African Service Maintenance Limited v Comarco Supply Base (EPZ) Limited & another
The bottom line
#A company that wanted arbitration instead filed the wrong court document, so it lost that right and must now defend the case in Kenya's High Court.
What this practically means
#Executive summary
#Key legal issues
#Compliance with section 6(1) of the Arbitration Act as a precondition to invoking arbitration
The 1st respondent, having filed a memorandum of appearance with a preliminary objection rather than a notice of motion for stay under section 6(1), waived its right to refer the dispute to arbitration and submitted to the court's jurisdiction.
Section 6(1) requires a party to apply for stay of proceedings not later than the time of entering appearance, by way of summons in the suit under rule 2 of the Arbitration Rules 1997 and by motion under Order 51 rule 1 of the Civil Procedure Rules. Filing a preliminary objection instead compelled the court to evaluate facts, taking the party beyond the scope of the Arbitration Act and constituting submission to jurisdiction.
Whether the preliminary objection met the Mukisa Biscuit threshold
The objection required the court to go beyond the scope of the Arbitration Act and the arbitration agreements and to evaluate facts, and therefore failed the threshold for a preliminary objection.
A valid preliminary objection must rest on a pure point of law without ascertainment of facts. Here the court had to discern whether the charterparty agreements or the tripartite agreement governed, which required factual evaluation, defeating the objection.
Right to be heard on the tripartite agreement
The trial court erred in striking out the claim against the 1st respondent, which was also party to the tripartite agreement, thereby denying the appellant the right to ventilate that dispute.
The 1st respondent was a party to the tripartite agreement; separating the claims and striking out the suit against it denied the appellant the right to be heard on disputes arising from that agreement, which contained no arbitration clause.
Legal principles established
#- A party who files a preliminary objection instead of an application for stay under section 6(1) of the Arbitration Act loses the right to rely on the arbitration clause and submits to the court's jurisdiction.
- A preliminary objection requiring the court to evaluate facts does not meet the Mukisa Biscuit threshold.
- Jurisdiction is a threshold issue that must be decided forthwith on the material before the court.
Court orders
#- 1.The appellant's suit against the 1st respondent in Mombasa High Court Commercial Case No 15 of 2018 be and is hereby reinstated, to be determined by another judge of the High Court other than N Mwangi, J.
- 2.Costs to the appellant
- On appeal from
- High Court of Kenya at Mombasa
- Mombasa High Court Commercial Case No. 15 of 2018
- Jurisdiction invoked
- Article 165 of the Constitution (first-instance jurisdiction) with the appeal under the Court of Appeal's appellate jurisdiction; Arbitration Act No 4 of 1996, section 6 central to the dispute
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "African Service Maintenance Limited v Comarco Supply Base (EPZ) Limited & another", Case Analysis (2022). Civil Appeal 160 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/1264/eng@2022-11-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.