John Oriri Nyandoro v Transmara Sugar Company Limited
The bottom line
#Kenya's Court of Appeal ruled that a sugarcane contract's arbitration clause stayed valid despite law changes, and the cane farmer's lawsuit must go to arbitration.
What this practically means
#Executive summary
#Key legal issues
#Effect of transitional constitutional and statutory provisions on a contractual arbitration clause referencing abolished officers and institutions
The clause remains valid and operative; the court must construe pre-existing law with alterations and adaptations to conform to the Constitution, substituting successors such as the Assistant County Commissioner for the District Officer and the Agriculture, Fisheries and Food Authority for the Kenya Sugar Board.
Article 259 obliges the court to interpret the law to give effect to the Constitution's purpose, values and principles. Clause 7 of the Sixth Schedule mandates that pre-existing law be construed with alterations, adaptations, qualifications and exceptions necessary to conform to the Constitution. The transitional provisions changed designations rather than extinguishing powers; the Authority under section 3(3) of the AF&FA Act succeeded to the Kenya Sugar Board, and the out-grower entity was not a creature of the repealed Sugar Act.
Whether loss of the Sugar Arbitration Tribunal, the agreed appeal forum, rendered the arbitration clause incapable of performance under section 6(a) of the Arbitration Act
No. The clause is not incapable of performance or inoperative; the parties' intention to preserve a right of appeal is achieved through an appeal to the High Court on a question of law under section 39 of the Arbitration Act.
The tribunal became defunct with the repeal of the Sugar Act, so a dissatisfied party can no longer access it. However, the parties' intention was to preserve a right of appeal against the arbitral committee's decision. In accordance with the transitional provisions, the court must construe clause 9 so as to protect that intention, with the appeal now lying to the High Court under section 39 of the Arbitration Act on questions of law arising in the course of the arbitration or out of the award.
Legal principles established
#- A contractual arbitration clause referencing officers or institutions abolished or altered by a change in law remains operative where transitional provisions (Article 7 of the Sixth Schedule to the Constitution and saving clauses in successor statutes) allow the referenced offices, institutions or functions to be construed as their constitutional or statutory successors.
- Where an agreement's agreed appeal mechanism to a tribunal abolished by repeal is lost, the parties' intention to preserve a right of appeal is protected by construing the agreement to allow an appeal to the High Court on a question of law under section 39 of the Arbitration Act.
Court orders
#- 1.The appeal is dismissed with costs
- 2.The judgment of the learned Judge of the High Court is upheld
- On appeal from
- High Court of Kenya at Migori
- HCCC No. 167 of 2018
- Jurisdiction invoked
- Second appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction (the judgment describes itself as 'a second appeal' from the High Court); no specific provision is quoted
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "John Oriri Nyandoro v Transmara Sugar Company Limited", Case Analysis (2021). Civil Appeal No. 256 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/1072/eng@2021-01-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.