JUDGEMENT
A. Background.
1. A brief history of this matter is that a dispute pitting the Applicant and the Respondent herein was pursuant to an arbitration clause in the easement agreement dated 26th November, 1992 referred to arbitration, whereby the Respondent herein was the Claimant while the Appellant was the Respondent. The Respondent sought the following reliefs in its statement of claim dated 30th April, 2024:
i. A declaration that the Respondent has breached its contract with the Claimant.
ii. An order compelling the Respondent to pay Ksh.5,750,000/- to the Claimant being compensation to the damages caused tomits golf course.
iii. An award of interest in (ii) above.
iv. An order compelling the Respondent to settle the one-off clearance cost of Ksh.3,000,000/- of the easement area and thereafter a monthly maintenance cost of Ksh.150,000/-.
v. The monthly maintenance cost in (iv) above to attract a ten (10) percent annual increment during the subsistence of the easement agreement.
vi. General damages for breach of contract.
vii. Costs plus interest therefrom of the arbitration proceedings.
viii. Any other relief that this Honourable Tribunal may deem just and expedient.
2. The parties presented their respective cases before the sole arbitrator Hon. John Olago Aluoch, CBS who, upon hearing the parties, set out the issues for determination as follows:
i. Whether the Respondent was in breach of the easement agreement between it and the Claimant.
ii. Whether the Claimant is entitled to the reliefs sought.
iii. Whether the Claimant is entitled to costs.
3. On 23rd January, 2025, the Arbitrator rendered his final award, in favour of the Respondent and against the Applicant, as follows:
i. Special damages for oil spillage – Ksh.5,750,000/-.
ii. Special damages for maintenance of easement area – Ksh. 4,800,000/-.
iii. Monthly maintenance from November, 2022 to date – Ksh.4,050,000/-.
iv. General damages for constitutional infringement – Ksh.100,000,000/-.
v. Arbitrator’s fees – Ksh.400,000/-.
vi. Costs of travel and accommodation for Claimant’s Counsel – Ksh.100,000/-.
vii. Total award – Ksh.115,100,000/-.
4. Following the delivery and publication of the award, the Respondent filed the application by motion on notice dated 3rd February, 2025 which sought the following orders:
1. THAT….[Spent].
2. THAT….[Spent].
3. THAT this Honourable Court be pleased to set aside the arbitral award published by the sole Arbitrator Hon. John Olago Aluoch, CBS on 23rd January, 2025.
4. THAT costs of this application be borne by the Respondent.
5. The grounds upon which the application is premised are set out on its face and are as follows:
1. That the Arbitrator exceeded his mandate and jurisdiction by sitting as a constitutional court and determining matters that touch on the provisions of the Articles of the Constitution of Kenya which are beyond the scope of the arbitration agreement.
2. That the final arbitral award contravenes the public policy of Kenya by awarding an unjustified, punitive and unconscionable monetary amount to the Respondent.
3. That the Arbitrator failed to adhere to the principles of natural justice by disregarding key evidence and submissions presented by the Applicant.
4. That the award is contrary to the provisions of Section 35(2)(a) and (b) of the Arbitration Act.
5. THAT the Arbitrator exhibited open biasness and opted to step in and submit on behalf of the Claimant which is a clear indicator of an Arbitrator who has a key interest in the matter.
6. The application is supported by the affidavit of Nelson O. Nyaduwa, the Applicant’s Senior Legal Officer sworn on 3rd February, 2025. The said deponent has in his affidavit restated and expounded on the above grounds.
7. In his affidavit, the deponent restated the history of the dispute and expounded on the above grounds. He annexed to his affidavit a copy of the easement agreement dated 26th November, 1992, a copy of the certified proceedings from the arbitral tribunal, a certified copy of the final arbitral award dated 23rd January, 2025, copies of the pleadings filed in the arbitral tribunal, among other documents.
8. In opposing the application, the Respondent filed a replying affidavit sworn on 27th February, 2025 by its secretary Albert Ojonyo and therein stated that the Respondent further relied on another (previous) affidavit that he swore in support of an application dated 24th January, 2025.
9. In precis, Mr. Ojonyo stated that none of the grounds under Section 35 of the Arbitration Act had been presented by the Appellant to warrant the setting aside of the arbitral award and that what the Applicant had done through its application was to invite this court to consider a challenge on the merits of the final arbitral award and the competency of the Arbitrator, which are not permissible under Section 35 of the Act.
10. The Respondent’s secretary made further depositions that the Applicant’s motion was anchored on a misconstruction and/or misinterpretation of the arbitral award as to its nature, manner and instance of exercise of the Arbitrator’s mandate.
11. With regard to the ground of alleged contravention of jurisdictional limits by the Arbitrator, Mr. Ojonyo stated that the final award did not in any manner involve the interpretation or interrogation of the Constitution and did not, therefore, go afoul of Article 165(3)(a) of the Constitution as the Arbitrator merely considered the text of Articles 40 and 42, which did not amount to invoking the jurisdiction contemplated under Article 165(3)(b).
12. In respect of the averment in the supporting affidavit that there would be a loss of public funds if the award is not set aside, the Respondent’s secretary stated in his affidavit that state corporations were bound by contractual obligations and were subject to applicable arbitration proceedings.
13. On the point that there was perceived or apparent bias on the part of the Arbitrator stemming from his alleged membership to the Respondent, Mr. Ojonyo deposed that the Arbitrator was struck off from the membership of the Respondent in 2019 and was not, at the time of the arbitration proceedings a member of the Respondent.
14. To that end, the deponent annexed as “AO-18”, “AO-19”, “AO-20”, “AO-21”, “AO-22”, “AO-23”, “AO-24” and “AO-26” documents to support that position. The deponent stated that in any event, the Arbitrator, upon being appointed by the Law Society of Kenya, disclosed through an email dated 22nd April, 2024 (“AO-30”) that he was an erstwhile member of the Respondent and the Applicant consented to his appointment.
15. The record of this court bears it that the Respondent filed the chamber summons dated 24th January, 2025 in which the following orders were sought:
1. THAT….[Spent].
2. THAT the Honourable Court be pleased to issue an order recognizing and enforcing the arbitral award issued on the 23rd day of January, 2025 by Hon. John Olago Aluoch, CBS, Advocate, M.CIArb as a judgement of the High Court of Kenya.
3. THAT costs of the application be awarded to the Applicant.
16. The grounds upon which the application is premised are briefly that the final arbitral award issued on 23rd January, 2025 is under Section 32A of the Arbitration Act valid, final and binding on the parties and that the Respondent was through the application seeking to invoke this court’s jurisdiction under Section 36 of the Arbitration Act in order that the final arbitral award is recognized and enforced as the judgement of this court.
17. The chamber summons application is accompanied by and grounded upon the sworn affidavit of Albert Ojonyo, in which he reiterates the foregoing grounds and provides further elaboration and detailed explanation in support of the same.
18. The chamber summons application is contested through the sworn affidavit of Nelson O. Nyadiwa, in which he relies on and reiterates the aforementioned grounds for the setting aside of the final arbitral award, and advances them as the principal reasons upon which the application seeking the recognition and enforcement of the arbitral award ought to be declined.
19. Vide a notice of motion dated 14th February, 2025, Fanuel Charles Gaya and Robinson Adera Oyugi sought to be joined as Interested Parties in the instant proceedings and further sought leave to participate in the instant proceedings.
20. The application for joinder by the two parties was allowed by the consent of the parties on 1st April, 2025. The parties further agreed that the application for setting aside of the arbitral award be heard by way of written submissions and the parties complied with the directions and filed their respective submissions.
21. In arbitration proceedings, where a party files an application for the setting aside of an arbitral award and the opposing party files an application for the recognition of the same award, the proper route for the court to take is the one that I discussed in the case of County Government of Kisumu v Coretec Systems & Solutions Limited (Commercial Arbitration Cause E001 of 2023) [2025] KEHC 13909 (25 September 2025) (Ruling) in which I made the following observations:
“34. In a nutshell, the argument fronted by the Applicant is that, it is irregular for the court to hear an application for recognition and enforcement of an arbitral award before hearing and determining a pending application to set aside the same award and that if the court did so, that would contravene both the Arbitration Act and Article 50 of the Constitution, which provides for the right to a fair hearing.
35. While Section 36 of the Arbitration Act provides for recognition and enforcement of an arbitral award, Section 37 of the Act allows a party to apply for setting aside an arbitral award on specific grounds.
36. Notably, Section 36(2) provides that:
“An arbitral award shall be recognized as binding and enforced in accordance with the provisions of this section unless it is set aside or suspended by a court of competent jurisdiction.”
(Underlined emphasis).
37 . This, in my view, implies that recognition and enforcement can only proceed if the award is not subject to a pending setting aside application, or unless the court determines that such an application is unmeritorious.
38. Courts have generally held that applications for recognition and enforcement and applications to set aside should be considered together or that the setting aside application should be determined first. This, I think is meant to avoid a possibility of conflicting decisions and premature enforcement of an award that might be invalidated and to avoid undermining the right to challenge an award under Section 37.
39. In the case of Christ for All Nations v Apollo Insurance Co Ltd [2002] 2 EA 366 the Court of Appeal held that where an application to set aside an arbitral award has been filed, it is prudent for the court to defer enforcement proceedings until the setting aside application is heard and determined. The court stated that:
“It would be imprudent for the High Court to recognize and enforce an award that is under challenge.”
40. The correct approach would in my view therefore be for the court to either order for the consolidation of the two applications (for recognition/enforcement and for setting aside), or to hear them together or to determine the one seeking for the setting aside of the award first, then proceed with enforcement if the award survives.”
22. The foregoing being the position in law, the parties herein proffered the correct position that the application for setting aside the award be heard first as it has a direct bearing on the course that the application that seeks enforcement and adoption of the award will take.
23. I will, consequently, proceed to consider and determine the application seeking the recognition and enforcement of the arbitral award only after I have first addressed and rendered a decision on the application that seeks to set aside the said award.
B. The Applicant’s submissions on the notice of motion dated 3rd February, 2025.
24. In its submissions, the Appellant states, in support of its first ground, that in the proceedings before the Arbitrator, the reliefs that the Respondent sought against the Applicant were based on alleged contractual breaches and that no prayer was made based on constitutional violations or infringements under Articles 43, 46 and 47 and that as such, the Arbitrator not only exceeded the scope of the arbitration dispute but also went on to address matters concerning constitutional violations, which matters are an exclusive preserve of the High Court.
25. In particular, the Appellant submitted that the Arbitrator awarded the Respondent Ksh.100,000,000/-, citing constitutional infringements and consumer rights violations under the three Articles of the Constitution, which matters and/or reliefs were beyond his jurisdiction.
26. In a nutshell, the Applicant submitted that the Arbitrator lacked jurisdiction to interpret the three Articles of the Constitution, which mandate is constitutionally a preserve of the High Court in line with Section 165(3)(d)(i) of the Constitution. The Applicant thus proffered the position that the arbitral award went afoul of Section 19 of the Arbitration Act which mandates fairness and strict adherence to the scope of the dispute.
27. The second ground that the Applicant presented was that the Arbitrator’s membership in Nyanza Club (the Respondent) established a palpable conflict of interest thus breaching Section 13 of the Arbitration Act and the constitutional dictates of impartiality under Article 50(1) of the Constitution.
28. The third ground that the Applicant presented in its submissions related to the evidence that was adduced before the Arbitrator. The Applicant urged that forensic evidence that was tendered revealed that some of the documents tendered in evidence by the Respondent were fabricated and offended Sections 106A and 106B of the Evidence Act, Cap 80 Laws of Kenya and therefore vitiated the arbitration proceedings. The Applicant therefore contended that the award contravenes Section 35(2)(b)(ii) of the Arbitration Act and Article 201 of the Constitution.
C. The Interested Parties’ submissions on the notice of motion dated 3rd February, 2025.
29. In their filed submissions, the Interested Parties supported the Applicant’s application seeking to set aside the arbitral award. The Interested Parties submitted that they had a legitimate interest in the instant proceedings as the Applicant is a public entity and that there was a likelihood that public funds would be lost and the Respondent unjustly enriched.
30. The first ground that the Interested Parties proffered was that the arbitral award violates public policy, particularly with regard to what they alleged was misuse of public funds and violation of constitutional principles of accountability. In their view, the court was mandated under Section 35(2)(b)(ii) of the Arbitration Act to set aside the award as it conflicted public policy in that public funds were at the risk of being misused or lost, noting that Article 201 of the Constitution dictates that public funds be utilized efficiently, transparently and in a manner that promotes accountability.
31. The second ground presented by the Interested Parties was that the Arbitrator exceeded his jurisdiction by not only making a determination on constitutional matters, but also that such matters fell outside the scope of the arbitration. In that respect, the submissions of the Interested Parties mirrored those of the Applicant.
32. The third ground that the Interested Parties urged in support of the Applicant’s application was that the Arbitrator exhibited bias or conflict of interest in conducting the arbitration proceedings. The submission on this point were that the Arbitrator failed to disclose his membership to the Respondent, which raised concerns of conflict of interest and bias, thereby undermining the fairness of the arbitration proceedings.
D. The Respondent’s submissions on the notice of motion dated 3rd February, 2025.
33. In opposing the Applicant’s application, the Respondent first addressed the challenge by the Applicant seeking that the Respondent’s replying affidavit be expunged on account of having been filed outside the timelines that were issued by the court. In its view, the request, which was presented by way of a preliminary objection, was not available to the Applicant by virtue of Article 159(2)(d) of the Constitution, as the same amounted to a procedural technicality which did not affect the substance of the litigation.
34. With regard to the Applicant’s point that there was apparent or perceived bias and a conflict of interest on the part of the Arbitrator, which was supported by the Interested Parties, the Respondent reiterated the position that it had presented evidence to demonstrate that the Arbitrator was not its member at the time of the arbitration and that he disclosed to the parties that he had therebefore been a member, yet the Applicant did not contest his appearance as the umpire in the arbitration proceedings.
35. Further, the Respondent submitted that Sections 13(3) and 14 of the Arbitration Act provided elaborate mechanisms of challenging the Arbitrator on account of bias and that the Applicant did not employ the mechanisms provided under the provisions of the Act, effectively waiving its rights, if any, to address the issue under Section 5 of the Act.
36. The Respondent addressed in its submissions the allegation by the Applicant that some evidence that was presented before the Arbitrator was fabricated by stating that the forensic report by Julkin Technologies Limited did not derive any conclusive determination on the authenticity of the documents that the Respondent produced vis a vis compliance with the rules of evidence and that as such, no such tampering was proved.
37. On the ground of allegation of violation of public policy, the Respondent submitted that neither the Applicant nor the Interested Parties presented any proof that public funds would be unlawfully lost or that the Respondent stood to be unjustly enriched. The Respondent urged that the Applicant was bound by the easement agreement and the arbitration clause under the said agreement, pursuant to Section 41 of the Arbitration Act.
38. The submission of the Respondent on the issue raised by the Applicant and supported by the Interested Parties that the award was ultra vires the provisions of the Constitution was that the mandate of the Arbitrator was drawn from the easement agreement and the law and that the Arbitrator therefore acted within his mandate in granting the reliefs.
39. The Respondent urged that although the claim for damages for constitutional violations were not specifically sought in the statement of claim, the reference to “any other relief that this Honourable Tribunal may deem just and expedient” aptly covered the quest for all the reliefs that the Arbitrator ultimately granted, more specifically under Rule 89 of the Arbitration Rules. The Respondent thus submitted that under Section 10 of the Arbitration Act, this court should not interfere with the findings of the Arbitrator.
E. Issues for determination.
40. Having outlined the factual and procedural history of this matter, I will deduce the issues that I am now tasked to determine, which are:
i. Whether the Respondent’s replying affidavit was filed outside the timelines granted by the court, and if so, whether the same should be struck out or expunged from the record.
ii. Whether the Arbitrator exceeded his mandate and jurisdiction by determining and awarding reliefs founded on alleged constitutional violations, contrary to the arbitration agreement, the Arbitration Act and Article 165(3) of the Constitution.
iii. Whether the arbitral award offends the public policy of Kenya within the meaning of Section 35(2)(b)(ii) of the Arbitration Act, including the allegations of unjust enrichment and misuse or loss of public funds.
iv. Whether the Arbitrator acted with actual, apparent or perceived bias or was conflicted, and whether such bias vitiates the arbitral proceedings and the final award.
v. Whether the arbitral proceedings were conducted in breach of the rules of natural justice, including whether the Arbitrator disregarded material evidence or relied on evidence that was inadmissible, fabricated or improperly admitted.
vi. Whether the Applicant waived its right to challenge the Arbitrator on grounds of bias or jurisdiction by failing to invoke the mechanisms provided under Sections 5, 13 and 14 of the Arbitration Act.
vii. Whether the grounds advanced by the Applicant and supported by the Interested Parties satisfy the threshold for setting aside an arbitral award under Section 35(2)(a) and (b) of the Arbitration Act.
viii. What orders should be made on the notice of motion dated 3rd February, 2025, including orders as to costs and consequently, what orders should be made on the chamber summons dated 24th January, 2025..
F. Analysis and findings.
41. The first issue for determination is whether the Respondent’s replying affidavit was filed outside the timelines granted by the court, and if so, whether the same should be struck out or expunged from the record.
42. The Applicant challenged the Respondent’s replying affidavit on the ground that it was filed outside the timelines granted by the court and urged that the same be struck out or expunged from the record. According to the Applicant, the late filing amounted to non-compliance with court orders and undermined the integrity of the judicial process and that the only fate that should befall the affidavit is its expungement.
43. In response, the Respondent conceded that the replying affidavit may not have been filed strictly within the timelines directed by the court but submitted that the delay in filing the same did not occasion any prejudice to the Applicant and was a procedural lapse curable under Article 159(2)(d) of the Constitution. The Respondent further contended that the Applicant was in any event afforded an opportunity to respond to the contents of the affidavit through written submissions.
44. This court has considered the record and the rival arguments on that issue. It is evident that there was non-compliance with the court’s directions as regards the timelines for filing the replying affidavit. Such non-compliance is not to be trivialized, as court orders are binding and adherence to timelines is critical to the orderly administration of justice. Failure to comply with court directions does, in that sense, undermine the judicial process.
45. However, the mere fact of late filing does not automatically render a pleading or affidavit liable to be struck out. The court must go further and interrogate whether the non-compliance goes to the substance of the dispute, whether it occasioned prejudice to the opposing party and whether striking out would serve the interests of justice.
46. Of particular relevance to the present proceedings is the nature of the substantive application before the court. The primary question is whether the arbitral award should be set aside under Section 35 of the Arbitration Act.
47. Non-compliance with court-imposed timelines for filing a response, while undesirable, is not among the grounds provided under Section 35 for setting aside an arbitral award. Consequently, such procedural default, standing alone, cannot found a basis for impeaching the validity of the arbitral award or excluding material placed before the court in response to the setting-aside application.
48. This court is also guided by Article 159(2)(d) of the Constitution, which enjoins courts to administer justice without undue regard to procedural technicalities. In the case of Kenya Ports Authority v Kenya Power & Lighting Co. Limited [2012] eKLR, the court, while addressing the scope of Article 159, observed that:
“Combining the meaning of these words ‘procedural technicalities’ may be described as those that more concern the mode of proceedings and the rules involved that regulate formalities rather than substantive rights under law.”
49. Applying that principle to the present case, the late filing of the replying affidavit relates to the mode and timing of proceedings rather than to the substantive rights of the parties. The Applicant did not demonstrate that it suffered any prejudice that could not be remedied, nor did it show that its right to a fair hearing under Article 50 of the Constitution was compromised. The record shows that the Applicant was able to fully canvass its case and respond to the Respondent’s arguments.
50. While the court deprecates non-compliance with its orders and reiterates that parties must always adhere strictly to timelines, the circumstances of this case do not justify the draconian step of striking out or expunging the replying affidavit. To do so would be to elevate form over substance and potentially impede the just determination of the substantive dispute before the court.
51. The determination that I then reach on this issue is that I find that although the Respondent filed its replying affidavit outside the timelines granted by this court, such non-compliance amounts to a procedural irregularity. It does not constitute a ground for setting aside an arbitral award under Section 35 of the Arbitration Act, nor does it warrant the striking out or expunging of the affidavit from the record. The replying affidavit shall therefore remain on record and be considered in the determination of the substantive application.
52. The second issue for me to address is whether the Arbitrator exceeded his mandate and jurisdiction by determining and awarding reliefs founded on alleged constitutional violations, contrary to the arbitration agreement, the Arbitration Act and Article 165(3) of the Constitution.
53. This issue engages fundamental questions about the proper scope of arbitral jurisdiction, the relationship between private dispute resolution and constitutional adjudication and the limits of judicial supervision of arbitral awards under Kenyan law.
54. The Applicant and the Interested Parties both contended that the Arbitrator exceeded his mandate by making a substantive determination that the Respondent’s constitutional rights were violated and by awarding Kshs.100,000,000/– as “general damages for constitutional infringement,” in circumstances where no constitutional causes of action were pleaded or referred to arbitration. They further argued that such a finding and award fell outside the contractual dispute submitted for arbitration and intruded into the exclusive constitutional jurisdiction of the High Court.
55. The Respondent argued that the Arbitrator merely applied constitutional principles in considering the contract dispute and that general relief sought in the statement of claim sufficiently empowered him to make the award.
56. In determining this issue, this court must consider the relevant statutory provisions of the Arbitration Act, the constitutional mandate under Article 165(3) of the Constitution and applicable jurisprudence including the Supreme Court’s interpretation of the scope of judicial intervention in arbitration.
57. The first and most fundamental principle is that constitutional claims for infringement of fundamental rights invoke the enforcement of the Bill of Rights, a core part of the constitutional order.
58. Under Article 165(3)(a) of the Constitution, the High Court has original jurisdiction in all civil matters and, critically, the jurisdiction to interpret the Constitution and determine whether any law, act or omission is inconsistent with, or in contravention of, the Constitution. This jurisdiction includes the power to grant appropriate remedies for breaches of constitutional rights such as declarations, injunctions and damages, as provided under Article 23(3) and Article 24 of the Constitution.
59. Even in instances where parties have agreed to resolve their disputes through arbitration, such an agreement cannot oust or displace the High Court’s constitutional jurisdiction to grant relief for violation of fundamental rights. The authority to hear and determine constitutional questions is not derivative. It stems from the Constitution itself.
60. An arbitrator’s mandate is drawn from the arbitration agreement and the submission to arbitration. It is not co extensive with the constitutional jurisdiction of superior courts. Thus, any purported award of constitutional damages by an arbitrator necessarily raises the question whether he or she has assumed powers that are not conferred by the arbitration agreement or by law.
61. The statutory framework governing arbitration in Kenya, particularly Section 35(2)(a)(iv) of the Arbitration Act, circumscribes the jurisdiction of an arbitral tribunal and the grounds upon which an arbitral award may be set aside by the High Court.
62. Section 35(2)(a)(iv) provides that an arbitral award may be set aside if “…the arbitral award deals with a dispute not contemplated by or not falling within the terms of the reference to arbitration or contains decisions on matters beyond the scope of the reference to arbitration…”.
63. This provision reflects the principle that arbitral jurisdiction is derivative of the parties’ agreement and that an Arbitrator cannot decide matters that were not submitted to him. An arbitral tribunal that ventures beyond the scope of the reference is said to have acted in excess of jurisdiction, and its award on such matters may be impugned under Section 35.
64. From the pleadings in this case, the dispute referred to arbitration was contractual in nature with respect to alleged breaches of the easement agreement. The reliefs claimed were for breach of contract,
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A. Background.
1. A brief history of this matter is that a dispute pitting the Applicant and the Respondent herein was pursuant to an arbitration clause in the easement agreement dated 26th November, 1992 referred to arbitration, whereby the Respondent herein was the Claimant while the Appellant was the Respondent. The Respondent sought the following reliefs in its statement of claim dated 30th April, 2024:
i. A declaration that the Respondent has breached its contract with the Claimant.
ii. An order compelling the Respondent to pay Ksh.5,750,000/- to the Claimant being compensation to the damages caused tomits golf course.
iii. An award of interest in (ii) above.
iv. An order compelling the Respondent to settle the one-off clearance cost of Ksh.3,000,000/- of the easement area and thereafter a monthly maintenance cost of Ksh.150,000/-.
v. The monthly maintenance cost in (iv) above to attract a ten (10) percent annual increment during the subsistence of the easement agreement.
vi. General damages for breach of contract.
vii. Costs plus interest therefrom of the arbitration proceedings.
viii. Any other relief that this Honourable Tribunal may deem just and expedient.
2. The parties presented their respective cases before the sole arbitrator Hon. John Olago Aluoch, CBS who, upon hearing the parties, set out the issues for determination as follows:
i. Whether the Respondent was in breach of the easement agreement between it and the Claimant.
ii. Whether the Claimant is entitled to the reliefs sought.
iii. Whether the Claimant is entitled to costs.
3. On 23rd January, 2025, the Arbitrator rendered his final award, in favour of the Respondent and against the Applicant, as follows:
i. Special damages for oil spillage – Ksh.5,750,000/-.
ii. Special damages for maintenance of easement area – Ksh. 4,800,000/-.
iii. Monthly maintenance from November, 2022 to date – Ksh.4,050,000/-.
iv. General damages for constitutional infringement – Ksh.100,000,000/-.
v. Arbitrator’s fees – Ksh.400,000/-.
vi. Costs of travel and accommodation for Claimant’s Counsel – Ksh.100,000/-.
vii. Total award – Ksh.115,100,000/-.
4. Following the delivery and publication of the award, the Respondent filed the application by motion on notice dated 3rd February, 2025 which sought the following orders:
1. THAT….[Spent].
2. THAT….[Spent].
3. THAT this Honourable Court be pleased to set aside the arbitral award published by the sole Arbitrator Hon. John Olago Aluoch, CBS on 23rd January, 2025.
4. THAT costs of this application be borne by the Respondent.
5. The grounds upon which the application is premised are set out on its face and are as follows:
1. That the Arbitrator exceeded his mandate and jurisdiction by sitting as a constitutional court and determining matters that touch on the provisions of the Articles of the Constitution of Kenya which are beyond the scope of the arbitration agreement.
2. That the final arbitral award contravenes the public policy of Kenya by awarding an unjustified, punitive and unconscionable monetary amount to the Respondent.
3. That the Arbitrator failed to adhere to the principles of natural justice by disregarding key evidence and submissions presented by the Applicant.
4. That the award is contrary to the provisions of Section 35(2)(a) and (b) of the Arbitration Act.
5. THAT the Arbitrator exhibited open biasness and opted to step in and submit on behalf of the Claimant which is a clear indicator of an Arbitrator who has a key interest in the matter.
6. The application is supported by the affidavit of Nelson O. Nyaduwa, the Applicant’s Senior Legal Officer sworn on 3rd February, 2025. The said deponent has in his affidavit restated and expounded on the above grounds.
7. In his affidavit, the deponent restated the history of the dispute and expounded on the above grounds. He annexed to his affidavit a copy of the easement agreement dated 26th November, 1992, a copy of the certified proceedings from the arbitral tribunal, a certified copy of the final arbitral award dated 23rd January, 2025, copies of the pleadings filed in the arbitral tribunal, among other documents.
8. In opposing the application, the Respondent filed a replying affidavit sworn on 27th February, 2025 by its secretary Albert Ojonyo and therein stated that the Respondent further relied on another (previous) affidavit that he swore in support of an application dated 24th January, 2025.
9. In precis, Mr. Ojonyo stated that none of the grounds under Section 35 of the Arbitration Act had been presented by the Appellant to warrant the setting aside of the arbitral award and that what the Applicant had done through its application was to invite this court to consider a challenge on the merits of the final arbitral award and the competency of the Arbitrator, which are not permissible under Section 35 of the Act.
10. The Respondent’s secretary made further depositions that the Applicant’s motion was anchored on a misconstruction and/or misinterpretation of the arbitral award as to its nature, manner and instance of exercise of the Arbitrator’s mandate.
11. With regard to the ground of alleged contravention of jurisdictional limits by the Arbitrator, Mr. Ojonyo stated that the final award did not in any manner involve the interpretation or interrogation of the Constitution and did not, therefore, go afoul of Article 165(3)(a) of the Constitution as the Arbitrator merely considered the text of Articles 40 and 42, which did not amount to invoking the jurisdiction contemplated under Article 165(3)(b).
12. In respect of the averment in the supporting affidavit that there would be a loss of public funds if the award is not set aside, the Respondent’s secretary stated in his affidavit that state corporations were bound by contractual obligations and were subject to applicable arbitration proceedings.
13. On the point that there was perceived or apparent bias on the part of the Arbitrator stemming from his alleged membership to the Respondent, Mr. Ojonyo deposed that the Arbitrator was struck off from the membership of the Respondent in 2019 and was not, at the time of the arbitration proceedings a member of the Respondent.
14. To that end, the deponent annexed as “AO-18”, “AO-19”, “AO-20”, “AO-21”, “AO-22”, “AO-23”, “AO-24” and “AO-26” documents to support that position. The deponent stated that in any event, the Arbitrator, upon being appointed by the Law Society of Kenya, disclosed through an email dated 22nd April, 2024 (“AO-30”) that he was an erstwhile member of the Respondent and the Applicant consented to his appointment.
15. The record of this court bears it that the Respondent filed the chamber summons dated 24th January, 2025 in which the following orders were sought:
1. THAT….[Spent].
2. THAT the Honourable Court be pleased to issue an order recognizing and enforcing the arbitral award issued on the 23rd day of January, 2025 by Hon. John Olago Aluoch, CBS, Advocate, M.CIArb as a judgement of the High Court of Kenya.
3. THAT costs of the application be awarded to the Applicant.
16. The grounds upon which the application is premised are briefly that the final arbitral award issued on 23rd January, 2025 is under Section 32A of the Arbitration Act valid, final and binding on the parties and that the Respondent was through the application seeking to invoke this court’s jurisdiction under Section 36 of the Arbitration Act in order that the final arbitral award is recognized and enforced as the judgement of this court.
17. The chamber summons application is accompanied by and grounded upon the sworn affidavit of Albert Ojonyo, in which he reiterates the foregoing grounds and provides further elaboration and detailed explanation in support of the same.
18. The chamber summons application is contested through the sworn affidavit of Nelson O. Nyadiwa, in which he relies on and reiterates the aforementioned grounds for the setting aside of the final arbitral award, and advances them as the principal reasons upon which the application seeking the recognition and enforcement of the arbitral award ought to be declined.
19. Vide a notice of motion dated 14th February, 2025, Fanuel Charles Gaya and Robinson Adera Oyugi sought to be joined as Interested Parties in the instant proceedings and further sought leave to participate in the instant proceedings.
20. The application for joinder by the two parties was allowed by the consent of the parties on 1st April, 2025. The parties further agreed that the application for setting aside of the arbitral award be heard by way of written submissions and the parties complied with the directions and filed their respective submissions.
21. In arbitration proceedings, where a party files an application for the setting aside of an arbitral award and the opposing party files an application for the recognition of the same award, the proper route for the court to take is the one that I discussed in the case of County Government of Kisumu v Coretec Systems & Solutions Limited (Commercial Arbitration Cause E001 of 2023) [2025] KEHC 13909 (25 September 2025) (Ruling) in which I made the following observations:
“34. In a nutshell, the argument fronted by the Applicant is that, it is irregular for the court to hear an application for recognition and enforcement of an arbitral award before hearing and determining a pending application to set aside the same award and that if the court did so, that would contravene both the Arbitration Act and Article 50 of the Constitution, which provides for the right to a fair hearing.
35. While Section 36 of the Arbitration Act provides for recognition and enforcement of an arbitral award, Section 37 of the Act allows a party to apply for setting aside an arbitral award on specific grounds.
36. Notably, Section 36(2) provides that:
“An arbitral award shall be recognized as binding and enforced in accordance with the provisions of this section unless it is set aside or suspended by a court of competent jurisdiction.”
(Underlined emphasis).
37 . This, in my view, implies that recognition and enforcement can only proceed if the award is not subject to a pending setting aside application, or unless the court determines that such an application is unmeritorious.
38. Courts have generally held that applications for recognition and enforcement and applications to set aside should be considered together or that the setting aside application should be determined first. This, I think is meant to avoid a possibility of conflicting decisions and premature enforcement of an award that might be invalidated and to avoid undermining the right to challenge an award under Section 37.
39. In the case of Christ for All Nations v Apollo Insurance Co Ltd [2002] 2 EA 366 the Court of Appeal held that where an application to set aside an arbitral award has been filed, it is prudent for the court to defer enforcement proceedings until the setting aside application is heard and determined. The court stated that:
“It would be imprudent for the High Court to recognize and enforce an award that is under challenge.”
40. The correct approach would in my view therefore be for the court to either order for the consolidation of the two applications (for recognition/enforcement and for setting aside), or to hear them together or to determine the one seeking for the setting aside of the award first, then proceed with enforcement if the award survives.”
22. The foregoing being the position in law, the parties herein proffered the correct position that the application for setting aside the award be heard first as it has a direct bearing on the course that the application that seeks enforcement and adoption of the award will take.
23. I will, consequently, proceed to consider and determine the application seeking the recognition and enforcement of the arbitral award only after I have first addressed and rendered a decision on the application that seeks to set aside the said award.
B. The Applicant’s submissions on the notice of motion dated 3rd February, 2025.
24. In its submissions, the Appellant states, in support of its first ground, that in the proceedings before the Arbitrator, the reliefs that the Respondent sought against the Applicant were based on alleged contractual breaches and that no prayer was made based on constitutional violations or infringements under Articles 43, 46 and 47 and that as such, the Arbitrator not only exceeded the scope of the arbitration dispute but also went on to address matters concerning constitutional violations, which matters are an exclusive preserve of the High Court.
25. In particular, the Appellant submitted that the Arbitrator awarded the Respondent Ksh.100,000,000/-, citing constitutional infringements and consumer rights violations under the three Articles of the Constitution, which matters and/or reliefs were beyond his jurisdiction.
26. In a nutshell, the Applicant submitted that the Arbitrator lacked jurisdiction to interpret the three Articles of the Constitution, which mandate is constitutionally a preserve of the High Court in line with Section 165(3)(d)(i) of the Constitution. The Applicant thus proffered the position that the arbitral award went afoul of Section 19 of the Arbitration Act which mandates fairness and strict adherence to the scope of the dispute.
27. The second ground that the Applicant presented was that the Arbitrator’s membership in Nyanza Club (the Respondent) established a palpable conflict of interest thus breaching Section 13 of the Arbitration Act and the constitutional dictates of impartiality under Article 50(1) of the Constitution.
28. The third ground that the Applicant presented in its submissions related to the evidence that was adduced before the Arbitrator. The Applicant urged that forensic evidence that was tendered revealed that some of the documents tendered in evidence by the Respondent were fabricated and offended Sections 106A and 106B of the Evidence Act, Cap 80 Laws of Kenya and therefore vitiated the arbitration proceedings. The Applicant therefore contended that the award contravenes Section 35(2)(b)(ii) of the Arbitration Act and Article 201 of the Constitution.
C. The Interested Parties’ submissions on the notice of motion dated 3rd February, 2025.
29. In their filed submissions, the Interested Parties supported the Applicant’s application seeking to set aside the arbitral award. The Interested Parties submitted that they had a legitimate interest in the instant proceedings as the Applicant is a public entity and that there was a likelihood that public funds would be lost and the Respondent unjustly enriched.
30. The first ground that the Interested Parties proffered was that the arbitral award violates public policy, particularly with regard to what they alleged was misuse of public funds and violation of constitutional principles of accountability. In their view, the court was mandated under Section 35(2)(b)(ii) of the Arbitration Act to set aside the award as it conflicted public policy in that public funds were at the risk of being misused or lost, noting that Article 201 of the Constitution dictates that public funds be utilized efficiently, transparently and in a manner that promotes accountability.
31. The second ground presented by the Interested Parties was that the Arbitrator exceeded his jurisdiction by not only making a determination on constitutional matters, but also that such matters fell outside the scope of the arbitration. In that respect, the submissions of the Interested Parties mirrored those of the Applicant.
32. The third ground that the Interested Parties urged in support of the Applicant’s application was that the Arbitrator exhibited bias or conflict of interest in conducting the arbitration proceedings. The submission on this point were that the Arbitrator failed to disclose his membership to the Respondent, which raised concerns of conflict of interest and bias, thereby undermining the fairness of the arbitration proceedings.
D. The Respondent’s submissions on the notice of motion dated 3rd February, 2025.
33. In opposing the Applicant’s application, the Respondent first addressed the challenge by the Applicant seeking that the Respondent’s replying affidavit be expunged on account of having been filed outside the timelines that were issued by the court. In its view, the request, which was presented by way of a preliminary objection, was not available to the Applicant by virtue of Article 159(2)(d) of the Constitution, as the same amounted to a procedural technicality which did not affect the substance of the litigation.
34. With regard to the Applicant’s point that there was apparent or perceived bias and a conflict of interest on the part of the Arbitrator, which was supported by the Interested Parties, the Respondent reiterated the position that it had presented evidence to demonstrate that the Arbitrator was not its member at the time of the arbitration and that he disclosed to the parties that he had therebefore been a member, yet the Applicant did not contest his appearance as the umpire in the arbitration proceedings.
35. Further, the Respondent submitted that Sections 13(3) and 14 of the Arbitration Act provided elaborate mechanisms of challenging the Arbitrator on account of bias and that the Applicant did not employ the mechanisms provided under the provisions of the Act, effectively waiving its rights, if any, to address the issue under Section 5 of the Act.
36. The Respondent addressed in its submissions the allegation by the Applicant that some evidence that was presented before the Arbitrator was fabricated by stating that the forensic report by Julkin Technologies Limited did not derive any conclusive determination on the authenticity of the documents that the Respondent produced vis a vis compliance with the rules of evidence and that as such, no such tampering was proved.
37. On the ground of allegation of violation of public policy, the Respondent submitted that neither the Applicant nor the Interested Parties presented any proof that public funds would be unlawfully lost or that the Respondent stood to be unjustly enriched. The Respondent urged that the Applicant was bound by the easement agreement and the arbitration clause under the said agreement, pursuant to Section 41 of the Arbitration Act.
38. The submission of the Respondent on the issue raised by the Applicant and supported by the Interested Parties that the award was ultra vires the provisions of the Constitution was that the mandate of the Arbitrator was drawn from the easement agreement and the law and that the Arbitrator therefore acted within his mandate in granting the reliefs.
39. The Respondent urged that although the claim for damages for constitutional violations were not specifically sought in the statement of claim, the reference to “any other relief that this Honourable Tribunal may deem just and expedient” aptly covered the quest for all the reliefs that the Arbitrator ultimately granted, more specifically under Rule 89 of the Arbitration Rules. The Respondent thus submitted that under Section 10 of the Arbitration Act, this court should not interfere with the findings of the Arbitrator.
E. Issues for determination.
40. Having outlined the factual and procedural history of this matter, I will deduce the issues that I am now tasked to determine, which are:
i. Whether the Respondent’s replying affidavit was filed outside the timelines granted by the court, and if so, whether the same should be struck out or expunged from the record.
ii. Whether the Arbitrator exceeded his mandate and jurisdiction by determining and awarding reliefs founded on alleged constitutional violations, contrary to the arbitration agreement, the Arbitration Act and Article 165(3) of the Constitution.
iii. Whether the arbitral award offends the public policy of Kenya within the meaning of Section 35(2)(b)(ii) of the Arbitration Act, including the allegations of unjust enrichment and misuse or loss of public funds.
iv. Whether the Arbitrator acted with actual, apparent or perceived bias or was conflicted, and whether such bias vitiates the arbitral proceedings and the final award.
v. Whether the arbitral proceedings were conducted in breach of the rules of natural justice, including whether the Arbitrator disregarded material evidence or relied on evidence that was inadmissible, fabricated or improperly admitted.
vi. Whether the Applicant waived its right to challenge the Arbitrator on grounds of bias or jurisdiction by failing to invoke the mechanisms provided under Sections 5, 13 and 14 of the Arbitration Act.
vii. Whether the grounds advanced by the Applicant and supported by the Interested Parties satisfy the threshold for setting aside an arbitral award under Section 35(2)(a) and (b) of the Arbitration Act.
viii. What orders should be made on the notice of motion dated 3rd February, 2025, including orders as to costs and consequently, what orders should be made on the chamber summons dated 24th January, 2025..
F. Analysis and findings.
41. The first issue for determination is whether the Respondent’s replying affidavit was filed outside the timelines granted by the court, and if so, whether the same should be struck out or expunged from the record.
42. The Applicant challenged the Respondent’s replying affidavit on the ground that it was filed outside the timelines granted by the court and urged that the same be struck out or expunged from the record. According to the Applicant, the late filing amounted to non-compliance with court orders and undermined the integrity of the judicial process and that the only fate that should befall the affidavit is its expungement.
43. In response, the Respondent conceded that the replying affidavit may not have been filed strictly within the timelines directed by the court but submitted that the delay in filing the same did not occasion any prejudice to the Applicant and was a procedural lapse curable under Article 159(2)(d) of the Constitution. The Respondent further contended that the Applicant was in any event afforded an opportunity to respond to the contents of the affidavit through written submissions.
44. This court has considered the record and the rival arguments on that issue. It is evident that there was non-compliance with the court’s directions as regards the timelines for filing the replying affidavit. Such non-compliance is not to be trivialized, as court orders are binding and adherence to timelines is critical to the orderly administration of justice. Failure to comply with court directions does, in that sense, undermine the judicial process.
45. However, the mere fact of late filing does not automatically render a pleading or affidavit liable to be struck out. The court must go further and interrogate whether the non-compliance goes to the substance of the dispute, whether it occasioned prejudice to the opposing party and whether striking out would serve the interests of justice.
46. Of particular relevance to the present proceedings is the nature of the substantive application before the court. The primary question is whether the arbitral award should be set aside under Section 35 of the Arbitration Act.
47. Non-compliance with court-imposed timelines for filing a response, while undesirable, is not among the grounds provided under Section 35 for setting aside an arbitral award. Consequently, such procedural default, standing alone, cannot found a basis for impeaching the validity of the arbitral award or excluding material placed before the court in response to the setting-aside application.
48. This court is also guided by Article 159(2)(d) of the Constitution, which enjoins courts to administer justice without undue regard to procedural technicalities. In the case of Kenya Ports Authority v Kenya Power & Lighting Co. Limited [2012] eKLR, the court, while addressing the scope of Article 159, observed that:
“Combining the meaning of these words ‘procedural technicalities’ may be described as those that more concern the mode of proceedings and the rules involved that regulate formalities rather than substantive rights under law.”
49. Applying that principle to the present case, the late filing of the replying affidavit relates to the mode and timing of proceedings rather than to the substantive rights of the parties. The Applicant did not demonstrate that it suffered any prejudice that could not be remedied, nor did it show that its right to a fair hearing under Article 50 of the Constitution was compromised. The record shows that the Applicant was able to fully canvass its case and respond to the Respondent’s arguments.
50. While the court deprecates non-compliance with its orders and reiterates that parties must always adhere strictly to timelines, the circumstances of this case do not justify the draconian step of striking out or expunging the replying affidavit. To do so would be to elevate form over substance and potentially impede the just determination of the substantive dispute before the court.
51. The determination that I then reach on this issue is that I find that although the Respondent filed its replying affidavit outside the timelines granted by this court, such non-compliance amounts to a procedural irregularity. It does not constitute a ground for setting aside an arbitral award under Section 35 of the Arbitration Act, nor does it warrant the striking out or expunging of the affidavit from the record. The replying affidavit shall therefore remain on record and be considered in the determination of the substantive application.
52. The second issue for me to address is whether the Arbitrator exceeded his mandate and jurisdiction by determining and awarding reliefs founded on alleged constitutional violations, contrary to the arbitration agreement, the Arbitration Act and Article 165(3) of the Constitution.
53. This issue engages fundamental questions about the proper scope of arbitral jurisdiction, the relationship between private dispute resolution and constitutional adjudication and the limits of judicial supervision of arbitral awards under Kenyan law.
54. The Applicant and the Interested Parties both contended that the Arbitrator exceeded his mandate by making a substantive determination that the Respondent’s constitutional rights were violated and by awarding Kshs.100,000,000/– as “general damages for constitutional infringement,” in circumstances where no constitutional causes of action were pleaded or referred to arbitration. They further argued that such a finding and award fell outside the contractual dispute submitted for arbitration and intruded into the exclusive constitutional jurisdiction of the High Court.
55. The Respondent argued that the Arbitrator merely applied constitutional principles in considering the contract dispute and that general relief sought in the statement of claim sufficiently empowered him to make the award.
56. In determining this issue, this court must consider the relevant statutory provisions of the Arbitration Act, the constitutional mandate under Article 165(3) of the Constitution and applicable jurisprudence including the Supreme Court’s interpretation of the scope of judicial intervention in arbitration.
57. The first and most fundamental principle is that constitutional claims for infringement of fundamental rights invoke the enforcement of the Bill of Rights, a core part of the constitutional order.
58. Under Article 165(3)(a) of the Constitution, the High Court has original jurisdiction in all civil matters and, critically, the jurisdiction to interpret the Constitution and determine whether any law, act or omission is inconsistent with, or in contravention of, the Constitution. This jurisdiction includes the power to grant appropriate remedies for breaches of constitutional rights such as declarations, injunctions and damages, as provided under Article 23(3) and Article 24 of the Constitution.
59. Even in instances where parties have agreed to resolve their disputes through arbitration, such an agreement cannot oust or displace the High Court’s constitutional jurisdiction to grant relief for violation of fundamental rights. The authority to hear and determine constitutional questions is not derivative. It stems from the Constitution itself.
60. An arbitrator’s mandate is drawn from the arbitration agreement and the submission to arbitration. It is not co extensive with the constitutional jurisdiction of superior courts. Thus, any purported award of constitutional damages by an arbitrator necessarily raises the question whether he or she has assumed powers that are not conferred by the arbitration agreement or by law.
61. The statutory framework governing arbitration in Kenya, particularly Section 35(2)(a)(iv) of the Arbitration Act, circumscribes the jurisdiction of an arbitral tribunal and the grounds upon which an arbitral award may be set aside by the High Court.
62. Section 35(2)(a)(iv) provides that an arbitral award may be set aside if “…the arbitral award deals with a dispute not contemplated by or not falling within the terms of the reference to arbitration or contains decisions on matters beyond the scope of the reference to arbitration…”.
63. This provision reflects the principle that arbitral jurisdiction is derivative of the parties’ agreement and that an Arbitrator cannot decide matters that were not submitted to him. An arbitral tribunal that ventures beyond the scope of the reference is said to have acted in excess of jurisdiction, and its award on such matters may be impugned under Section 35.
64. From the pleadings in this case, the dispute referred to arbitration was contractual in nature with respect to alleged breaches of the easement agreement. The reliefs claimed were for breach of contract,
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