A. Background
1. This dispute arises from a Share Purchase Agreement (SPA) dated 23rd January 2016, where the Applicants agreed to purchase the entire issued share capital of the 3rd Applicant for Kshs. 31,500,000.
2. The completion date was extended several times up to April 2017, during which the Respondents failed to pay the balance of the purchase price. The Applicants treated the agreement as terminated and disposed of the shares.
3. The Respondents initiated arbitral proceedings in April 2024, culminating in an award dated 22nd September 2025.
4. The Applicants filed the present application seeking to set aside the award on multiple grounds, including procedural irregularity, contravention of the SPA, and conflict with public policy.
B. Issues for Determination
5. The central issue is whether the arbitral award can be set aside under Section 35 of the Arbitration Act , specifically:
i. Whether the arbitral tribunal acted without jurisdiction by entertaining a claim beyond the limitation period; andii. Whether the award offends public policy.
C. Applicable Law
6. Section 35(2) of the Arbitration Act provides the exclusive grounds for setting aside an arbitral award. Judicial intervention is limited to:
• lack of jurisdiction;
• excess of authority;
• violation of mandatory law or public policy.
7. The Supreme Court in Nyutu Agrovet Limited v Airtel Networks Kenya Limited affirmed that courts must exercise restraint and intervene only where the arbitral tribunal acted beyond its mandate or in conflict with public policy .
8. Limitation of actions is a mandatory statutory bar under Section 4(1)(a) of the Limitation of Actions Act . Actions commenced beyond six years from accrual of cause of action are statutorily extinguished , which goes directly to the tribunal’s jurisdiction to entertain the claim.
D. Analysis
(i) Limitation as a Jurisdictional/Public Policy Issue
9. The SPA was terminated on 4th May 2017. Arbitral proceedings commenced in April 2024, almost seven years later, outside the six-year limitation period.
10. Limitation extinguishes the legal right to sue , not merely a remedy. A tribunal has no jurisdiction to entertain a claim that has been extinguished by statute.
11. This principle is reinforced by Kenyan authorities on public policy and limitation, including Owners of the Motor Vessel Lilian S v Caltex Oil Kenya Ltd , which emphasizes that jurisdictional defects cannot be cured by party participation.
12. Therefore, even though the Respondents participated in the arbitration without raising limitation, the Court finds that the tribunal’s jurisdiction was fettered by the statutory bar , which is a matter of public policy and non-derogable statutory law .
(ii) Tribunal’s Mandate and Excess of Authority
13. The Applicants contended that the tribunal misapplied Clause 13.1 of the SPA. Upon review, the tribunal interpreted the contract within its mandate. Any error of contract interpretation does not amount to excess of jurisdiction under Section 35(2)(a)(iv).
14. The key issue is not whether the tribunal correctly interpreted the SPA but whether it had the authority to entertain the dispute. The claim was statutorily barred , and therefore the tribunal exceeded its authority by proceeding to issue an award.
(iii) Public Policy
15. Public policy under Section 35(2)(b)(ii) includes compliance with mandatory statutory provisions , such as limitation periods.
16. The award granted relief on a claim extinguished by law. Allowing such an award to stand would contravene public policy and undermine the rule of law.
(iv) Conclusion on the Award
17. The arbitral tribunal acted without jurisdiction in entertaining a claim barred by Section 4(1)(a) of the Limitation of Actions Act.
18. The award of Kshs. 8,350,000 with interest is therefore null and void , as it was predicated on a claim that the law does not recognize.
E. Orders
19. The arbitral award dated 22nd September 2025 is set aside in its entirety .
20. Each party shall bear its own costs .
It is so ordered.
DATED, SIGNED AND DELIVERED AT MOMBASA THIis 19TH DAY OF MARCH 2026.
HON. LADY JUSTICE W. K. MICHENI
JUDGE
MISS NYAMETA PRESENT FOR THE APPLICANT
NO APPEARANCE BY RESPONDENT
MS BEBORA COURT ASSISTANT PRESENT
1. This dispute arises from a Share Purchase Agreement (SPA) dated 23rd January 2016, where the Applicants agreed to purchase the entire issued share capital of the 3rd Applicant for Kshs. 31,500,000.
2. The completion date was extended several times up to April 2017, during which the Respondents failed to pay the balance of the purchase price. The Applicants treated the agreement as terminated and disposed of the shares.
3. The Respondents initiated arbitral proceedings in April 2024, culminating in an award dated 22nd September 2025.
4. The Applicants filed the present application seeking to set aside the award on multiple grounds, including procedural irregularity, contravention of the SPA, and conflict with public policy.
B. Issues for Determination
5. The central issue is whether the arbitral award can be set aside under Section 35 of the Arbitration Act , specifically:
i. Whether the arbitral tribunal acted without jurisdiction by entertaining a claim beyond the limitation period; andii. Whether the award offends public policy.
C. Applicable Law
6. Section 35(2) of the Arbitration Act provides the exclusive grounds for setting aside an arbitral award. Judicial intervention is limited to:
• lack of jurisdiction;
• excess of authority;
• violation of mandatory law or public policy.
7. The Supreme Court in Nyutu Agrovet Limited v Airtel Networks Kenya Limited affirmed that courts must exercise restraint and intervene only where the arbitral tribunal acted beyond its mandate or in conflict with public policy .
8. Limitation of actions is a mandatory statutory bar under Section 4(1)(a) of the Limitation of Actions Act . Actions commenced beyond six years from accrual of cause of action are statutorily extinguished , which goes directly to the tribunal’s jurisdiction to entertain the claim.
D. Analysis
(i) Limitation as a Jurisdictional/Public Policy Issue
9. The SPA was terminated on 4th May 2017. Arbitral proceedings commenced in April 2024, almost seven years later, outside the six-year limitation period.
10. Limitation extinguishes the legal right to sue , not merely a remedy. A tribunal has no jurisdiction to entertain a claim that has been extinguished by statute.
11. This principle is reinforced by Kenyan authorities on public policy and limitation, including Owners of the Motor Vessel Lilian S v Caltex Oil Kenya Ltd , which emphasizes that jurisdictional defects cannot be cured by party participation.
12. Therefore, even though the Respondents participated in the arbitration without raising limitation, the Court finds that the tribunal’s jurisdiction was fettered by the statutory bar , which is a matter of public policy and non-derogable statutory law .
(ii) Tribunal’s Mandate and Excess of Authority
13. The Applicants contended that the tribunal misapplied Clause 13.1 of the SPA. Upon review, the tribunal interpreted the contract within its mandate. Any error of contract interpretation does not amount to excess of jurisdiction under Section 35(2)(a)(iv).
14. The key issue is not whether the tribunal correctly interpreted the SPA but whether it had the authority to entertain the dispute. The claim was statutorily barred , and therefore the tribunal exceeded its authority by proceeding to issue an award.
(iii) Public Policy
15. Public policy under Section 35(2)(b)(ii) includes compliance with mandatory statutory provisions , such as limitation periods.
16. The award granted relief on a claim extinguished by law. Allowing such an award to stand would contravene public policy and undermine the rule of law.
(iv) Conclusion on the Award
17. The arbitral tribunal acted without jurisdiction in entertaining a claim barred by Section 4(1)(a) of the Limitation of Actions Act.
18. The award of Kshs. 8,350,000 with interest is therefore null and void , as it was predicated on a claim that the law does not recognize.
E. Orders
19. The arbitral award dated 22nd September 2025 is set aside in its entirety .
20. Each party shall bear its own costs .
It is so ordered.
DATED, SIGNED AND DELIVERED AT MOMBASA THIis 19TH DAY OF MARCH 2026.
HON. LADY JUSTICE W. K. MICHENI
JUDGE
MISS NYAMETA PRESENT FOR THE APPLICANT
NO APPEARANCE BY RESPONDENT
MS BEBORA COURT ASSISTANT PRESENT