' Background and Introduction
1. This Ruling determines three applications arising from arbitral proceedings between the parties. The applications dated 14th March 2025 and 10th June 2025 filed by JINGSING seek to have RICHLANDS compelled to provide security of Kshs. 16,055,963.40 and for adoption and recognition of the award respectively. The application dated 19th December 2024 is filed by RICHLANDS and seeks to have the award published on 9th December 2024 set aside.
Analysis and Determination:
a) Application for Security
2. I have carefully considered the applications, responses and the submissions filed by both parties. The application dated 14th March 2025, invoking Section 37(2) of the Arbitration Act, is premised on the Court’s discretionary power to order security. The application is also supported by the provisions of Order 42 Rule 6 of the Civil Procedure Rules, which provides for security as one of the requirements for stay of execution orders.
3. The application is opposed through a replying affidavit sworn by Thomas Letangule on 2nd July 2025. RICHLANDS argues that the application for security is premature because there has been no application filed for the recognition and enforcement of the arbitral award as a judgment of this Court. Furthermore, RICHLANDS asserts that JINGSING has failed to provide any evidence indicating RICHLANDS’ inability or unwillingness to satisfy the award if JINGSING were to succeed in obtaining recognition of the award.
4. It is true that the Civil Procedure Rules envisage a stay of execution of a decree or judgment under Order 42 Rule 6. While an arbitral award is final and binding between the parties, it does not automatically qualify as a judgment of the Court; rather, it must be recognized through a formal court process before a decree can issue within the meaning envisaged in Order 42 Rule 6. Even then, this provision is primarily designed to facilitate stays pending appeal and is not directly applicable to the scenario where the party seeks enforcement or security before recognition.
5. To address this gap, the Arbitration Act provides a specific framework under Section 37(2) which allows the High Court, when there is an application to set aside or suspend an arbitral award, to postpone its decision if it finds it appropriate. Additionally, if a party seeks recognition or enforcement of the award, the Court may order the opposing party to provide security, provided it deems such an order proper.
6. The jurisprudence is now well settled that the discretion of the Court in granting an order for costs ought not to be exercised whimsically but in a manner that would not impede a party’s access to justice. The Supreme Court has pronounced itself clearly in the case of Westmont Holdings SDN BHD V Central Bank of Kenya & 2 Others, [2023] KESC 11 (KLR).
7. The Court of Appeal in Gatirau Peter Munya V Dickson Mwenda Kithinji & 2 Others, [2014] eKLR, aptly elaborated that:
“In an application for security for costs, the applicant ought to establish that the respondent, if unsuccessful in the proceedings, would be unable to pay costs due to poverty. It is not enough to allege that a respondent will be unable to pay costs in the event that he is unsuccessful.
The rationale for security for costs is to ensure firstly, that a party is not left without recompense for costs that might be awarded to him in the event that the unsuccessful party is unable to pay the same due to poverty; secondly, it ensures that a litigant who by reason of his financial ability is unable to pay costs of the litigation if he loses, is disabled from carrying on litigation indefinitely except on conditions that offer protection to the other party. In Noormohamed Abdulla V Ranchhodbhal J. Patel & Another, (1962) E.A. 448, it was held that:
“The order for security for costs in such a case is not directed towards enforcing payment of the costs as such, but is designed to ensure that a litigant who by reason of near insolvency is unable to pay the costs of the litigation when he loses, is disabled from carrying on the litigation indefinitely except upon terms and conditions which afford some measure of protection to the other parties.”
8. These principles, in my view, apply in equal measure to applications brought under Section 37(2) of the Arbitration Act.
9. Applying these principles to the present case, I am not satisfied that JINGSING has provided sufficient reason for granting of the order sought. It is important to remember that this is a discretionary relief, and as such, the applicant must establish a substantial and credible basis for the Court to exercise its discretion in their favor. The mere existence of an application to set aside the arbitral award does not constitute, on its own, a sufficient ground for such an order, especially in the absence of evidence demonstrating RICHLANDS’ inability or unwillingness to satisfy the award.
10. Furthermore, it must be emphasized that under Section 37(2) of the Arbitration Act, security is not a mandatory condition. It is within the Court’s discretion to decide whether to impose such security, and this discretion should only be exercised where there is concrete evidence justifying the need to do so. JINGSING has failed to produce any such evidence; no demonstration of financial incapacity, insolvency, or any other circumstances indicating that RICHLANDS would be unable to satisfy a recognition or enforcement order.
11. In light of the established jurisprudence, I find that JINGSING has not convincingly justified its apprehension that RICHLANDS will be unable to settle the award should it succeed in the application to set aside. Consequently, this application for security must fail.
b) Application for Setting Aside the Award:
12. The application is brought under Section 35 of the Arbitration Act. The Court of Appeal in Mahan Limited V Villa Care Limited, [2019] eKLR cautioned against transforming Section 35 applications into backdoor appeal mechanisms, stressing that challenges raised by parties must fall within the narrow statutory grounds for setting aside. The Court stated:
“This Court has considered the arguments made for and against setting aside the award. The Applicant argues that the Arbitrator misconstrued the evidence and law, typically an appeal argument. Section 35 application jurisdiction is limited. Parties elect to arbitrate to avoid court litigation and should not set aside an award simply because it is unfavorable. The applicant must demonstrate that the Section 35 grounds exist.”
13. I have considered the grounds raised by RICHLANDS in its application. Section 35 of the Act does not envisage that an award can be set aside for failure to give reasons or simply because an applicant disagrees with the findings of an arbitrator or questions the basis upon which the arbitrator reached a decision as is the case in the instant application. Questions as to whether the arbitrator went beyond the scope of the reference to arbitration are issues that ought to have been raised and determined first before the tribunal. I have not been shown any evidence that these grounds were raised at that point.
14. With respect to the award being contra-public interest, Section 35 (2) (b) (ii) allows an award to be set aside if it conflicts with the public policy of Kenya. However, the courts have consistently held that this ground must be interpreted narrowly. As Ringera J observed in Christ for All Nations V Apollo Insurance Co Ltd, [2002] 2 EA 366:
“An award may be set aside as being inconsistent with public policy if it is inconsistent with the Constitution or other written law, or inimical to the national interest or morality.”
15. Similarly, in Dinesh Construction Limited & Another V Aircon Electronic Services (Nairobi) Limited, [2021] eKLR, the court emphasized that allegations of conflict with public policy must not be vague or generalized; they must be particularized and substantiated. The applicants have not met this standard. The issues raised are merits-based and not public policy questions. Accordingly, this application is also dismissed.
c) Application for Recognition of the Award
16. The legal parameters for enforcement of an arbitral award are set out under Section 36 of the Arbitration Act. It requires that:
“36. (1) An arbitral award, irrespective of the state in which it was made shall be recognized as binding and, upon application in writing to the High Court, shall be enforced subject to this section and section 37.
(2) Unless the High Court otherwise orders, the party replying on an arbitral award or applying for its enforcement shall furnish—
the duly authenticated original arbitral award or a duly certified copy of it; and the original arbitration agreement or a duly certified copy of it.”
17. Having considered and determined the fate of the application for setting aside the award, the only thing required under Section 36 is for this Court to satisfy itself that an applicant has complied with the requirements under Section 36(2). A perusal of the application confirms that the claimant has produced a certified copy of the arbitral award dated and published on 9th December 2024, by QS. Walter A. Odundo FCIArb as well as a certified copy of the AGREEMENT AND CONDITIONS OF CONTRACT FOR BUILDING WORKS dated 13th December 2016, which bears an arbitration clause at clause 45. This is in full compliance of the requirements of the Act under Section 36. JINGSING is therefore deserving of the orders sought.
Disposition and Final Orders
18. Accordingly, and for the reasons stated above:
i. The application dated 14th March 2025 seeking orders for security to be provided is dismissed;
ii. The application dated 19th December 2024 seeking to have the award published on 9th December 2024 set aside is dismissed;
iii. The application dated 10th June 2025 seeking the adoption and recognition of the award dated and published on 9th December 2024 is allowed as prayed;
iv. Each party shall bear its own costs in respect of the applications dated 14th March 2025 and 19th December 2024.
v. RICHLANDS shall pay costs to JINGSING in respect of the application dated 10th June 2025, as it is the successful party on that application.
'
1. This Ruling determines three applications arising from arbitral proceedings between the parties. The applications dated 14th March 2025 and 10th June 2025 filed by JINGSING seek to have RICHLANDS compelled to provide security of Kshs. 16,055,963.40 and for adoption and recognition of the award respectively. The application dated 19th December 2024 is filed by RICHLANDS and seeks to have the award published on 9th December 2024 set aside.
Analysis and Determination:
a) Application for Security
2. I have carefully considered the applications, responses and the submissions filed by both parties. The application dated 14th March 2025, invoking Section 37(2) of the Arbitration Act, is premised on the Court’s discretionary power to order security. The application is also supported by the provisions of Order 42 Rule 6 of the Civil Procedure Rules, which provides for security as one of the requirements for stay of execution orders.
3. The application is opposed through a replying affidavit sworn by Thomas Letangule on 2nd July 2025. RICHLANDS argues that the application for security is premature because there has been no application filed for the recognition and enforcement of the arbitral award as a judgment of this Court. Furthermore, RICHLANDS asserts that JINGSING has failed to provide any evidence indicating RICHLANDS’ inability or unwillingness to satisfy the award if JINGSING were to succeed in obtaining recognition of the award.
4. It is true that the Civil Procedure Rules envisage a stay of execution of a decree or judgment under Order 42 Rule 6. While an arbitral award is final and binding between the parties, it does not automatically qualify as a judgment of the Court; rather, it must be recognized through a formal court process before a decree can issue within the meaning envisaged in Order 42 Rule 6. Even then, this provision is primarily designed to facilitate stays pending appeal and is not directly applicable to the scenario where the party seeks enforcement or security before recognition.
5. To address this gap, the Arbitration Act provides a specific framework under Section 37(2) which allows the High Court, when there is an application to set aside or suspend an arbitral award, to postpone its decision if it finds it appropriate. Additionally, if a party seeks recognition or enforcement of the award, the Court may order the opposing party to provide security, provided it deems such an order proper.
6. The jurisprudence is now well settled that the discretion of the Court in granting an order for costs ought not to be exercised whimsically but in a manner that would not impede a party’s access to justice. The Supreme Court has pronounced itself clearly in the case of Westmont Holdings SDN BHD V Central Bank of Kenya & 2 Others, [2023] KESC 11 (KLR).
7. The Court of Appeal in Gatirau Peter Munya V Dickson Mwenda Kithinji & 2 Others, [2014] eKLR, aptly elaborated that:
“In an application for security for costs, the applicant ought to establish that the respondent, if unsuccessful in the proceedings, would be unable to pay costs due to poverty. It is not enough to allege that a respondent will be unable to pay costs in the event that he is unsuccessful.
The rationale for security for costs is to ensure firstly, that a party is not left without recompense for costs that might be awarded to him in the event that the unsuccessful party is unable to pay the same due to poverty; secondly, it ensures that a litigant who by reason of his financial ability is unable to pay costs of the litigation if he loses, is disabled from carrying on litigation indefinitely except on conditions that offer protection to the other party. In Noormohamed Abdulla V Ranchhodbhal J. Patel & Another, (1962) E.A. 448, it was held that:
“The order for security for costs in such a case is not directed towards enforcing payment of the costs as such, but is designed to ensure that a litigant who by reason of near insolvency is unable to pay the costs of the litigation when he loses, is disabled from carrying on the litigation indefinitely except upon terms and conditions which afford some measure of protection to the other parties.”
8. These principles, in my view, apply in equal measure to applications brought under Section 37(2) of the Arbitration Act.
9. Applying these principles to the present case, I am not satisfied that JINGSING has provided sufficient reason for granting of the order sought. It is important to remember that this is a discretionary relief, and as such, the applicant must establish a substantial and credible basis for the Court to exercise its discretion in their favor. The mere existence of an application to set aside the arbitral award does not constitute, on its own, a sufficient ground for such an order, especially in the absence of evidence demonstrating RICHLANDS’ inability or unwillingness to satisfy the award.
10. Furthermore, it must be emphasized that under Section 37(2) of the Arbitration Act, security is not a mandatory condition. It is within the Court’s discretion to decide whether to impose such security, and this discretion should only be exercised where there is concrete evidence justifying the need to do so. JINGSING has failed to produce any such evidence; no demonstration of financial incapacity, insolvency, or any other circumstances indicating that RICHLANDS would be unable to satisfy a recognition or enforcement order.
11. In light of the established jurisprudence, I find that JINGSING has not convincingly justified its apprehension that RICHLANDS will be unable to settle the award should it succeed in the application to set aside. Consequently, this application for security must fail.
b) Application for Setting Aside the Award:
12. The application is brought under Section 35 of the Arbitration Act. The Court of Appeal in Mahan Limited V Villa Care Limited, [2019] eKLR cautioned against transforming Section 35 applications into backdoor appeal mechanisms, stressing that challenges raised by parties must fall within the narrow statutory grounds for setting aside. The Court stated:
“This Court has considered the arguments made for and against setting aside the award. The Applicant argues that the Arbitrator misconstrued the evidence and law, typically an appeal argument. Section 35 application jurisdiction is limited. Parties elect to arbitrate to avoid court litigation and should not set aside an award simply because it is unfavorable. The applicant must demonstrate that the Section 35 grounds exist.”
13. I have considered the grounds raised by RICHLANDS in its application. Section 35 of the Act does not envisage that an award can be set aside for failure to give reasons or simply because an applicant disagrees with the findings of an arbitrator or questions the basis upon which the arbitrator reached a decision as is the case in the instant application. Questions as to whether the arbitrator went beyond the scope of the reference to arbitration are issues that ought to have been raised and determined first before the tribunal. I have not been shown any evidence that these grounds were raised at that point.
14. With respect to the award being contra-public interest, Section 35 (2) (b) (ii) allows an award to be set aside if it conflicts with the public policy of Kenya. However, the courts have consistently held that this ground must be interpreted narrowly. As Ringera J observed in Christ for All Nations V Apollo Insurance Co Ltd, [2002] 2 EA 366:
“An award may be set aside as being inconsistent with public policy if it is inconsistent with the Constitution or other written law, or inimical to the national interest or morality.”
15. Similarly, in Dinesh Construction Limited & Another V Aircon Electronic Services (Nairobi) Limited, [2021] eKLR, the court emphasized that allegations of conflict with public policy must not be vague or generalized; they must be particularized and substantiated. The applicants have not met this standard. The issues raised are merits-based and not public policy questions. Accordingly, this application is also dismissed.
c) Application for Recognition of the Award
16. The legal parameters for enforcement of an arbitral award are set out under Section 36 of the Arbitration Act. It requires that:
“36. (1) An arbitral award, irrespective of the state in which it was made shall be recognized as binding and, upon application in writing to the High Court, shall be enforced subject to this section and section 37.
(2) Unless the High Court otherwise orders, the party replying on an arbitral award or applying for its enforcement shall furnish—
the duly authenticated original arbitral award or a duly certified copy of it; and the original arbitration agreement or a duly certified copy of it.”
17. Having considered and determined the fate of the application for setting aside the award, the only thing required under Section 36 is for this Court to satisfy itself that an applicant has complied with the requirements under Section 36(2). A perusal of the application confirms that the claimant has produced a certified copy of the arbitral award dated and published on 9th December 2024, by QS. Walter A. Odundo FCIArb as well as a certified copy of the AGREEMENT AND CONDITIONS OF CONTRACT FOR BUILDING WORKS dated 13th December 2016, which bears an arbitration clause at clause 45. This is in full compliance of the requirements of the Act under Section 36. JINGSING is therefore deserving of the orders sought.
Disposition and Final Orders
18. Accordingly, and for the reasons stated above:
i. The application dated 14th March 2025 seeking orders for security to be provided is dismissed;
ii. The application dated 19th December 2024 seeking to have the award published on 9th December 2024 set aside is dismissed;
iii. The application dated 10th June 2025 seeking the adoption and recognition of the award dated and published on 9th December 2024 is allowed as prayed;
iv. Each party shall bear its own costs in respect of the applications dated 14th March 2025 and 19th December 2024.
v. RICHLANDS shall pay costs to JINGSING in respect of the application dated 10th June 2025, as it is the successful party on that application.
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