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Court of AppealDismissedCivil Appeal No. 111 of 1997

B.R. AGGARWAL suing in his capacity as executor of THE LATE LEKHRAJ AGGARWAL v MUNSHIRAM & COMPANY LIMITED [2000] KECA 397 (KLR)

Court of Appeal
10 November 2000
OMOmoloAKAkiwumiPhilip Kiptoo TunoiP. K. Tunoi
814 words in judgment
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The bottom line

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Once an arbitration award becomes a court judgment in Kenya, every dispute covered by the arbitration is closed — even ones the arbitrator never decided.

What this practically means

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Executive summary

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The appellant, executor of the estate of the late Lekhraj Aggarwal, sued Munshiram & Company Limited for Shs.477,656.50, claiming the sum was owed to his late father as a director and confirmed by the company's letter of 17th December 1979. The respondent denied liability, contending the claim had been fully considered in an arbitration before Mr. C. J. Patel, the sole arbitrator appointed over all disputes between the deceased and his five sons, and that judgment had been entered in terms of the award by Masime J on 18th July 1980. Pall J upheld the plea of res judicata and dismissed the claim. On appeal, Tunoi JA affirmed the decision. He held that the claim the subject of the appeal was substantially and directly in issue before Masime J, and that once the final award was made the judgment of the court, it extinguished all claims which were the subject matter of the reference and barred any action on the original cause of action. Following Purser & Co. Hillingdon Ltd v Jackson, the court held that a claimant is estopped by res judicata from raising an issue included in the terms of reference even where the arbitrator made no award on that issue. The court rejected the appellant's argument that the Shs.400,000 claim was extraneous to the reference, finding that all disputes, including that claim, were to be determined by the arbitrator under final and conclusive terms. The appeal was dismissed with costs. This decision binds subordinate courts on the preclusive effect of arbitration awards entered as judgment.

Key legal issues

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01

Whether the claim was res judicata following the arbitration award entered as judgment

Holding

Yes. The claim the subject of the appeal was substantially and directly in issue before Masime J; the final award, having been made the judgment of the court, extinguished all claims which were the subject matter of the reference and barred any action on the original cause of action.

Reasoning

The terms of reference agreed by the parties covered all disputes between the deceased and his sons, including the claim of Shs.400,000, and the award was final and conclusive. Once the final award was entered as judgment, it operated to extinguish all claims within the reference. Relying on Purser & Co. Hillingdon Ltd v Jackson, the court held that even an issue on which the arbitrator made no award is caught by res judicata if it was within the terms of reference.

p. 3
02

Whether the Shs.400,000 claim was extraneous to the reference

Holding

No. The claim was taken into consideration in the final award and was not extraneous to the terms of reference.

Reasoning

The court adopted the reasoning of Masime J in H.C.C. Misc. Cause No. 361 of 1979, who had rejected the separate claim on the strength of Clause 2 of the Award, considering that the claim was taken into account in the final award. Looking at the terms of reference, all disputes including the Shs.400,000 claim were to be determined by the arbitrator, whose award was final and conclusive as the parties desired.

p. 3

Legal principles established

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  • Where a particular issue is included in the terms of reference of an arbitration, the claimant is estopped by res judicata from raising that issue in subsequent proceedings even if the arbitrator made no award on that issue; a final award made the judgment of the court extinguishes all claims that were the subject matter of the reference.

Court orders

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  1. 1.Appeal dismissed with costs to the respondent
On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 1804 of 1985
Jurisdiction invoked
First appeal to the Court of Appeal from the High Court (not expressly stated in the judgment)

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, "B.R. AGGARWAL suing in his capacity as executor of THE LATE LEKHRAJ AGGARWAL v MUNSHIRAM & COMPANY LIMITED [2000] KECA 397 (KLR)", Case Analysis (2000). Civil Appeal No. 111 of 1997. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2000/397/eng@2000-11-10

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