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Court of AppealStruck OutNot stated in the judgment· [2022] KECA 85 (KLR)

Advertising Company Limited v Kenya Post Office Savings Bank

Court of Appeal of Kenya
4 February 2022
DMD. K. MusingaRNR. N. NambuyeWKW. Karanja
1,123 words in judgment
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The bottom line

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Kenya's Court of Appeal confirmed you cannot challenge a set-aside arbitral award on appeal without first getting the High Court's leave.

What this practically means

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Executive summary

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This Court of Appeal decision (Musinga, P, Nambuye and Karanja, JJA) concerned an appeal against a High Court ruling of 29th June 2017 by F. Amin, J., which set aside in its entirety an arbitral award of 28th April 2015 by Mr. Kamau Karori, FCIArb, in favour of The Advertising Company Limited for Kshs.10,336,567.06 plus costs and interest at 17% per annum. The respondent had applied under section 35(1) of the Arbitration Act and rule 7 of the Arbitration Rules to set aside the award, contending that the arbitrator dealt with matters not contemplated by the agreement. The appellant appealed, and the respondent applied to strike out the notice and record of appeal on the basis that sections 10, 35, 36 and 37 of the Arbitration Act bar appeals from High Court decisions under the Act. The single issue the court framed was whether a right of appeal to the Court of Appeal exists from a section 35 setting-aside decision where the parties' agreement conferred no such right. Applying the Supreme Court's later decisions in Nyutu Agrovet v Airtel and Synergy Industrial Credit v Cape Holdings, the court held that the Court of Appeal has only residual, exceptional jurisdiction over such determinations, exercisable only in the clearest of cases. It was not disputed that the appellant never sought leave to appeal; without leave the appeal does not lie. The court struck out the notice and record of appeal and ordered the appellant to bear the costs of the appeal.

Key legal issues

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Whether an appeal lies to the Court of Appeal from a High Court ruling on a section 35 application to set aside an arbitral award, absent an agreement conferring a right of appeal and absent leave

Holding

No appeal lies without leave. Relying on the Supreme Court's decisions in Nyutu Agrovet and Synergy Industrial Credit, the Court of Appeal has only residual jurisdiction in exceptional and limited circumstances, and here no leave was sought, so the notice and record of appeal were struck out.

Reasoning

The parties filed submissions in 2018 before the Supreme Court clarified the position in Nyutu Agrovet and Synergy Industrial Credit. Those decisions established that the Court of Appeal's jurisdiction over section 35 determinations is exceptional, narrow and residual. It was not disputed that the appellant never sought leave to appeal from the High Court ruling setting aside the award in its entirety. Without the grant of leave, the appeal does not lie, and the proper course is to strike out the notice and record of appeal.

p. 3

Legal principles established

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  • An appeal to the Court of Appeal from a High Court decision on an application under section 35 of the Arbitration Act does not lie without leave; where no leave was sought or granted, the appeal is incompetent and must be struck out.
  • Per the Supreme Court in Nyutu Agrovet, the Court of Appeal may assume jurisdiction over a section 35 setting-aside determination only in the clearest of cases where the High Court stepped outside the grounds in section 35, and that narrow jurisdiction must be exercised sparingly.

Court orders

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  1. 1.The notice and record of appeal filed by the appellant are struck out
  2. 2.The appellant shall bear the costs of this appeal
On appeal from
High Court of Kenya at Nairobi
Not stated in the judgment
Jurisdiction invoked
No right of appeal lies from a High Court decision under section 35 of the Arbitration Act without leave; appeal before the Court of Appeal on that basis examined per Nyutu Agrovet and Synergy Industrial Credit (Supreme Court)

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, "Advertising Company Limited v Kenya Post Office Savings Bank", Case Analysis (2022). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/85/eng@2022-02-04

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