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Court of AppealAllowedCivil Application No. 129 of 2020· [2020] KECA 376 (KLR)

University of Nairobi v Multiscope Consulting Engineers [2020] KECA 376 (KLR)

Court of Appeal
7 August 2020
HOHannah OkwenguMohamed Abdulahi WarsameM. WarsameJMJ. Mohammed
2,246 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~9 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal allowed the University of Nairobi to challenge a Kshs 113 million arbitral award, but only after it deposits half the amount in a joint account.

What this practically means

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Executive summary

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The University of Nairobi sought leave from the Court of Appeal to appeal against a High Court ruling (Tuiyott, J, 13 May 2020) striking out its motion under section 35 of the Arbitration Act to set aside an arbitral award of Kshs 113,594,205 in favour of Multiscope Consulting Engineers, and sought a stay of further proceedings in the related High Court miscellaneous causes. The High Court had upheld a preliminary objection that the setting-aside motion was filed out of time under section 35(3), which prescribes a three-month limitation period running from receipt of the award. The applicant argued it was never notified of the award's delivery, that time had not begun to run, and that the striking out denied it a fair hearing. Applying the Supreme Court's decision in Nyutu Agrovet, the Court of Appeal confirmed that although section 35 creates no express right of appeal, a narrow residual jurisdiction exists in exceptional circumstances where the High Court's decision is so grave or manifestly wrong as to close the door of justice. Finding that the applicant's motion was struck out on limitation without any merits determination, and that a significant interpretive question on section 35(3) arose, the court granted leave to appeal. It also stayed the High Court proceedings on condition that the applicant deposit Kshs 56,797,102 (half the award) in a joint interest-earning account within 90 days, failing which the stay lapses. Costs of the application abide the outcome of the appeal.

Key legal issues

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01

Whether leave to appeal should be granted against a High Court decision under section 35 of the Arbitration Act

Holding

Leave was granted because exceptional circumstances existed: the motion was struck out on limitation without a merits determination, and an important question on the interpretation of section 35(3) arises.

Reasoning

The court applied the Supreme Court's Nyutu test. Although section 35 creates no express right of appeal, the striking out of the applicant's motion on limitation grounds meant the substantive issues were never addressed; the applicant was shut out from the seat of justice, and whether the judge's decision was so manifestly wrong as to close the door of justice required appellate ventilation.

p. 3
02

Whether a stay of further proceedings should issue pending the intended appeal

Holding

Stay of proceedings was granted on condition that the applicant deposits half the decretal amount into a joint interest-earning account within 90 days.

Reasoning

The court balanced the parties' positions: enforcement of the substantial award would disrupt the applicant's operations and render a successful appeal a paper victory, yet the respondent faced prejudice given the applicant's demonstrated inability even to pay arbitral fees. A conditional stay protected both parties' interests.

p. 3

Legal principles established

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  • An appeal lies to the Court of Appeal from a High Court determination under section 35 of the Arbitration Act only in exceptional circumstances, where the High Court stepped outside the grounds in section 35 and made a decision so grave or manifestly wrong that it completely closed the door of justice.
  • This residual appellate jurisdiction must be exercised sparingly and only in the clearest of cases, so as not to open a floodgate of appeals undermining the essence of arbitration.

Court orders

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  1. 1.Leave granted to the applicant to lodge an appeal against the ruling and orders issued by the High Court on 13th May 2020 in H.C. Misc. Cause No E083 of 2019
  2. 2.All further proceedings in H.C. Misc. Cause No E083 of 2019 and H.C. Misc. Cause No E36 of 2019 stayed pending the hearing and determination of the intended appeal, on condition that the applicant deposits Kshs 56,797,102 into an interest-earning account in the joint names of the parties' counsel within 90 days, failing which the stay lapses
  3. 3.The applicant to file and serve the intended appeal within 60 days from the date of the ruling
  4. 4.Costs of the application to abide the outcome of the appeal

Authorities

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Legislation

  • Arbitration Actsection 35
  • Arbitration Actsection 35(3)
  • Arbitration Actsection 32(5)
  • Arbitration Actsection 10
  • Constitution of Kenya, 2010Articles 48, 50(1) and 164(3)

Cases cited (4)

  • Nyutu Agrovet Limited vs Airtel (K) Networks Limited & 2 others
    [2019] eKLR (Petition No. 12 of 2016)
  • Synergy Industrial Credit Limited vs Cape Holdings Limited
    [2019] eKLR (Petition No 2 of 2019)
  • Narok County Government vs Livingston Kuninin Ntutu & two others
    [2018] eKLR
  • Kenya Bureau of Standards vs GeoChem Middle East
    (Civil Application No 132 of 2017 UR)
On appeal from
High Court at Nairobi
Misc. Cause No. E083 of 2019
Jurisdiction invoked
Leave to appeal against a decision of the High Court made under section 35 of the Arbitration Act, exercisable in exceptional circumstances per the Supreme Court's Nyutu Agrovet decision

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (5)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "University of Nairobi v Multiscope Consulting Engineers [2020] KECA 376 (KLR)", Case Analysis (2020). Civil Application No. 129 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/376/eng@2020-08-07

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