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ELCPartially Allowed· [2020] KEELC 989 (KLR)

Jacob Cheruiyot & another v Joseph Gitau Mwangi & 3 others [2020] KEELC 989 (KLR)

High Court of Kenya (land and environment matter; court not expressly named in the judgment)
8 October 2020
SOS. Okong'o
4,799 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~19 min to read original · ~4 min brief

The bottom line

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The High Court adopted an arbitration award as judgment and dismissed a late challenge, confirming Kenya's strict three-month deadline for setting aside awards.

What this practically means

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Executive summary

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The plaintiffs sued the defendants over a sale agreement dated 13th November, 2014 for House No. M-29, Hazina Estate, Nairobi, seeking specific performance, an injunction against distress for rent, and general damages. Pursuant to the arbitration clause in the agreement, the court stayed the suit by consent on 24th November, 2016 and referred the dispute to Justus M. Munyithya as sole arbitrator, who delivered a final award on 13th November, 2018. The arbitrator found the defendants in breach for failing to release completion documents, held the purported rescission null and void, found the plaintiffs were not tenants at will liable to rent, ordered specific performance through an escrow mechanism, and directed the plaintiffs to pay service charge. The plaintiffs applied to have the award filed, adopted and entered as judgment, while the defendants applied to set it aside as impossible to implement and as exceeding the reference. The court held the defendants' application was incompetent, having been filed on 7th March, 2019, outside the three-month window in section 35(3) of the Arbitration Act. On the merits, the court found no proof of any section 35 ground, held that impossibility of implementation is an enforcement rather than a setting-aside issue, and noted the arbitrator's liberty-to-apply order. The defendants' application was dismissed; the award was recognised and adopted as a judgment of the court, with a decree to issue upon filing of the original or certified award. The plaintiffs were awarded the costs of both applications.

Key legal issues

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01

Timeliness of the application to set aside the award

Holding

The defendants' application filed on 7th March, 2019 against an award delivered on 13th November, 2018 was out of time under section 35(3) and therefore incompetent

Reasoning

Section 35(3) requires a setting-aside application to be made within 3 months of receipt of the award. The deadline was 13th February, 2019 but the application was filed on 7th March, 2019. The defendants did not respond to this objection despite it being expressly raised by the plaintiffs, so the application was incompetent.

p. 5
02

Scope of the reference and alleged excess of mandate

Holding

The arbitrator dealt with all issues referred and did not exceed the terms of reference; the arbitration clause did not limit the disputes referable

Reasoning

The dispute was referred pursuant to the arbitration clause in the sale agreement, which set no limits on the nature or scope of arbitrable disputes; scope was left to the parties' pleadings and statements of issues. The arbitrator determined both parties' claims and issues, found the defendants in breach, and framed a completion mechanism. No matters beyond the reference were decided.

p. 5
03

Alleged impossibility of implementing the award

Holding

Impossibility of implementation is not a ground for setting aside an award under section 35; it is properly an enforcement question arising only after adoption

Reasoning

The defendants argued the award was unworkable because the property was registered in the name of NSSF and timelines were impractical. The court held the court cannot determine enforceability before adoption, and that the arbitrator's final order granting liberty to apply allows parties to seek directions on timelines and compliance issues after adoption.

p. 5
04

Recognition and adoption of the award

Holding

Having established no section 35 or section 37 grounds, the defendants gave no basis for the court to decline recognition and enforcement; the plaintiffs' application for adoption succeeded

Reasoning

Section 37 sets out the grounds on which a court may decline to recognise and enforce an arbitral award, which largely mirror the section 35 setting-aside grounds. Since none were established, the award complied with the statutory requirements and was adopted as a judgment of the court, with a decree to issue in terms thereof.

p. 5

Legal principles established

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  • An application to set aside an arbitral award under section 35(3) of the Arbitration Act must be made within 3 months of receipt of the award; an application filed out of time without leave is incompetent
  • Impossibility of implementing an arbitral award is not a ground for setting it aside; it is an enforcement issue to be addressed after adoption of the award
  • The party seeking to set aside an award bears the burden of proving the grounds in section 35, and the court's intervention is limited by section 10 of the Arbitration Act

Court orders

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  1. 1.The 1st and 2nd defendants' application dated 25th February, 2019 is dismissed
  2. 2.The arbitral award by Justus M. Munyithya delivered on 13th November, 2018 is recognised and adopted as a judgment of the court
  3. 3.A decree shall issue accordingly in terms thereof for enforcement by the court
  4. 4.Before a decree is issued, the plaintiffs shall file in court an original arbitral award dated 13th November, 2018 or a copy certified by the arbitrator
  5. 5.The plaintiffs shall have the costs of the defendants' application dated 25th February, 2019 and of their application dated 12th February, 2019

Authorities

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Legislation

  • Arbitration Actsections 10, 34, 35(1), (2)(a)(ii), (iv), (4), (3), 36(1) and (2), 37
  • Civil Procedure Actsection 59, section 3A
  • Civil Procedure RulesOrder 46 Rules 14, 16(1)(b), (3), 17, 18(1)(a), (2) and (3); Order 51 Rule 1
  • Law Society Conditions of Sale (1989 Edition)Condition 6(2)(c)
  • Arbitration Act Cap 4 of 1995arbitration clause in the sale agreement

Cases cited (3)

  • Nyutu Agrovet Limited v Airtel Networks Limited
    [2015] eKLR
  • Heva Fund LLP v Katchy Kollections Limited
    [2018] eKLR
  • Christ for All Nations v Apollo Insurance Co. Ltd.
    [2002] 2 E.A. 366
Jurisdiction invoked
Sections 35, 36 and 37 of the Arbitration Act, 1995 and section 59 of the Civil Procedure Act

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, "Jacob Cheruiyot & another v Joseph Gitau Mwangi & 3 others [2020] KEELC 989 (KLR)", Case Analysis (2020). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/989/eng@2020-10-08

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