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ELCAllowedNotice of Motion dated 20th March, 2018 (suit number not stated in the judgment)· [2019] KEELC 3177 (KLR)

Tihan Limited v Sohan Singh Josh & Sons Limited [2019] KEELC 3177 (KLR)

Environment and Land Court of Kenya
24 May 2019
1,951 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~8 min to read original · ~4 min brief

The bottom line

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A Kenyan court protected a tenant from eviction pending arbitration, showing courts will safeguard leased property while disputes go to an arbitrator.

What this practically means

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Executive summary

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The Plaintiff moved the court by Notice of Motion dated 20th March 2018 seeking an interim injunction restraining the Defendant from barring access to, re-entering, or interfering with the Plaintiff's quiet possession of Go-Down A2 on L.R. No. 12715/6242, leased by an agreement of 21st September 2016 for a term running to 31st May 2021, and seeking referral of the dispute to arbitration. The Plaintiff claimed the Defendant accused it of breaching the Lease by entering a Share Acquisition Agreement and threatened eviction despite the agreement having aborted. The Defendant denied any arbitrable dispute, contended the Plaintiff had waived arbitration by filing suit, and asserted the Lease had been validly terminated for non-payment of rent for the quarter commencing 1st March 2018. The court found it undisputed that a Lease existed containing Clause 19 providing for arbitration of any dispute between Landlord and Tenant. It held that the Defendant's accusations regarding late rent and unconsented change of shareholding gave rise to a dispute arising from the Lease, which had to be referred to an arbitrator. Applying Section 7(1) of the Arbitration Act and the Court of Appeal's decision in Safaricom Limited v Ocean View Beach Hotel Limited, the court identified the essentials for interim protection as the existence of an arbitration agreement and a threat to the subject matter. Finding eviction would render the arbitration nugatory, the court allowed the application: it issued the injunction pending the suit and arbitration, referred the matter to arbitration within sixty days, conditioned the injunction on payment of rent and service charge up to 1st May 2019 within sixty days, and ordered each party to bear its own costs. The ruling was delivered at Machakos on 24th May 2019 by O.A. Angote, Judge.

Key legal issues

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01

Existence of an arbitration agreement and reference of the dispute to arbitration

Holding

The Lease contained an arbitration clause (Clause 19) and, a dispute having arisen over alleged breach and termination of the Lease, the matter had to be referred to arbitration.

Reasoning

The court found that the Lease of 21st September 2016 contained Clause 19 referring disputes between Landlord and Tenant to an arbitrator appointed by the Chartered Institute of Arbitrators (Kenya Chapter). The Defendant's accusations of late payment of rent and unconsented transfer of shares gave rise to a dispute arising from the Lease, which therefore had to be referred to an arbitrator under the agreement.

p. 2
02

Entitlement to interim measures of protection pending arbitration

Holding

The Plaintiff satisfied the principles for an interim protective order (existence of arbitration agreement and threat to subject matter), but the injunction issued on condition of payment of rent, which was not in dispute.

Reasoning

Relying on Safaricom Limited v Ocean View Beach Hotel Limited, the court applied the twin essentials: existence of an arbitration agreement and threat to the subject matter. The suit land was the subject matter of the arbitration; eviction would render the arbitration nugatory. Because the rent was admitted and not in dispute, the court conditioned the injunction on the Plaintiff paying the rent and service charge up to 1st May 2019 within sixty days.

p. 3

Legal principles established

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  • The essentials for granting interim measures of protection under Section 7 of the Arbitration Act are the existence of an arbitration agreement and whether the subject matter is under threat.
  • It is not incompatible with an arbitration agreement for a party to seek interim protection from the High Court before or during arbitral proceedings.

Court orders

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  1. 1.An order of injunction restraining the Defendant, its servants, employees, nominees, assigns, agents and particularly the Xfor guards, from barring access by the Plaintiff's employees, agents or customers to Go-down No A2 in Wing B road on L.R. No. 12715/6242, from re-entering or taking away the Plaintiff's property, or interfering with the Plaintiff's quiet possession, pending the inter partes hearing of the suit and the arbitration
  2. 2.The matter referred to arbitration pursuant to Clause 19 of the Lease dated 21st September, 2016 within sixty (60) days from the date of the Ruling
  3. 3.Order 1 granted on condition that the Plaintiff pays the requisite rent and service charge to the Defendant up to and including 1st May, 2019 within sixty (60) days from the date of the Ruling
  4. 4.Each party to bear its own costs

Authorities

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Legislation

  • Arbitration ActSection 7(1)

Cases cited (1)

  • Safaricom Limited vs. Ocean View Beach Hotel Limited & 2 Others
    (2010) eKLR
Jurisdiction invoked
Section 7(1) of the Arbitration Act, allowing the High Court to grant interim measures of protection in support of arbitration

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, "Tihan Limited v Sohan Singh Josh & Sons Limited [2019] KEELC 3177 (KLR)", Case Analysis (2019). Notice of Motion dated 20th March, 2018 (suit number not stated in the judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/3177/eng@2019-05-24

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