Background and Introduction
1. The parties entered into a Dealer Agreement dated 8th October 2019. Following the emergence of a dispute between them, the matter was referred to arbitration in accordance with Clause 22 of the Agreement. By an Interim Award dated 9th September 2024, the Arbitrator allowed MK HAJJI’s Notice of Motion dated 8th February 2024, thereby granting them access to SAFARICOM’s Dealer Portal for the purpose of retrieving documents in the custody of SAFARICOM PLC. SAFARICOM PLC has not complied with the said award, prompting the present application. It is this Interim Award that MK HAJJI seeks to have recognized and adopted as an order of this Court through their application dated 21st November 2024 filed in Misc. Application No. E079 of 2024.
2. SAFARICOM PLC has opposed that application and has, in turn, filed a cross-application in Misc. Application No. E092 of 2024 seeking to set aside the said award. The application which is dated 9th December 2024 is equally opposed by MK HAJJI. The issues raised in the two applications are intertwined and substantially overlap. Accordingly, this composite ruling addresses both applications in Miscellaneous Application No. E079 of 2024 and Miscellaneous Application No. E092 of 2024.
Analysis and Determination
3. SAFARICOM PLC seeks to set aside the said interim award, primarily on grounds that the Arbitrator acted ultra vires the arbitration agreement; that the award violated Section 29(5) of the Arbitration Act (hereinafter the Act) by allegedly failing to apply the contract terms; that the arbitrator denied SAFARICOM PLC a fair opportunity to be heard, and that relief was granted which was not specifically prayed for by MK HAJJI.
4. The central issue for determination is whether the interim arbitral award dated 9th September 2024 meets the threshold for recognition and enforcement under Section 36 of the Act, or whether it ought to be set aside under Section 35 of the same Act.
5. The legal framework governing judicial intervention in arbitral proceedings is rooted in the Act, which affirms the principles of party autonomy, minimal court interference, and the finality of arbitral awards. Section 32A of the Act encapsulates this core principle by providing that:
“Except as otherwise agreed by the parties, an arbitral award shall be final and binding upon the parties to the arbitration.”
6. This provision underscores the central philosophy of arbitration as a private and binding dispute resolution mechanism chosen by the parties. It affirms that, once an award is issued, the courts are not to revisit or reopen the merits of the dispute except in narrowly defined instances permitted under the Act. The parties, having voluntarily submitted to arbitration, are generally bound by the outcome.
7. Aligned with this philosophy, Section 10 of the Act imposes a strict limitation on the jurisdiction of courts in arbitral matters. It provides that:
“Except as provided in this Act, no court shall intervene in matters governed by this Act.”
8. The intent of this provision is to protect the autonomy and integrity of the arbitral process from judicial interference and to prevent parties from using the courts to circumvent the consequences of an unfavorable award. The role of the courts is, therefore, supportive rather than supervisory, intended to give effect to arbitration agreements and facilitate the enforcement of awards, not to act as an appellate forum.
9. In the context of the present proceedings, the application to set aside the interim award invites consideration of whether the Court may intervene in respect of partial or interim arbitral awards. Section 32(6) of the Act answers this question directly:
“An arbitral tribunal may, in the course of arbitral proceedings, make an interim, interlocutory or partial award.”
10. Although interim awards do not finally determine all the issues in dispute, they are nonetheless binding and enforceable to the same extent as final awards. They carry legal effect and are subject to recognition or challenge under the applicable provisions of the Act. Accordingly, this Court has jurisdiction to either recognize and enforce such an award under Section 36, or to set it aside, albeit only on the narrow grounds enumerated under Section 35.
11. These grounds include incapacity of a party; invalidity of the arbitration agreement; lack of proper notice or inability to present one’s case; the award dealing with a dispute not contemplated or not falling within the terms of the submission to arbitration; improper composition of the tribunal; or conflict with public policy.
12. SAFARICOM PLC contends that the arbitrator exceeded the scope of the reference and granted relief that had not been specifically prayed for. Such objections, if valid, fall for consideration under Section 35(2)(a)(iv) of the Act, which permits the setting aside of an award where it deals with a dispute not contemplated by or not falling within the terms of the reference to arbitration. However, no evidence has been placed before this Court to demonstrate that this jurisdictional objection was raised timely during the arbitral proceedings, as required by both statute and case law.
13. Section 17(3) of the Act expressly provides that:
“A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings.”
14. Failure to raise such an objection at the appropriate time amounts to a waiver. This position was affirmed in Kenya Shell Ltd v Kobil Petroleum Ltd [2006] eKLR, where the Court of Appeal held that a party who participates in arbitral proceedings without promptly raising objections to jurisdiction or procedure is deemed to have waived the right to do so later. More recently, in Kibuwa Leasing & Management Limited v Jadala Investments Limited & Another [2023] KECA 895 (KLR), the Court of Appeal upheld the decision in Joma Investments Limited v N.K. Brothers Limited [2018] eKLR, where it was emphasized that parties must invoke the procedure under Section 17 to challenge jurisdiction and may not circumvent it by seeking to set aside the award at a later stage.
15. SAFARICOMs further complaint, that the arbitrator failed to apply Section 29(5) of the Act or granted relief not expressly sought, is in substance a challenge to the merits of the arbitrator’s decision, thinly veiled as a jurisdictional objection. It bears reiterating that the Arbitrator is the master of both facts and law in arbitral proceedings. As held by the Court of Appeal in Anne Mumbi Hinga v Victoria Njoki Gathara [2009] eKLR, courts do not sit in appeal over arbitral awards.
16. The Court of Appeal was emphatic that this court did not have jurisdiction to intervene in any manner not specifically provided for in the Act. An erroneous application of the law or an allegedly improper interpretation of contract terms does not, without more, amount to a valid ground for setting aside an award.
17. Moreover, SAFARICOM PLC has not demonstrated that it was denied a fair hearing or that the arbitrator’s direction took it by surprise. The allegation of denial of a reasonable opportunity to present its case is entirely unsubstantiated. Section 35(2)(a)(iii) permits the setting aside of an award where a party was not given a fair opportunity to present its case. However, in Anne Mumbi Hinga, the Court of Appeal underscored that no application to set aside an award may be grounded outside the express provisions of Section 35. In the present case, the factual foundation required to trigger the protection of Section 35(2)(a)(iii) is clearly lacking.
18. On the contrary, the existence of the interim award is not in dispute, and the arbitration agreement between the parties is admitted. The documents have been attached in the application brought by MK HAJJI. Accordingly, the award meets the statutory threshold for recognition and enforcement under Sections 36(1) and 36(3) of the Act. The challenge mounted against the award does not satisfy any of the strict and exclusive grounds for setting aside under Section 35.
Disposition and Final Orders
i. Misc. Application No. E079 of 2024 is hereby allowed. The interim arbitral award dated 9th September 2024 is recognized and adopted as an order of this Court pursuant to Section 36 of the Arbitration Act.
ii. The Applicant is granted leave to enforce the interim award as a decree of this Court.
iii. The Respondent is hereby compelled to comply with the interim award within 14 days as directed by the Arbitrator.
iv. Misc. Application No. E092 of 2024 is hereby dismissed.
v. Each party shall bear its own costs, noting that the substantive dispute remains pending before the Arbitrator.
1. The parties entered into a Dealer Agreement dated 8th October 2019. Following the emergence of a dispute between them, the matter was referred to arbitration in accordance with Clause 22 of the Agreement. By an Interim Award dated 9th September 2024, the Arbitrator allowed MK HAJJI’s Notice of Motion dated 8th February 2024, thereby granting them access to SAFARICOM’s Dealer Portal for the purpose of retrieving documents in the custody of SAFARICOM PLC. SAFARICOM PLC has not complied with the said award, prompting the present application. It is this Interim Award that MK HAJJI seeks to have recognized and adopted as an order of this Court through their application dated 21st November 2024 filed in Misc. Application No. E079 of 2024.
2. SAFARICOM PLC has opposed that application and has, in turn, filed a cross-application in Misc. Application No. E092 of 2024 seeking to set aside the said award. The application which is dated 9th December 2024 is equally opposed by MK HAJJI. The issues raised in the two applications are intertwined and substantially overlap. Accordingly, this composite ruling addresses both applications in Miscellaneous Application No. E079 of 2024 and Miscellaneous Application No. E092 of 2024.
Analysis and Determination
3. SAFARICOM PLC seeks to set aside the said interim award, primarily on grounds that the Arbitrator acted ultra vires the arbitration agreement; that the award violated Section 29(5) of the Arbitration Act (hereinafter the Act) by allegedly failing to apply the contract terms; that the arbitrator denied SAFARICOM PLC a fair opportunity to be heard, and that relief was granted which was not specifically prayed for by MK HAJJI.
4. The central issue for determination is whether the interim arbitral award dated 9th September 2024 meets the threshold for recognition and enforcement under Section 36 of the Act, or whether it ought to be set aside under Section 35 of the same Act.
5. The legal framework governing judicial intervention in arbitral proceedings is rooted in the Act, which affirms the principles of party autonomy, minimal court interference, and the finality of arbitral awards. Section 32A of the Act encapsulates this core principle by providing that:
“Except as otherwise agreed by the parties, an arbitral award shall be final and binding upon the parties to the arbitration.”
6. This provision underscores the central philosophy of arbitration as a private and binding dispute resolution mechanism chosen by the parties. It affirms that, once an award is issued, the courts are not to revisit or reopen the merits of the dispute except in narrowly defined instances permitted under the Act. The parties, having voluntarily submitted to arbitration, are generally bound by the outcome.
7. Aligned with this philosophy, Section 10 of the Act imposes a strict limitation on the jurisdiction of courts in arbitral matters. It provides that:
“Except as provided in this Act, no court shall intervene in matters governed by this Act.”
8. The intent of this provision is to protect the autonomy and integrity of the arbitral process from judicial interference and to prevent parties from using the courts to circumvent the consequences of an unfavorable award. The role of the courts is, therefore, supportive rather than supervisory, intended to give effect to arbitration agreements and facilitate the enforcement of awards, not to act as an appellate forum.
9. In the context of the present proceedings, the application to set aside the interim award invites consideration of whether the Court may intervene in respect of partial or interim arbitral awards. Section 32(6) of the Act answers this question directly:
“An arbitral tribunal may, in the course of arbitral proceedings, make an interim, interlocutory or partial award.”
10. Although interim awards do not finally determine all the issues in dispute, they are nonetheless binding and enforceable to the same extent as final awards. They carry legal effect and are subject to recognition or challenge under the applicable provisions of the Act. Accordingly, this Court has jurisdiction to either recognize and enforce such an award under Section 36, or to set it aside, albeit only on the narrow grounds enumerated under Section 35.
11. These grounds include incapacity of a party; invalidity of the arbitration agreement; lack of proper notice or inability to present one’s case; the award dealing with a dispute not contemplated or not falling within the terms of the submission to arbitration; improper composition of the tribunal; or conflict with public policy.
12. SAFARICOM PLC contends that the arbitrator exceeded the scope of the reference and granted relief that had not been specifically prayed for. Such objections, if valid, fall for consideration under Section 35(2)(a)(iv) of the Act, which permits the setting aside of an award where it deals with a dispute not contemplated by or not falling within the terms of the reference to arbitration. However, no evidence has been placed before this Court to demonstrate that this jurisdictional objection was raised timely during the arbitral proceedings, as required by both statute and case law.
13. Section 17(3) of the Act expressly provides that:
“A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings.”
14. Failure to raise such an objection at the appropriate time amounts to a waiver. This position was affirmed in Kenya Shell Ltd v Kobil Petroleum Ltd [2006] eKLR, where the Court of Appeal held that a party who participates in arbitral proceedings without promptly raising objections to jurisdiction or procedure is deemed to have waived the right to do so later. More recently, in Kibuwa Leasing & Management Limited v Jadala Investments Limited & Another [2023] KECA 895 (KLR), the Court of Appeal upheld the decision in Joma Investments Limited v N.K. Brothers Limited [2018] eKLR, where it was emphasized that parties must invoke the procedure under Section 17 to challenge jurisdiction and may not circumvent it by seeking to set aside the award at a later stage.
15. SAFARICOMs further complaint, that the arbitrator failed to apply Section 29(5) of the Act or granted relief not expressly sought, is in substance a challenge to the merits of the arbitrator’s decision, thinly veiled as a jurisdictional objection. It bears reiterating that the Arbitrator is the master of both facts and law in arbitral proceedings. As held by the Court of Appeal in Anne Mumbi Hinga v Victoria Njoki Gathara [2009] eKLR, courts do not sit in appeal over arbitral awards.
16. The Court of Appeal was emphatic that this court did not have jurisdiction to intervene in any manner not specifically provided for in the Act. An erroneous application of the law or an allegedly improper interpretation of contract terms does not, without more, amount to a valid ground for setting aside an award.
17. Moreover, SAFARICOM PLC has not demonstrated that it was denied a fair hearing or that the arbitrator’s direction took it by surprise. The allegation of denial of a reasonable opportunity to present its case is entirely unsubstantiated. Section 35(2)(a)(iii) permits the setting aside of an award where a party was not given a fair opportunity to present its case. However, in Anne Mumbi Hinga, the Court of Appeal underscored that no application to set aside an award may be grounded outside the express provisions of Section 35. In the present case, the factual foundation required to trigger the protection of Section 35(2)(a)(iii) is clearly lacking.
18. On the contrary, the existence of the interim award is not in dispute, and the arbitration agreement between the parties is admitted. The documents have been attached in the application brought by MK HAJJI. Accordingly, the award meets the statutory threshold for recognition and enforcement under Sections 36(1) and 36(3) of the Act. The challenge mounted against the award does not satisfy any of the strict and exclusive grounds for setting aside under Section 35.
Disposition and Final Orders
i. Misc. Application No. E079 of 2024 is hereby allowed. The interim arbitral award dated 9th September 2024 is recognized and adopted as an order of this Court pursuant to Section 36 of the Arbitration Act.
ii. The Applicant is granted leave to enforce the interim award as a decree of this Court.
iii. The Respondent is hereby compelled to comply with the interim award within 14 days as directed by the Arbitrator.
iv. Misc. Application No. E092 of 2024 is hereby dismissed.
v. Each party shall bear its own costs, noting that the substantive dispute remains pending before the Arbitrator.