1. Before the court is the 1st and 2nd Defendants’ Notice of Motion application dated 7/7/2026 filed pursuant to Section 6(1) & (2) of the Arbitration Act, 1995, Order 51 Rule 1 of the Civil Procedure Rules, 2010 and Article 159(2)(c) of the Constitution of Kenya, 2010 .
2. The Defendants sought the following orders:
“ 1. Spent
2.This Honourable Court be pleased to stay all further proceedings in this suit as against the 1st and 2nd Defendants, pending reference of the dispute the subject of this suit to a multi-tired dispute resolution process including arbitration in accordance with Schedule 2, Clause 1 of the Implementing Partner Agreement signed in May 2025 between the Plaintiff and the 1st Defendant ("the Agreement").
3.This Honourable Court be pleased to refer the Plaintiff and the 1st and 2nd Defendants to arbitration in accordance with Schedule 2, Clause 1 of the Agreement.
4. The costs of this Application be provided for .”
3. The grounds of the application were that the Plaintiff's claim arose from a written agreement containing a valid and binding multi-tiered dispute resolution clause requiring negotiation, mediation and arbitration under the ICC Rules seated in Ontario, Canada.
4. The Defendants maintained that the dispute fell within the scope of the arbitration agreement, which remained valid, operative and capable of performance. The Defendants further asserted that the court's jurisdiction had been contractually deferred until the agreed dispute resolution mechanism had been exhausted, that they had not taken any step inconsistent with their right to rely on the arbitration clause, having filed the application promptly upon entering appearance and before filing a defence, and that they were ready and willing to participate in arbitration. They therefore urged the court to uphold the parties' contractual bargain and refer the dispute to arbitration in line with Article 159(2)(c) of the Constitution and sections 1A and 1B of the Civil Procedure Act.
5. The Plaintiff filed Grounds of opposition dated 20/7/2026 opposing the 1st and 2nd Defendants' application for referral of the dispute to arbitration.
6. The Plaintiff contended that the application offended section 6 of the Arbitration Act, which requires an application for stay and referral to arbitration to be filed not later than the time of entering appearance. It was argued that although the Defendants entered an unconditional appearance on 1/7/2026, they only filed the application on 9/7/2026, eight days later, contrary to the statutory requirement and the Court of Appeal's interpretation that such an application must be filed simultaneously with the entry of appearance. The Plaintiff therefore maintained that the application was fatally defective and liable to be struck out.
Analysis and determination.
7. A background of this dispute is that the Plaintiff and the 1st Defendant are parties to an Implementing Partner Agreement signed in May 2025 (the Agreement) which was produced as “GMW-1” in the Defendant’s Supporting Affidavit.
8. The Plaintiff instituted the present suit vide a plaint dated 12/6/2026 where it contended that the Defendants breached the Agreement causing it to suffer losses to the tune of USD 237,939.00 which sums were advanced to the 1st Defendant and unlawfully utilized by the 2nd and 3rd Defendants.
9. Schedule 2(1) of the Agreement states as follows:
“ 1.1 If any dispute, controversy or claim arises out of or in connection with this agreement, including any question regarding its existence, validity, interpretation, breach or termination (a "Dispute"), it shall be referred, upon written notice ("Dispute Notice") given by one party to the other, to a senior executive from each party who has authority to settle the Dispute and who is not directly responsible for administration or performance of any part of the Services. The senior executives shall seek to resolve the Dispute on an amicable basis within 14 days of the Dispute Notice being received.
1.2 Any Dispute not resolved within 14 Days of the Dispute Notice being received may be referred by either party to mediation before a mediator to be agreed between the parties. The parties shall share (equally) the costs of the mediator, and the mediation venue.
1.3 If either party fails or refuses to agree to or participate further in the mediation procedure or if, in any event, the Dispute is not resolved within 35 Days from receipt of the Dispute Notice, The Dispute shall be referred to and finally resolved by arbitration pursuant to the Rules of the International Court of Arbitration of the International Chamber of Commerce ("ICC") which rules are deemed to be incorporated by reference into this section .”
10. The dispute resolution mechanism as set out above dictates the procedure that the parties must follow in resolving any dispute arising from the Agreement.
11. It is the 1st and 2nd Defendants case that the dispute ought to be resolved according to the terms of the agreement and that they have not taken any step in these proceedings inconsistent with, or which could be construed as a waiver of, their right to rely on the arbitration agreement.
12. The Plaintiff, on the other hand, argued that the application is fatally defective because it was filed eight days after the Memorandum of Appearance, contrary to the requirement that an application for referral to arbitration be filed simultaneously with the entry of appearance.
13. Section 6 of the Arbitration Act states:
“ 6. 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 .”
14. In Charles Njogu Lofty v Bedovin Enterprises Ltd [2005] eKLR , the Court of Appeal affirmed the position taken by the trial court (Githinji, J.) (as he then was) who held that: “ In my view, section 6(1) of the Arbitration Act, 1995, which (this) court is construing means that any application for stay of proceedings cannot be made after the applicant has entered appearance or after the applicant has filed pleadings or after the applicant has taken any other step in the proceedings, so the latest permissible time for making an application for stay of proceedings is the time that the applicant enters appearance .”
15. Similarly in Mt. Kenya University v Step Up Holding (K) Ltd [2018] KECA 125 (KLR) , the Court of Appeal held as follows:
“ We have construed section 6 of the Arbitration Act on our own and….. we reiterate that in order to succeed, the law obligated the appellant to file the application seeking reference to arbitration simultaneously with the entry of appearance and thereafter take no further procedural steps in the matter .”
16. Guided by the authorities above, I take the view that an application seeking stay of proceedings and referral to arbitration must be filed simultaneously with the entry of appearance or at the time when a party acknowledges the claim against which the stay of proceedings is sought.
17. In this case, the Memorandum of appearance was filed on 1/7/2026 while the instant application was filed on 9/7/2026. Eight days lapsed before the 1st and 2nd Defendants jolted to action seeking to stay the present proceedings and refer the application be filed matter to arbitration. The application should have therefore, been filed simultaneously with the entry of appearance as required by the law.
18. As such, the instant application is devoid of merit and is hereby dismissed with costs.
DATED, SIGNED AND DELIVERED VIRTUALLY at NAIROBI ON this 17 th day of SEPTEMBER, 2026
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2. The Defendants sought the following orders:
“ 1. Spent
2.This Honourable Court be pleased to stay all further proceedings in this suit as against the 1st and 2nd Defendants, pending reference of the dispute the subject of this suit to a multi-tired dispute resolution process including arbitration in accordance with Schedule 2, Clause 1 of the Implementing Partner Agreement signed in May 2025 between the Plaintiff and the 1st Defendant ("the Agreement").
3.This Honourable Court be pleased to refer the Plaintiff and the 1st and 2nd Defendants to arbitration in accordance with Schedule 2, Clause 1 of the Agreement.
4. The costs of this Application be provided for .”
3. The grounds of the application were that the Plaintiff's claim arose from a written agreement containing a valid and binding multi-tiered dispute resolution clause requiring negotiation, mediation and arbitration under the ICC Rules seated in Ontario, Canada.
4. The Defendants maintained that the dispute fell within the scope of the arbitration agreement, which remained valid, operative and capable of performance. The Defendants further asserted that the court's jurisdiction had been contractually deferred until the agreed dispute resolution mechanism had been exhausted, that they had not taken any step inconsistent with their right to rely on the arbitration clause, having filed the application promptly upon entering appearance and before filing a defence, and that they were ready and willing to participate in arbitration. They therefore urged the court to uphold the parties' contractual bargain and refer the dispute to arbitration in line with Article 159(2)(c) of the Constitution and sections 1A and 1B of the Civil Procedure Act.
5. The Plaintiff filed Grounds of opposition dated 20/7/2026 opposing the 1st and 2nd Defendants' application for referral of the dispute to arbitration.
6. The Plaintiff contended that the application offended section 6 of the Arbitration Act, which requires an application for stay and referral to arbitration to be filed not later than the time of entering appearance. It was argued that although the Defendants entered an unconditional appearance on 1/7/2026, they only filed the application on 9/7/2026, eight days later, contrary to the statutory requirement and the Court of Appeal's interpretation that such an application must be filed simultaneously with the entry of appearance. The Plaintiff therefore maintained that the application was fatally defective and liable to be struck out.
Analysis and determination.
7. A background of this dispute is that the Plaintiff and the 1st Defendant are parties to an Implementing Partner Agreement signed in May 2025 (the Agreement) which was produced as “GMW-1” in the Defendant’s Supporting Affidavit.
8. The Plaintiff instituted the present suit vide a plaint dated 12/6/2026 where it contended that the Defendants breached the Agreement causing it to suffer losses to the tune of USD 237,939.00 which sums were advanced to the 1st Defendant and unlawfully utilized by the 2nd and 3rd Defendants.
9. Schedule 2(1) of the Agreement states as follows:
“ 1.1 If any dispute, controversy or claim arises out of or in connection with this agreement, including any question regarding its existence, validity, interpretation, breach or termination (a "Dispute"), it shall be referred, upon written notice ("Dispute Notice") given by one party to the other, to a senior executive from each party who has authority to settle the Dispute and who is not directly responsible for administration or performance of any part of the Services. The senior executives shall seek to resolve the Dispute on an amicable basis within 14 days of the Dispute Notice being received.
1.2 Any Dispute not resolved within 14 Days of the Dispute Notice being received may be referred by either party to mediation before a mediator to be agreed between the parties. The parties shall share (equally) the costs of the mediator, and the mediation venue.
1.3 If either party fails or refuses to agree to or participate further in the mediation procedure or if, in any event, the Dispute is not resolved within 35 Days from receipt of the Dispute Notice, The Dispute shall be referred to and finally resolved by arbitration pursuant to the Rules of the International Court of Arbitration of the International Chamber of Commerce ("ICC") which rules are deemed to be incorporated by reference into this section .”
10. The dispute resolution mechanism as set out above dictates the procedure that the parties must follow in resolving any dispute arising from the Agreement.
11. It is the 1st and 2nd Defendants case that the dispute ought to be resolved according to the terms of the agreement and that they have not taken any step in these proceedings inconsistent with, or which could be construed as a waiver of, their right to rely on the arbitration agreement.
12. The Plaintiff, on the other hand, argued that the application is fatally defective because it was filed eight days after the Memorandum of Appearance, contrary to the requirement that an application for referral to arbitration be filed simultaneously with the entry of appearance.
13. Section 6 of the Arbitration Act states:
“ 6. 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 .”
14. In Charles Njogu Lofty v Bedovin Enterprises Ltd [2005] eKLR , the Court of Appeal affirmed the position taken by the trial court (Githinji, J.) (as he then was) who held that: “ In my view, section 6(1) of the Arbitration Act, 1995, which (this) court is construing means that any application for stay of proceedings cannot be made after the applicant has entered appearance or after the applicant has filed pleadings or after the applicant has taken any other step in the proceedings, so the latest permissible time for making an application for stay of proceedings is the time that the applicant enters appearance .”
15. Similarly in Mt. Kenya University v Step Up Holding (K) Ltd [2018] KECA 125 (KLR) , the Court of Appeal held as follows:
“ We have construed section 6 of the Arbitration Act on our own and….. we reiterate that in order to succeed, the law obligated the appellant to file the application seeking reference to arbitration simultaneously with the entry of appearance and thereafter take no further procedural steps in the matter .”
16. Guided by the authorities above, I take the view that an application seeking stay of proceedings and referral to arbitration must be filed simultaneously with the entry of appearance or at the time when a party acknowledges the claim against which the stay of proceedings is sought.
17. In this case, the Memorandum of appearance was filed on 1/7/2026 while the instant application was filed on 9/7/2026. Eight days lapsed before the 1st and 2nd Defendants jolted to action seeking to stay the present proceedings and refer the application be filed matter to arbitration. The application should have therefore, been filed simultaneously with the entry of appearance as required by the law.
18. As such, the instant application is devoid of merit and is hereby dismissed with costs.
DATED, SIGNED AND DELIVERED VIRTUALLY at NAIROBI ON this 17 th day of SEPTEMBER, 2026
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