Sadrudin Kurji & another v Shalimar Limited & 2 others [2008] KECA 67 (KLR)
The bottom line
#Kenya's Court of Appeal ruled that an arbitral award cannot be converted into a court judgment behind a party's back - everyone must be served and heard.
What this practically means
#Executive summary
#Key legal issues
#Service of applications subsequent to filing of an arbitral award
Rule 4(2) of the Arbitration Rules 1997 is categorical that all applications subsequent to filing of an award must be served on all parties; the ex parte enforcement application breached this and the notice of filing of the award was not a substitute for service.
The court held that notice of the filing of the award did not satisfy rule 4(2). The appellants were parties to the arbitral proceedings and were entitled to be served with the subsequent application for enforcement. Failure to serve denied them a hearing at the second stage contemplated by the Act and offended the rules of natural justice.
Two-stage structure for challenging arbitral awards
The Arbitration Act envisages objections at two stages: before the award is filed in court (section 35) and after filing (section 37); denial of a hearing at the second stage offends natural justice.
The court distinguished between setting aside an award under section 35 before filing and resisting enforcement under section 37 after filing. The appellants' complaint was about the second stage, and the failure to serve the enforcement application denied them the opportunity to raise section 37 grounds.
Applicability of Civil Procedure Rules to judgments entered under the Arbitration Act
Order IXB rule 8 and Order XLIV of the Civil Procedure Rules apply through rule 11 of the Arbitration Rules to set aside or review a judgment entered under section 36; a decree need not first be extracted and the right to apply accrues on entry of judgment.
The Arbitration Act is silent on review or setting aside a judgment entered in terms of an award. Rule 11 fills the lacuna. Judgment entered under section 36 is enforceable as a decree under rule 6, so it is amenable to review if reasonable and relevant grounds are established, with grounds for challenge confined to sections 35 to 37.
Leave before ex parte enforcement of an arbitral award
Prior leave is necessary before an ex parte application to enforce an arbitral award as a decree; it enables the court to verify that all necessary pre-judgment steps have been taken.
Rule 6 permits ex parte application for leave to enforce only where no application to set aside has been made under section 35. The respondents applied ex parte without leave. The court agreed with the appellants that leave was necessary to enable the court to satisfy itself that all necessary steps before judgment had been taken.
Whether the objections amounted to preliminary points of law
Neither the absence of an extracted order nor the objection based on Order XLIV qualified as a preliminary objection; the latter called for the exercise of judicial discretion, and the High Court erred in striking out the application on that basis.
Applying Mukisa Biscuit, a preliminary objection must be a pure point of law on assumed facts. No provision required inclusion of an extracted order; the Order XLIV point required the court to decide whether the application fell within that provision, an exercise of discretion. The court below also improperly delved into the bona fides of the application.
Legal principles established
#- All applications subsequent to the filing of an arbitral award in the High Court must be served on all parties at least seven days before the hearing date; an ex parte enforcement application served on no party offends natural justice
- Leave of the court is required before a party may move ex parte to enforce an arbitral award as a decree, and such application lies only where no application to set aside the award is pending under section 35
- Rule 11 of the Arbitration Rules 1997 imports the Civil Procedure Rules into arbitration proceedings to fill lacunae, so Order IXB rule 8 and Order XLIV review provisions may be invoked to challenge a judgment entered under section 36 of the Arbitration Act, provided the grounds fall within sections 35 to 37 of the Act
- An objection requiring the exercise of judicial discretion, or resting on a merely procedural requirement, is not a valid preliminary objection
Court orders
#- 1.Appeal allowed
- 2.The order of the superior court dated 31st March 2004 striking out the appellants' Chambers Summons dated 2nd October 2003 set aside
- 3.Appellants awarded the costs of this appeal
- 4.The appellants' application to set aside the judgment of the superior court entered on 13th March 2003 to be set down for hearing before a Judge other than Mwera and Anyara Emukule, JJ
- On appeal from
- High Court of Kenya at Nairobi
- H.C. Misc. Cause No. 59 of 2003
- Jurisdiction invoked
- First appeal from the High Court in a matter arising under the Arbitration Act 1995; appeal against ruling and order of the High Court
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Sadrudin Kurji & another v Shalimar Limited & 2 others [2008] KECA 67 (KLR)", Case Analysis (2008). Civil Appeal No. 64 of 2006. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2008/67/eng@2008-10-31
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.