' Background and Introduction
1. For determination is the application dated 12th November 2024, filed by China National Aero Technology International Engineering Corporation. It seeks to have the Final Award published on 18th June, 2024 by Arch. Julius M. F. Mutunga, MAAK, FCIArb, Sole Arbitrator recognized and adopted as a Judgment of this Honorable Court and for leave to be granted to the applicant to enforce the final award and that a decree do issue in the terms of the award and finally for costs.
2. The application is supported by the affidavit sworn by DUAN HAO HAO on behalf of the applicant, on 12th November 2024. It is opposed by a replying affidavit sworn by GRACE WERU on behalf of the respondent, on 21st May 2025.
3. The respondent’s opposition is premised on several grounds, chief among them being that its sole asset, “The Alma,” is subject to preservation and enforcement orders issued by the Insolvency Court and the Court of Appeal. The respondent argues that enforcement of the award would jeopardize the insolvency process, prejudice other creditors, and violate public policy.
4. The respondent further contends that part of the award, specifically the sum of Kshs. 105,000,000/=, is conditional upon the completion of the Alma Project, which has not occurred. It argues that enforcing this component would unjustly reward the applicant for work not completed and unfairly elevate its claim above those of other creditors, including secured lenders and homeowners.
5. Additionally, the respondent challenges the interest rates awarded, describing them as exorbitant, oppressive, and contrary to public policy. It asserts that enforcement would diminish the pool of assets available for distribution to creditors in the insolvency process.
Analysis and Determination
6. I have carefully considered the application, the affidavits and submissions on record, and the applicable legal framework under the Arbitration Act, 1995.
7. Section 36 of the Arbitration Act provides for the recognition and enforcement of arbitral awards. Section 37 outlines the limited grounds upon which recognition or enforcement may be refused. These include incapacity of parties, invalidity of the arbitration agreement, lack of proper notice, the award dealing with matters beyond the scope of submission, improper composition of the tribunal, or conflict with public policy.
8. I note that the respondent has not filed any application under Section 35 of the Arbitration Act seeking to set aside the award. In any event, even if such an application were to be filed now, it would be time-barred under Section 35(3), which requires such applications to be made within three months of receipt of the award.
9. The respondent’s reliance on the ongoing insolvency proceedings as a basis to oppose recognition is misplaced. I have previously pronounced myself on this issue, (See Misc Arb E030/2023 Cytonn Investments Management PLC V Margaret Mary Njunguna) and reiterate that liquidation or insolvency proceedings do not constitute a valid ground for refusing recognition under the Arbitration Act. An arbitral award may be enforced by a successful party as a creditor, subject to the applicable insolvency framework.
10. On the allegations of public policy, I am guided by the jurisprudence of our courts, (Christ for All Nations V Apollo Insurance Co Ltd, [2002] EA 366) which have consistently held that the public policy exception under Section 37 must be narrowly construed. It is not sufficient for a party to merely allege hardship or inconvenience. The opposing party must demonstrate that enforcement of the award would violate fundamental notions of justice, morality, or fairness in a manner that shocks the conscience of the court.
11. In this case, the respondent has not demonstrated that enforcement of the award would violate public policy. The award was rendered by a duly appointed arbitrator, following a process agreed upon by the parties. The respondent participated in the proceedings and has not challenged the award through the proper statutory channels. The claim that enforcement would prejudice other creditors is a matter for the insolvency process to manage, not a basis for this Court to refuse recognition.
12. As for the argument that the Kshs. 105,000,000/= was conditional upon completion of the Alma Project, this is a matter that was considered and determined by the arbitrator. This Court cannot re-evaluate the merits of the award under the guise of enforcement. The Arbitration Act does not permit such a review.
13. Regarding the interest rates awarded, again, they were within the discretion of the arbitrator and have not been shown to be unlawful or unconscionable under Kenyan law. The respondent has not provided any legal basis to support the claim that the interest rates offend public policy.
14. The applicant has complied with the requirements of Section 36(2) of the Arbitration Act by furnishing this Court with a duly certified copy of the Final Arbitral Award dated 18th June 2024, as well as the agreement containing the arbitration clause under which the dispute was referred to arbitration. These documents form the basis upon which recognition and enforcement may be granted, and their submission satisfies the procedural threshold for invoking the Court’s jurisdiction under the Act.
Disposition
15. In light of the foregoing, I find no legal basis to refuse recognition and enforcement of the Final Arbitral Award dated 18th June 2024. The application dated 12th November 2024 is hereby allowed.
16. The Final Award published by Arch. Julius M. F. Mutunga is recognized and adopted as a judgment of this Court. Leave is granted to the applicant to enforce the award, and a decree shall issue in the terms of the award.
17. Costs of this application shall be borne by the respondent.
It is so ordered.
'
1. For determination is the application dated 12th November 2024, filed by China National Aero Technology International Engineering Corporation. It seeks to have the Final Award published on 18th June, 2024 by Arch. Julius M. F. Mutunga, MAAK, FCIArb, Sole Arbitrator recognized and adopted as a Judgment of this Honorable Court and for leave to be granted to the applicant to enforce the final award and that a decree do issue in the terms of the award and finally for costs.
2. The application is supported by the affidavit sworn by DUAN HAO HAO on behalf of the applicant, on 12th November 2024. It is opposed by a replying affidavit sworn by GRACE WERU on behalf of the respondent, on 21st May 2025.
3. The respondent’s opposition is premised on several grounds, chief among them being that its sole asset, “The Alma,” is subject to preservation and enforcement orders issued by the Insolvency Court and the Court of Appeal. The respondent argues that enforcement of the award would jeopardize the insolvency process, prejudice other creditors, and violate public policy.
4. The respondent further contends that part of the award, specifically the sum of Kshs. 105,000,000/=, is conditional upon the completion of the Alma Project, which has not occurred. It argues that enforcing this component would unjustly reward the applicant for work not completed and unfairly elevate its claim above those of other creditors, including secured lenders and homeowners.
5. Additionally, the respondent challenges the interest rates awarded, describing them as exorbitant, oppressive, and contrary to public policy. It asserts that enforcement would diminish the pool of assets available for distribution to creditors in the insolvency process.
Analysis and Determination
6. I have carefully considered the application, the affidavits and submissions on record, and the applicable legal framework under the Arbitration Act, 1995.
7. Section 36 of the Arbitration Act provides for the recognition and enforcement of arbitral awards. Section 37 outlines the limited grounds upon which recognition or enforcement may be refused. These include incapacity of parties, invalidity of the arbitration agreement, lack of proper notice, the award dealing with matters beyond the scope of submission, improper composition of the tribunal, or conflict with public policy.
8. I note that the respondent has not filed any application under Section 35 of the Arbitration Act seeking to set aside the award. In any event, even if such an application were to be filed now, it would be time-barred under Section 35(3), which requires such applications to be made within three months of receipt of the award.
9. The respondent’s reliance on the ongoing insolvency proceedings as a basis to oppose recognition is misplaced. I have previously pronounced myself on this issue, (See Misc Arb E030/2023 Cytonn Investments Management PLC V Margaret Mary Njunguna) and reiterate that liquidation or insolvency proceedings do not constitute a valid ground for refusing recognition under the Arbitration Act. An arbitral award may be enforced by a successful party as a creditor, subject to the applicable insolvency framework.
10. On the allegations of public policy, I am guided by the jurisprudence of our courts, (Christ for All Nations V Apollo Insurance Co Ltd, [2002] EA 366) which have consistently held that the public policy exception under Section 37 must be narrowly construed. It is not sufficient for a party to merely allege hardship or inconvenience. The opposing party must demonstrate that enforcement of the award would violate fundamental notions of justice, morality, or fairness in a manner that shocks the conscience of the court.
11. In this case, the respondent has not demonstrated that enforcement of the award would violate public policy. The award was rendered by a duly appointed arbitrator, following a process agreed upon by the parties. The respondent participated in the proceedings and has not challenged the award through the proper statutory channels. The claim that enforcement would prejudice other creditors is a matter for the insolvency process to manage, not a basis for this Court to refuse recognition.
12. As for the argument that the Kshs. 105,000,000/= was conditional upon completion of the Alma Project, this is a matter that was considered and determined by the arbitrator. This Court cannot re-evaluate the merits of the award under the guise of enforcement. The Arbitration Act does not permit such a review.
13. Regarding the interest rates awarded, again, they were within the discretion of the arbitrator and have not been shown to be unlawful or unconscionable under Kenyan law. The respondent has not provided any legal basis to support the claim that the interest rates offend public policy.
14. The applicant has complied with the requirements of Section 36(2) of the Arbitration Act by furnishing this Court with a duly certified copy of the Final Arbitral Award dated 18th June 2024, as well as the agreement containing the arbitration clause under which the dispute was referred to arbitration. These documents form the basis upon which recognition and enforcement may be granted, and their submission satisfies the procedural threshold for invoking the Court’s jurisdiction under the Act.
Disposition
15. In light of the foregoing, I find no legal basis to refuse recognition and enforcement of the Final Arbitral Award dated 18th June 2024. The application dated 12th November 2024 is hereby allowed.
16. The Final Award published by Arch. Julius M. F. Mutunga is recognized and adopted as a judgment of this Court. Leave is granted to the applicant to enforce the award, and a decree shall issue in the terms of the award.
17. Costs of this application shall be borne by the respondent.
It is so ordered.
'