1. The Applicant, Philis Kitui Warenjeka, having secured a final award from the sole arbitrator, Prots Sayende, made on the 2/12/2021, now prays to court that the award be recognised and enforced as a judgment of the court. The chamber summons is brought pursuant to section 36 (1) 4(3) together with section 37 of the Act as well as Rule 9 of the Arbitration Rules.
2. The grounds on the face of the application and reiterated in the Affidavit of support disclose that the dispute has its roots on an agreement for sale of an apartment described as Flat B2, situated on the ground floor of Block B erected upon LR No.330/98 (original Number 330/40/9/2. The contractual purchase price was agreed at Kshs.18,500,000 of which the claimant paid a deposit of Kshs.5,550,000 leaving a balance of Kshs.12,950,000 payable before the completion date.
3. There was failure to pay the balance of the purchase price as a consequence of which the respondent invoked the arbitration clause in the sale agreement. At the conclusion of the arbitrate proceedings, an award was made in favour of the claimant for specific performance within set timelines with self-executing default clause that the respondent pays the balance of the purchase price within 30 days from the date of the award or from the date the claimants would have made a demand pursuant to the award. The award having been given on the 2/12/2021, the Respondent was issued with a notice dated 17/2/2023 but he never paid the sum awarded hence it became imperative that the same be recognised and enforced by the court.
4. The letter of demand dated 17/2/2023 asked of the Respondent to:
Effect payment as follows;
i. Kenya shillings Twelve Million, Nine Hundred and Fifty Thousand ( Kshs. 12,950,000) to be paid within Thirty (30) days from the date of this Notice
ii. Rent arrears from November, 2016 to July 2017 at Kenya Shillings Eighty-Five Thousand (Kshs.85,000) per month amounting to seven hundred and sixty-five thousand (Kshs.765,000/=).
iii. Rent arears form 3rd August, 2018 to 2nd August, 2019 at Kenya Shillings Eighty-five Thousand (Kshs.85,000/=) per month amounting to Kenya Shillings one million and twenty thousand (Kshs.1,020,000/=).
iv. Costs for Arbitration amounting to Kenya shillings Two Hundred and Fifty-seven thousand, seven hundred and Fifty (Kshs.257,750/-) refundable t us within Thirty (30) days from the date of this Notice.
v. The rent arrears should be paid within Ninety (90) days from the date of this Notice and shall be less any service charge paid subject to presentation of evidence of payment for the same.
TAKE NOTICE that if we do not receive the said monies demanded within the prescribed time above will have the following effect;
i. Failure to pay (i) above within the prescribed thirty (30) days, the agreement will be deemed terminated forthwith.
ii. Default to pay (ii) and (iii) above within the stipulated time simple interest shall accrue thereon at the rate of 12% per annum until payment in full.
iii. Default to pay (iv) above within the stipulated time, simple interest shall accrue thereon at 12% per annum until payment in full.
5. By the further affidavit sworn by the claimant, after being served with the replying affidavit, the claimant asserts that the letter was not only served upon the counsel then on record for the respondent, but also upon the respondent directly out of abundance of caution. The said affidavit also gave a calculation of the sum outstanding after the purchaser/vendor relationship was terminated, which include; accrued rent, arbitration costs and 10% of the purchase at Kshs.9,555,000/=. That sum when adjusted with the deposit of purchase price leaves a net balance of Kshs.4,555,000.
6. The application was opposed by the Replying affidavit sworn by the Respondent on the 24/10/2023, which affidavit unequivocally acknowledges the agreement and failure to pay the balance of purchase price by the contractual completion date, but attributes that failure to the fact that it was the applicant who requested her to halt the agreement on account of the fact that the claimant’s father had passed on. It is additionally admitted that it was the Respondent who invoked the arbitration clause, then makes a complaint that her advocate never informed her of the final award and that the advocate received service under protest hence she only became aware of the award after being served with the instant application. She thus proposes an out of court settlement but hastens to add that he is not able financially to settle the award for balance of purchase price in one lump sum but in equal instalments. She further proposes that the rent arrears be waived and arbitration costs paid after the last instalment slated for end of April, 2024. She concluded the affidavit by urging that she be not condemned for the mistake of her counsel and further that by dint of Article 159 of the constitution the court should promote alternative dispute resolution mechanism by acceding to her proposal on payment.
7. Pursuant to the directions by the court issued on the 11/10/2023 and repeated on the 9/2/2024 both sides have filed written submissions which the court has had the benefit of reading and duly appreciating.
8. From the reading of the chamber summons and the two affidavits in support thereof; the Replying affidavit and the rival submissions, the issue for determination is whether a case has been established for the recognition and enforcement of the final award by the sole arbitrator.
9. The spirit of the arbitration is that the process being consensual and finally binding on the parties, a final award ought to be recognised and enforced unless the Respondent, as the obligant, demonstrates to the court that the circumstances for refusal to recognition or enforcement enacted under the Act exist. Here the court finds that the applicant has fully complied with section 36 of the Act and is thus entitled to recognition unless the respondent demonstrates otherwise
10. Here, the Respondent admits unequivocally that there was an agreement which obligated him to pay a sum of Kshs.12,500,000 to the Respondent; that the said sum was not paid as covenanted for which default which it invoked the arbitration clause from which proceedings the current final award was made. The respondent does not deny the obligation to pay but only seek that he be allowed time to pay and be excused from part of the obligation in the award. The replying affidavit filed doesn’t challenge the legality or propriety of the award. In fact, there is not disclose any legal basis to justify refusal to the recognition of the award. The court recognises that parties are bond by their bargain that the outcome of arbitration would be final and binding and that it has no part to play save that of a facilitator towards realisation of the parties wishes.
11. On the plea that the two parties be allowed to engage on an out of court settlement, the court deems such a request beyond its authority. The dispute belongs to the parties and the court only intervenes where there is a dispute live dispute seeking resolution. On the converse, the court cannot coerce the parties into an alternative dispute mechanism against the wishes of any of them. Alternative dispute resolution like negotiation and mediation, must be voluntarily and consensual. Here I see no consent by the applicant to negotiate or mediate
12. In this matter, parties having, in their autonomy, chosen the arbitration route and having obtained a final award therefrom, the duty of the court is to respect and facilitate their wish that the outcome of the arbitration be final and binding upon them with no liberty for the court for interference unless for the known statutory reasons under the Act. To accede to the Respondent’s request that the court directs that parties negotiate a final award wound run affront the spirit and tenure of the Arbitration Act and practice. To so proceed would be to interfere otherwise than as provided under the Act. That is not the liberty of the Court and the invitation towards that route must be resisted. see Anne Mumbi Hinga – vs – Victoria Njoki Gathara [2009] eKLR
13. It thus follows that the chamber summons dated 26.05.2023 is well merited. It is allowed on terms that the court recognises the final award dated 2nd December 2021 for enforcement as the decree of the court and shall be treated as such decree.
14. The costs of the summons are awarded to the applicant.
Dated, signed and delivered, Virtually, this 28th day of August, 2024
2. The grounds on the face of the application and reiterated in the Affidavit of support disclose that the dispute has its roots on an agreement for sale of an apartment described as Flat B2, situated on the ground floor of Block B erected upon LR No.330/98 (original Number 330/40/9/2. The contractual purchase price was agreed at Kshs.18,500,000 of which the claimant paid a deposit of Kshs.5,550,000 leaving a balance of Kshs.12,950,000 payable before the completion date.
3. There was failure to pay the balance of the purchase price as a consequence of which the respondent invoked the arbitration clause in the sale agreement. At the conclusion of the arbitrate proceedings, an award was made in favour of the claimant for specific performance within set timelines with self-executing default clause that the respondent pays the balance of the purchase price within 30 days from the date of the award or from the date the claimants would have made a demand pursuant to the award. The award having been given on the 2/12/2021, the Respondent was issued with a notice dated 17/2/2023 but he never paid the sum awarded hence it became imperative that the same be recognised and enforced by the court.
4. The letter of demand dated 17/2/2023 asked of the Respondent to:
Effect payment as follows;
i. Kenya shillings Twelve Million, Nine Hundred and Fifty Thousand ( Kshs. 12,950,000) to be paid within Thirty (30) days from the date of this Notice
ii. Rent arrears from November, 2016 to July 2017 at Kenya Shillings Eighty-Five Thousand (Kshs.85,000) per month amounting to seven hundred and sixty-five thousand (Kshs.765,000/=).
iii. Rent arears form 3rd August, 2018 to 2nd August, 2019 at Kenya Shillings Eighty-five Thousand (Kshs.85,000/=) per month amounting to Kenya Shillings one million and twenty thousand (Kshs.1,020,000/=).
iv. Costs for Arbitration amounting to Kenya shillings Two Hundred and Fifty-seven thousand, seven hundred and Fifty (Kshs.257,750/-) refundable t us within Thirty (30) days from the date of this Notice.
v. The rent arrears should be paid within Ninety (90) days from the date of this Notice and shall be less any service charge paid subject to presentation of evidence of payment for the same.
TAKE NOTICE that if we do not receive the said monies demanded within the prescribed time above will have the following effect;
i. Failure to pay (i) above within the prescribed thirty (30) days, the agreement will be deemed terminated forthwith.
ii. Default to pay (ii) and (iii) above within the stipulated time simple interest shall accrue thereon at the rate of 12% per annum until payment in full.
iii. Default to pay (iv) above within the stipulated time, simple interest shall accrue thereon at 12% per annum until payment in full.
5. By the further affidavit sworn by the claimant, after being served with the replying affidavit, the claimant asserts that the letter was not only served upon the counsel then on record for the respondent, but also upon the respondent directly out of abundance of caution. The said affidavit also gave a calculation of the sum outstanding after the purchaser/vendor relationship was terminated, which include; accrued rent, arbitration costs and 10% of the purchase at Kshs.9,555,000/=. That sum when adjusted with the deposit of purchase price leaves a net balance of Kshs.4,555,000.
6. The application was opposed by the Replying affidavit sworn by the Respondent on the 24/10/2023, which affidavit unequivocally acknowledges the agreement and failure to pay the balance of purchase price by the contractual completion date, but attributes that failure to the fact that it was the applicant who requested her to halt the agreement on account of the fact that the claimant’s father had passed on. It is additionally admitted that it was the Respondent who invoked the arbitration clause, then makes a complaint that her advocate never informed her of the final award and that the advocate received service under protest hence she only became aware of the award after being served with the instant application. She thus proposes an out of court settlement but hastens to add that he is not able financially to settle the award for balance of purchase price in one lump sum but in equal instalments. She further proposes that the rent arrears be waived and arbitration costs paid after the last instalment slated for end of April, 2024. She concluded the affidavit by urging that she be not condemned for the mistake of her counsel and further that by dint of Article 159 of the constitution the court should promote alternative dispute resolution mechanism by acceding to her proposal on payment.
7. Pursuant to the directions by the court issued on the 11/10/2023 and repeated on the 9/2/2024 both sides have filed written submissions which the court has had the benefit of reading and duly appreciating.
8. From the reading of the chamber summons and the two affidavits in support thereof; the Replying affidavit and the rival submissions, the issue for determination is whether a case has been established for the recognition and enforcement of the final award by the sole arbitrator.
9. The spirit of the arbitration is that the process being consensual and finally binding on the parties, a final award ought to be recognised and enforced unless the Respondent, as the obligant, demonstrates to the court that the circumstances for refusal to recognition or enforcement enacted under the Act exist. Here the court finds that the applicant has fully complied with section 36 of the Act and is thus entitled to recognition unless the respondent demonstrates otherwise
10. Here, the Respondent admits unequivocally that there was an agreement which obligated him to pay a sum of Kshs.12,500,000 to the Respondent; that the said sum was not paid as covenanted for which default which it invoked the arbitration clause from which proceedings the current final award was made. The respondent does not deny the obligation to pay but only seek that he be allowed time to pay and be excused from part of the obligation in the award. The replying affidavit filed doesn’t challenge the legality or propriety of the award. In fact, there is not disclose any legal basis to justify refusal to the recognition of the award. The court recognises that parties are bond by their bargain that the outcome of arbitration would be final and binding and that it has no part to play save that of a facilitator towards realisation of the parties wishes.
11. On the plea that the two parties be allowed to engage on an out of court settlement, the court deems such a request beyond its authority. The dispute belongs to the parties and the court only intervenes where there is a dispute live dispute seeking resolution. On the converse, the court cannot coerce the parties into an alternative dispute mechanism against the wishes of any of them. Alternative dispute resolution like negotiation and mediation, must be voluntarily and consensual. Here I see no consent by the applicant to negotiate or mediate
12. In this matter, parties having, in their autonomy, chosen the arbitration route and having obtained a final award therefrom, the duty of the court is to respect and facilitate their wish that the outcome of the arbitration be final and binding upon them with no liberty for the court for interference unless for the known statutory reasons under the Act. To accede to the Respondent’s request that the court directs that parties negotiate a final award wound run affront the spirit and tenure of the Arbitration Act and practice. To so proceed would be to interfere otherwise than as provided under the Act. That is not the liberty of the Court and the invitation towards that route must be resisted. see Anne Mumbi Hinga – vs – Victoria Njoki Gathara [2009] eKLR
13. It thus follows that the chamber summons dated 26.05.2023 is well merited. It is allowed on terms that the court recognises the final award dated 2nd December 2021 for enforcement as the decree of the court and shall be treated as such decree.
14. The costs of the summons are awarded to the applicant.
Dated, signed and delivered, Virtually, this 28th day of August, 2024