1. I have considered the Preliminary Objection dated 16th May 2024, together with the submissions of the parties and the applicable law.
2. The Application seeks a prayer to strike out the suit together with costs.
3. The Applicant submitted that the Respondent had attempted to commence proceedings against it by way of a Notice of Motion dated 30th April 2024, without first filing a substratum plaint. The same contravenes section 19 of the Civil Procedure Act and Order 3, Rule 1 of the Rules.
4. The Applicant relied on the decision of the High Court in Proto Energy Limited v Hashi Energy Limited (2019) eKLR at paragraph 14, where the court stated as follows:
“Order 3 Rule (i) (ii) provides that every suit shall be instituted by way of a Plaint. As a general rule a suit can only be instituted by way of a plaint, petition or an originating summons. A notice of motion is not legally recognized as an originating process. A notice of motion can only be filed within a property instituted suit. The applicants failed to file any originating process in this matter. I find that the attempt to institute this suit by way of a notice of motion renders the entire suit defective”
5. Additionally, the Applicant submitted that in any event, the cause of action fell within the pecuniary jurisdiction of the lower court, and ought to have been filed there.
6. In opposition to the Preliminary Objection, the Respondent submitted that it had not filed a suit. It was before the court seeking interim orders of preservation prior to arbitration proceedings.
7. Counsel submitted the said interim measures sought by the Respondent are not barred under Section 7 of the Arbitration Act.
8. Having considered the above, the starting point, to my mind, is whether or not the parties have agreed to submit or refer the present matter to arbitration? Further, in the event the same is affirmative; the next question is whether or not the court is able grant interim measures of preservation prior to the commencement of arbitral proceedings?
9. As regards the first issue, Counsel for the respondent read out Clause 15 of the Loan Agreement between the parties, in full. The same provides for an agreement to arbitrate between the parties concerning any dispute arising out of the agreement. Counsel for the applicant confirmed that the agreement read as out, was in fact the agreement between the parties, and applies to the parties.
10. Additionally, the respondent submitted that it had triggered the clause, and had written a letter to the Chartered Institute of Arbitrators requesting it to appoint an arbitrator in relation to the present dispute between the parties.
11. I am therefore satisfied that there is in fact an arbitration agreement between the parties.
12. As regards the second issue concerning the grant of interim measures of preservation. Section 7(1) of the Arbitration Act, 1995 (“the Act’), provides as follows:
It is not incompatible with an arbitration agreement for a party to request from the High Court, before or during arbitral proceedings, an interim measure of protection and for the High Court to grant that measure.
13. Guided by the above, I am satisfied that there is both an arbitration agreement between the parties, and that a party may seek interim measures of protections before this court prior to the commencement of such proceedings.
14. Accordingly, the preliminary objection fails because there is in fact no suit that may be struck out, as prayed for.
15. The motion filed before this court is not a suit, but rather an application for interim measures of protection, which I find the application has a right to seek pursuant to Section 7 of the Arbitration Act, as stated above.
16. For clarity, the substantive dispute between the parties ought to be heard and determined in accordance with the arbitration procedure and agreement between the parties. The matter is accordingly referred to arbitration in accordance with the agreement between the parties.
17. Based on the reasons above, the Preliminary Objection is dismissed with costs.
18. The file is marked as closed.