Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
Court of AppealAllowedCivil Application No. NAI 135 of 2016 (UR 106/2016)· [2017] KECA 223 (KLR)

Shree Haree Builders Limited v Bazara Alex Tabulo & another [2017] KECA 223 (KLR)

Court of Appeal of Kenya
6 October 2017
1,447 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~6 min to read original · ~4 min brief

The bottom line

#

Kenya's Court of Appeal halted arbitration mid-stream, confirming courts can stop arbitral proceedings pending an appeal when continuing would make that appeal meaningless.

What this practically means

#

Executive summary

#
The applicant, Shree Haree Builders Limited, sought stay of arbitral proceedings before the 2nd respondent, the sole arbitrator, pending an intended appeal against a High Court ruling by Aburili, J. dated 17th May 2016, in which the Judge declined to stay the arbitral proceedings. The background was a construction contract dispute referred to arbitration; the applicant had challenged the arbitrator's independence and partiality and sought his recusal, while the 1st respondent had raised a preliminary objection that there was no written arbitration agreement. The arbitrator elected to hear the jurisdiction objection first, prompting the applicant's High Court applications for termination of the arbitrator's mandate and for stay, both unsuccessful. The application before the Court of Appeal was brought under Rule 5(2)(b) of the Court of Appeal Rules. The Court applied the twin principles from Stanley Kang'ethe Kinyanjui v Tony Keter & 5 Others: the intended appeal must be arguable, and the appeal must be rendered nugatory if stay is refused. The Court found a single arguable ground on whether jurisdiction or prejudice should be determined first, and held that continuing arbitral proceedings would render a successful appeal irreversible and nugatory. The application was allowed as prayed, with costs in the appeal. This was an interlocutory ruling exercising original and discretionary jurisdiction, not a decision disturbing the ruling below, and the merits remain for the bench hearing the intended appeal.

Key legal issues

#
01

Whether the intended appeal was arguable under Rule 5(2)(b)

Holding

The Court found the intended appeal arguable, including on whether the issue of jurisdiction or prejudice should be heard and determined first, while avoiding any merits determination.

Reasoning

The Court applied the settled test that an arguable ground need not succeed but must not be frivolous. It identified grounds concerning bias, the arbitrator's jurisdiction, and the sequencing of the recusal and jurisdiction applications, and was satisfied that at least one ground was arguable without delving into the merits of the appeal.

p. 3
02

Whether the intended appeal would be rendered nugatory if stay was not granted

Holding

The Court found the nugatory limb satisfied because the arbitral proceedings, if allowed to continue, would not be reversible on a successful appeal.

Reasoning

Applying Stanley Kang'ethe Kinyanjui v Tony Keter, the Court reasoned that nugatory status depends on whether what is sought to be stayed is reversible or compensable in damages. Since the applicant sought to stop the arbitrator proceeding on grounds of lack of independence/partiality, allowing the arbitral proceedings to conclude would render a successful appeal nugatory.

p. 3

Legal principles established

#
  • Under Rule 5(2)(b) the Court exercises original and discretionary jurisdiction, and an applicant must satisfy the twin tests of an arguable appeal and that the appeal will be rendered nugatory absent stay.
  • A single non-frivolous ground suffices to establish arguability on a Rule 5(2)(b) application.

Court orders

#
  1. 1.Stay of the arbitral proceedings and/or any further proceedings before the 2nd respondent (arbitrator) pending the lodging, hearing and determination of the applicant's intended appeal
  2. 2.Costs of the application awarded in the appeal

Authorities

#

Legislation

  • Court of Appeal RulesRule 5(2)(b)

Cases cited (1)

  • Stanley Kang’ethe Kinyanjui v Tony Keter & 5 Others
    Civil Application No. NAI. 31/2012
On appeal from
High Court of Kenya, Nairobi
Miscellaneous Application No. 489 of 2015
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Shree Haree Builders Limited v Bazara Alex Tabulo & another [2017] KECA 223 (KLR)", Case Analysis (2017). Civil Application No. NAI 135 of 2016 (UR 106/2016). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/223/eng@2017-10-06

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