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Court of AppealDismissedCivil Appeal 130 of 2002· [2006] KECA 181 (KLR)

Joseph W. Karanja & another v Geoffrey Ngari Kuira [2006] KECA 181 (KLR)

Court of Appeal of Kenya
14 July 2006
ROR. S. C. OmoloEOE. O. O'KubasuWDW. S. Deverell
1,840 words in judgment
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The bottom line

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Kenya's Court of Appeal confirmed that arbitration procedures can be changed by agreement at preliminary meetings, and a court may order a case reargued when key evidence was hidden.

What this practically means

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Executive summary

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This appeal concerned the aftermath of an arbitration between the Karanjas (appellants) and Mr. Kuira (respondent) over shareholding and profits in Busara Forest View Academy Limited. The arbitral tribunal's award of 4th January 1999 was set aside by Onyango Otieno J on 2nd December 1999 on the single ground that clause 8.7 of the arbitration agreement, requiring a verbatim record of proceedings and evidence, had not been complied with. The appellants then applied for review under section 80 of the Civil Procedure Act and Order XLIV of the Civil Procedure Rules, contending that at a preliminary meeting on 11th June 1997 the parties had agreed, recorded in a Minute, that no full transcript was required, spouses taking notes instead, and that this had not been disclosed to the court. On 15th February 2002 the Judge found sufficient reasons for review, set aside his own order of 2nd December 1999, and ordered the original Notice of Motion dated 9th June 1999 heard afresh, with each party bearing its own costs, but declined to vary the order so as to resuscitate the award. The appellants appealed against the refusal to vary, citing prejudice from delay. The Court of Appeal, dismissing the appeal, held that procedural matters may be dealt with by agreement at preliminary meetings without formal amendment of the arbitration agreement, consistent with section 20(1) of the Arbitration Act 1995, and that the Judge properly exercised his discretion in ordering the application reargued in light of the newly disclosed Minute. The delay, though unfortunate, did not justify interference. Costs of the appeal were awarded to the respondent.

Key legal issues

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01

Whether the requirement in clause 8.7 of the arbitration agreement that the tribunal keep a verbatim record could be varied by agreement at a preliminary meeting without formal amendment of the agreement

Holding

The Court held it could; procedural matters are routinely dealt with at preliminary meetings and need not be incorporated by formal amendment, consistent with section 20(1) of the Arbitration Act 1995.

Reasoning

The Court reasoned that matters of procedure are commonly settled at preliminary meetings of arbitrators, and a Minute recording such agreement suffices. Section 20(1) of the Arbitration Act 1995 entitles parties to agree on procedure, so the non-requirement of a full transcript could be so agreed. The respondent's argument that only a formal amendment of clause 8.7 would suffice was therefore not conclusive.

p. 3
02

Whether the superior court properly exercised its discretion in granting review on the ground of non-disclosure of the Minute and in ordering the original application to be heard afresh rather than varying its order

Holding

Yes. The non-disclosure of the Minute was significant because the First Ruling had been founded on the absence of any record; the Judge was entitled to order the application reargued.

Reasoning

The Court found that what led the Judge to grant review was the non-disclosure of the Minute, which was significant because his original decision rested on the absence of a record. Exercising review discretion, he could properly direct that the original application be reargued in light of the new information. The resulting delay, though unfortunate and prolonged by the Judge's elevation to the Court of Appeal, did not render the exercise of discretion wrong.

p. 4

Legal principles established

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  • Procedural matters in arbitration may validly be agreed at preliminary meetings of the arbitrators without formal amendment of the arbitration agreement
  • Under section 20(1) of the Arbitration Act 1995 the parties are free to agree on the procedure to be followed by the arbitral tribunal in the conduct of the proceedings

Court orders

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  1. 1.The appeal be dismissed with costs
On appeal from
High Court of Kenya at Nairobi, Milimani Commercial Courts
H.C. Misc. Application No. 65 of 1999
Jurisdiction invoked
First appeal from the High Court under the Civil Procedure Act (appeal against an interlocutory ruling; no specific constitutional provision invoked in the judgment)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (5)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Joseph W. Karanja & another v Geoffrey Ngari Kuira [2006] KECA 181 (KLR)", Case Analysis (2006). Civil Appeal 130 of 2002. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2006/181/eng@2006-07-14

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