Bomas of Kenya Limited v Standard Investment Bank Limited (Civil Application E456 of 2021) [2023] KECA 544 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that missed arbitration deadlines cannot be rescued later, and refused Bomas of Kenya permission to appeal an award's enforcement.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the Court of Appeal has jurisdiction under section 39(3)(b) of the Arbitration Act to grant leave to appeal from the High Court's ruling exercising jurisdiction under sections 35, 36 and 37 of the Act
- 2.Whether the applicant met the threshold for leave to appeal as articulated in the Nyutu Agrovet and Synergy Industrial Credit decisions of the Supreme Court
- 3.Whether stay of the High Court ruling should be granted pending the intended appeal
Key legal issues
#Whether section 39(3)(b) of the Arbitration Act confers jurisdiction on the Court of Appeal to grant leave to appeal from a High Court ruling on setting aside and enforcement of an award under sections 35, 36 and 37
No. The section 39(3)(b) gateway applies only to High Court decisions made under section 39(2); the impugned ruling was made under sections 35, 36 and 37, so the intended appeal is incompetent.
The Court applied its own earlier decisions in Kenyatta International Convention Centre v Congress Rental South Africa and Okeno & Sons Building Contractors v Bukura Agricultural College, which hold that section 39 appeals to the High Court require prior agreement between the parties and that appeals to the Court of Appeal under section 39(3) lie only from decisions of the High Court exercising appellate jurisdiction under section 39(2). Since the High Court here was setting aside and enforcing an award under sections 35, 36 and 37, section 39(3)(b) was not available.
Whether, even if jurisdiction existed, the applicant satisfied the exceptional-circumstances threshold for leave to appeal under the Supreme Court's Nyutu Agrovet and Synergy Industrial Credit decisions
The applicant did not demonstrate exceptional circumstances; the plea for leave failed.
The Court applied the Supreme Court's holdings that judicial intervention in matters not specifically provided for by the Arbitration Act can only be countenanced in exceptional instances, and that an intended appeal not anchored within the four corners of section 35 should not be admitted. The applicant could not show the High Court stepped outside section 35. Additionally, the notice of appeal challenged only the dismissal of the set-aside application, not the order allowing enforcement.
Whether the applicant's time-barred set-aside application could be sustained under section 37 of the Act in opposition to enforcement
No. Section 37 provides grounds only for refusal of recognition or enforcement and cannot be used to bypass section 35's time limit.
The Court noted that section 35(3) imposes a three-month limit on applications to set aside an award, and that the applicant did not apply within that period. Following the Supreme Court's Nyutu Agrovet guidance, section 37 only provides grounds for refusal of recognition or enforcement of an award; it does not provide an alternative route to set aside an award for a party that missed the section 35(3) window. The summary nature of enforcement proceedings and the policy of minimal court intervention under section 10 of the Act reinforce this.
Whether stay of the High Court ruling should be granted pending the intended appeal
Stay was not considered because, leave having been refused, there was no appeal before the Court under Rule 5(2)(b).
The Court held that once the prayer for leave failed, addressing the prayer for stay would serve no utilitarian value. The Court's discretion under Rule 5(2)(b) presupposes an appeal before it; since the intended appeal could not properly be instituted, the stay application necessarily fell away with the motion.
Legal principles established
#- An appeal to the Court of Appeal under section 39(3)(b) of the Arbitration Act lies only from a decision of the High Court made in the exercise of its jurisdiction under section 39(2); decisions under sections 35, 36 and 37 fall outside that gateway.
- A party caught by the three-month time bar in section 35(3) of the Arbitration Act cannot circumvent that failure by seeking refuge in section 37 of the Act in resistance to enforcement of the award.
- Not every decision of the High Court under section 35 of the Arbitration Act is appealable to the Court of Appeal; an intended appellant must demonstrate that the High Court went beyond the grounds set out in section 35.
Court orders
#- 1.The applicant's Notice of Motion dated 9th December 2022 is dismissed with costs to the respondent
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the judgment
Wrote the judgment
- On appeal from
- High Court of Kenya
- Nairobi HCComm Misc. No. E230 of 2021
- Jurisdiction invoked
- Section 39(3)(b) of the Arbitration Act; Rules 5(2)(b), 39(a), 42 & 43 of the Court of Appeal Rules, 2010; Article 164(3)(a) of the Constitution
Relief refused
#Leave to appeal to the Court of Appeal against the ruling of Mabeya, J. dated 25th November 2022
The High Court was exercising jurisdiction under sections 35, 36 and 37 of the Arbitration Act, not section 39(2), so section 39(3)(b) cannot be invoked; the applicant also failed to meet the Nyutu/Synergy exceptional-circumstances threshold, and the notice of appeal did not challenge the order allowing recognition and enforcement of the award
Stay of the High Court ruling pending the intended appeal
Having refused leave, there is no appeal before the Court against which stay could be granted under Rule 5(2)(b)
Costs
The applicant's Notice of Motion dated 9th December 2022 is dismissed with costs to the respondent.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
In dismissing the applicant's application for setting aside the arbitral award, and in allowing the enforcement the arbitral award, the High Court was not exercising appellate jurisdiction under section 39(2), therefore, the jurisdiction of this Court under section 39(3) (b) cannot be invoked.
Section 37 of the Act only provides grounds for refusal of recognition or enforcement of an award, therefore, the applicant could not properly by pass the provisions of section 35 and purport to circumvent its failure by seeking refuge in section 37 of the Act.
The upshot is that the applicant's Notice of Motion dated 9th December 2022 is dismissed with costs to the respondent.
Issues in the judgment
#The respondent is not named anywhere in the judgment text; it is referred to only descriptively, and the identity of the contracting party cannot be confirmed from the judgment itself.
The judgment text contains typographical/rendering errors (e.g. 'sufier' for 'suffer', 'afiect' for 'affect', 'party's #autonomy' for 'party's "autonomy"'), and the corpus quotes are reproduced as printed.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Bomas of Kenya Limited v Standard Investment Bank Limited (Civil Application E456 of 2021) [2023] KECA 544 (KLR)", Case Analysis (2023). Nairobi HCComm Misc. No. E230 of 2021 (application for leave to appeal, Notice of Motion dated 9th December 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/544/eng@2023-05-12
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.