' Introduction
1. Before this Court are two related applications arising from the same arbitral proceedings between Benisa Limited (“the Applicant”) and Runji Consulting Group (“the Respondent”). The Arbitral Award in question is dated 6th August 2024, issued by Eng. Basil Ononbhara Odigie, FCIArb.
2. The first to be filed is the Chamber Summons dated 10th September 2024 by Benisa Limited, filed in HCCOMMARB No. E059 of 2024 (hereinafter referred to as “the Applicant”), seeking to set aside the arbitral Award on the grounds that the award is contrary to public policy and was issued in excess of the arbitral tribunal’s jurisdiction.
3. The second is the Respondent’s Chamber Summons dated 25th September 2024 by Runji Consulting Group Limited, filed in HCCOMMARB No. E066 of 2024 seeking recognition and enforcement of the same award as a judgment of this Court.
4. The two applications were heard together and are therefore determined in this consolidated Ruling.
Factual Background
5. This dispute arises from a water infrastructure project undertaken by Benisa Construction Limited (hereinafter also referred to as “the Applicant” or “Benisa” as context may permit), a civil engineering contractor, for Embu Water and Sanitation Company (EWASCO), the employer under the main contract. The Respondent (Runji), a firm of consulting engineers, served as the Project Engineer and Contract Administrator, responsible for supervising the works, certifying payments, and issuing Interim Payment Certificates (IPCs) under the main construction contract.
6. The dispute between the parties arose from a Deed of Undertaking dated 24th April 2020 executed between Benisa Limited, Runji Consulting Group, and EWASCO. The Deed related to consultancy services provided by the Respondent to EWASCO in connection with a construction project in which the Applicant was the contractor.
7. The Deed of Undertaking was to enable EWASCO to pay to the Respondent a sum of Kshs. 63,463,669.00 through the savings made from the Respondent’s works budget. The Deed provided in part that:
“NOW, THEREFORE, in consideration of the premises and mutual covenants set forth herein, the Parties agree as follows:
1. EWASCO undertakes and commits to Pay to Benisa, KES 75,966,354.4 by way of Interim Payment Certificates (IPC). This amount comprises KES 63,463,669.60 owed to RUNJI, KES 9,329,201.40 VAT at 14 per cent (payable by BENISA), and a nominal overhead charge of KES 3,173,483.48 to BENISA.
2. BENISA has, as part of this agreement, given the Co-operative Bank Ltd (Embu Branch) an Irrevocable Authority to directly pay RUNJI KES 63,63,669.60 upon receipt of the Interim Payment Certificate and to pay any balance of the Interim Payment Certificate to BENISA''S Account. A copy of this Irrevocable Authority and the Bank''s Acknowledgement is attached to this Deed.
3. RUNJI will, thereafter, promptly refund any amounts previously advanced to them by EWASCO by way of Installment payment and which may not have been deducted from the money paid to BENISA.”
8. Essentially, by the Undertaking, EWASCO undertook to pay to BENISA, KES 75,966,354.4 by way of Interim Payment Certificates (IPC), out of which KES 63,463,669.60 was to be paid out to RUNJI, KES 9,329,201.40 VAT at 14 per cent (payable by BENISA), and a nominal overhead charge of KES 3,173,483.48 to BENISA.
9. It was also part of the agreement between the parties that BENISA would issue to the bank (Cooperative Bank Limited) an Irrevocable Authority to directly pay RUNJI KES 63,63,669.60 upon receipt of the Interim Payment Certificate and to pay any balance of the Interim Payment Certificate to BENISA''S Account. This was ostensibly to guarantee payments to RUNJI.
10. The Deed contained an arbitration clause providing that any dispute arising therefrom would be referred to arbitration.
11. A dispute subsequently arose regarding payments due under the Deed. BENISA had paid to RUNJI the monies as per the Deed of Undertaking, save for KES 15,463,669.69. The ensuing dispute was referred to Eng. Basil Ononbhara Odigie, FCIArb, Sole Arbitrator.
12. On 6th August 2024, the arbitrator rendered an award in favour of the Respondent, directing the Applicant to pay:
(a) KES. 15,463,669.60 being sums due under the Deed of Undertaking;
(b) Simple interest thereon at 3 per cent per annum above the Central Bank of Kenya base lending rate from 17th June 2020 until full payment; and
(c) Costs of arbitration assessed at Kshs. 2,213,413.63 with interest at the same rate until payment in full.
13. Aggrieved by the decision of the arbitral tribunal, the Applicant filed the present application seeking to set aside the arbitral award on grounds that it is contrary to public policy, violates the law, is founded on an illegal contract, and was made in excess of jurisdiction.
14. The Respondent, on its part, filed a separate application for recognition of the arbitral award.
15. The applications were consolidated and heard together, given the inextricable link between the fate of the setting aside application and the success of the enforcement application.
Applicant’s Case
16. The Applicant contended that the Deed of Undertaking dated 24th April 2020, upon which the Award was premised, was illegal, void ab initio, and unenforceable as it was entered into under coercion, undue influence, and improper pressure exerted by the Respondent. It was argued that the Respondent, being the Project Engineer and Contract Administrator, responsible for supervising the works, certifying payments, and issuing IPCs under the main construction contract, abused its position of influence by conditioning the issuance of Interim Payment Certificates upon execution of the Deed, thereby exerting economic duress on the Applicant.
17. The Applicant further contended that the arbitral tribunal exceeded its jurisdiction by enforcing a contract it had acknowledged was tainted by illegality, contrary to Sections 35(2)(a)(iv) and 35(2)(b)(ii) of the Arbitration Act. It was argued that once the tribunal held that it lacked jurisdiction to determine issues of illegality and fraud, the tribunal was bound to “down its tools” as guided by the Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd [1989] KLR 1 case.
18. The Applicant also urged that the award is contrary to public policy of Kenya and cited the case of Christ for All Nations v Apollo Insurance Co. Ltd [2002] 2 EA 366 and Glencore Grain Ltd v TSS Grain Millers Ltd [2002] eKLR, where it was held that an award may be set aside if it is inconsistent with justice, morality, or the laws of Kenya.
19. The Applicant maintained that enforcing the Deed of Undertaking would sanction an illegal payment mechanism amounting to a kickback scheme, contrary to the Public Procurement and Disposal Act.
20. Finally, the Applicant challenged the interest awarded at 3 per cent above the base rate as punitive and prayed that, if the award were to stand, interest should be limited to the prevailing court rates.
21. The Applicant therefore sought orders setting aside the arbitral award in its entirety, a declaration that the Deed of Undertaking was illegal and void, thereby contravening public policy of Kenya, and a finding that the arbitrator acted in excess of jurisdiction.
Respondent’s Case
22. The Respondent opposed the application for setting aside of the arbitral award, and urged the Court to allow its application for recognition and enforcement of the arbitral award. Through the Affidavit sworn on 11th June 2025 by its Managing Director, Runji Ngware, the Respondent contended that the application by BENISA is frivolous, vexatious, and intended to delay the realization of the fruits of the award.
23. The Respondent asserted that the Applicant’s grounds—namely allegations of illegality and coercion—did not fall within the statutory parameters for setting aside an award under Section 35 of the Arbitration Act, and that the award was proper and final. According to the Respondent, the application by BENISA amounted to an attempt to re-litigate matters already determined by the arbitrator. Reliance was placed on, among others, the case of Kenya Oil Company Ltd & Another v Kenya Pipeline Company Ltd [2014] eKLR, where the Court of Appeal held that courts should not interfere with arbitral findings of fact, however erroneous they may appear.
24. Mr. RUNJI averred that the Award directed the applicant to pay KES. 15,463,669.60 together with interest at 3 percent above the Central Bank base rate and arbitration costs of KES. 2,213,413.63. He denied claims that the Deed of Undertaking dated 24th April 2020 was procured through coercion or undue influence, noting that similar allegations had been raised and rejected by the arbitral tribunal for lack of evidence.
25. Mr. RUNJI clarified that the tribunal did not find the deed fraudulent or illegal but merely advised parties to refer such issues to a court of law. He refuted BENISA’s allegations of conflict of interest, kickback arrangements, or wrongful withholding of certificates, pointing out that all these issues had been canvassed before and dismissed by the arbitrator.
26. He maintained that the arbitrator acted within his mandate in determining obligations under the Deed of Undertaking and that the acknowledgment of lack of jurisdiction to decide criminal culpability for fraud did not preclude the tribunal from interpreting the parties’ commercial rights.
27. On the question of interest, the Respondent maintained that the tribunal exercised its discretion properly under Section 32C of the Arbitration Act, having found the interest rate of 3 percent above the base rate moderate. Reliance was placed on Housing Finance Company of Kenya v Sharok Kher Mohamed Ali Hirji & Another [2019] KECA 166 (KLR), where the Court of Appeal upheld the discretionary award of interest.
28. He concluded by urging the court to instead allow the Respondent’s Application dated 25th September 2024, filed in HCCOMM ARB/E066/2024, seeking to enforce the arbitral award.
29. Pursuant to the directions of this Court, both parties filed their respective written submissions. The Applicants, through the law firm of R&R Advocates LLP, filed their submissions dated 30th April 2025, whilst the Respondent filed theirs dated 11th June 2025 through Messrs. RONN Law Advocates LLP.
Analysis and determination
30. Having considered the pleadings, affidavits, rival submissions, and the applicable law, the following issues arise for determination:
i. Whether the BENISA’s application dated 10th September 2024 meets the threshold for setting aside an arbitral award under Section 35 of the Arbitration Act; and
ii. Whether RUNJI’s application dated 24th September 2024 meets the threshold for recognition of the arbitral award.
31. The scope of judicial intervention in arbitral proceedings is deliberately narrow. Under Section 10 of the Arbitration Act, no court shall intervene in matters governed by the Act except as provided therein.
32. Further, Section 32 of the Act is clear that, “except as otherwise agreed by the parties, an arbitral award is final and binding upon the parties to it, and no recourse is available against the award otherwise than in the manner provided by this Act.”
33. The restriction on the jurisdiction of this Court on arbitral matters is founded on the fact that arbitration arises purely as a matter of agreement between parties when parties agree, upfront, that their disputes will be settled by an arbitrator, and not by the national courts. The parties also agree to accept the arbitrator’s view of the facts and the meaning of the contract between them. For this reason, courts will not sit to hear the claims of factual or legal error by an arbitrator as an appellate court does in reviewing decisions of lower courts. This is the party autonomy that is embedded in the Arbitration Act.
34. The above position was aptly captured in Nyutu Agrovet Limited v Airtel Networks Kenya Limited [2015] eKLR, by the Court of Appeal as follows:
“The rationale behind the limited intervention of courts in arbitral proceedings and awards lies in the principle of party autonomy. Once parties have chosen arbitration as their mode of dispute resolution, court intervention must be the exception rather than the rule.”
35. The above position has been reiterated by the courts in several cases. In Synergy Industrial Credit Ltd v Cape Holdings Ltd [2020] eKLR, the Court of Appeal observed that: -
“One of the significant features of the Arbitration Act (the Act) is the principle of party autonomy, which entitles parties to have their disputes resolved by the forum and in the manner of their choice. For that very reason, the instances when the court may intervene in arbitral proceedings or interfere with an arbitral award are not at large; they are few and only those specified by the Act”.
36. In Geo Chem Middle East v Kenya Bureau of Standards [2020] eKLR, the Supreme Court of Kenya quoted, with approval, Ochieng J’s holding in the High Court that:
“It is not the function nor mandate of the High Court to re-evaluate such decisions of an arbitral tribunal, when the court was called upon to determine whether or not to set aside and award … if the court were to delve into the task of ascertaining the correctness of the decision of an arbitrator, the court would be sitting on an appeal over the decision in issue. In light of the public policy of Kenya, which loudly pronounces the intention of giving finality to arbitral awards, it would actually be against the said public policy to have the Court sit on appeal over the decision of the arbitral tribunal”.
37. The limited parameters within which an arbitral award may be set aside are circumscribed under Section 35 of the Arbitration Act as follows:
“(2) An arbitral award may be set aside by the High Court only if—
(a) the party making the application furnishes proof—
(i) that a party to the arbitration agreement was under some incapacity; or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication of that law, the laws of Kenya; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) 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, provided that if the decisions on matters referred to arbitration can be separated from those not so referred, only that part of the arbitral award which contains decisions on matters not referred to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless that agreement was in conflict with a provision of this Act from which the parties cannot derogate; or failing such agreement, was not in accordance with this Act; or
(vi) the making of the award was induced or affected by fraud, bribery, undue influence or corruption;
(b) the High Court finds that—
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law of Kenya; or
(ii) the award is in conflict with the public policy of Kenya.”
38. The justification for limited judicial intervention under Section 35 is now well settled.
39. In Reliable Concrete Works v Ngewanji Company Limited [2022] eKLR, the court held that Section 35(2) strictly circumscribes the jurisdiction of the High Court in setting aside arbitral awards, and an applicant must bring himself squarely within those statutory bounds. The Court stated that: -
“Courts have taken the position that the grounds for setting aside of an arbitral award as set out under the above section of the Act are strict and spell out the jurisdiction of the court in setting aside an Arbitral Award. This is the position that was taken in Midco Holdings Limited v Summit Textiles (EA) Limited [2014] e KLR, where it was held:
“… Section 35 (2) of the Arbitration Act circumscribes the grounds upon which an arbitral award can be set aside, and an applicant seeking to set aside an arbitral award must bring himself strictly within the legal bounds of that Section. See the case of TRANSWORD SAFARIS LTD V EAGLE AVIATION LTD & 3 OTHERS NBI MISC APPLICATION NO. 238 OF 2003, Nyamu J. (as he then was).”
40. Similarly, in Epco Builders Ltd v Adam S. Marjan Arb. Cause No. 15 of 2014 [2014] eKLR, the Court emphasized that Section 35 is not an avenue for a rehearing or appeal; the Court must not substitute its own assessment of evidence for that of the arbitrator.
41. It is against the above backdrop that I will now proceed and examine the instant application. In the present case, the central question for determination is whether the Award ought to be set aside, and if the answer is in the negative, whether it ought to be recognized and enforced as an order and decree of the court.
42. The Applicant (BENISA) in its application for setting aside relies on two principal grounds under Section 35(2) to seek the setting aside of the Award:
i) That the Award is in conflict with the public policy of Kenya (Section 35(2)(b)(ii)), particularly as it allegedly enforces an illegal or void contract; and
ii) That the Arbitrator exceeded the scope of the reference (Section 35(2)(a)(iv)).
43. The Respondent, on the other hand, opposed the application for setting aside of the arbitral award, and at the same time supported its own application for recognition and enforcement of the Award.
44. According to the Respondent, BENISA’s application is an appeal disguised as a Section 35 motion. It maintains that the application does not meet the threshold for setting aside an arbitral award under the Act.
45. The Respondent maintained that no illegality was proved. It is further the Respondent’s position that the arbitrator acted within his mandate, and that this Court cannot interfere merely because it would have reached a different conclusion.
46. The Court will now proceed and evaluate each parties’ submissions, taking into account the applicable law and decided authorities.
Whether the Award is in conflict with the public policy of Kenya
47. The issue of public policy as a ground for setting aside an arbitral award was extensively dealt with by Ringera J (as he then was) in the case of Christ for All Nations v Apollo Insurance Co. Ltd [2002] 2 E. A 366, where he held that: -
“Public policy is a broad concept incapable of precise definition. An award can be set aside under Section 35 (2) (b) (ii) of the Arbitration Act as being inconsistent with the public policy of Kenya if it is shown that it was either (a) inconsistent with the Constitution or any other law of Kenya whether written or unwritten, or (b) inimical to the national interest of Kenya, or (c) contrary to justice and morality”.
48. The learned Judge (Ringera J) held that in order to succeed in an application for setting aside an arbitral award on the grounds of public policy, an applicant must establish that the award is contrary to fundamental policy of the Kenya, violation of the laws of Kenya, and further that the enforcement of such an award would be contrary to justice and morality.
49. In the present case, the Applicant argued that enforcement of the award would perpetuate an illegal contract, kickbacks, unjustly enrich the Respondent, and undermine procurement law.
50. The Respondent argues that the Applicant’s grounds do not fall within Section 35(2)(b)(ii) of the Arbitration Act, and that the Applicant is attempting to disguise an appeal as a public policy challenge. It urges the Court to adopt a narrow construction of public policy, akin to the English approach in Westacre Investments v Jugoimport [2000] QB 288, where public policy was invoked sparingly to preserve finality.
51. Having carefully examined the Deed of Undertaking dated 24th April 2020, which formed the basis of the arbitral award, I note that the Deed was basically a contract of payment, by which EWASCO (being the contracting public entity) undertook to pay the Contract Administrator (RUNJI) through the Contractor (BENISA). There was no other consideration under the Deed.
52. By the Deed, EWASCO was to pay to BENISA a sum of KES 75,966,354.4 by way of Interim Payment Certificates (IPC), out of which KES 63,463,669.60 was to be paid out to RUNJI, with BENISA only retain the VAT component (KES 9,329,201.40) and a further (KES 3,173,483.48), which was described under the Deed to be in respect of “a nominal overhead charge.” This payment mechanism introduced by the Deed of Undertaking is, however, in my view, wholly inconsistent with the statutory procurement framework governing public contracts in Kenya.
53. The relevant portions of the Deed, provided as follows:
“1. EWASCO undertakes and commits to Pay to Benisa, KES 75,966,354.4 by way of Interim Payment Certificates (IPC). This amount comprises KES 63,463,669.60 owed to RUNJI, KES 9,329,201.40 VAT at 14 percent (payable by BENISA), and a nominal overhead charge of KES 3,173,483.48 to BENISA.
2. BENISA has, as part of this agreement, given the Co-operative Bank Ltd (Embu Branch) an Irrevocable Authority to directly pay RUNJI KES 63,63,669.60 upon receipt of the Interim Payment Certificate and to pay any balance of the Interim Payment Certificate to BENISA''S Account. A copy of this Irrevocable Authority and the Bank''s Acknowledgement is attached to this Deed.
4. RUNJI will, thereafter, promptly refund any amounts previously advanced to them by EWASCO by way of Installment payment and which may not have been deducted from the money paid to BENISA.”
54. Essentially, by the Undertaking, EWASCO undertook to pay to BENISA, KES 75,966,354.4 by way of Interim Payment Certificates (IPC), out of which KES 63,463,669.60 was to be paid out to RUNJI, KES 9,329,201.40 VAT at 14 percent (payable by BENISA), and a nominal overhead charge of KES 3,173,483.48 to BENISA.
55. It was also part of the agreement between the parties that BENISA would contemporaneously issue an Irrevocable Authority to the bank (Cooperative Bank Limited) to directly pay RUNJI KES 63,63,669.60 upon receipt of the Interim Payment Certificate and to pay any balance of the Interim Payment Certificate to BENISA''S Account. This was ostensibly to guarantee payments to RUNJI.
56. From the record, it is not in dispute that the primary contract upon which the Deed was based is the water infrastructure project contract between BENISA and EWASCO, a public entity. Under the Public Procurement and Asset Disposal Act, Cap. 412C, payments for works executed under a public contract must flow directly from the procuring entity to the contractor, subject to certification by the project engineer. However, in the present case, the Deed of Undertaking disrupted this statutory chain by having the payment pass through the contractor (BENISA) to the RUNJI, who, coincidentally, was also the Contract Administrator.
57. Section 2 of the Public Procurement and Asset Disposal Act, Cap 412C, defines “contract administration” as follows:
“contract administration" means management of terms of procurement or asset disposal contracts made with contractors or suppliers after tender award by a procuring entity, for the purpose of assuring compliance with obligations such as timely delivery, quality and quantity inspection, acceptance, payment, claims, dispute resolution and completion, among other terms.”
58. Section 150 of the Act is clear that the work of a contract administrator is, among other things, responsible for confirming the right quality and quantity of goods, works, or services have been delivered and issuing a certificate in respect thereof. The provision states that:
“150 Contract Administration
(3) Where goods, works and services under sub-section (2), are of technical nature and the specifications were provided by a technical department or professionals engaged to work on behalf of the accounting officer, that technical department or professionals engaged to work on behalf of the accounting officer shall be responsible for confirming the right quality and quantity of goods, works or services have been delivered and issue a certificate to the recipient accounting officer.”
59. Through this Deed of Undertaking, the Respondent (the Contract Administrator) inserted itself as a beneficiary of contract proceeds (of which it was also the supervisor) without any competitive procurement process or statutory authorization. This arrangement evidently has all the hallmarks of a kickback scheme, whereby the Respondent leveraged its fiduciary role to extract financial benefit from the Applicant.
60. As the Contract Administrator, RUNJI was under Section 150 of the Public Procurement and Asset Disposal Act, subject to the provisions of the Act. Section 66 of the Public Procurement and Asset Disposal Act expressly prohibits inducements, corrupt practices, and conflicts of interest in procurement. The provision states in part that:
“A person to whom this Act applies shall not be involved in any corrupt, coercive, obstructive, collusive or fraudulent practice; or conflicts of interest in any procurement or asset disposal proceeding.”
61. By conditioning certification on payments to itself, the Respondent acted in direct contravention of this statutory safeguard, which prohibits, among others, pass-through payments causing conflicts. Such conduct undermines transparency, fairness, and accountability in public procurement and is therefore contrary to the public policy of Kenya.
62. Beyond the procurement irregularities already highlighted, the Court also notes that under the Deed, parties agreed that the Value Added Tax (VAT) in relation to the whole of the payment was to be paid by BENISA, despite the fact that the payment was essentially being made to RUNJI.
63. Under the Value Added Tax Act, 2013, VAT is a statutory obligation imposed on the supplier of taxable services or goods. The Respondent, being a consulting engineer and service provider, was the taxable person responsible for accounting to the Kenya Revenue Authority (KRA) for VAT on its consultancy fees. Section 43 charges a supplier with the responsibility to, among other things, keep a record of the “details of the amounts of tax charged on each supply made or received and ................sufficient written evidence to identify the supplier and the recipient, and to show the nature and quantity of services supplied, the time of supply, the place of supply, the consideration for the supply, and the extent to which the supply has been used by the recipient for a particular purpose;”
64. By transferring this obligation to the Applicant, the Deed potentially distorted the tax regime and undermined the principle that tax liabilities are personal to the supplier.
65. In view of the foregoing discussion, I find that enforcement of the present award would perpetuate an illegal contract, undermining not only the procurement law but also the tax laws of Kenya. Accordingly, it would therefore be obnoxious to justice and morality, and contrary to public policy within the meaning of Section 35(2)(b)(ii) of the Arbitration Act.
66. As held in Christ for All Nations v Apollo Insurance Co Ltd and Glencore Grain Ltd v TSS Grain Millers Ltd, awards are contrary to public policy if they enforce illegal or immoral contracts, violate statutory provisions, or offend justice and morality. Here, the Deed introduced a pass-through payment scheme, from a Procuring Entity (EWASCO) to the Contract Administrator (RUNJI), through the Contractor -BENISA. As pointed out above, enforcing such a scheme would undermine public procurement integrity and could sanction unethical conduct by the Respondent.
67. It is a fundamental principle of public policy that an illegal contract cannot be enforced by any court or tribunal. Enforcing the Award would therefore perpetuate an illegal transaction. It is no answer that the Applicant in this case had acknowledged liability and even paid a significant portion of the Kshs. Kshs. 63,463,669.00 agreed under the Deed, leaving a balance of only Kshs. 15,463,669.60 outstanding.
68. The law is clear that illegality cannot be cured by consent, waiver, or estoppel. In Scott v Brown [1892] 2 QB 724, the Court held that no court ought to enforce an illegal contract or allow itself to be made an instrument of enforcing obligations arising therefrom. The principle is categorical: once illegality is brought to the attention of the court, the court must decline to lend its aid, regardless of whether one party has already performed or acknowledged liability.
69. Similarly, in Glencore Grain Ltd v TSS Grain Millers Ltd [2002] KLR, the High Court emphasized that contracts which are void or immoral cannot be enforced, and that the fact of partial performance does not sanitize the illegality. The rationale is clear: to enforce such obligations would perpetuate corruption, undermine statutory safeguards, and erode public confidence in the justice system.
70. The Court of Appeal in Standard Chartered Bank Kenya Ltd v Intercom Services Ltd & 4 others [2004] KECA 163 (KLR) accepted the submissions that once an issue of a breach of a statute is brought to the attention of the Court in the course of proceedings, then in the interest of justice the Court must investigate it because the court’s fundamental role is to uphold the law. The court upheld and endorsed the old English case of HOLMAN Vs. JOHNSON (1775-1802) All ER 98, where Chief Justice Mansfield stated;
“The principle of public policy is this: Ex dolo malo no oritur actio. No court will lend its aid to a
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1. Before this Court are two related applications arising from the same arbitral proceedings between Benisa Limited (“the Applicant”) and Runji Consulting Group (“the Respondent”). The Arbitral Award in question is dated 6th August 2024, issued by Eng. Basil Ononbhara Odigie, FCIArb.
2. The first to be filed is the Chamber Summons dated 10th September 2024 by Benisa Limited, filed in HCCOMMARB No. E059 of 2024 (hereinafter referred to as “the Applicant”), seeking to set aside the arbitral Award on the grounds that the award is contrary to public policy and was issued in excess of the arbitral tribunal’s jurisdiction.
3. The second is the Respondent’s Chamber Summons dated 25th September 2024 by Runji Consulting Group Limited, filed in HCCOMMARB No. E066 of 2024 seeking recognition and enforcement of the same award as a judgment of this Court.
4. The two applications were heard together and are therefore determined in this consolidated Ruling.
Factual Background
5. This dispute arises from a water infrastructure project undertaken by Benisa Construction Limited (hereinafter also referred to as “the Applicant” or “Benisa” as context may permit), a civil engineering contractor, for Embu Water and Sanitation Company (EWASCO), the employer under the main contract. The Respondent (Runji), a firm of consulting engineers, served as the Project Engineer and Contract Administrator, responsible for supervising the works, certifying payments, and issuing Interim Payment Certificates (IPCs) under the main construction contract.
6. The dispute between the parties arose from a Deed of Undertaking dated 24th April 2020 executed between Benisa Limited, Runji Consulting Group, and EWASCO. The Deed related to consultancy services provided by the Respondent to EWASCO in connection with a construction project in which the Applicant was the contractor.
7. The Deed of Undertaking was to enable EWASCO to pay to the Respondent a sum of Kshs. 63,463,669.00 through the savings made from the Respondent’s works budget. The Deed provided in part that:
“NOW, THEREFORE, in consideration of the premises and mutual covenants set forth herein, the Parties agree as follows:
1. EWASCO undertakes and commits to Pay to Benisa, KES 75,966,354.4 by way of Interim Payment Certificates (IPC). This amount comprises KES 63,463,669.60 owed to RUNJI, KES 9,329,201.40 VAT at 14 per cent (payable by BENISA), and a nominal overhead charge of KES 3,173,483.48 to BENISA.
2. BENISA has, as part of this agreement, given the Co-operative Bank Ltd (Embu Branch) an Irrevocable Authority to directly pay RUNJI KES 63,63,669.60 upon receipt of the Interim Payment Certificate and to pay any balance of the Interim Payment Certificate to BENISA''S Account. A copy of this Irrevocable Authority and the Bank''s Acknowledgement is attached to this Deed.
3. RUNJI will, thereafter, promptly refund any amounts previously advanced to them by EWASCO by way of Installment payment and which may not have been deducted from the money paid to BENISA.”
8. Essentially, by the Undertaking, EWASCO undertook to pay to BENISA, KES 75,966,354.4 by way of Interim Payment Certificates (IPC), out of which KES 63,463,669.60 was to be paid out to RUNJI, KES 9,329,201.40 VAT at 14 per cent (payable by BENISA), and a nominal overhead charge of KES 3,173,483.48 to BENISA.
9. It was also part of the agreement between the parties that BENISA would issue to the bank (Cooperative Bank Limited) an Irrevocable Authority to directly pay RUNJI KES 63,63,669.60 upon receipt of the Interim Payment Certificate and to pay any balance of the Interim Payment Certificate to BENISA''S Account. This was ostensibly to guarantee payments to RUNJI.
10. The Deed contained an arbitration clause providing that any dispute arising therefrom would be referred to arbitration.
11. A dispute subsequently arose regarding payments due under the Deed. BENISA had paid to RUNJI the monies as per the Deed of Undertaking, save for KES 15,463,669.69. The ensuing dispute was referred to Eng. Basil Ononbhara Odigie, FCIArb, Sole Arbitrator.
12. On 6th August 2024, the arbitrator rendered an award in favour of the Respondent, directing the Applicant to pay:
(a) KES. 15,463,669.60 being sums due under the Deed of Undertaking;
(b) Simple interest thereon at 3 per cent per annum above the Central Bank of Kenya base lending rate from 17th June 2020 until full payment; and
(c) Costs of arbitration assessed at Kshs. 2,213,413.63 with interest at the same rate until payment in full.
13. Aggrieved by the decision of the arbitral tribunal, the Applicant filed the present application seeking to set aside the arbitral award on grounds that it is contrary to public policy, violates the law, is founded on an illegal contract, and was made in excess of jurisdiction.
14. The Respondent, on its part, filed a separate application for recognition of the arbitral award.
15. The applications were consolidated and heard together, given the inextricable link between the fate of the setting aside application and the success of the enforcement application.
Applicant’s Case
16. The Applicant contended that the Deed of Undertaking dated 24th April 2020, upon which the Award was premised, was illegal, void ab initio, and unenforceable as it was entered into under coercion, undue influence, and improper pressure exerted by the Respondent. It was argued that the Respondent, being the Project Engineer and Contract Administrator, responsible for supervising the works, certifying payments, and issuing IPCs under the main construction contract, abused its position of influence by conditioning the issuance of Interim Payment Certificates upon execution of the Deed, thereby exerting economic duress on the Applicant.
17. The Applicant further contended that the arbitral tribunal exceeded its jurisdiction by enforcing a contract it had acknowledged was tainted by illegality, contrary to Sections 35(2)(a)(iv) and 35(2)(b)(ii) of the Arbitration Act. It was argued that once the tribunal held that it lacked jurisdiction to determine issues of illegality and fraud, the tribunal was bound to “down its tools” as guided by the Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd [1989] KLR 1 case.
18. The Applicant also urged that the award is contrary to public policy of Kenya and cited the case of Christ for All Nations v Apollo Insurance Co. Ltd [2002] 2 EA 366 and Glencore Grain Ltd v TSS Grain Millers Ltd [2002] eKLR, where it was held that an award may be set aside if it is inconsistent with justice, morality, or the laws of Kenya.
19. The Applicant maintained that enforcing the Deed of Undertaking would sanction an illegal payment mechanism amounting to a kickback scheme, contrary to the Public Procurement and Disposal Act.
20. Finally, the Applicant challenged the interest awarded at 3 per cent above the base rate as punitive and prayed that, if the award were to stand, interest should be limited to the prevailing court rates.
21. The Applicant therefore sought orders setting aside the arbitral award in its entirety, a declaration that the Deed of Undertaking was illegal and void, thereby contravening public policy of Kenya, and a finding that the arbitrator acted in excess of jurisdiction.
Respondent’s Case
22. The Respondent opposed the application for setting aside of the arbitral award, and urged the Court to allow its application for recognition and enforcement of the arbitral award. Through the Affidavit sworn on 11th June 2025 by its Managing Director, Runji Ngware, the Respondent contended that the application by BENISA is frivolous, vexatious, and intended to delay the realization of the fruits of the award.
23. The Respondent asserted that the Applicant’s grounds—namely allegations of illegality and coercion—did not fall within the statutory parameters for setting aside an award under Section 35 of the Arbitration Act, and that the award was proper and final. According to the Respondent, the application by BENISA amounted to an attempt to re-litigate matters already determined by the arbitrator. Reliance was placed on, among others, the case of Kenya Oil Company Ltd & Another v Kenya Pipeline Company Ltd [2014] eKLR, where the Court of Appeal held that courts should not interfere with arbitral findings of fact, however erroneous they may appear.
24. Mr. RUNJI averred that the Award directed the applicant to pay KES. 15,463,669.60 together with interest at 3 percent above the Central Bank base rate and arbitration costs of KES. 2,213,413.63. He denied claims that the Deed of Undertaking dated 24th April 2020 was procured through coercion or undue influence, noting that similar allegations had been raised and rejected by the arbitral tribunal for lack of evidence.
25. Mr. RUNJI clarified that the tribunal did not find the deed fraudulent or illegal but merely advised parties to refer such issues to a court of law. He refuted BENISA’s allegations of conflict of interest, kickback arrangements, or wrongful withholding of certificates, pointing out that all these issues had been canvassed before and dismissed by the arbitrator.
26. He maintained that the arbitrator acted within his mandate in determining obligations under the Deed of Undertaking and that the acknowledgment of lack of jurisdiction to decide criminal culpability for fraud did not preclude the tribunal from interpreting the parties’ commercial rights.
27. On the question of interest, the Respondent maintained that the tribunal exercised its discretion properly under Section 32C of the Arbitration Act, having found the interest rate of 3 percent above the base rate moderate. Reliance was placed on Housing Finance Company of Kenya v Sharok Kher Mohamed Ali Hirji & Another [2019] KECA 166 (KLR), where the Court of Appeal upheld the discretionary award of interest.
28. He concluded by urging the court to instead allow the Respondent’s Application dated 25th September 2024, filed in HCCOMM ARB/E066/2024, seeking to enforce the arbitral award.
29. Pursuant to the directions of this Court, both parties filed their respective written submissions. The Applicants, through the law firm of R&R Advocates LLP, filed their submissions dated 30th April 2025, whilst the Respondent filed theirs dated 11th June 2025 through Messrs. RONN Law Advocates LLP.
Analysis and determination
30. Having considered the pleadings, affidavits, rival submissions, and the applicable law, the following issues arise for determination:
i. Whether the BENISA’s application dated 10th September 2024 meets the threshold for setting aside an arbitral award under Section 35 of the Arbitration Act; and
ii. Whether RUNJI’s application dated 24th September 2024 meets the threshold for recognition of the arbitral award.
31. The scope of judicial intervention in arbitral proceedings is deliberately narrow. Under Section 10 of the Arbitration Act, no court shall intervene in matters governed by the Act except as provided therein.
32. Further, Section 32 of the Act is clear that, “except as otherwise agreed by the parties, an arbitral award is final and binding upon the parties to it, and no recourse is available against the award otherwise than in the manner provided by this Act.”
33. The restriction on the jurisdiction of this Court on arbitral matters is founded on the fact that arbitration arises purely as a matter of agreement between parties when parties agree, upfront, that their disputes will be settled by an arbitrator, and not by the national courts. The parties also agree to accept the arbitrator’s view of the facts and the meaning of the contract between them. For this reason, courts will not sit to hear the claims of factual or legal error by an arbitrator as an appellate court does in reviewing decisions of lower courts. This is the party autonomy that is embedded in the Arbitration Act.
34. The above position was aptly captured in Nyutu Agrovet Limited v Airtel Networks Kenya Limited [2015] eKLR, by the Court of Appeal as follows:
“The rationale behind the limited intervention of courts in arbitral proceedings and awards lies in the principle of party autonomy. Once parties have chosen arbitration as their mode of dispute resolution, court intervention must be the exception rather than the rule.”
35. The above position has been reiterated by the courts in several cases. In Synergy Industrial Credit Ltd v Cape Holdings Ltd [2020] eKLR, the Court of Appeal observed that: -
“One of the significant features of the Arbitration Act (the Act) is the principle of party autonomy, which entitles parties to have their disputes resolved by the forum and in the manner of their choice. For that very reason, the instances when the court may intervene in arbitral proceedings or interfere with an arbitral award are not at large; they are few and only those specified by the Act”.
36. In Geo Chem Middle East v Kenya Bureau of Standards [2020] eKLR, the Supreme Court of Kenya quoted, with approval, Ochieng J’s holding in the High Court that:
“It is not the function nor mandate of the High Court to re-evaluate such decisions of an arbitral tribunal, when the court was called upon to determine whether or not to set aside and award … if the court were to delve into the task of ascertaining the correctness of the decision of an arbitrator, the court would be sitting on an appeal over the decision in issue. In light of the public policy of Kenya, which loudly pronounces the intention of giving finality to arbitral awards, it would actually be against the said public policy to have the Court sit on appeal over the decision of the arbitral tribunal”.
37. The limited parameters within which an arbitral award may be set aside are circumscribed under Section 35 of the Arbitration Act as follows:
“(2) An arbitral award may be set aside by the High Court only if—
(a) the party making the application furnishes proof—
(i) that a party to the arbitration agreement was under some incapacity; or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication of that law, the laws of Kenya; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) 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, provided that if the decisions on matters referred to arbitration can be separated from those not so referred, only that part of the arbitral award which contains decisions on matters not referred to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless that agreement was in conflict with a provision of this Act from which the parties cannot derogate; or failing such agreement, was not in accordance with this Act; or
(vi) the making of the award was induced or affected by fraud, bribery, undue influence or corruption;
(b) the High Court finds that—
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law of Kenya; or
(ii) the award is in conflict with the public policy of Kenya.”
38. The justification for limited judicial intervention under Section 35 is now well settled.
39. In Reliable Concrete Works v Ngewanji Company Limited [2022] eKLR, the court held that Section 35(2) strictly circumscribes the jurisdiction of the High Court in setting aside arbitral awards, and an applicant must bring himself squarely within those statutory bounds. The Court stated that: -
“Courts have taken the position that the grounds for setting aside of an arbitral award as set out under the above section of the Act are strict and spell out the jurisdiction of the court in setting aside an Arbitral Award. This is the position that was taken in Midco Holdings Limited v Summit Textiles (EA) Limited [2014] e KLR, where it was held:
“… Section 35 (2) of the Arbitration Act circumscribes the grounds upon which an arbitral award can be set aside, and an applicant seeking to set aside an arbitral award must bring himself strictly within the legal bounds of that Section. See the case of TRANSWORD SAFARIS LTD V EAGLE AVIATION LTD & 3 OTHERS NBI MISC APPLICATION NO. 238 OF 2003, Nyamu J. (as he then was).”
40. Similarly, in Epco Builders Ltd v Adam S. Marjan Arb. Cause No. 15 of 2014 [2014] eKLR, the Court emphasized that Section 35 is not an avenue for a rehearing or appeal; the Court must not substitute its own assessment of evidence for that of the arbitrator.
41. It is against the above backdrop that I will now proceed and examine the instant application. In the present case, the central question for determination is whether the Award ought to be set aside, and if the answer is in the negative, whether it ought to be recognized and enforced as an order and decree of the court.
42. The Applicant (BENISA) in its application for setting aside relies on two principal grounds under Section 35(2) to seek the setting aside of the Award:
i) That the Award is in conflict with the public policy of Kenya (Section 35(2)(b)(ii)), particularly as it allegedly enforces an illegal or void contract; and
ii) That the Arbitrator exceeded the scope of the reference (Section 35(2)(a)(iv)).
43. The Respondent, on the other hand, opposed the application for setting aside of the arbitral award, and at the same time supported its own application for recognition and enforcement of the Award.
44. According to the Respondent, BENISA’s application is an appeal disguised as a Section 35 motion. It maintains that the application does not meet the threshold for setting aside an arbitral award under the Act.
45. The Respondent maintained that no illegality was proved. It is further the Respondent’s position that the arbitrator acted within his mandate, and that this Court cannot interfere merely because it would have reached a different conclusion.
46. The Court will now proceed and evaluate each parties’ submissions, taking into account the applicable law and decided authorities.
Whether the Award is in conflict with the public policy of Kenya
47. The issue of public policy as a ground for setting aside an arbitral award was extensively dealt with by Ringera J (as he then was) in the case of Christ for All Nations v Apollo Insurance Co. Ltd [2002] 2 E. A 366, where he held that: -
“Public policy is a broad concept incapable of precise definition. An award can be set aside under Section 35 (2) (b) (ii) of the Arbitration Act as being inconsistent with the public policy of Kenya if it is shown that it was either (a) inconsistent with the Constitution or any other law of Kenya whether written or unwritten, or (b) inimical to the national interest of Kenya, or (c) contrary to justice and morality”.
48. The learned Judge (Ringera J) held that in order to succeed in an application for setting aside an arbitral award on the grounds of public policy, an applicant must establish that the award is contrary to fundamental policy of the Kenya, violation of the laws of Kenya, and further that the enforcement of such an award would be contrary to justice and morality.
49. In the present case, the Applicant argued that enforcement of the award would perpetuate an illegal contract, kickbacks, unjustly enrich the Respondent, and undermine procurement law.
50. The Respondent argues that the Applicant’s grounds do not fall within Section 35(2)(b)(ii) of the Arbitration Act, and that the Applicant is attempting to disguise an appeal as a public policy challenge. It urges the Court to adopt a narrow construction of public policy, akin to the English approach in Westacre Investments v Jugoimport [2000] QB 288, where public policy was invoked sparingly to preserve finality.
51. Having carefully examined the Deed of Undertaking dated 24th April 2020, which formed the basis of the arbitral award, I note that the Deed was basically a contract of payment, by which EWASCO (being the contracting public entity) undertook to pay the Contract Administrator (RUNJI) through the Contractor (BENISA). There was no other consideration under the Deed.
52. By the Deed, EWASCO was to pay to BENISA a sum of KES 75,966,354.4 by way of Interim Payment Certificates (IPC), out of which KES 63,463,669.60 was to be paid out to RUNJI, with BENISA only retain the VAT component (KES 9,329,201.40) and a further (KES 3,173,483.48), which was described under the Deed to be in respect of “a nominal overhead charge.” This payment mechanism introduced by the Deed of Undertaking is, however, in my view, wholly inconsistent with the statutory procurement framework governing public contracts in Kenya.
53. The relevant portions of the Deed, provided as follows:
“1. EWASCO undertakes and commits to Pay to Benisa, KES 75,966,354.4 by way of Interim Payment Certificates (IPC). This amount comprises KES 63,463,669.60 owed to RUNJI, KES 9,329,201.40 VAT at 14 percent (payable by BENISA), and a nominal overhead charge of KES 3,173,483.48 to BENISA.
2. BENISA has, as part of this agreement, given the Co-operative Bank Ltd (Embu Branch) an Irrevocable Authority to directly pay RUNJI KES 63,63,669.60 upon receipt of the Interim Payment Certificate and to pay any balance of the Interim Payment Certificate to BENISA''S Account. A copy of this Irrevocable Authority and the Bank''s Acknowledgement is attached to this Deed.
4. RUNJI will, thereafter, promptly refund any amounts previously advanced to them by EWASCO by way of Installment payment and which may not have been deducted from the money paid to BENISA.”
54. Essentially, by the Undertaking, EWASCO undertook to pay to BENISA, KES 75,966,354.4 by way of Interim Payment Certificates (IPC), out of which KES 63,463,669.60 was to be paid out to RUNJI, KES 9,329,201.40 VAT at 14 percent (payable by BENISA), and a nominal overhead charge of KES 3,173,483.48 to BENISA.
55. It was also part of the agreement between the parties that BENISA would contemporaneously issue an Irrevocable Authority to the bank (Cooperative Bank Limited) to directly pay RUNJI KES 63,63,669.60 upon receipt of the Interim Payment Certificate and to pay any balance of the Interim Payment Certificate to BENISA''S Account. This was ostensibly to guarantee payments to RUNJI.
56. From the record, it is not in dispute that the primary contract upon which the Deed was based is the water infrastructure project contract between BENISA and EWASCO, a public entity. Under the Public Procurement and Asset Disposal Act, Cap. 412C, payments for works executed under a public contract must flow directly from the procuring entity to the contractor, subject to certification by the project engineer. However, in the present case, the Deed of Undertaking disrupted this statutory chain by having the payment pass through the contractor (BENISA) to the RUNJI, who, coincidentally, was also the Contract Administrator.
57. Section 2 of the Public Procurement and Asset Disposal Act, Cap 412C, defines “contract administration” as follows:
“contract administration" means management of terms of procurement or asset disposal contracts made with contractors or suppliers after tender award by a procuring entity, for the purpose of assuring compliance with obligations such as timely delivery, quality and quantity inspection, acceptance, payment, claims, dispute resolution and completion, among other terms.”
58. Section 150 of the Act is clear that the work of a contract administrator is, among other things, responsible for confirming the right quality and quantity of goods, works, or services have been delivered and issuing a certificate in respect thereof. The provision states that:
“150 Contract Administration
(3) Where goods, works and services under sub-section (2), are of technical nature and the specifications were provided by a technical department or professionals engaged to work on behalf of the accounting officer, that technical department or professionals engaged to work on behalf of the accounting officer shall be responsible for confirming the right quality and quantity of goods, works or services have been delivered and issue a certificate to the recipient accounting officer.”
59. Through this Deed of Undertaking, the Respondent (the Contract Administrator) inserted itself as a beneficiary of contract proceeds (of which it was also the supervisor) without any competitive procurement process or statutory authorization. This arrangement evidently has all the hallmarks of a kickback scheme, whereby the Respondent leveraged its fiduciary role to extract financial benefit from the Applicant.
60. As the Contract Administrator, RUNJI was under Section 150 of the Public Procurement and Asset Disposal Act, subject to the provisions of the Act. Section 66 of the Public Procurement and Asset Disposal Act expressly prohibits inducements, corrupt practices, and conflicts of interest in procurement. The provision states in part that:
“A person to whom this Act applies shall not be involved in any corrupt, coercive, obstructive, collusive or fraudulent practice; or conflicts of interest in any procurement or asset disposal proceeding.”
61. By conditioning certification on payments to itself, the Respondent acted in direct contravention of this statutory safeguard, which prohibits, among others, pass-through payments causing conflicts. Such conduct undermines transparency, fairness, and accountability in public procurement and is therefore contrary to the public policy of Kenya.
62. Beyond the procurement irregularities already highlighted, the Court also notes that under the Deed, parties agreed that the Value Added Tax (VAT) in relation to the whole of the payment was to be paid by BENISA, despite the fact that the payment was essentially being made to RUNJI.
63. Under the Value Added Tax Act, 2013, VAT is a statutory obligation imposed on the supplier of taxable services or goods. The Respondent, being a consulting engineer and service provider, was the taxable person responsible for accounting to the Kenya Revenue Authority (KRA) for VAT on its consultancy fees. Section 43 charges a supplier with the responsibility to, among other things, keep a record of the “details of the amounts of tax charged on each supply made or received and ................sufficient written evidence to identify the supplier and the recipient, and to show the nature and quantity of services supplied, the time of supply, the place of supply, the consideration for the supply, and the extent to which the supply has been used by the recipient for a particular purpose;”
64. By transferring this obligation to the Applicant, the Deed potentially distorted the tax regime and undermined the principle that tax liabilities are personal to the supplier.
65. In view of the foregoing discussion, I find that enforcement of the present award would perpetuate an illegal contract, undermining not only the procurement law but also the tax laws of Kenya. Accordingly, it would therefore be obnoxious to justice and morality, and contrary to public policy within the meaning of Section 35(2)(b)(ii) of the Arbitration Act.
66. As held in Christ for All Nations v Apollo Insurance Co Ltd and Glencore Grain Ltd v TSS Grain Millers Ltd, awards are contrary to public policy if they enforce illegal or immoral contracts, violate statutory provisions, or offend justice and morality. Here, the Deed introduced a pass-through payment scheme, from a Procuring Entity (EWASCO) to the Contract Administrator (RUNJI), through the Contractor -BENISA. As pointed out above, enforcing such a scheme would undermine public procurement integrity and could sanction unethical conduct by the Respondent.
67. It is a fundamental principle of public policy that an illegal contract cannot be enforced by any court or tribunal. Enforcing the Award would therefore perpetuate an illegal transaction. It is no answer that the Applicant in this case had acknowledged liability and even paid a significant portion of the Kshs. Kshs. 63,463,669.00 agreed under the Deed, leaving a balance of only Kshs. 15,463,669.60 outstanding.
68. The law is clear that illegality cannot be cured by consent, waiver, or estoppel. In Scott v Brown [1892] 2 QB 724, the Court held that no court ought to enforce an illegal contract or allow itself to be made an instrument of enforcing obligations arising therefrom. The principle is categorical: once illegality is brought to the attention of the court, the court must decline to lend its aid, regardless of whether one party has already performed or acknowledged liability.
69. Similarly, in Glencore Grain Ltd v TSS Grain Millers Ltd [2002] KLR, the High Court emphasized that contracts which are void or immoral cannot be enforced, and that the fact of partial performance does not sanitize the illegality. The rationale is clear: to enforce such obligations would perpetuate corruption, undermine statutory safeguards, and erode public confidence in the justice system.
70. The Court of Appeal in Standard Chartered Bank Kenya Ltd v Intercom Services Ltd & 4 others [2004] KECA 163 (KLR) accepted the submissions that once an issue of a breach of a statute is brought to the attention of the Court in the course of proceedings, then in the interest of justice the Court must investigate it because the court’s fundamental role is to uphold the law. The court upheld and endorsed the old English case of HOLMAN Vs. JOHNSON (1775-1802) All ER 98, where Chief Justice Mansfield stated;
“The principle of public policy is this: Ex dolo malo no oritur actio. No court will lend its aid to a
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