Mt Kenya University v Step Up Holding (K) Ltd
The bottom line
#If you want a Kenyan court to send your dispute to arbitration, you must ask immediately when entering appearance—wait, and you lose that right.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the trial Judge misapprehended both the facts and the law when he declined to allow the appellant's application to refer the matter for arbitration in terms of the Arbitration Clause
Key legal issues
#Whether the appellant lost its right to rely on the arbitration clause by taking procedural steps before applying for reference to arbitration
Yes. The appellant entered appearance and filed a replying affidavit to the injunction application before filing the reference application, thereby losing the right to rely on the arbitration clause under section 6(1).
Section 6(1) requires an application for stay and referral to be made not later than the time of entering appearance or otherwise acknowledging the claim. The appellant entered appearance on 13th September 2011, replied to the injunction application on 14th October 2011, and only filed the chamber summons on 25th October 2011. The trial Judge correctly found the right lost, and the Court of Appeal affirmed that exercise of discretion.
Whether the appellant was ready and willing to do everything to facilitate arbitration
No. The appellant's denial of any dispute and its expressed doubt as to the completeness of the MOU demonstrated it was not ready and willing to facilitate arbitration.
The trial Judge examined the correspondence, including the appellant's text message denying the existence of a dispute and its affidavit insisting the MOU was incomplete. Those findings supported the conclusion that the appellant was not ready and willing to do everything to facilitate arbitration, a condition the court must consider under section 6(1). The Court of Appeal found no misapprehension of the facts.
Whether the Court of Appeal should interfere with the trial Judge's discretionary decision
No. The trial Judge correctly exercised his discretion and properly appreciated both the facts and the law.
Applying the crystallized principles in United India Insurance Co Ltd v East African Underwriters, the Court of Appeal interferes with discretion only on established error of law, misapprehension of fact, wrong considerations, or a plainly wrong result. Finding none, the Court affirmed the ruling below.
Legal principles established
#- A party invoking section 6(1) of the Arbitration Act must file the application for reference to arbitration not later than the time of entering appearance or otherwise acknowledging the claim, and must take no further procedural step in the matter; the right to rely on the arbitration clause is otherwise lost.
- Responding to an application for injunction amounts to taking a procedural step in the matter, which defeats a later application for stay of proceedings pending arbitration.
- The Court of Appeal will not interfere with a discretionary decision of a judge unless the judge misdirected himself in law, misapprehended the facts, took into account matters he should not have, failed to take into account matters he should have, or the decision is plainly wrong.
Court orders
#- 1.Appeal dismissed in its entirety
- 2.Costs of the appeal and of the court below awarded to the respondent
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the judgment
Wrote the judgment
- On appeal from
- High Court of Kenya
- Jurisdiction invoked
- Appellate jurisdiction of the Court of Appeal over a discretionary ruling of the High Court (the judgment does not cite a specific constitutional provision)
Relief refused
#Setting aside the High Court ruling dismissing the application for stay of proceedings pending arbitration and referral of the dispute to arbitration
The appellant took a procedural step (responding to the injunction application) before filing the reference application, contrary to section 6(1) of the Arbitration Act
Costs
The appeal is dismissed in its entirety with costs to the respondent both on appeal and in the court below.
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.
Turning to section 6(1) where like in this case, the applicant brings an application for stay of proceedings way after entering appearance, the right to rely on the arbitration clause is lost
Critically the appellant's response to the respondent's application for injunction amounted to the taking of a procedural step in the matter before the initiation of the reference process
We therefore find no error in the Judge's findings. They are accordingly affirmed.
The upshot is that the appeal has no merit. It is dismissed in its entirety with costs to the respondent both on appeal and in the court below.
Issues in the judgment
#Duplicate paragraph numbering: two consecutive paragraphs are both numbered 26
Respondent's name inconsistently rendered in the judgment
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (2)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Gedi & another v Theuri[2023] KEELC 17686 (KLR)25 May 2023applied
- Waita v Venture Holdings Ltd; Koni (Interested Party)[2022] KEELC 15094 (KLR)24 Nov 2022applied
Cite this brief
#Cite this brief
Caselaw, "Mt Kenya University v Step Up Holding (K) Ltd", Case Analysis (2018). Civil Appeal 186 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/125/eng@2018-11-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.