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ELCDismissedNot stated in the judgment (plaint dated 22/7/2019; notice of motion dated 22/7/2019)· [2020] KEELC 2249 (KLR)

Jerald Lee Cooper & another v Patanisho Educational Centre Limited [2020] KEELC 2249 (KLR)

Environment and Land Court
27 May 2020
BEB M Eboso
1,762 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~7 min to read original · ~4 min brief

The bottom line

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Kenya's Environment and Land Court refused to protect a property buyer because he wasn't a party to the arbitration agreement covering the dispute.

What this practically means

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Executive summary

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The plaintiffs sued the defendant, the registered lessee of the suit property in Kayole, Nairobi, seeking declarations that the defendant was bound by an agreement for sale dated 16/3/2018 with the 1st plaintiff, a set-off of rent against the purchase price, prohibitory and mandatory injunctions (the latter compelling referral of disputes to arbitration), damages, costs and interest. Together with the plaint they filed a notice of motion dated 22/7/2019 seeking interim injunctions restraining the defendant from interfering with the 2nd plaintiff's quiet possession, terminating the sale agreement or evicting the 2nd plaintiff, pending initiation, adoption and conclusion of intended arbitration proceedings. The defendant opposed, contending the 2nd plaintiff was not privy to the contract and had defaulted on rent, and that the consent to transfer had not issued owing to unresolved title issues in the area handled by the Nairobi City County Government. The court identified a single issue: whether the plaintiffs had met the criteria for an interim injunction pending arbitration under Section 7 of the Arbitration Act. Applying the Safaricom v Ocean View Beach Hotel criteria, the court held that the arbitration agreement was between the 1st plaintiff and the defendant only; the 2nd plaintiff, a stranger to it, had no locus to invoke Section 7, and the joint application therefore failed the existence-of-arbitration-agreement requirement. The application was rejected with costs to the plaintiffs (i.e. the plaintiffs ordered to bear the costs of the application).

Key legal issues

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01

Whether an interim measure of protection under Section 7 of the Arbitration Act could issue to the two plaintiffs jointly

Holding

No - the 2nd plaintiff was not a party to the arbitration agreement dated 16/3/2018 and therefore cannot enforce it or invoke Section 7; the joint application fails the first criterion of existence of an arbitration agreement

Reasoning

The court applied the Safaricom v Ocean View Beach Hotel criteria for interim measures under Section 7. The arbitration agreement was between the 1st plaintiff and the defendant only. Because the plaintiffs sued jointly and sought the relief jointly, granting it would confer a Section 7 benefit on a stranger to the arbitration agreement, the 2nd plaintiff. On that ground alone the application was rejected.

p. 3

Legal principles established

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  • A party who is not privy to an arbitration agreement has no locus to invoke the court's jurisdiction under Section 7 of the Arbitration Act for interim measures, and cannot be granted relief under that section on a joint suit with a party to the agreement
  • The court's jurisdiction under Section 7 of the Arbitration Act is exercised on the principles in Safaricom Limited v Ocean View Beach Hotel Limited, beginning with the existence of an arbitration agreement

Court orders

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  1. 1.The plaintiffs' notice of motion dated 22/7/2019 is found to be unmerited and is rejected
  2. 2.The plaintiffs shall bear the costs of the application

Authorities

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Legislation

  • Arbitration ActSection 7

Cases cited (6)

  • Safaricom Limited v Ocean View Beach Hotel Limited & 2 others
    [2010] eKLR
  • Kenya Oil Co Ltd v Kenya Pipeline
    [2010] eKLR
  • Prof Lawrence Gumbe & another v Honourable Mwai Kibaki & others
    High Court Miscellaneous No 1025 of 2004
  • Nyutu Agrovet Limited v Airtel Networks Limited
    [2015] eKLR
  • Housing Finance Co of Kenya Ltd v Njuguna
  • National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & another
    [2001] eKLR
Jurisdiction invoked
Section 7 of the Arbitration Act (interim measures by court), in a suit filed in the Environment and Land Court

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, "Jerald Lee Cooper & another v Patanisho Educational Centre Limited [2020] KEELC 2249 (KLR)", Case Analysis (2020). Not stated in the judgment (plaint dated 22/7/2019; notice of motion dated 22/7/2019). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/2249/eng@2020-05-27

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