Movies for You Limited v Industrial & Commercial Development Corporation [2017] KEELC 3340 (KLR)
The bottom line
#Kenya's High Court upheld an arbitral award against Uchumi Supermarkets, confirming that losing parties cannot easily overturn arbitration results by claiming delay or public policy.
What this practically means
#Executive summary
#Key legal issues
#Whether an arbitral award made after the expiry of a court-ordered timeline for filing the award in court is a nullity and contrary to public policy.
The award is not a nullity. The time frame fixed by the court was for filing the award in court, not for making it. That period can be extended by the court, and there was a pending application by the Defendant for extension of time to file the award.
The court distinguished between the making of an award and its filing in court. The initial 90-day period expired on 29th December 2011 and was once extended to 31st March 2012 at the Plaintiff's own instance. The Act does not impose time lines on arbitrators, and delay in making the award is not a ground for setting it aside under the Arbitration Act 1995. A party who did not challenge the tribunal's jurisdiction before it cannot raise jurisdiction post-award.
Whether the arbitral tribunal was improperly constituted because the arbitrator did not appoint assessors or professional advisors.
The contention had no merit. Under clause 5 of the lease, the appointment of assessors or professional advisers was at the discretion of the arbitrator, not mandatory. Further, the ground was raised for the first time in submissions and was not pleaded in the application or supporting affidavit.
The application was brought only under section 35(2)(b)(ii) on public policy grounds. The composition of the tribunal falls under section 35(2)(a)(v), a ground the Plaintiff never invoked in its application. The Plaintiff was not permitted to introduce new grounds of attack at the submission stage, and the issue of tribunal composition had never been raised before the arbitrator.
Whether the court could interfere with the arbitrator's findings of fact and interpretation of the lease terms.
The court has no jurisdiction to re-open findings of fact made by an arbitral tribunal. A mistake of fact or law is not a ground for setting aside or remitting an award; the court's intervention is limited to errors of law apparent on the face of the award.
Relying on Tcat Limited vs. Joseph Arthur Kibutu, Geogas S.A vs. Tammo Gas Limited, and DB Shapriya and Co. Ltd. vs. Bish International BV, the court held that where parties specifically refer a question to arbitration, the court will not interfere with the award even if the arbitrator's view differs from that of the court. The arbitrator's definition of 'amusement' and interpretation of the lease could not be interrogated.
Whether the award was contrary to the public policy of Kenya.
The Plaintiff failed to discharge the burden of demonstrating that the award was inconsistent with the Constitution or any Kenyan law, inimical to the national interest, or contrary to justice and morality.
The public policy ground under section 35(2)(b)(ii) must be approached with caution. The Plaintiff placed no material before the court showing illegality, offensiveness to justice and morality, or harm to the national interest. Public policy leans towards the finality of arbitral awards, subject only to challenge within the narrow confines of section 35.
Legal principles established
#- Public policy is a ground for setting aside an arbitral award only where the award is inconsistent with the Constitution or any law of Kenya, inimical to the national interest, or contrary to justice and morality.
- The public policy defence to the setting aside or enforcement of an arbitral award must be approached with extreme caution and construed narrowly.
- A court has no jurisdiction to re-open findings of fact already made by an arbitral tribunal; a mistake of fact or law is not a ground for setting aside an award.
- A party who failed to challenge the jurisdiction of the arbitral tribunal before it cannot raise the issue of jurisdiction after the final award as a ground for setting it aside under public policy.
- A time frame fixed by the court for filing an award in court does not limit the arbitrator's jurisdiction to make the award, and delay in making an award is not a ground for setting it aside under the Arbitration Act 1995.
Court orders
#- 1.The Chamber Summons application dated 17th September 2012 is dismissed.
- 2.Costs of the application are awarded to the Defendant.
- Jurisdiction invoked
- Sections 35(1), (2)(b)(ii) of the Arbitration Act, 1995 and Rule 7 of the Arbitration Rules, 1997
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Margaret Gacigi Gecaga v Udi Mareka Gecaga & Quinvest Limited[2020] KEHC 3369 (KLR)14 Aug 2020
Cite this brief
#Cite this brief
Caselaw, "Movies for You Limited v Industrial & Commercial Development Corporation [2017] KEELC 3340 (KLR)", Case Analysis (2017). Chamber Summons application dated 17th September 2012 (suit filed 27th July 2011). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/3340/eng@2017-01-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.