR. respondent from changing the sales territory and from callin 19 for or realizing the Bank Guarantee. Consequent ypon service of the pleadings being effected, the respondent ostensibly instructed its the advocates, messrs Iseme, Kamau and Maoma who filed on 7th November 2016 a notice of appointment of Advocates and an application seeking an order for stay of the sult as aforestated. 11, In the impugned ruling dated 19th January 2017, the learned judge found that he respondent did not waive or lose its right to rely on the arbitral clause in the Distributorship Agreement and therofore stayed the suit and referred the dispute to arbitration, thus allowing the respondent's application. 12, The issue in this appeal is whether in the circumstances ofthis case, the learned judge was right in staying the suit as he did. The answer to this is to be found in the Arbitration Act, Chapter 49 of the Laws of Kenya whose Section 6 states- "6.(4) A court before which proceedings are brought In a matter which Is the subject of an arbitration agreement shall, i a party so applies not later than the time when that party enters appearance or otherwise acknowledges the claim against which the stay of proceedings is Sought, stay the proceedings and refer the parties to arbitration uniess it finds — (a) That the arbitration agreement is null and vold, inoperative or Incapable of being performed; or (0) that there is not in fact any dispute between the parties with regard to the matters agreed to be referred to arbitration. 6. (2) proceedings before the cot wurt shall not be continued after an application under subsection (1) has been made and the matter remains undet termined. ourt declines to stay legal proceedings, any provision of the arbitration ‘award is a condition precedent fo the bringing of legal 6. (3) If the cc In relation to those proceedings. ‘agreement to the effect that an proceedings In respect of any matter is of no effect. 19, The genesis of the dispute relating to the High court suit No.448 of 2016 was the Distribution lant and the respondent whose clause 16 stated — ‘Agreement dated 26th March 2014 between the appel “ARBITRATION This Agreement shall be governed and construed In accordance with the laws of the Republic of Kenya. between the parties hereto as to the construction Incase of any dispute or difference arising ‘duties or obligations of elther party there under every such or in accordance with the of this Agreement or the rights ‘and matter in difference shall be referred fo a single arbitra replacing such Act. The said dispute Arbitration Act, (1995) Laws of Kenya or any act amending or ‘upon mutually between the parties and falling agreement within p:tiew kenyalaw or - Page 5 Scanned with CamScanner‘Adrao Limited v Nation Modia Group Limited (2017) oki fourteen (14) days from the dato of the notice of dis pute tho arbitrator shall be appointed at the requos of elthor party by the Chairman for tho timo being of the Chartorod Institute of Arbitrators (Konya Branch). 14, tis not in disput that tho Distribution Agraomont was valid and that it containad In clause 16 the above arbitral clause, Its also a fact that a dispute exists batwoon tha appellant and the respondent with regard to the question whether the respondent has breachod the Distributorship Agrooment by arbitrariy charging tho sales torritory two timas, once to Thika Road and currantly to Donholm, Tho euit brought in tho High Court by the appollant relatos to a matter which Is tho subjact of an arbitration agreoment, vide clause 16 of tho Distnbutorship Agreement, Consequently, In pursunnce with Section (1) of the ‘Atbitration Act, it was open to the respondent to apply “not later than tho time when the respondent centered appearance or otherwise acknowledged the claim against which tho etay ofthe sult was sought The record shows elealy that the respondent merely flad a notice of appointment of advocates and procoeded to apply for stay of the sult. Once o defendant, ina sul founded on a contract containing of penal elause, enters appaarance or causos a notice of appointment of advocates fd on its bohalf and prior thereto or contemporaneously with such of the notice of appointment or entering of appndranee ich of flee on application for stay of proceedings, the court Is statutorily obligated to slay the proceedings and 's provided In the arbitral clause in tho Agreement unloss tho court to refer the parties to arbitration a: ase nay fandings as are roerred to in (a) and (b) of Section 6(1) of tho Arbitration Act. It should be tmphasized that the right to seek and obtaln stay of proceedings under section G(t) ofthe ‘Arbitration Act led In the proceedings, By dint of the defence, the party fling It subjects Is lost the moment a defence Is fil itso to jurisdiction of the court and cannot thareafter resi from that position. 15. In FAIRLANE SUPERMARKET LIMTED VERSUS BARCLAYS BANK LTD NBIHCCC NO- 102 OF 2011, this court held that ~ the option to refer to the matter to arbitration was sealed when the defendant herein entered appearance and followed It with a defence. In the case of CORPORATE INSURANCE COMPANY TR WACHIRA (1995-1996) IEA 20, It was held that If the appellant had wished to Invoke the Cause, it ought to have applied for a stay of proceedings after entering appearance and before Guivering any pleading and that the appellant had fost Its right to rely on the arbitration clause by filing a defence shes to take advant 1d to deal as a matter of priority with the Issue of stay 16, In this appeal the learned judge was entitle. fs I telated to jurisdiction, in the memorable words of Justice of appeal Nyarangi JA in the case of OWNERS OF MOTOR VESSELS LILIAN V. CALTEX OIL KENYA LTO [1989] Scanned with CamScanner‘Ado Linited v Nation Meda Group Lino [017 #KL PE oxntive diapute rowoltlon oct ania Inch i diaputos away from the onus {he arbitral proeee®. nding that the 47, Tho Constitution of Kenya 2010 recognlzen all arbitration, Parties have the freedom of contract and even {0 roxolve thet subject to supportive court intervention in ‘spocitic areas of law fo ensure falrnene Ith Tho respondent was perfectly entitled to seek ard obtalt stay of the ‘sult awit did, HH 1v ou A Jeamed judge was spot on her decision (I ordering slay), We uphold that deoiston. 48. We find ro merit in this appeal, We dlsrnisn with costs to tho ronpondont, day of December 2017. Dated and dellvered at Nalrob! this 4th G.B, M, KARIUKI SC JUDGE OF APPEAL F. SICHALE JUDGE OF APPEAL gs. ole KANTAI JUDGE OF APPEAL Teertity that this is a true COPY of the original. DEPUTY. REGISTRAR rene te 08 Np pl OT snoeguaelt ie amas 9 Po SS Scanned with CamScanner(10 Lid v China Road & Bridge Corporation Kenya [2001] eXLR GIKENYA LAW opt terme Fase tray IN THE COURT OF APPEAL. AT NAIROBI ‘oram: Tun} in ‘CIVIL APPEAL NO 157 OF 2000 NIAZSONS (K) LIMITED .. esseesevamees APPELLANT VERSUS CHINA ROAD & BRIDGE CORPORATION (KENYA)....--- RESPONDENT (Appeal from the ruling of the High Court of Kenya at Nairobi (ustice Onyango Otieno) dated 15th April, 1999 in HCCC No 126 of 1999) JUDGMENTS Bosire JA. Niazsons (K) Limited, the appellant, was sub-contracted by China Road & Bridge Corporation (Kenya), the respondent, to execute road works on 2 52 km stretch of the Garsen-Hola Road st ax azrzed contract price of Kshs 473,665,086.10 and other mutually agreed terms which were reduced into writing ‘Among those terms is clause T, which provides thus: "T Arbitration (a) All disputes and differences in connection with this subcontract and with the execution thereof, shall be first settled between the contractor and subcontractor by friendly and amicable negotiation. If no sezlemect can thus be reached, the disputes and differences shall be submitted for arbitration, (b) Either the contractor or the sub-contractor is plaintiff, the arbitration shall take place im Nairobi, Kenya, and be conducted by the Institute of Engineers of Kenya. The procedural law and rules for arbit be the Arbitration Act, chapter 49 of the laws of Kenya. The appointed (sic) of arbitration sh Chairman of the Institute of Engineers of Kenya. (c) The award or decision of the Institute of Engineers of Kenya shall be accepted as final and binding for both the contractor and the sub-contractor and neither the contractor nor the sub-contractor shall seek Fecourse to a law Court or other authorities to appeal for revision of the decision. {@) All arbitration expenses shall be borne by the losing party." ‘The sppellant as plaintiff in Nai High Court Civil Case No 126 of 1999, sued the respondent claiming ‘various liquidated sums of money and damages for alleged breaches of the sub-contract aforesaid. In its Plaint dated 8th February, 1999 the appellant has averred, inter alia, that it executed part of the consracted ‘works whereupon certificates of satisfactory completion were duly issued. It was therefore entitled 12 Payment for the same, but the respondent as the main contractor has failed or refused to make payment. 0 GNA Appeal 157 of 2000 | Kenya Law Reports 2022 Page 1 of 10. Scanned with CamScanner{gxsons (K) Lid v China Road & Bridge Corporation Kenya [2001] ekLR. ‘The respondent was served with summons to enter appearance and the plain; it appear a written statement of defence on the ground that doing so would insite tas ct ay atieeceooe under section 6 of the Arbitration Act, 1995. Instead it filed an application for orders that r4 woceedn +4 the suit be stayed witha direction thatthe parties submit themaelses (a arbitatin in tems of clase T, of the subcontract, aforesaid. The application was initially expressed to be brought under section (1K) and os 6(2) of the Arbitration Act cap 49 Laws of | Kenya and order L rule (1) of the Civil Procedure Rules, bt the aplication wa ter amended to read section 61a) and () and secon 62) ofthe Arbitration Ac Ls. itration Rules, 1997 and section 3A of the Civil Procedure Rules (sic) cap 21 Laws of At the hearing of the application the appellant through its counsel, Mr R Billing. raised a preliminary objection to it on three main grounds. First that clause T aforesaid is null and void because it relied on repealed Act to wit the Arbitration Act, cap 49 Laws of Kenya. Second, that section 6 of the 1995 Arbitration Act unlike section 6 ofthe former Arbitration Act, which it repealed and replaced, does not bar a defendant in a suit from filing its pleadings. And because the respondent, on the mistaken belief that it did. ‘was in default by failing to file its written statement of defence in the suit ithin the prescribed time or at all, the appellant was entitled to an ex parte judgment in default of defence. Third, that even assuming that the matters between the parties could be referred, there was no discernible dispute or difference which could be referred. Moreover, he further urged, the respondent by its conduct, was not ready and willing to submit to the arbitral process. In answer to those submissions Mr Wena who appeared for Mr Miller for the respondent, as defendant in the suit, submitted on the authority of Joab Henry Onyango Omino v Lalji Meghji Patel & Co Lid Civil ‘Appeal No 119 of 1997, hatin view of the pending application for stay of proceedings the appellant was { ‘ot entitled to judgment in default of defence. Besides, he said, section 6 of the 1995 Arbitration Act, did rot change or affect the parties’ contractual obligations as the dispute between them arose afr the repeal t and replacement of section 6 of the ‘Arbitration Act, cap 49 Laws of Kenya. In Joab Henry Onyango Omino v Lalji Meghji Patel & Co Ltd (supra), this Court beld, inter alia, tras: +. the appellant made his application for stay ofthe proceedings inthe superior court under section &{1) of the Act as is outlined above. Having thus made that application, as long as the same remained, ‘undetermined, its effect was to suspend the filing of defence by the appellant to the respondentit=39:s claim against him with the result thatthe default judgment entered against him cannot have been regular.” “The respondent's case in the present appeal as in the case cited above is based on an arbisrstion agreement which was made under the repealed Arbitration Act, cap 49 Laws of Kenya. ‘Onyango Otieno, J who heard the matter did not agree with the appellant's counsel and consequensly ‘overruled the preliminary objection and thus provoked this appeal. There are twelve grounds of appeal, bat ‘considering what I propose to say later in this judgment I do not need to set them out herein full. That is the nore so because Mr Billing's submissions which I have already set out and which he rehashed at the hearing of the appeal, summarize the appellant's case. Me Cecil Miller appeared with Mr Wena for the respondent in the appeal. In his submissions Mr Miller stated that in view of the fact that the Arbitration Act, 1995, has no express provision for appeals, clause T. ‘oresaid, accords with the law. In the alternative, he submited thatthe alleged offending pars ofthe said ‘lause are severable without rendering the clause inoperative on the essential aspect of arbitration. Is support ofthe lanier submission he relied on the case of Lee v The Showmend#39:5 Guild of G B (1952) 2B 329 (CA) which is in the appellant's list of authorities. Mr Miller also urged the view that the “material before the trial court clearly showed the existence of a dispute or difference between the pull ‘and that all along the respondent has been ready and willing to submit to arbitration. It was his view, 2150, that section 6 ofthe caren Atitration Act ike section 6 ofthe repealed Act, does not permit the wise of “Civ Appeal 157 of 2000 | Kenya Law Reports 2022 Page 2 of 10. Scanned with CamScanner- Givi Appeal 167 of 2000 | Kanye Law Reports 2022 yarn (KLM v Cd Td A vig Corin Hanya 141] ny ater the proceedings by a detent oh i uv lvives wala to et posing 4 tsterone® Iie vbew theretare, Une append bs at entiled janet tated deine eee Thies an Untertocustary appeal, Hath the aut and the application fy a einen ee at eta ot the mult and the appllention. 1 ain alive the fet that #4 a cenit with nly aypeiie atom “ a svopetly exprena any concluded view un any of the leeuee eavehiig om thes enarite of ths wt 0 te ‘application we doinye so will, in ny view, bnfelngas ont us jurdedienins of tha tral erat ani tony WO verlag le laceton th male, And yet tha 16 what eel wn bande agyoar og v0 0 Thelt reapective subvnteslons whlch F dumbed eles are elently on the tanita 4 vhvarvins of te nent for slay cla ate Ui ig the spare et {ho Jurledicton anid powers of this Cuniet ave eet it unde netics So tes Agypettat Iriel Mle 6 Laws of Kenya, Subaection (2) therea enacte thie mn the erereine oh (4 letermination af any agent i yet, wtf iH have, wii to wry Ab junc vote te Mi ject eneidering tt yun heveatien rend “or all purposes of ane Ineldental to the hear and 1 Juriedietion conferred by thi Act the Cet of APP tind uration een iy thle Act the gow, wut we tw appelan N99 reir ‘An J state earlier Onyanger Otis J heat het hed new oon He ed iris the ‘ject, in whe nee hear the rexpondent&cH39;s upplicalion for stay Pr ec ‘dectinn tu entertain a6 proceed on 0 Wear the slay application He could alse sustalre the whjection 1 which cans he wentld whe the appt for slay. Te fa two cpio dn Ba cle Sippene, tend of aera the preliminary objection athe dd, he upheld id ie proceed tereaier” Regardless of the me ee reapondentHa cnse, Cyan Cen J had unico a hat waa to cesar the mare ae ae f the reapective cates of the appeliant md Ihe respondent “The stage for dolng, a0 ad not reeled ws the exponent ut wv ant filed te writen saterant ef detencen Ail he would gropery do was to det the ponent ie hin dates ae epi te ie that Onyange Olen J was wrong, 1 distninen the vethin which to do 60, Consequently eve! assur 9 preliminary point out juriedcato only ext He uy vacating, his onder of dummissal of Oe appellant &n preliminary point and abating therefor Wn ee ve daieing or atiking out te wpicaion for 0 arecting the reapondent to ile Ue defence wilin & specified period That 18 10 of proceedings however, the appellantdei9ys ene den vop cae Le that the Femme judge othe supenion cert erved wet ony 0 ing to find that the faifure by the respondent to file & i an plaintiff an 4 ‘As indicated earlier tho appellant eestaing Is peclinay objection ut nso in fall sihiten interment of defence within fourteet days Of atering, appearance entitied i parte judgment in default of defence, By tat Kention which was aber its connect A199 ‘appellant seems to suggest that section Aci) ofthe Arbitration Act, 1998, petite parallel prceeding best perae rdinary courts and «domeatctbunal The policy fo the law, as understand if, #8 that concurrent ngs before two. or moe orn 8 disapproved, If hy ‘authority is necessary, there is the clear etment in section 6 of the Civil Procedure Aety ‘which provides that No cour shall proceed with the tral of any sll oF ing in which the matter in nue Is aso directly and substantially in issue ina previously insted irr proceeding between the same partis, or between partes ander whom dey oF any of them cai Thgating der the same tle where such eu oF procecting Is persing inthe name or any cet cunt ‘havi jrindiction in Kenya to grant the relief claimed.” ‘oncusrent proceedings both aut the appellant cited section 6(2) of the Arbitration Act, 1995, as peemitting before the ordinary courts and before a domestic tribunal, ‘The wording of that subsection is in effect Inneanin, the Page 9 of 10. Scanned with CamScanneri ons (K) Lid v China Road & Bridge Corporation Kenya [2001] eKLR jogous toa reference of disputes to arbitration under order 45 of the Civil Procedure Rules. 11 does not at An contradict the provisions of section 6 of the Civil Procedure Act. It merely clarifies to the parties ‘concerned that should they wish to resolve the matters in dispute between them before a domestic tribunal they should feel free to do so notwithstanding that a suit is pending in court and provided that the reference is made by consent, If they decide to do that, the proceedings before the Court must of necessity be stayed. This therefore my view, and so hold, that section 6(2) of the Arbitration Act, 1995, does not permit parallel proceedings to be handled simultaneously. Consequently, it was not open (0 the respondent to take out an application for stay of proceedings and at the same time file a written statement of defence. As stated in the Joab Omino case (supra) the bringing of an application for stay of proceedings under rule 6(1) of the Arbitration Act, 1995, the respondent's duty to file a written statement of defence was suspended. Besides, default of defence as provided under order 9A rule 3 of the Civil Procedure Rules does not envisage a situation as exists inthe present ease, Tt envisages a case where a defendant is indolent. To deny a litigant as the respondent in the present appeal a chance to put forward a defence whether before the Count or before a private tribunal asthe appellant seeks to do, more so ina case where the claim is enormous, will be tantamount to offending the audi alteram partem principle. The hearing it was accorded before Onyango Otieno, J and before us is merely a hearing on preliminary issues and not on the merits or otherwise of its case. below is principally based on clause T. The main issue in the that clause. The appellant's main argument is thatthe said that paragraph (c) thereof ousts the jurisdiction of the Courts to clause is against public policy to the extent : deal with ‘any disputes ‘between the parties arising from the sub-contract aforesaid. It cannot be gainsaid that ina contract may be severed off if doing so in an appropriate case an offending part of a contract or a clause srillno ater the nature ofthe Seem ot clause. In Lee v The Showmend's Guild of Great Britain (supra) Denning LI remarked, in pertinent part, thus: "parties should seek, by agreement, to take the law out of the hands of the Courts and put it nto the hands of a private tribunal, without any recourse at all to the Courts in case of error of law, then the agreement is to that extent contrary to public policy and void: see Czamnikow & Co Ltd vs Roth Schmidt & Co (1922) 2 KB 478, 488 ..” (emphasis supplied) Whether or not severence is possible in a particular case is clearly a matter for the trial court as in some ceases to come to a decision it might call for the examination of facts and evidence in general. Section 6(1) of the Arbitration Act, 1995, under which the respondent's application for stay of the appellant's suit was brought provides as follows: The respondent's case in the Court appeal hinges on the legality or otherwise of "6(1) A court before which proceedings are brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than the time when that party enters appearance or files any pleadings or takes any other step in the proceedings, stay the proceedings and refer the parties to arbitration ‘unless it finds ~ (a) that the arbitration agreement is null and void, inoperative or incapable of being performed; or (b ythat there isnot infact any dispute between the parties with regard to the matters agreed to be referred to arbitration.” ‘Whether or not an arbitration clause or agreement is valid is a matter the Court scised of a suit in which a stay is sought is duty bound to decide. The aforequoted scction does not expressly state at what stage it should do so. However, a careful reading of the section leaves no doubt that the Court must hear that ‘pplication to come to a decision one way or the other. It appears to me that all un applicant is obliged to do is to bring his application promptly. ivd Appeal 187 of 2000 | Kenya Law Reports 2022 Page 4 of 10. Scanned with CamScannert dealt, in specific + in pan, ecieally the suesion whe th is re ‘edi Ne fepeal of th over the ube uarding the validity ofthe arbitration agreement, and mo Proceedings he ich wae to etween the part coma he Arbitration Act, cap 49, Laws of Kenya, which 10t however ies, rendered the atbitrati im th Dt et, deal wit dered the arbitration agreement null and void. Tha He tt View oF the fact that cht B86 the appellan&i9;8 counsel raised in the appeal nage jhe JUisdiction oF the Coun ay Us T (€) of the arbitration agreement, which prima facie tonde ee laller issue may not be decir s SeteeeMt is not rendered invalid for being against public policy. This Wording of section 6(1) of ahenigee® Without prejudicing the pending application for stay in view of tne {0 consider before a decig ny 25 At: The said section envisages that all the issues a court is called pon think, is inappropriate, ce ot A dealt with at the same time. A piecemeal approach to the application, 1 * expensive and may in some cases be prejudicial to either party. T think icati inca a ge ning cation under section (1) ofthe Arbitration Act has been made iti incumbent impediments set out fate cn nate © deal with it a8 a whole, to discover whether any of the legal issues which ween the Section exist as to disenttle the applicant toa stay. Determination of some ofthe appellant cna ised call for the examination of the evidence. I is for that reason tha I think that the Pellint should not have raised the three points it did, in limine, but should have made them part of its Brounds for opposing a stay as the three grounds are an integral part of the issues the Court is obliged to Consider and rule on in an application under that section. A finding as to whether or not there exists a dispute capable of being referred to arbitration cannot in my view be the subject matter of a pre inary objection. Likewise the finding one way or the other whether an arbitration agreement is inoperative or incapable of being performed also requires an examination of the evidence. It is my view that the leamed Judge erred in allowing the appellant to raise the threc points in limine. That is the more so because on the authority of the case of Mukisa Biscuit Co v West End Distributors [1969] EA 696, a preliminary point raises purely points of law. Law JA observed at p 700 that: "'So far as | am aware, a preliminary objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings, and which if argued as a preliminary point may dispose of the suit." And Newbold P at p 701, observed that: “The first matter relates to the increasing practice of raising points, which should be argued in the normal manner, quite improperly by way of preliminary objection. A preliminary objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct, It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion. The improper raising of points by way of preliminary objection docs nothing but unnecessarily increase costs and, on occasion, confuse the issues.” Having come to the foregoing conclusion, I eschew any attempt at expressing any view touching on the ‘merits of the application. I also do not find it necessary to consider the various other authorities which were cited as they touch on the merits or otherwise of the application for stay. In the result, I would dismiss the appeal with costs to the respondent. I would not however certify costs for two counsel. O'Kubasu JA. I have heard the advantage of reading in draft the judgment of Tumoi and Bosire JJ A. 1 agree with the reasoning and conclusion of Bosire JA more so since this is an interlocutory appeal and hence this court should confine itself to the issues limited to this appeal. Hence, I would dismiss the appeal with costs to the respondent. Tunol JA. Niazsons (K) limited, the appellant and the plaintiff in the suit, is a limited liability company incorporated in Kenya under the Companies Act Cap 486 Laws of Kenya. It caries on the business of civil engineers and contractors and as it is apparent from this litigation it specialises in road works. The i . Givi Appeal 157 of 2000 | Kenya Law Reports 2022 Page 5 of 10. Scanned with CamScannerFavzsons (0) Lid v Chin Read & Bridge Corporation Kenya (2001) okLR respondent is a foreign entity inc , ‘orporat . ' same Act. Itis one of the major ener ects Feil Republic of China and duly registered under the in the country. This is about the fou . anplication so, the fact si ater Is coming to this cour, twice as an appeal and evice as an agreement made between the eae the dispute are well known to us. The claim arises from a sub-contract to execute road works of rps wrtng and dated 12th May, 19, whereby the appellant undertook towards Hola direction, The ilometres stretch of the Garsen-Hola road from km 223 at Garsen upto km 171 sub-contract the reopen dees ePeliant avers that it having fully observed and fulfilled all the terms of the failed, neglected eo ert GesPite demands made and notice of intention to sue having been seed has 1900, ine ected 9 Fesed to pay the sums demanded or (o admit liability. Therefore, on 8* February certified ate ms filed a suit in the High Court of Kenya at Nairobi secking judgment in respect of sums She Tae pabable to iby the respondent under a road-buildng contract and speci ‘damages in the sum of coer ots45893 as well as a sum of Shs4$9,946,413/00 or such other sums as may be determined by the t It also sought an injunction in respect of breach of the terms and conditions of sub-contract The respondent entered appearance on 16th February, 1999, and on the same day applied by a notice of motion for stay of proceedings pending reference to arbitration in terms of an arbitration clause contained in the contract between the parties. The notice of motion was later amended to be a chamber summons. Otieno J Mr. Billing, for the appellant, raised 3 When the application came for hearing before Onyango se T of the sub-contract three pronged preliminary objection grounded mainly on the construction of claus agreement which refers to arbitration. The clause reads as follows:~ “T. Arbitration (a) All disputes and difference be first settled between contractor and sub-contractor can thus be reached, the disputes and differences shall be submitted for arbitration plaintiff, the arbitration shall take place in Nairobi, Kenya, F arbitration shall in connection with this Sub-contract and with the execution thereof, shall by friendly and amicable negotiation. If no settlement (®) Either the contractor or the sub-contractor is and be conducted by the Institute of Engineers of Kenya. The procedural law and rules for be the Arbitration Act, Chapter 49 of the Laws of Kenya. The appointment of the arbitrator shall be by the Chairman of the Institute of Engineers of Kenya. (©) The award or decision of the Institute of Engineers of Kenya shall be accepted as final and binding for both the contractor and the sub-contractor and neither the contractor or the sub-contractor shall seek recourse to a law court or other authorities to appeal for revision of the decision. (4) All arbitration expenses shall be borne by the losing party. ‘Mr Billing submitted; firstly, that the respondent in filing the application seeking reference to arbitration it had taken steps in the proceedings and therefore under section 6(1) (a) of the Arbitration Act, 1995 (the Act) it'was precluded from seeking a reference to arbitration; secondly, that there is no dispute to be referred to arbitration as the appellant had filed a request for judgment as no defence was lodged within the prescribed time; and, thirdly, that clause T aforesaid is null and void because it relied on a repealed Act. Mr Wena, for the respondent, attacked the preliminary objection largely basing his arguments on the decision of Joab Henry Onyango Omino v Lalji Meghji Patel & Co Ltd Civil Appeal No 119 of 1997 (unreported) which held that: - “When an application under section 6(1) of the Act is made b itrati ‘ yy @ party to arbitration agreement, it is iapactona ie court to which such an application is made to deal with itso as to discover whether or in Soe or alfference arises within the arbitration agreement for if it does, then itis forthe opposing 40 show cause why effect should not be given (o the agreement, Indeed, once parties to an agreement Page 6 of 10. Scanned with CamScannerzzsons (K) Ltd v China Road & Bridge c, ny KLR sone (K) Ltd v Ch 109 Corporation Kenya (2001) okt have chosen to determine their dis dis i inary court cir disputes or ditfer ordinary s of law, that choice shoul drat only brteenae domed forum other 1 aside.” wn resorting 10 the ‘Mr Wena submitted further that i default of defence, pid ut An wigw ofthe stay application the appellant was not ented to Jud leatoed fidgs tds raced that section 6 of the former Arbitration Act had been re reed, The has lodged this interlocuory ing overaed the preliminary objection and the appellant ‘being taied sopplocnentary record of aie When the appeal was called to hearing Mr, Billing sought leave to file paragraph oles reg Pet incorporating an amended memorandum of upped The newly introduced “9. The leamed jud, Rertaear tis cael biog in failing to give interlocutory judgment in favour of the appellant against the sh 609,727,755.87 together with the interest thereon.” The new prayer is in prayer is in the same terms. As Mr Miller did not oppose the supplementary record of appeat and th ie amendment, the same were duly admitted as part of the record of appeal. ee pelos us, three main grounds of appeal were urged on behalf of the appellant. Its first and major ¢ that clause T aforesaid is void in that it was an attempt to oust the jurisdiction of the court ie to Prevent there being any appeal or application under the Act of (0 set aside the award. To support hid argument Mr Billing relied on the decision of this court in Tononoka Stcels Limited vs Eastern and Southern Africa Trade and Development Bank, Civil Appeal No 255 of 1998 (unreported) and he referred to the following passage in the judgment of Lakha JA :- dentin the instant appeal, the original defendant, instead of pleading as Ihat the Kenya Court had no jurisdiction and that the suit accordingly sald be digmiksed for want of jurisdiction, should have made an application under section 6 of the aaestion Act, 1995 fora stay of proceedings. No such application was made in his SA, The respondent followed a wrong procedure and it is manifest from the record that section 6 of the Arbitration Act was not referred to by counsel and is not refered fo by the leamed trial jude in his ruling. Indeed, it was not appeal, but being a matter of jurisdiction is clearly one which should mentioned in the arguments on this aoe be taken, If an application had be made atthe proper time under section © if seems probable that the Court would have been satisfied as to the requisite matters set out in the section and would have made an torder staying the proceedings . As however, no such application was m mn that the order made should be quashed. Mr. Miller argued that clause T aforesaid offended no known provisions of law and did not in any way oust the jurisdiction of the court. Moreover, under section 35 of the Act, Rt to the High Court sav al awards has been provided; and, in any cas, he averred, even if he was HONE the offending clause is severable from the rest of the clause without rendering the sub-contract inoperative on the aspect of arbitration. The fundamental point whic! contained in clause T aforesai ase, in effect, principally hinges on the sid clause T. Ordinarily, such an arbitration clauses simpliciter docs not ts to do so, it would be contrary to public purported! Great Britain [1952] 2QB 329 Romer LI said ilege of every man to resort to them for «The courts jealously uphold and safeguard the primafacie priv his legal rights, As an example of this, it has been held that ny attempt ‘It appears from this that the respon did in paragraph 7 of the defence # jade, I am of the opi his being urged on behalf of the appellant is that such an agreement ra i the juradition of the court and is therefore void. The respondents the court. But, if it oust the jurisdiction of Showmen's Guild of policy. in Lee vs The + determination and enforcement o' by a testator to divert from the courts the power of deciding questions of construction that may arise on his wits and vesting that power in his executors instead will fai..on the ground that they are contrary to public policy.” Givi Appeal 157 of 2000 | Kenya Law Reports 2022 Page 7 of 10. Scanned with CamScanner i sidedflesore() 8 China Road & Bridge Corporation Kenya ‘ave chosen to determine their disputes or ere ordinary courts of law, that choice should mn Mr Wena submitted further that default of defence. It mattered leaned judge in a re differences through a domestic forum other than resorting to the 'ot only be brushed aside.” a ‘of the stay application the appellant was not entitled to judgment in served ay het 6 of the former Arbitration Act had been repealed. The has lodged this imeriscoc ane en eTue the preliminary objection and the apellan being dssatistied supplementary record of era: When the appeal was called o hearing Mr. Billing sought lave to fe Paragraph reads as fallen ee neoPertng an amended memorandum of appeal. The newly introduced “9. The learned j judge erred in failing to f the appellant against the respondent i 16 lo give interlocutory judgment in favour of the appellant agai ‘Spondent in the sum of Ksh 609,727,755.87 together with the interest thereon.” ‘The new prayer i appeal ree Rew Prayer i inthe same tems. As Mr Miller didnot oppose the supplementary record of appeal and amendment, the same were duly admitted as part of the record of appeal. On appeal before us, three main grounds of appeal were urged on behalf of the appellant. Its first and major contention is that clause T aforesaid is void in that it was an attempt to oust the jurisdiction of the cour i¢ 10 prevent there being any appeal or application under the Act or to set aside the award. To support hid argument Mr Billing relied on the decision ofthis court in Tononoka Sieels Limited vs Eastern and Southern Africa Trade and Development Bank, Civil Appeal No 255 of 1998 (unreported) and he referred to the following passage in the judgment of Lakha JA :- “It appears from this that the respondent in the instant appeal, the original defendant, instead of pleading as it did in paragraph 7 ofthe defence thatthe Kenya Court had no jurisdiction and that the suit accordingly should be dismissed for want of jurisdiction, should have made an application under section 6 of the “Arbitration Act , 1995 fora stay of proceedings. No such application was made inthis case. The respondent followed a wrong procedure and it is manifest from the record that section 6 ofthe Arbitration Act was not referred to by counsel and is not referred to by the leamed trial judge in his ruling, Indeed, it was not mentioned in the arguments on this appeal, but being a matter of jurisdiction is clearly one which should tow be taken. If an application had be made at the proper time under section 6 it seems probable that the ‘Court would have been satisfied as to the requisite matters set out in the section and would have made an order staying the proceedings . As however, no such application was made, I am of the opinion that the ‘order made should be quashed.” id offended no known provisions of law and did not in any way oust the jurisdiction of the court. Moreover, ‘under section 35 of the Act, recourse to the High Court against arbitral awards has been provided; and, in any case, he averred, even if he was wrong the offending clause is ‘severable from the rest of the clause without rendering the sub-contract inoperative on the aspect of arbitration. The fundamental point which is being urged on behalf of the appellant is that such an agreement as contained in clause T aforesaid ousts the jurisdiction of the court and is therefore void. The respondent's ‘case, in effect, principally hinges on the said clause T. Ordinarily, such an arbitration clauses simpliciter does not oust the jurisdiction of the court. But, if it ‘attempts to do so, it would be contrary to public policy. In Lee vs The Showmen's Guild of Great Britain (1952) 2QB 329 Romer LI said "The courts jealously uphold and safeguard the primafacie privilege of every man to resort to them for determination and enforcement of hs legal rights. As an example of this, it has been held that any attempt Ua kent vt rm tects ic pow of dciding gosto af contruction that may aie on his = on vesting that power in his execulors instead will fail..on the ground that they are contrary to public ‘Gv Appeal 157 of 2000 | Kenya Law Reports 2022 Page 7 of 10. Mr. Miller argued that clause T aforesai Scanned with CamScanner(6) Lid v China Road & Bridge Corporation Kenya [2001] KL erations of publie policy would act as ‘may well be that the same cu N of the courts on questions of law by contractual consideration. It Romer LJ also thought t fetter on attempts to oust the jurisdi discemible, therefore, as we said in the fine English cours that all agreements purporting wo ous the jr vords which appear in the sub-contract elause (¢) of the Arbitration clause state: cither the contractor nor the sub-contractor shall seek recourse to a law court or other authorities and decisive. They court of law thus Tononoka case (ibid) that it is a well settled general rule recognised jon of the courts are prohibited. The appeal for revision of the decision." These intrusive words which do not normally appear in evince, in my view, intention of the parties beyond doubt in its jurisdiction, arbitration clause are el ugreeing nol (0 resort Lo ousti What is contended is this: the intrusive words referred to hereinabove unequivocally oust the jurisdiction of the court. The effect of clause T is to vest in the Institute of Engineers of Kenya the exclusive power of interpreting the sub-contract between the appellant and the respondent who had contractually debarred themselves from resorting to the courts. I therefore, am persuaded by the contention and I have no hesitation in concluding that the clause seeks to oust the jurisdiction of the court. It is also my view that clause T is incapable of being severed from the rest of the clause and yet still leave intuct the arbitration clause, The arbitration clause would be extinguished completely. If that is s0, and I s0 hold, then there is ample authority of this court in the case of Davis vs Mistry [1973] EA 463 that the jurisdiction of the court can only be ousted by an Act of Parliament. As the clause, in my judgment, sought (o oust the jurisdiction of the ink that on that point the learned judge, with respect, was court, it is void and for that reason I would wrong. Section 6(1) (a) and (b) of the Act, so far as relevant, reads:- “6(1) A court before which proceedings are brought in a matter which is the subject of an arbitration agreement shall...stay the proceedings and refer the parties to arbitration unless it finds- (a) That the arbitration agreement is null and void, inoperative or incapable of being performed; or (b) That there is not in fact any dispute between the parties with regard to the matters agreed to be referred to arbitrat The language of section 6(1) (a) and (b) upon which this appeal also largely turns, is different from that contained in section 6 of the repealed Arbitration Act, Cap 49. Having held, as I have, that the arbitration clause is void the court, in my view, ought to have refused a stay, therefore the learned judge was, with tes. It is manifestly clear that respect, in error. Secondly, it was submitted by Mr Billing that there was not in fact a dispute between the parties with regard to the matters to be referred to arbitration and the court must therefore refuse a stay. He referred us to the certificates issued by the Engineer. I have carefully perused this cert there is no identification of any dispute whatsoever arising from then nor is there any evidence as to the extent or value of any purported dispute. For example, the respondent does not challenge the validity or otherwise of certificates 2 b (which is certificate Number 21), 3 & 4 worth Shs 29, 134, 142/29 and certificate on VOP for Shs 8, 438,073/80. It appears to me, therefore, from a consideration of the available material on record that there is no evidence that the respondent:- (a) Objected to the certificates; (b) Disputed the certificates or any parts thereof entitling the respondent to withhold payment; or (¢) Relied on any mistake on the part of the engineer, ‘tal Appeal 157 of 2000 | Kenya Law Reports 2022 Page 8 of 10. Scanned with CamScanner10 Corporation Kanye 2001] KL sa before this court tht the respondent hy eit is plain that If anything, the yy sone (k) Ld v China Road 6 Bid ‘on the materi ked oF relied there is no evidence "spondent in his wee a Jause before the suit was institute 225i nse fie ha wes pd ha It ny are ieee tian seat. Most arbitration clauses usualy start ; 2 pany dispute or difeence shall arse perween the partes = Me" a a ‘8068 (0 arbitration, = se issue is what happens when there ino GPE ree a aa icerert 10 pay" This yy the Earl of Hae vs J H Billington ted (1899) Ae an i ith b inent issue was adequately dealt wi tab RY pedon and North Western and Great Wester sven he sid= a pirat on whatever STUN i that a di brpean a difference of opinion befor the scton that py wri in dhe superior Courts. Any contention tha Mr gervees, ase then for he fis ime the question they have a right to go to an arbitrator, seems wethat a condition precedent tothe invoralo! uf ed terween the parties should have arisen an think Fe munched either by formal paint inthe COM the parties could, when they are sued FOF te eae whether or not the charges Were reasonable & tobe absolutely untenable.” Ifa debtor agrees that money is du ccan and must proceed by a does not constitute nor False & Sir Musil and Prof Boyd p 96 mere refusal to pay upon a claim which i Jause into operatio ey fil it, there is obviously no dispute, the 1, but simply fails 0 Pay 1 pute, the creditor tro, rather than by arbitration equally silence in the face of a screaming claim te see The Law and Practice ‘af Commercial Arbitration in England, by , is not really a dispute, does not necessarily pa a dapeed calling an arbitration ¢! mn. : raat there, that cours ean a vthout previous reeourse to arbitration fe enforce a claim which isnot disputed but which an be resorted t use to arre was in my view no of any genuine dispute between the employer merely persists in not paying: ejected by the learned jud parties, a tay onthe respondents application ‘ought to have been reje judge. the respondent not ready or willing to invoke the arbitration having arisen. In other words, appellant must ‘unequivocally elect to have the dispute Bt, inthe instant case there is no ‘evidence that the respondent proceeded to make “trator as provided for in the arbitration clause. It was only on 12th February, 1999, after the institution of the suit in court by the appellant, that the respondent made an appointment of ee ate Sach an appoiniment was invalid ast was contrary (0 Ye arbitration clause which provided that the appointer of arbitrators shall be the Chairman for the Institute of Engineers of Kenya. “Accordingly, the appointment made by the respondent was invalid and any award by such persons would arid There was, therefore, no valid appointment of any arbitrator wndet the clause when the pplication for slay was made. [dink that wilingness to arbitrate manifests itself if the respondent does aor obliged 10 do in the arbitration eg make a valid appoinimenis of the arbitrators 10 ON of the at euse, When it doesnot do soa all, as here, can it then be said that the respondent wa ready ‘and willing for such an arbitration” With respect, the answer to this ‘would, in my view, be in the negative. ‘The fact that an application for stay has been made, as in this eas, does not mean that there isan aroma’ enlargement of time for fling the defence. As was said by Cockar, J (ashe then was), in 17 Engineering aaa Limtied vs Minicipal Councll of Mombasa, High Court Civil Case No 3986 of 1983, (unreported): “Fling of an application for stay of proceedings docs not automatically enlarge time for filing defence” fence either without ce to show that the 1k was submitted by that the appellant was clause upon a dispute decided by arbitration. any appointment of an arbi With respect, I agree. ‘There is no request for an enlargement of time for the filing of det prejudice or inthe event of the application for stay failing. In addition, there is no eviden ‘Chl Appeal 157 of 2000 | Kenya Law Reports 2022 Page 9 of 10. sits aa Scanned with CamScannerés suazsons(K) Lid v China Road & Bridge Corporation Kenya [2001] eKLR indent applied either to the appellant or to the court for filing one without prejudice or for an extension bf time forthe filing of the defence, ‘Nor does it appear that there is anything in the language of th desired any time for the filing of the defence to be extended in refused. .e summons to indicate that the respondent the event of the application for stay being Finally, though this is an interlocutory appeal both parties have submitted So es Se aspects ofthe suit and have actually asked and besceched us 1 dispose ofthe aPPed! is ute, this 7 artes coeTuively, Inte Dartoulereramstances ofthis pea! wd theca 15 =, ovals porwr todo so and it cannot be sa, nearest, that i i intringig om Dg ET tppelant was ened in aw to have judgment entered fort when I mae TAT 1999, after the expiry of the time for filing defence on 3rd March, 1999, the Civil Procedure Rules. the superior court given 2a 1 this appeal with costs, set aside the order of the superior court ive" on nd eer nt EE re ye Kshs 609,727,755.87 together with interest thereon. | would also order appellant the costs in the superior court ‘As the other members of the court are of a differen them. Dated and Delivered at Nairobi this 2% day of March, 2001 t view, the orders of the court shall be as proposed by P.K.TUNOL JUDGE OF APPEAL S.E.0 BOSIRE JUDGE OF APPEAL E.0. O°KUBASU JUDGE OF APPEAL ORR ns ‘While the design, structure and metadata of the Case Search database are licensed by Kenya Law under a Creative ‘Commons Attribution-Share Alike 4.0 International, the texts of the judicial opinions contained in it are in the public domaine ae rom ay copyright restrictions Read our Priviey Policy Digium (Givi Appeal 157 of 2000 | Kenya Law Reports 2022 Page 10 of 10. bee Sas na Scanned with CamScanner