Background and Introduction
1. For determination is the Originating Summons (OS) dated 12th August 2024, brought under Section 15(2) of the Arbitration Act, 1995 and Rules 3(1) and (2) of the Arbitration Rules, 1997. By the OS, the plaintiff seeks an order that the mandate of the sole arbitrator, Noah Wambua Kilonzo (the arbitrator), be and is hereby terminated pursuant to section 15(2) of the Arbitration Act. The OS is supported by the affidavit and further affidavit of CATHERINE NJERI NJAIMWE, the plaintiff.
2. The plaintiff contends that the arbitrator is unable to perform the functions of his office. She particularly takes issue with the arbitrator’s delay of 4 months in responding to her enquiries. She contends that she has suffered great loss and prejudice and prays that the court assists her to expedite the arbitration proceedings by granting the order sought.
3. The application is opposed by the defendant through the replying affidavit sworn by GRACE WAMBUI WERU on 15th October 2024. The defendant argues that the plaintiff had willingly submitted to arbitration before the arbitrator and has been participating in the proceedings. Further, that the application before the court is premature as there was a pending ruling before the arbitrator on the same issue of termination.
4. In the defendant’s view, the real reason for seeking the termination was because the plaintiff could not afford the arbitrator’s fees, which is not a ground for termination of the arbitrator’s mandate. On its part, the defendant contends that it has faith in the arbitrator’s ability to handle the dispute between the parties in a structured and timeous manner. The defendant urges that the plaintiff has the option of withdrawing her claim under Section 33(2)(a) and (c) of the Arbitration Act which would effectively terminate the sole arbitrator’s mandate.
Analysis and Determination
5. The parties filed written submissions to buttress their arguments, which I have carefully considered alongside the pleadings, evidence and case law cited by both sides.
6. The defendant raises a preliminary issue with the further affidavit sworn by the plaintiff, having been filed without leave of this court. The defendant wants the further affidavit struck out also for introducing new evidence. I have considered the submission by the defendant and I note from the court record that on 19th November 2024 this court directed that ‘the further affidavit be and is hereby deemed as being properly on record’, following a prayer by the plaintiff.
7. It is my further finding that the evidence produced through the plaintiff’s further affidavit is not substantial as alleged by the defendant. It does not introduce any new issues as it goes to support the grounds already raised by the plaintiff’s application, and substantiate the delay by the arbitrator to communicate. As the defendant correctly points out, the further affidavit only introduces an email and a letter, marked as CNN 1 and CNN 2 respectively, which were in any case, also copied to the defendant at the time they were sent to the arbitrator.
8. I find that no prejudice has been occasioned to the defendant by the further affidavit. It provides further information that will enable this court determine the matter with finality. Moreover, the defendant has had an opportunity to respond to this evidence. The long and short of this is that the further affidavit shall remain on record.
9. The other preliminary issue raised by the defendant is that the arbitration proceedings cannot stand due to the ongoing liquidation proceedings in Cytonn High Yield Solutions, Insolvency Petition No. E063 of 2021 and Cytonn Real Estate Project Notes (In Liquidation) V Office of the Official Receiver, Insolvency Petition No. E064. However, the proceedings before this court are between the plaintiff and Cytonn Investments Management PLC. In the absence of any explanation or evidence establishing a connection between the companies involved in the liquidation proceedings and the defendant in this matter, I am unable to accept the defendant’s argument.
10. Even if the defendant is affected by the ongoing liquidation processes, I am of the view that, in a case such as this, at the very worst, an arbitral award would serve as proof of debt to be submitted to the Official Receiver.
11. That said, Section 15(1) and (2) of the Arbitration Act under which the application is premised provides:
“(1) The mandate of an arbitrator shall terminate if—
(a) he is unable to perform the functions of his office or for any other reason fails to conduct the proceedings properly and with reasonable dispatch; or
(b) he withdraws from his office; or
(c) the parties agree in writing to the termination of the mandate.
(2) If there is any dispute concerning any of the grounds referred to in subsection (1) (a), a party may apply to the High Court to decide on the termination of the mandate.”
12. I am mindful of the strict and limited jurisdiction this court has in applications arising from arbitration proceedings, as outlined in Section 10 of the Act. This provision unequivocally states that, except as expressly provided under the Act, no court shall intervene in matters governed by it. Courts have consistently upheld this principle, ensuring they do not interfere in disputes where parties have chosen arbitration as their preferred forum for resolution.
13. Similarly, the grounds for terminating an arbitrator's mandate under section 14 of the Arbitration Act or due to failure or impossibility to act as provided in section 15(1), (2) and (3) of the Arbitration Act must be defined with equal strictness. This is meant to prevent undue interference in the arbitration process, except for cases where exceptionally compelling reasons exist.
14. The plaintiff's complaint centers on the delay caused by the arbitrator, particularly noting that the hearing was concluded and submissions closed in May 2024. The plaintiff further raises concerns about the arbitrator's lack of responsiveness, highlighting unanswered communications sent in July and August 2024.
15. While the concerns raised by the plaintiff are noted, Section 14 of the Arbitration Act outlines the procedure for challenging an arbitrator. It provides as follows:
“(1) Subject to subsection (3), the parties are free to agree on a procedure for challenging an arbitrator.
(2) Failing an agreement under subsection (1), a party who intends to challenge an arbitrator shall, within fifteen days after becoming aware of the composition of the arbitral tribunal or after becoming aware of any circumstances referred to in section 13 (3), send a written statement of the reasons for the challenge to the arbitral tribunal, and unless the arbitrator who is being challenged withdraws from his office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge.
(3) If a challenge under agreed procedure or under subsection (2) is unsuccessful, the challenging party may, within thirty days after being notified of the decision to reject the challenge, apply to the High Court to determine the matter.
(4) On an application under subsection (3), the arbitrator who was challenged shall be entitled to appear and be heard before the High Court determines the application.
(5) The High Court may confirm the rejection of the challenge or may uphold the challenge and remove the arbitrator.
(6) The decision of the High Court on such an application shall be final and shall not be subject to appeal.”
16. No evidence has been presented to this court indicating compliance with the processes stipulated under Section 14. I emphasize that these processes uphold the principle of autonomy in arbitration proceedings, a principle this court is duty-bound to respect and defer to.
17. In light of this and to avoid prejudicing any further steps that may be taken in this matter, I will refrain from commenting further.
Disposition
18. Accordingly, the OS dated 12th August 2024 is dismissed with costs to the defendants.
DATED, SIGNED AND DELIVERED IN NAIROBI
THIS 21ST DAY OF FEBRUARY 2025.
F. MUGAMBI
JUDGE