2. The applicant is seeking a stay of court proceedings pursuant to section 6 of the Arbitration Act.
3. In support of the above, the applicant submitted that there are documents which bind the parties to arbitration and that the same have been admitted by the respondents. Counsel submitted that the issues of criminal conduct as alleged by the respondent’s, are in fact arbitrable. He relied on the authority of Blue Limited vs Jaribu Credit Traders Limited 2008 eKLR in support of the argument that a mere allegation of fraud in the pleadings may not deny a tribunal of jurisdiction.
4. Further to the above, counsel submitted that the court ought not re write a contract between the parties, and further, that because the respondent has alleged that the contract between the parties is unconscionable, the burden of proving the same rests on the party advancing that claim, which has not been done.
5. Additionally, counsel submitted that the present agreements were drafted by lawyers and not laypersons; and that the parties knew what they were getting into at the time of entering into the various contracts.
6. Finally, counsel submitted that the only documents filed in court at present are the notices of appointment. He stated that no further steps have been taken. In particular, no replying affidavit to the petition has been filed to acknowledge the court proceedings.
7. In opposition to the application, counsel for the respondent submitted that the application is bad in law and ought to be dismissed. Further, that the arbitration agreement is null and void.
8. Counsel contended that the applicant has submitted to the jurisdiction of the court by entering appearance and as such, the applicant is estopped from referring the matter to arbitration.
9. Counsel further submitted that the agreements are unconscionable for, among other reasons, that that the bargaining power between the parties was not equal at the time of entering into the contract.
10. Having considered the submissions of counsel, I note that the relevant law is found at Section 6 of the Arbitration Act.
11. Section 6 of the Act provides as follows:
Stay of legal proceedings
(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 otherwise acknowledges the claim against which the stay of proceedings is sought, 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 arbitration.
(2)
Proceedings before the court shall not be continued after an application under subsection (1) has been made and the matter remains undetermined.
(3)
If the court declines to stay legal proceedings, any provision of the arbitration agreement to the effect that an award is a condition precedent to the bringing of legal proceedings in respect of any matter is of no effect in relation to those proceedings.
12. Based on the above, the first step for this court is to determine whether or not an arbitration agreement exists between the parties.
13. I have perused the various agreements between the parties and looked at the relevant clauses of the agreements, namely clause 12 of the Trust Deed dated 23 February 2007; Clause 10 of the Amended Deed dated 19th June, 2008; Clause 2 of the Second Amended Deed; and I have perused the relevant clauses of the various Mpesa Terms and Conditions of Use agreements made between the years of 2007 and 2022.
14. Having considered the same, I am satisfied that there exists between the parties, not one, but several agreements to refer any dispute arising between the parties to arbitration, arising from the various agreements as stated above.
15. As one example, counsel for the applicant drew my attention to Clause 19 of the Mpesa Service Conditions of Use, which I note sets out detailed provisions relating to the arbitral process, including timelines for appointment of the arbitrator, the number of arbitrators to be appointed; and the applicable institutional rules. Having considered the above, I am satisfied that the said agreement is valid and enforceable and that it musters the test set out in section 6 of the Arbitration Act.
16. Having found the above, prior to granting a stay of court proceedings, the court is mandated to inquire whether the present application has been taken as the first step in the legal proceedings, and has therefore not waived its right to continue with the arbitral process. Looking at the record before me, I am satisfied that this has been complied with. I note that the applicant has not filed any pleadings; nor has it taken any substantive steps to acknowledge the court’s jurisdiction in respect of the claim in question.
17. The final part of the test as provided in section 6(b) of the Act, is to ensure that there is, in fact, a dispute between the parties that falls within the scope of the arbitration agreement. Having considered the submission of the parties, I am of the view that once the court has found that there is, in fact, a valid arbitration agreement, unless the dispute appears so totally unrelated, or it is on the face of it, so obvious that the dispute falls outside of the Tribunals jurisdiction, the proper position is to refer the matter to the arbitration, and allow the Tribunal to determine which matters, if any, fall outside the scope of its jurisdiction. The present matter is no exception.
18. Finally, I am of the view that the language in section 6 of the Act is couched in mandatory terms, the implication being that unless there is non- compliance by the applicant with the same, this court is obliged to grant a stay of proceedings and refer the matter to arbitration. To my mind, the court does not have jurisdiction to exempt certain matters from arbitration once the provisions under section 6 have been complied with.
19. Based on reasons as set out above, I am satisfied that the application dated 23 October, 2023 is with merit. The orders of the court are as follows:
a. Proceedings before the court are hereby stayed in order to facilitate the arbitral proceedings.
b. The matter is referred to the present Chairperson of the Chartered Institute of Arbitrators, Kenya Branch, for appointment of a sole arbitrator in accordance with the terms of the arbitration agreement as set out in the Mpesa Service Conditions of Use. For clarity, such appointment by the Chairperson shall take into account the particular experience and relevant qualifications required of an arbitrator as stipulated in the said arbitration agreement.
c. The applicant shall have the costs of the application.
d. The file is accordingly marked as closed.