Rebecca Ndanu Munguti (Suing through her Attorney Sussanah Mukii Matee) v Acher Dramond Morgan Limited [2019] KEELC 2778 (KLR)
The bottom line
#A Kenyan court refused to cancel an arbitration award but also declined to enforce it, ruling enforcement must be filed as a separate miscellaneous application.
What this practically means
#Executive summary
#Key legal issues
#Whether the award of mesne profits was beyond the scope of the reference to arbitration under Section 35(2)(a)(iv) of the Arbitration Act
The mesne profits claim was within the scope of the reference; the setting-aside application failed
The arbitration was invoked consensually through a joint letter citing Article 13.2 of the agreement, without the parties framing specific questions. Both parties then pleaded before the arbitrator, the claimant sought mesne profits and the respondent opposed the claim in its entirety, inviting determination. The arbitrator framed mesne profits as one of the issues and determined it. The defendant's objection was in substance a challenge to the merits of that finding, which is not a statutory ground for setting aside under Section 35(2).
Whether the pending suit (Nairobi ELC 354 of 2013) was the proper forum for adoption and enforcement of the award
It was not, absent a referral order or consent; adoption must be sought by miscellaneous application
The arbitration was initiated by the parties through a joint letter during the pendency of the suit, not through a court order, so there was no referral order. Without a referral order or a consent on the forum of adoption, the proper avenue is a miscellaneous application. The court accordingly declined the adoption order but left the party free to file such an application. The consolidation order made on oral request was also vacated as it lacked consensus and the suit remained unsettled.
Legal principles established
#- A challenge to the merits of an arbitrator's finding is not a ground for setting aside an award under Section 35(2) of the Arbitration Act
- Where parties plead and invite the arbitrator to determine an issue, an objection that the relief fell outside the contract comes too late in setting-aside proceedings
- In the absence of a referral order or consent, adoption and enforcement of an arbitral award must be sought by miscellaneous application, not in the pending suit
Court orders
#- 1.The Notice of Motion dated 24/5/2017 in Nairobi ELC Miscellaneous Application Number 96 of 2017 seeking the setting aside of part of the arbitral award dated 25/4/2017 is rejected for lack of merit
- 2.The Notice of Motion dated 29/5/2017 in Nairobi ELC Case Number 354 of 2013 seeking adoption and enforcement of the award is declined on the ground that, in absence of a consent, Nairobi ELC Case Number 354 of 2013 is not the proper forum for adoption and enforcement of the award
- 3.Any party desirous of enforcing the award is at liberty to bring a miscellaneous application for the adoption and enforcement of the award
- 4.The consolidation order made on 29/11/2017 in relation to Nairobi ELC Case Number 354/2013 and Nairobi ELC Miscellaneous Application Number 96 of 2017 is vacated and their respective folders are separated
- 5.Each party shall bear their respective costs of the two applications
- Jurisdiction invoked
- Section 35 of the Arbitration Act (No. 4 of 1995) - application to set aside an arbitral award; and the court's inherent jurisdiction over adoption and enforcement of arbitral awards
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Rebecca Ndanu Munguti (Suing through her Attorney Sussanah Mukii Matee) v Acher Dramond Morgan Limited [2019] KEELC 2778 (KLR)", Case Analysis (2019). Nairobi ELC Case Number 354 of 2013 & Nairobi ELC Miscellaneous Application Number 96 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/2778/eng@2019-06-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.