1. I have considered the Notice of Motion Application dated 5th December, 2023 together with the supporting affidavit sworn on even date and the replying affidavit sworn in opposition on 18th December,, 2023 together with the rival submissions made by the parties, and the applicable law.
2. The Application seeks interim measures of protection, including: restraining the respondent from breaching the terms of the contact of construction between the parties by inter-alia, hiring a new supplier, or interfering with the construction/development of the contractual works pending a determination by the arbitral tribunal concerning the dispute.
3. In support of the above, counsel for the applicant submitted that the central issue is the non -performance of the contract by the respondent, which is a material issue before this court. He submitted that there are claims for works that have not been assessed amounting to over Kshs 300,000,000. The only way to resolve the said dispute is by way of arbitration.
4. He contended that the works are under threat because if a sub contactor were to take over the work at this point, it will not be possible to assess which works were carried out by the plaintiff/ applicant. Preservation of the work is therefore necessary in order for the tribunal to make a proper determination.
5. Counsel submitted that the arbitral process may not commence until notice has been provided in accordance with the contract. Accordingly, he sought 90 days to commence this process.
6. In opposition to the application, counsel for the respondent submitted that it is not in dispute that there in an agreement to arbitrate. However, counsel's primary argument was that there is no threat to the subject matter of the dispute to warrant the granting of the interim relief.
7. Having considered the submissions of counsel, I note that the relevant law is found at Section 7 of the Arbitration Act, 1995 (“the Act’), which provides as follows:
“7.
(1) It is not incompatible with an arbitration agreement for a party to request from the High Court, before or during arbitral proceedings, an interim measure of protection and for the High Court to grant that measure.”
8. Further to the above, the criteria upon which such a measure ought to be granted was set out in the decision of the Court of Appeal in Safaricom Limited v Ocean View Beach Hotel Limited & 2 others [2010] eKLR (No 1 LOA), as follows:
a) The existence of an arbitration agreement.
b) Whether the subject matter of arbitration is under threat.
c) In the special circumstances which is the appropriate measure of protection after an assessment of the merits of the application?
d) For what period must the measure be given especially if requested for before the commencement of the arbitration so as to avoid encroaching on the tribunal’s decision making power as intended by the parties?
9. On the first limb, I am satisfied that that there exists between the parties a valid agreement to arbitrate, the same is not disputed, and counsel drew my attention to the agreement found at the applicant's annexure JK 1 at page 48 and 49 of the affidavit, and notably at Clause 45 of the contract.
10. Further, I have read the above said clause, and I am satisfied that the present dispute falls within the subject matter of the arbitration contemplated between the parties because the arbitration agreement relates to any dispute arising “during, the progress, after completion” or relating to “abandonment of works”.
11. The applicant pointed out that that the dispute between the parties relates to assessment of works carried out by the applicant, and also pointed out that there are claims by the respondent relating to over payment for various works. Further, counsel for the respondent alluded to abandonment as an issue for determination by the tribunal. To my mind, all of the above, reasonably fall within the scope of the arbitration agreement.
12. Taking the above into consideration, I am persuaded that in the event a new contractor were to take over the contract mid- way through the works, it may not be possible for the tribunal to make an accurate assessment as stated above.
13. Accordingly, I find it appropriate to grant the interim relief sought pending a determination of the tribunal on the relevant issues raised by the applicant. To my mind, this is an appropriate relief to preserve the subject matter of the dispute.
14. Having stated the above, I am also satisfied that the test for grant of an injunction in Giella v Cassman Brown [1973] EA 358 has also been met. In particular, based on the circumstances of the case as set out above, I find that prima facie case has been made out; further, allaying any doubts in relation to the second limb, namely whether irreparable injury will occur that cannot be compensated by way of damages, I find that the balance of convenience tilts in favour of the applicant. I say so because the parties have voluntarily chosen to determine their disputes arising out of the contract by way of arbitration, and accordingly, the tribunal ought to be given an opportunity to carry out its mandate. I am therefore persuaded that the status quo ought to be preserved until such time as tribunal may have the opportunity to do so.
15. Based on reasons as set out above, I am satisfied that the application dated 5th December 2023 is with merit. The orders of this court are that prayer No.3 is granted pending the hearing and determination of the tribunal on the relevant issues set out above, either by way of partial award, or final award, as may be appropriate.
16. The file is accordingly marked as closed.