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Case Brief · caselaw.co.ke
Court of AppealPartially AllowedCivil Appeal No 61 of 1985

Irungu Kihuni v Wambugu Gakunga & another [1986] KECA 12 (KLR)

Court of Appeal of Kenya
9 October 1986
1,911 words in judgment
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The bottom line

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If you agreed to arbitration in Kenya, you cannot later raise defences like limitation that you never argued before the arbitrators.

What this practically means

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Executive summary

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This is an interlocutory decision of the Court of Appeal at Nyeri in an appeal against the ruling of Patel J (June 14, 1984), who had dismissed the appellant's application to set aside an arbitral award in a dispute over plot number 10, Mweiga Trading Centre, Nyeri, concerning contributions to commercial premises and an alleged agreement to apply for a lease in joint names. The respondents took a preliminary objection at the hearing of the appeal. Nyarangi JA, writing for a unanimous bench, held that the six arbitration issues were framed by a signed consent order and did not include limitation; the appellant, having raised limitation in his defence but not based his case before the arbitrators on it, had abandoned it, and to allow it on appeal would nullify the consent order. Once parties apply for a reference to arbitration, the court has no discretion and the parties are estopped from attacking the order of reference; estoppel can arise from silence or inaction. Ground 3 of the memorandum of appeal was therefore struck out. The court also refused leave to amend ground 2 to plead res judicata: res judicata must be pleaded at trial, the cited 1967 Resident Magistrate's Court case involved different parties and subject-matter, and amendment at that stage would require further evidence and unsettle foundations. Costs of the preliminary objection went to the respondents, and the remainder of the appeal was set down for the next Nyeri sessions.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether ground 3 of the memorandum of appeal, raising limitation of actions against the arbitral award, should be struck out on preliminary objection
  2. 2.Whether the appellant should be granted leave to amend ground 2 of the memorandum of appeal to add a ground of res judicata

Key legal issues

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01

Whether the appellant could challenge the award on limitation grounds not raised before the arbitrators

Holding

The limitation ground was abandoned by the consent reference; raising it on appeal would nullify the consent order and is barred by estoppel

Reasoning

The six issues were framed by consent and none mentioned limitation; no evidence was taken on it. Permitting the appellant to argue limitation would destroy the basis of the consent order. Parties who agree to a reference are estopped from attacking it, and estoppel can arise from silence or inaction where a party is under a duty to speak or act.

p. 3
02

Whether leave to amend the memorandum of appeal to plead res judicata should be granted

Holding

Refused: res judicata was not pleaded at trial, the prior RM case involved different parties and subject-matter, and further evidence would be needed

Reasoning

The appellant never pleaded res judicata in his defence. The record of Civil Appeal No 27 of 1967 (RM's Court, Nyeri) showed different parties and a partnership-accounts subject-matter. While leave to amend exists, it is rarely given and only for inadvertent omission where all material is before the court without further evidence.

p. 3

Legal principles established

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  • Once parties by consent apply for a reference of their disputes to arbitration under order XLV rules 1 and 3, the court has no discretion and the parties are estopped from attacking the order of reference
  • A party who framed issues for arbitration by signed consent and did not base his case on a defence of limitation is deemed to have abandoned that defence for the arbitration and cannot raise it on appeal against the award
  • Res judicata must be pleaded and can only properly be raised at the trial, not by amendment of a memorandum of appeal

Court orders

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  1. 1.Ground 3 of the memorandum of appeal is struck out
  2. 2.Leave to amend ground 2 of the memorandum of appeal to plead res judicata is refused
  3. 3.The remainder of the appeal is to be set down for the next Court of Appeal sessions at Nyeri
  4. 4.Costs of the preliminary objection awarded to the respondents

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

majority
majority
On appeal from
High Court of Kenya at Nyeri
Civil Case No 110 of 1983
Jurisdiction invoked
Appeal from the High Court under the Appellate Jurisdiction Act and Civil Procedure Rules (order XLV)

Relief refused

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Leave to amend the memorandum of appeal to include a ground of res judicata

Res judicata is a matter of pleading, was never pleaded at trial, and amendment at that stage would require further evidence and unsettle foundations

p. 3

Costs

Costs of the preliminary objection given to the respondents

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

The court therefore has no discretion in the matter once the parties apply to the court for an order of reference and the parties are estopped from attacking the order of reference which was made on their application.
p. 3Estoppel against attacking a consent order of reference
Res judicata is a matter of pleading and can be only properly raised at the trial
p. 3Res judicata must be pleaded at trial
As Gachuhi Ag JA also agrees it is ordered that ground 3 of the memorandum of appeal is dismissed. Leave to amend ground 2 of the memorandum of appeal is refused.
p. 3Final orders on the preliminary objection

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Irungu Kihuni v Wambugu Gakunga & another [1986] KECA 12 (KLR)", Case Analysis (1986). Civil Appeal No 61 of 1985. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1986/12/eng@1986-10-09

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.