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Court of AppealDismissedCivil Appeal E004 of 2020

Transmara Sugar Company Limited v Oino

Court of Appeal
19 December 2025
1,834 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~7 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal ruled that an arbitration clause naming abolished offices and tribunals is unenforceable, so the farmer's lawsuit proceeds in court.

What this practically means

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Executive summary

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The respondent, a sugarcane farmer, sued Transmara Sugar Company Limited for breach of a Sugar Growing and Supply Contract, claiming compensation for two unharvested cycles. The appellant sought a stay of the trial proceedings and referral to arbitration under clause 9 of the contract. The Principal Magistrates' Court at Rongo allowed the application, holding that the repeal of the Sugar Act, 2001 by the Crops Act, 2013 did not vitiate the arbitration clause. On first appeal, Mrima, J. of the High Court at Migori reversed, holding that parties cannot be forced into a dispute resolution mechanism legally non-existent ab initio, since the Sugar Act had been repealed before the 2014 contract and the Sugar Arbitration Tribunal disbanded. The Court of Appeal dismissed the appellant's second appeal. It held that the arbitration clause designated a committee including the District Officer (an office abolished by the Constitution of 2010) and an appeal to the Sugar Arbitration Tribunal (abolished by repeal), so the clause provided a process of dispute resolution legally non-existent ab initio and could not be rendered valid. Transitional provisions in the Constitution and the Agriculture, Fisheries and Food Authority Act could not save the clause; the parties could have adopted succeeding legislation and institutions by addendum but did not. The appeal was dismissed with no orders as to costs, the respondent having not participated in the appeal.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the arbitration clause under Clauses 9.1 to 9.4 of the Sugar Growing and Supply Contract was rendered inoperable on account of the repeal of the Sugar Act, 2001 by the Crops Act, 2013

Key legal issues

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01

Whether repeal of the Sugar Act, 2001 by the Crops Act, 2013 rendered the contractual arbitration clause inoperable

Holding

Yes. The clause referenced a committee including the District Officer and an appeal to the Sugar Arbitration Tribunal, all of which were non-existent when the contract was executed in 2014, so the clause cannot be enforced.

Reasoning

The contract was executed on 24th July 2014, after the Sugar Act had been repealed by the Crops Act assented to on 14th January 2013. The Constitution of 2010 had also abolished the Provincial Administration including the District Commissioner. Clause 9.4 provided for appeal to the Sugar Arbitration Tribunal, which had been abolished. The parties could have adopted succeeding legislation and institutions by addendum but did not. The clause therefore designated a legally non-existent mechanism ab initio and cannot be rendered valid.

p. 3
02

Whether transitional provisions in the Constitution and the Agriculture, Fisheries and Food Authority Act saved the arbitration clause

Holding

No. Transitional provisions could not save a clause that was already inoperative at execution; the parties could have included succeeding legislation and institutions as an addendum but did not.

Reasoning

The court accepted that transitional provisions exist in the Constitution and the AFFA Act, but the conundrum was that by the time of execution the Sugar Act was already repealed and the 2010 Constitution already in place. The first appellate judge's holding that the parties could have included succeeding legislation and institutions as an addendum was endorsed. The clause was therefore legally non-existent ab initio.

p. 4

Legal principles established

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  • An arbitration clause that designates a dispute resolution mechanism and institutions that were legally non-existent at the time of execution of the agreement cannot be enforced or rendered valid.
  • A second appellate court confines itself to matters of law and will not delve into matters of fact unless the courts below considered or failed to consider relevant matters or the decision is perverse.

Court orders

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  1. 1.The appeal is dismissed
  2. 2.No orders as to costs, since the respondent did not participate in the appeal

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority
majority
majority
On appeal from
High Court of Kenya at Migori
Civil Appeal No. 88 of 2018
Jurisdiction invoked
Second appeal to the Court of Appeal under the Constitution, Article 164 and the appellate jurisdiction over the High Court; the court invoked its second-appeal mandate confined to matters of law

Relief refused

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Appellant's prayer to uphold the trial court's order staying the suit and referring the dispute to arbitration

The arbitration clause provided for a dispute resolution process that was legally non-existent ab initio and cannot be rendered valid

p. 4

Costs

No orders as to costs since the respondent did not participate in this appeal

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

the arbitration clause in the said agreement provided for a process of dispute resolution which was legally non-existent ab initio, and cannot therefore be rendered valid.
p. 4Inoperability of arbitration clause referencing abolished institutions
We are in agreement with the holding of the learned rst Appellate Judge that if the parties intended to be bound by the succeeding legislation and institutions, nothing would have been dicult than for them to include it as an addendum to the agreement.
p. 4Parties' freedom to adopt succeeding legislation by addendum
We have said enough to show that this appeal is not merited. We accordingly dismiss it. We make no orders as to costs since the respondent did not participate in this appeal.
p. 4Final orders - dismissal and costs

Issues in the judgment

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minor

Judgment states the agreement 'was governed by the Sugar Act, 2001' while also holding the Act was already repealed at execution.

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, "Transmara Sugar Company Limited v Oino", Case Analysis (2025). Civil Appeal E004 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/2259/eng@2025-12-19

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