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ELCDismissedELC Application dated 10th March 2021· [2022] KEELC 1138 (KLR)

Jitihada Furniture Limited &2 others v Asad Anwar [2022] KEELC 1138 (KLR)

Environment and Land Court
23 February 2022
LMLucy N. Mbugua
2,065 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Nairobi court refused to overturn an arbitration award over a building on leased land, confirming that Kenyan courts rarely interfere with agreed arbitration outcomes.

What this practically means

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Executive summary

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The Plaintiff applied by notice of motion dated 10th March 2021 for stay of enforcement and setting aside of an arbitral award published on 14th December 2020, contending that the arbitrator exceeded jurisdiction by determining issues outside the reference - including an order that the Plaintiff hand over the suit property upon termination of the renewed lease - and by addressing unpleaded issues. The dispute arose from a 2008 ten-year lease of LR No. 209/289/8 with a renewal clause; the Plaintiff built a five storey business complex financed by a Kshs.145,000,000 loan instead of the agreed semi-permanent structures, and sought renewal of the lease. The Defendant opposed, arguing the tribunal merely restated the lease agreement, that the Plaintiff came with unclean hands, and that the application was time barred under Section 35 of the Arbitration Act; the Defendant himself also sought setting aside on public policy and other grounds. Applying Section 35(2)(a)(iv) and the arbitral clause-is-critical principle from Synergy Industrial Credit v Cape Holdings, the court found the award squarely within the reference: the five storey building was the central issue, the parties had to live with it under the maxim quicquid plantatur solo solo cedit, and the arbitrator merely stated the inevitable expiry of the renewed lease without rewriting the contract. The court declined to entertain the Defendant's grounds for setting aside as he had not moved the court appropriately and was time barred. The application was dismissed with each party bearing their own costs, the court noting the Respondent had likewise sought setting aside.

Key legal issues

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01

Whether the arbitral award dealt with matters beyond the scope of the reference to arbitration under Section 35(2)(a)(iv) of the Arbitration Act

Holding

The Arbitrator did not exceed jurisdiction; the award addressed the five storey building complex and the lease renewal, both arising from Clause 3(f) of the lease agreement which was the terms of reference

Reasoning

The court examined paragraph 90 of the award, noting the Arbitrator extracted Clause 3(f) of the lease verbatim. The building complex erected on the premises was the central issue and was within the reference. The Arbitrator merely stated the inevitable consequence that the extended lease of 10 years was not perpetual, and the award was made with certainty of execution. Setting aside would create a conundrum and rewrite nothing.

p. 3
02

Whether the Respondent's own grounds for setting aside the award could be determined

Holding

The court declined to pronounce on the Respondent's grounds for setting aside the award as he had not moved the court appropriately and was time barred

Reasoning

The Respondent raised grounds in the replying affidavit including public policy, separate legal entity and incomplete expert evidence. The court held that these could not be entertained because the Respondent had not filed an appropriate application under the Arbitration Act and any such application was now time barred under Section 35.

p. 3

Legal principles established

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  • In determining whether an arbitral tribunal has dealt with a dispute beyond the terms of the reference, the arbitral clause or agreement is critical
  • Where parties agree on arbitration as their dispute resolution forum, courts are obliged to give effect to that agreement
  • The maxim quicquid plantatur solo solo cedit - what is affixed to the land is part of the land

Court orders

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  1. 1.The application dated 10.3.2021 is DISMISSED
  2. 2.Each party bears their own costs of the application
Jurisdiction invoked
Section 35 of the Arbitration Act (application to set aside arbitral award)

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, "Jitihada Furniture Limited &2 others v Asad Anwar [2022] KEELC 1138 (KLR)", Case Analysis (2022). ELC Application dated 10th March 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/1138/eng@2022-02-23

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