Anne Muthoni Karanu v La Nyavu Gardens Limited [2020] KEELC 3590 (KLR)
The bottom line
#When a contract requires mediation before arbitration and mediation fails, Kenyan courts will stop the lawsuit and send the dispute to arbitration as agreed.
What this practically means
#Executive summary
#Key legal issues
#Whether to stay proceedings pending arbitration under Section 6 of the Arbitration Act
Stay granted and dispute referred to arbitration since the parties' agreement contained a valid mediation/arbitration clause and mediation had already failed
Clause 10 of the letter of offer required disputes first to be mediated by the presiding Bishop of CITAM and, failing resolution, referred to arbitration. Both parties attempted the mediation and the Bishop declined. The Respondent was not averse to arbitration, preferring only court-annexed mediation, which was not a mechanism the contract contemplated. The court therefore honoured the parties' agreement and stayed the suit, referring the dispute to arbitration with appointment per the contract clause.
Whether the court should direct court-annexed mediation or fix timelines for the award
Both requests declined: the contract did not provide for court-annexed mediation, and setting award timelines would encroach on the arbitrator's discretion
The Respondent proposed court-annexed mediation and timelines for filing the award. The court held that the contractual mechanism was private mediation followed by arbitration; since private mediation had failed, arbitration was the only remaining avenue. It also declined to impose timelines, holding that scheduling the arbitration, including delivery of the award, lies within the arbitrator's own discretion and not the court's.
Legal principles established
#- Where parties have agreed on a dispute-resolution mechanism and mediation has failed, the court should stay proceedings and refer the dispute to arbitration in accordance with the parties' agreement under Section 6 of the Arbitration Act
- A court will not prescribe timelines for an arbitrator to deliver an award, as that is within the arbitrator's discretion
Court orders
#- 1.Proceedings in the suit stayed
- 2.Matter referred to arbitration, with the arbitrator to be appointed in the manner contemplated in the letter of offer dated 17th October 2010
- 3.Applicant to have costs of the application
- Jurisdiction invoked
- Section 6 of the Arbitration Act, 1995
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Anne Muthoni Karanu v La Nyavu Gardens Limited [2020] KEELC 3590 (KLR)", Case Analysis (2020). Notice of Motion dated 3rd April 2014 (ruling). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/3590/eng@2020-02-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.