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 AppealPartially AllowedCivil Application No. 282 of 2016

Centurion Engineers & Builders Limited v Kenya Bureau of Standards [2018] KECA 84 (KLR)

Court of Appeal
23 November 2018
3,776 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~15 min to read original · ~4 min brief

The bottom line

#

Kenya's Court of Appeal cleared Centurion Engineers to challenge a High Court decision that overturned a Ksh. 384 million arbitration award in its favour.

What this practically means

#

Executive summary

#
This is a ruling of the Court of Appeal at Nairobi (Makhandia, Murgor and Otieno-Odek, JJ.A) on a Notice of Motion dated 23rd December 2016 by Centurion Engineers & Builders Limited seeking leave to appeal from a High Court ruling of 9th December 2016 (Tuiyot J.) which set aside an arbitral award of Ksh. 384,960,776.75 in the applicant's favour against the Kenya Bureau of Standards. The High Court had set the award aside for non-compliance with Section 47 of the Public Procurement and Asset Disposal Act as read with Regulation 31, the contract variations exceeding the 15% limit for works. The application was grounded on Section 39 of the Arbitration Act, there being no agreed right of appeal between the parties. The Court identified two limbs for leave under Section 39(3): a point of law of general importance and substantial effect on the parties' rights. It held that only prima facie demonstration is required at the leave stage and that the second limb was plainly satisfied given the sums at stake. On general importance, the Court applied the Supreme Court's criteria in Hermanus Philipus Steyn v Giovanni Gneccchi Ruscone, holding that conflicting High Court jurisprudence on the interpretation and application of Section 47 and Regulation 31 constitutes a point of law of general importance warranting appellate resolution. Noting contrary decisions on its jurisdiction but persuaded by its own decision in Kenya Bureau of Standards v Geo-Chem Middle East and the pending Supreme Court decision in Nyutu Agrovet v Airtel, the Court granted leave to appeal, confined to Section 39, directed filing of the Record of Appeal within 30 days, and ordered costs of the application to abide the outcome of the intended appeal.

Questions the Court framed

#

The issues the Court set itself to decide, in its own words.

  1. 1.Whether the Court of Appeal has jurisdiction under Section 39(3) of the Arbitration Act to grant leave to appeal from a High Court decision setting aside an arbitral award
  2. 2.Whether the applicant demonstrated a point of law of general importance justifying the grant of leave
  3. 3.Whether determination of that point of law will substantially affect the rights of one or more of the parties

Key legal issues

#
01

The two-limb test for leave to appeal under Section 39(3) of the Arbitration Act

Holding

An applicant must satisfy the Court that there is a point of law of general importance and that its determination will substantially affect the rights of one or more of the parties; the second limb was satisfied on the facts because an award of over Ksh. 384 million was at stake.

Reasoning

The Court read Section 39(3) as imposing two cumulative requirements. On the second limb, it held that the outcome of the intended appeal would directly affect both parties' rights: if the appeal succeeded the respondent would pay the award; if it failed the applicant would suffer loss. The test at the leave stage is prima facie demonstration only.

p. 4
02

Criteria for determining whether a point of law is of general importance

Holding

The categories are not closed; the point must be a point of law, substantial, arguable, contentious, arising from unsettled or contradictory jurisprudence, and affect a considerable number of persons.

Reasoning

Borrowing from the Supreme Court's criteria for a matter of general public importance in Hermanus Philipus Steyn v Giovanni Gneccchi Ruscone, the Court held that a point of law is of general importance if it transcends the particular case and bears significantly on public interest. Conflicting High Court decisions on the same provision constitute prima facie demonstration of general importance.

p. 4
03

Jurisdiction to grant leave to appeal against a High Court decision setting aside an arbitral award

Holding

The Court has jurisdiction to grant leave under Section 39(3) notwithstanding contrary decisions; it adopted its own reasoning in Kenya Bureau of Standards v Geo-Chem Middle East that aggrieved parties were not intended to be left without recourse to appeal.

Reasoning

Acknowledging conflicting decisions of the Court and the pending Supreme Court decision in Nyutu Agrovet v Airtel, the Court held that pending that decision it has jurisdiction to grant leave. It distinguished leave under Section 39 from leave under Section 35, granting leave only under the former.

p. 2

Legal principles established

#
  • Leave to appeal from a High Court decision on an arbitration award under Section 39(3) of the Arbitration Act requires demonstration of two limbs: a point of law of general importance, and that its determination will substantially affect the rights of one or more parties
  • At the leave stage an applicant need only make a prima facie demonstration; the merits of the intended appeal are not argued
  • A single point of law of general importance suffices on an application under Section 39(3); conflicting jurisprudence from the superior courts renders a point of law one of general importance
  • A point of law is of general importance if it transcends the circumstances of the particular case, is substantial, and its determination has a significant bearing on public interest

Court orders

#
  1. 1.Leave to appeal to the Court of Appeal granted to the applicant from the decision of the High Court (Tuiyot J.) delivered on 9th December 2016 in HCCC No. 506 of 2012
  2. 2.Applicant to file the Record of Appeal within 30 days from the date of the Ruling
  3. 3.Costs of the application to abide the outcome of the intended appeal

The bench

#

One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

majority

Wrote the judgment

majority

Wrote the judgment

On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 506 of 2012
Jurisdiction invoked
Section 39(3) of the Arbitration Act

Relief refused

#

Leave under Section 35 of the Arbitration Act

The leave granted is expressly confined to Section 39, not Section 35, of the Arbitration Act

p. 5

Costs

Costs of this application shall abide the outcome of the intended appeal.

Quotable passages

#

Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

The final order is that leave to appeal to this Court be and is hereby granted to the applicant to appeal from the decision of the High Court (Tuiyot J.) delivered on 9th December 2016 in HCCC No. 506 of 2012.
p. 5Final orders - grant of leave
For avoidance of doubt, the leave granted in this matter is pursuant to Section 39 of the Arbitration Act and not Section 35 of the Arbitration Act.
p. 5Scope of leave granted
In an application under Section 39(3) of the Arbitration Act, a single point of law of general importance suffices. An applicant need not demonstrate several points of law that are of general importance.
p. 4Section 39(3) leave test
At the stage of seeking leave, the applicant is not expected to argue the merits of the intended appeal.
p. 4Standard of demonstration at leave stage

Issues in the judgment

#
minor

The judgment describes the underlying Act as the 'Public Procurement and Asset Disposal Act, 2005' in places while the 2005 Act is elsewhere referred to as the 'Public Procurement and Disposal Act (2005)', creating ambiguity as to which statute and Regulation 31 the High Court applied

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Centurion Engineers & Builders Limited v Kenya Bureau of Standards [2018] KECA 84 (KLR)", Case Analysis (2018). Civil Application No. 282 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/84/eng@2018-11-23

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