Rhino Valley Lodge Limited v Kenya Wildlife Services [2020] KEELC 1471 (KLR)
The bottom line
#A Kenyan court protected a tenant from eviction pending arbitration, but only because the tenant agreed to deposit its admitted rent arrears.
What this practically means
#Executive summary
#Key legal issues
#Existence of an arbitration agreement
The existence of an arbitration agreement was common ground and the first guiding principle was satisfied
Both parties agreed that the lease contained an arbitration clause. The respondent argued no dispute existed to refer, but the court held that whether a dispute exists is for the arbitrator once proceedings commence, not for the court at the interim measures stage. The court therefore proceeded on the basis that a valid arbitration agreement existed and moved to the remaining principles.
Whether the subject matter of arbitration is under threat
The threatened eviction and lease termination rendered the subject matter under threat
The applicant demonstrated that the respondent had given notice to terminate the lease and threatened to take over possession without following the dispute resolution mechanism. The court accepted that eviction would severely prejudice the applicant and render the arbitration nugatory, concluding that by virtue of the threatened eviction the subject matter was indeed under threat.
Appropriate measure of protection on assessment of the merits
Interim protection granted on terms: deposit of admitted rent arrears and commencement of mediation/arbitration within 60 days
Although rent arrears were admitted and undisputed, the court balanced the interests of both parties rather than dismissing the application. It allowed the application in terms of prayers (a) to (e) but conditioned the interim protection on the applicant depositing the admitted rental dues in a joint interest-earning account and on commencement of mediation and, failing that, arbitration within 60 days, failing which the protection lapses automatically.
Preliminary objection on locus standi based on unstamped and unregistered lease
Not determined; the court declined to enter the merits at the interim stage
The respondent objected that the lease was never stamped or registered, relying on W.J. Blakeman Limited v Services Ltd to argue the lease and arbitration clause were void and the applicant lacked locus standi. The court did not rule on the objection, holding instead that it was not desirable to go into the merits of the dispute and that the issue of whether a dispute exists is for the arbitrator.
Legal principles established
#- It is not incompatible with an arbitration agreement for a party to request interim measures of protection from the High Court before or during arbitral proceedings
- In determining an application for interim measures under Section 7, the court's role is restricted and it should not go into the merits of the dispute
- Whether a dispute exists to be referred to arbitration is an issue for the arbitrator, not the court at the interim stage
- Interim protection may be granted on terms to balance the interests of both parties, such as conditional deposit of admitted rent arrears
Court orders
#- 1.Application allowed in terms of prayers (a), (b), (c), (d) and (e) - conservatory/interim measures of protection against eviction from the 12.3030 ha portion of LR. No. 24360 and against termination of the lease dated 30th September 2015 pending arbitration
- 2.Applicant to deposit rental dues of Kshs.9,764,774/= in a joint interest-earning account in the names of advocates for both parties within 60 days from the date of the ruling, pending the outcome of the arbitration
- 3.Mediation and, failing mediation, arbitration in terms of the dispute resolution mechanism to commence within 60 days from the date of the ruling
- 4.Failure to comply with the deposit and commencement conditions, the orders of interim protection to lapse automatically
- 5.Costs of the application to abide the outcome of the arbitration
- Jurisdiction invoked
- Section 7(1) of the Arbitration Act, 1995; Sections 1A, 1B, 3A and 63(c) and Order 40 Rules 1, 2 & 4 of the Civil Procedure Act; Articles 25(c), 48 and 50(1) of the Constitution of Kenya
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Rhino Valley Lodge Limited v Kenya Wildlife Services [2020] KEELC 1471 (KLR)", Case Analysis (2020). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/1471/eng@2020-07-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.