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Court of AppealDismissedCivil Application E037 of 2022· [2022] KECA 917 (KLR)

Prabhaki Developers Ltd v Structural Development Ltd

Court of Appeal
22 July 2022
1,466 words in judgment
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The bottom line

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The Court of Appeal refused to extend time to appeal an arbitration ruling because the company never first obtained the rare leave Kenya's law requires for such appeals.

What this practically means

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Executive summary

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Prabhaki Developers Ltd sought, by a single Judge motion dated 8th February 2022, an extension of time to appeal against the ruling of Majanja, J. delivered on 10th January 2022 in HC Misc. App. No. E331 of 2021, in which the High Court dismissed Prabhaki's application under section 35 of the Arbitration Act to set aside an arbitral award of Kshs 85,560,514.02 plus interest and costs, and allowed Structural Development Ltd's application under section 36 to enforce the award as a decree. Unusually, the applicant also sought a stay of execution in the same application. M'Inoti, JA held that extension of time and stay of execution should not be combined in one application, and treated the motion as limited to extension of time only. The respondent raised a preliminary objection that there is no automatic right of appeal from section 35 determinations and that the applicant had not obtained leave to appeal from either the High Court or this Court. Applying the Supreme Court's decisions in Nyutu Agrovet and Synergy Industrial Credit, the Judge held that leave is required and granted only in rare and exceptional circumstances. Since the applicant had neither sought nor obtained leave, extending time would be futile, as no competent appeal could be mounted. Although the 15-day delay would not have been inordinate given the Managing Director's Covid-19 isolation, the application was dismissed with costs to the respondent.

Key legal issues

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01

Whether a single Judge may extend time to appeal a section 35 Arbitration Act decision without leave to appeal

Holding

No - without leave to appeal, granted by the full Court, extension of time by a single Judge is futile and serves no purpose

Reasoning

The High Court decision was rendered under section 35 of the Arbitration Act, from which there is no automatic right of appeal. Leave must be obtained and is granted only in rare and exceptional circumstances per Nyutu Agrovet and Synergy Industrial Credit. The applicant neither sought nor obtained leave, so extending time would enable no competent appeal.

p. 3
02

Whether the combined application for extension of time and stay of execution was properly before the single Judge

Holding

The application was treated as limited to extension of time only, stay of execution being a matter for the full Court

Reasoning

The Court noted it is difficult to fathom how a stay of execution, grantable only by the full Court, could issue in a single Judge extension application. Citing Martin Change v Vitalis Odida and Abdulrazak Rageh Haji, the Judge held the two applications should not be combined and extension of time must be determined first.

p. 1
03

Whether the 15-day delay in lodging the notice of appeal was excusable

Holding

The delay would not have been considered inordinate given the Managing Director's Covid-19 isolation explanation, but this was immaterial given the absence of leave

Reasoning

The delay was 15 days by dint of rule 75(2), not seven days as claimed. The Managing Director's sworn explanation of Covid-19 isolation, supported by hospital results and undisputed by the respondent, would have satisfied the Mutiso and Fakir Mohamed tests, but the lack of leave to appeal was fatal.

p. 2

Legal principles established

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  • There is no automatic right of appeal from a High Court determination under section 35 of the Arbitration Act; leave is required and granted only in rare and exceptional circumstances
  • An application for extension of time and an application for stay of execution should not be combined in one application; extension of time must be heard and determined first
  • A single Judge should not extend time to appeal where the applicant has not obtained leave to appeal, as the intended appeal cannot competently be mounted

Court orders

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  1. 1.The application treated as limited to extension of time only
  2. 2.The motion on notice dated 8th February 2022 dismissed with costs to the respondent

Authorities

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Legislation

  • Arbitration Actsection 35
  • Arbitration Actsection 36
  • Arbitration Actsection 37
  • Court of Appeal Rulesrule 75(2)

Cases cited (8)

  • Martin Change v. Vitalis Odida
    C.A. No. E571 of 2021

    Extension of time and stay of execution should not be sought in the same application

  • Abdulrazak Rageh Haji v. Mahado Abdulrazak Adichare
    C.A. No. E.030 of 2020

    Extension of time must be heard and determined before a stay application

  • Leo Sila Mutiso v. Rose Hellen Wangari Mwangi
    C.A. Nai. 251 of 1997

    Test for extension of time

  • Fakir Mohamed v. Joseph Mugambi & 2 Others
    CA No. Nai. 332 of 2004

    Test for extension of time

  • Nyutu Agrovet Ltd. v. Airtel Networks Kenya Ltd & Another
    [2019] eKLR

    Appeal from section 35 determination lies only where the High Court stepped outside the section 35 grounds, in the clearest of cases

  • Synergy Industrial Credit Ltd v. Cape Holdings Ltd
    [2019] eKLR

    Court of Appeal has residual jurisdiction over section 35 appeals only in exceptional and limited circumstances

  • Inco Europe Ltd & others
    (supra)

    Residual jurisdiction, cited within the Synergy Industrial Credit extract

  • Nairobi City Water & Sewerage Co Ltd v Capture Solutions Ltd
    [2021] eKLR

    Doubt that an appeal can be sustained where leave was not first obtained to challenge an arbitral award

On appeal from
High Court of Kenya at Nairobi
HC Misc. App. No. E331 of 2021
Jurisdiction invoked
Rule 75(2) of the Court of Appeal Rules - single Judge application for extension of time to appeal

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, "Prabhaki Developers Ltd v Structural Development Ltd", Case Analysis (2022). Civil Application E037 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/917/eng@2022-07-22

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