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Court of AppealStruck OutCivil Appeal No. 228 of 2014· [2017] KECA 706 (KLR)

Micro-House Technologies Limited v Co-operative College of Kenya [2017] KECA 706 (KLR)

Court of Appeal
10 March 2017
DMD. K. MusingaSKS. Gatembu KairuAMA. K. Murgor
1,030 words in judgment
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The bottom line

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Kenya's Court of Appeal struck out an arbitration appeal because the company never obtained the mandatory leave required to challenge an arbitral award.

What this practically means

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Executive summary

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The appellant obtained an arbitral award published on 23rd January 2012 and sought its adoption as a judgment of the High Court, while the respondent moved to set the award aside. By a ruling dated 15th November 2012, Mutava, J. set aside the award. Leave to appeal was granted by the High Court and the appellant filed the present appeal. The respondent objected that the Court of Appeal had no jurisdiction because, under section 39(3) of the Arbitration Act, an appeal lies only where the parties agreed before delivery of the award that an appeal should lie, or where the Court of Appeal grants leave on a point of law of general importance substantially affecting the parties' rights. Neither condition was met. The appellant relied on section 75 of the Civil Procedure Act and the leave granted by the High Court. The Court found three facts undisputed: no prior agreement to appeal, no application to the Court of Appeal for leave, and no grant of leave by that Court. Following its unanimous five-judge decision in Nyutu Agrovet Limited v Airtel Networks Limited, the Court held that a right of appeal is conferred by statute and cannot be inferred, and that a party cannot rely on section 75(1) of the Civil Procedure Act or Article 164(3) of the Constitution to bypass section 39(3) of the Arbitration Act. Lacking jurisdiction, the Court struck out the appeal with costs to the respondent. The High Court ruling setting aside the award therefore stands undisturbed.

Key legal issues

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01

Jurisdiction of the Court of Appeal to hear an appeal from a High Court decision setting aside an arbitral award without leave under section 39(3)(b) of the Arbitration Act

Holding

The Court has no jurisdiction; leave under section 39(3)(b) of the Arbitration Act is mandatory and the unanimous decision in Nyutu Agrovet binds the Court

Reasoning

The Court found as undisputed facts that the parties had not agreed before the award that an appeal should lie, that no application was made to the Court of Appeal for leave on a point of law of general importance, and that no such leave was granted. Relying on Nyutu Agrovet Limited v Airtel Networks Limited, the Court held that a right of appeal is conferred by statute and cannot be inferred, and that neither section 75 of the Civil Procedure Act nor Article 164(3) of the Constitution can substitute for the statutory gateway in section 39(3) of the Arbitration Act.

p. 2

Legal principles established

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  • An appeal to the Court of Appeal from a High Court decision on an arbitral award lies only where the parties agreed before delivery of the award that an appeal should lie, or where the Court of Appeal grants leave on a point of law of general importance; a right of appeal is conferred by statute and cannot be inferred
  • Where a right of appeal does not lie under section 39(3) of the Arbitration Act, a party cannot rely on section 75(1) of the Civil Procedure Act or Article 164(3) of the Constitution to found an appeal to the Court of Appeal

Court orders

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  1. 1.The appeal is struck out
  2. 2.Costs of the appeal awarded to the respondent

Authorities

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Legislation

  • Arbitration Actsection 10
  • Arbitration Actsection 35
  • Arbitration Actsection 39(3)
  • Arbitration Actsection 39(3)(b)
  • Civil Procedure Actsection 75(1)
  • Civil Procedure RulesOrder 43
  • Constitution of KenyaArticle 164(3)

Cases cited (2)

  • Owners of Motor Vessel "Lillian's" v Caltex Oil (Kenya) Ltd
    [1989] KLR 1
  • Nyutu Agrovet Limited v Airtel Networks Limited
    [2015] eKLR
On appeal from
High Court of Kenya at Nairobi
Misc. Application No. 220 of 2012
Jurisdiction invoked
Appeal from the High Court; jurisdiction contested under section 39(3) of the Arbitration Act and section 75 of the Civil Procedure Act; the Court held it had none

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, "Micro-House Technologies Limited v Co-operative College of Kenya [2017] KECA 706 (KLR)", Case Analysis (2017). Civil Appeal No. 228 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/706/eng@2017-03-10

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