1. The two parties to this dispute entered into a sale agreement dated 5th February, 2017 by which agreement the applicant covenanted to sell to the Respondent the property known as Plot No. Ms 18, situated on Title No.1P 140826, (WITHIN LR No. 29059) KIAMBU, at a price and consideration of Kshs 4,050,000.
2. That agreement bound the parties to refer any dispute arising out of or in connection with it to arbitration by a single arbitrator agreed between parties by consent, or appointed by the chairman of the chartered institute of arbitration, Kenyan chapter, where the parties fail to agree on the appointment.
3. Indeed, a dispute arose and Hon John Olago Aluoch was appointed the sole administrator. The proceeding progressed and a final award was published and dated 20/6/2023. The arbitrator awarded to the Respondent an aggregate sum of Kshs.6,772,444 which would attract interest at court rates, if unsettled after 30 day from the date of the award.
4. The award aggrieved the applicant who has now invoked section 35 (1) and (2) of the Arbitration Act and prayed that the award be set aside on the grounds that; The award is contrary to public policy in Kenya for failure to consider the applicants pleading in the defence to the claim; Failure to consider the evidence led; Failure to comply with the principles of natural justice; contrary to the dictates of the law in evidence act and limitation of actions Act. In sum the award is faulted for failure to decide the substance of the dispute.
5. Those grounds were then reiterated in the affidavit sworn by Robert Wekesa Simiyu asserting that the arbitration proceedings were hurried without following the known established rules with the consequence that the applicant was denied the constitutional right to a fair hearing. The Affidavit then exhibits the agreement for sale, correspondence appointing the arbitrator and arbitrator’s letter calling for meetings as well as a letter forwarding the unsigned award to the parties.
6. The application was resisted by the Respondent by the replying affidavit sworn by Afemefura Antony Ike, a director of the Respondent. The gist of the resistance to the application were that the court lacks jurisdiction to entertain the matter because the application is time barred by dint of section 35(4) of the arbitration Act and that both counsel including counsel for the applicant were duly notified by way of an email on the 20/6/2023 that a signed award would be availed upon payment of outstanding arbitrator’s fees.
7. On the merits, it is contended that the attack on the award amount to a disguised appeal contrary to the provisions of section 32(5) of the Act.
8. As directed by the court, that the matter proceeds by way of written submissions on the material filed, both sides filed the respective submissions. The applicant’s submissions are dated 15/3/2024 while those by the Respondent are dated 6/2/2024.
9. In summary, the applicant contends, in the filed submissions, that failure by the arbitrator to properly consider the evidence led and to decide the matter in accordance with the procedure agreed between the parties infringed on its rights to a fair hearing and thus breached public policy in Kenya. It is equally asserted that the arbitral award is in fragrant disregard of public policy in Kenya. The decision in all Nations Church – vs - Apollo Insurance Co Ltd [2002] eKLR on what constitutes public policy for purpose of section 35 of the Act. It was also asserted that an award that is not merited results in unjust enrichment which is equally contrary to the public policy in Kenya. It was then submitted that where public policy is breached the remedy is to remit the award for arbitration for the second time. For that proposition, the decision in Kimani Gichuki - vs – Evangelical Mission to Africa [2021] KECA 339[KLR] was relied upon.
10. On the grounds of bias, it was underscored that the arbitrator exhibited open bias towards and in favour of the applicant by failing to consider evidence from its side and by alleging that the applicant did not deny the facts set out in the statement of claim. For that proposition, the decision in Teejay Estates Ltd – vs – Viher Construction Ltd [2022] KEHC was cited for the law that the arbitration tribunal must conduct itself in a manner that does not destroy the confidence of the parties or either of them, in the process.
11. Lastly, it was contended that the conduct of the arbitrator was contrary to the established principles of law including the principles of natural justice by failure to review and make a determination on the pleadings filed and the evidence led.
12. For the three grounds, the applicant pleads that the application be allowed in that the award be set aside and matter remitted back for fresh arbitration.
13. For the Respondent, the position taken is that; the application doesn’t lie because the court lacks jurisdiction to deal with the matter because, as pleaded, it is a clear land; that the application was filed out of the statutory set timelines and lastly that, on the merits, the application does not fit within the defined bounds of the window created by section 35 of the Act.
14. On jurisdiction, the respondent contends that the dispute having had its foundation on a lease agreement, the proper court would be the environment and court and not the high court. For that proposition, several decisions are cited all relying on the case of Metor Vessel Lilian ‘S’ and more recently the case of Virunga Ltd – vs – Kerai [2012] KEHC 12349(KLR).
15. On time bar, it highlighted that the arbitrator communicated to the parties by the email of 20/6/2023 and notified them that the same was available for collection upon payment of the applicant’s share of the arbitrator’s fees. On that basis, the respondent contends that the award was published on 20/6/2023 and the applicant had till the 20/9/2023 to file the application but did not do so till the 29/9/2024. When the same was filed, it was belated and time barred.
16. The decision in Jacob Cheruiyot – vs – Joseph Gitau [2020] eKLR and University of Nairobi – vs – Wultisage Consultancy Engineering Ltd [2020] eKLR were cited for the proposition of the law that an application filed beyond three months from the date of publication is time bared, incompetent and subject to being struck out.
17. On the merits, the respondent concedes that the right to be heard should not be compromised but then poses the question as to what happens when a party is given a chance to be heard but declines to offer himself to be heard. In this case the Respondent asserts that the applicant squandered the chance to file his pleadings and has not shown any evidence that he did so. The Respondent thus prays that the application be struck out as incompetent or be dismissed on the merits.
Analysis and determination
18. The window for the court to intervene in arbitration pleadings is limited by section 10 of the Act to only those instances permitted and coded by the statute. An applicant seeking to set aside an award must place itself within the bounds of section 35 of the Act and exhibit the grounds relied upon within the standards of balance of probabilities.
19. In this matter however, the Respondent has raised two points, jurisdiction and limitation of time; which are threshold in nature and must be determined before the court can delve into the merits. The two preliminary issues are;
i. Whether the application was filed within the statutory timelines?
ii. Whether the court is vested with jurisdiction to handle the matter.
20. It is plain that an application to set aside an award must be filed within three months from the date of publication/issue of the award.
21. The Respondent has asserted, without rebuttal from the applicant, that the award was issued by to sole arbitrator on the 20/6/2024. In the email communication of that date, the sole arbitrator informed the parties that the award was read and could be collected upon the application paying his portion of the arbitration fees.
22. In law an award is issued or deemed issued on the date it is brought to the attention of the parties, whether the parties choose to pick copies immediate or not.
23. In accordance with section 35 (3) of the arbitration Act, the award having been issued on the 20/6/2023, it was an obligation upon any of the parties to the arbitration who wished to seek its setting aside to do so not later than the 20/9/2024.
24. To the extent that the application for setting aside was filed on the 29/9/2024, the same was filed out of time and is thus incompetent. Being incompetent, its fate is that it must be struck out with costs to the Respondent.
25. Having been struck out, it would be moot to consider whether this court is the court vested with jurisdiction to deal with the matter.
26. However, and just a brief opinion, to this court, the dispute whether or not the award should be set aside or enforced, is not a dispute on title, use or occupation of land. It is a simple question whether the applicant has fitted itself within the bounds of section 35 to be entitled to the court intervening by setting aside the award. I see no question for determination by the Environment and Land court as a specialist court vested with the special jurisdiction to determine dispute over Environment and the use and occupation of, and title to land.
27. Without going into the merits, the application dated is struck out with costs for having been filed outside the time set by the statute.
Dated, signed and delivered Virtually, this 28th day of August, 2024
2. That agreement bound the parties to refer any dispute arising out of or in connection with it to arbitration by a single arbitrator agreed between parties by consent, or appointed by the chairman of the chartered institute of arbitration, Kenyan chapter, where the parties fail to agree on the appointment.
3. Indeed, a dispute arose and Hon John Olago Aluoch was appointed the sole administrator. The proceeding progressed and a final award was published and dated 20/6/2023. The arbitrator awarded to the Respondent an aggregate sum of Kshs.6,772,444 which would attract interest at court rates, if unsettled after 30 day from the date of the award.
4. The award aggrieved the applicant who has now invoked section 35 (1) and (2) of the Arbitration Act and prayed that the award be set aside on the grounds that; The award is contrary to public policy in Kenya for failure to consider the applicants pleading in the defence to the claim; Failure to consider the evidence led; Failure to comply with the principles of natural justice; contrary to the dictates of the law in evidence act and limitation of actions Act. In sum the award is faulted for failure to decide the substance of the dispute.
5. Those grounds were then reiterated in the affidavit sworn by Robert Wekesa Simiyu asserting that the arbitration proceedings were hurried without following the known established rules with the consequence that the applicant was denied the constitutional right to a fair hearing. The Affidavit then exhibits the agreement for sale, correspondence appointing the arbitrator and arbitrator’s letter calling for meetings as well as a letter forwarding the unsigned award to the parties.
6. The application was resisted by the Respondent by the replying affidavit sworn by Afemefura Antony Ike, a director of the Respondent. The gist of the resistance to the application were that the court lacks jurisdiction to entertain the matter because the application is time barred by dint of section 35(4) of the arbitration Act and that both counsel including counsel for the applicant were duly notified by way of an email on the 20/6/2023 that a signed award would be availed upon payment of outstanding arbitrator’s fees.
7. On the merits, it is contended that the attack on the award amount to a disguised appeal contrary to the provisions of section 32(5) of the Act.
8. As directed by the court, that the matter proceeds by way of written submissions on the material filed, both sides filed the respective submissions. The applicant’s submissions are dated 15/3/2024 while those by the Respondent are dated 6/2/2024.
9. In summary, the applicant contends, in the filed submissions, that failure by the arbitrator to properly consider the evidence led and to decide the matter in accordance with the procedure agreed between the parties infringed on its rights to a fair hearing and thus breached public policy in Kenya. It is equally asserted that the arbitral award is in fragrant disregard of public policy in Kenya. The decision in all Nations Church – vs - Apollo Insurance Co Ltd [2002] eKLR on what constitutes public policy for purpose of section 35 of the Act. It was also asserted that an award that is not merited results in unjust enrichment which is equally contrary to the public policy in Kenya. It was then submitted that where public policy is breached the remedy is to remit the award for arbitration for the second time. For that proposition, the decision in Kimani Gichuki - vs – Evangelical Mission to Africa [2021] KECA 339[KLR] was relied upon.
10. On the grounds of bias, it was underscored that the arbitrator exhibited open bias towards and in favour of the applicant by failing to consider evidence from its side and by alleging that the applicant did not deny the facts set out in the statement of claim. For that proposition, the decision in Teejay Estates Ltd – vs – Viher Construction Ltd [2022] KEHC was cited for the law that the arbitration tribunal must conduct itself in a manner that does not destroy the confidence of the parties or either of them, in the process.
11. Lastly, it was contended that the conduct of the arbitrator was contrary to the established principles of law including the principles of natural justice by failure to review and make a determination on the pleadings filed and the evidence led.
12. For the three grounds, the applicant pleads that the application be allowed in that the award be set aside and matter remitted back for fresh arbitration.
13. For the Respondent, the position taken is that; the application doesn’t lie because the court lacks jurisdiction to deal with the matter because, as pleaded, it is a clear land; that the application was filed out of the statutory set timelines and lastly that, on the merits, the application does not fit within the defined bounds of the window created by section 35 of the Act.
14. On jurisdiction, the respondent contends that the dispute having had its foundation on a lease agreement, the proper court would be the environment and court and not the high court. For that proposition, several decisions are cited all relying on the case of Metor Vessel Lilian ‘S’ and more recently the case of Virunga Ltd – vs – Kerai [2012] KEHC 12349(KLR).
15. On time bar, it highlighted that the arbitrator communicated to the parties by the email of 20/6/2023 and notified them that the same was available for collection upon payment of the applicant’s share of the arbitrator’s fees. On that basis, the respondent contends that the award was published on 20/6/2023 and the applicant had till the 20/9/2023 to file the application but did not do so till the 29/9/2024. When the same was filed, it was belated and time barred.
16. The decision in Jacob Cheruiyot – vs – Joseph Gitau [2020] eKLR and University of Nairobi – vs – Wultisage Consultancy Engineering Ltd [2020] eKLR were cited for the proposition of the law that an application filed beyond three months from the date of publication is time bared, incompetent and subject to being struck out.
17. On the merits, the respondent concedes that the right to be heard should not be compromised but then poses the question as to what happens when a party is given a chance to be heard but declines to offer himself to be heard. In this case the Respondent asserts that the applicant squandered the chance to file his pleadings and has not shown any evidence that he did so. The Respondent thus prays that the application be struck out as incompetent or be dismissed on the merits.
Analysis and determination
18. The window for the court to intervene in arbitration pleadings is limited by section 10 of the Act to only those instances permitted and coded by the statute. An applicant seeking to set aside an award must place itself within the bounds of section 35 of the Act and exhibit the grounds relied upon within the standards of balance of probabilities.
19. In this matter however, the Respondent has raised two points, jurisdiction and limitation of time; which are threshold in nature and must be determined before the court can delve into the merits. The two preliminary issues are;
i. Whether the application was filed within the statutory timelines?
ii. Whether the court is vested with jurisdiction to handle the matter.
20. It is plain that an application to set aside an award must be filed within three months from the date of publication/issue of the award.
21. The Respondent has asserted, without rebuttal from the applicant, that the award was issued by to sole arbitrator on the 20/6/2024. In the email communication of that date, the sole arbitrator informed the parties that the award was read and could be collected upon the application paying his portion of the arbitration fees.
22. In law an award is issued or deemed issued on the date it is brought to the attention of the parties, whether the parties choose to pick copies immediate or not.
23. In accordance with section 35 (3) of the arbitration Act, the award having been issued on the 20/6/2023, it was an obligation upon any of the parties to the arbitration who wished to seek its setting aside to do so not later than the 20/9/2024.
24. To the extent that the application for setting aside was filed on the 29/9/2024, the same was filed out of time and is thus incompetent. Being incompetent, its fate is that it must be struck out with costs to the Respondent.
25. Having been struck out, it would be moot to consider whether this court is the court vested with jurisdiction to deal with the matter.
26. However, and just a brief opinion, to this court, the dispute whether or not the award should be set aside or enforced, is not a dispute on title, use or occupation of land. It is a simple question whether the applicant has fitted itself within the bounds of section 35 to be entitled to the court intervening by setting aside the award. I see no question for determination by the Environment and Land court as a specialist court vested with the special jurisdiction to determine dispute over Environment and the use and occupation of, and title to land.
27. Without going into the merits, the application dated is struck out with costs for having been filed outside the time set by the statute.
Dated, signed and delivered Virtually, this 28th day of August, 2024