Dartstar Limited v Kilifi Boatyard Limited [2022] KEELC 1613 (KLR)
The bottom line
#A Kenyan court refused to overturn an arbitration decision over a lease dispute, confirming that land arbitration awards stand unless proven illegal or immoral.
What this practically means
#Executive summary
#Key legal issues
#Jurisdiction of the Environment and Land Court to entertain setting-aside applications under section 35 of the Arbitration Act
The ELC, a court of equal status under Article 162(2)(b), has jurisdiction over applications from arbitral awards whose subject matter falls within section 13 of the Environment and Land Court Act
The ELRC has been held to have such jurisdiction (Godfrey Mwampembwa v Nation Media Group), since the Arbitration Act predates courts of equal status and could not have intended to exclude them. The ELC is established under Article 162(2)(b) and section 4 of its Act, with jurisdiction over disputes relating to land, leases and contracts granting enforceable interests in land. The arbitration here concerned a lease over land, so the ELC has jurisdiction.
Whether the subject matter of the dispute was capable of settlement by arbitration
A dispute on renewal of a lease is arbitrable under the arbitration clause in the lease agreement
The Applicant contended the TOL was in the name of KPL and a TOL could only be issued by government, but it was not disputed that the TOL was in KPL's name and that Mr. Christopher Wilson identified himself as director of KPL during lease negotiations. The dispute concerned renewal of a lease, which is a proper subject of the ADR mode agreed in the lease, and the Applicant was aware of the arbitration and chose not to participate.
Whether the award conflicts with the public policy of Kenya
The Applicant did not prove the award was immoral, illegal or contrary to basic legal/moral principles
Adopting the Ringera J test in Christ for All Nations v Apollo Insurance, an award is set aside for public policy reasons only if inconsistent with the constitution or laws, inimical to national interest, or contrary to justice and morality. The Applicant knew KPL held the TOL but never raised the issue during arbitration. Section 35 is not an appeal on questions of law, and litigation must come to an end.
Legal principles established
#- Courts with the status of the High Court established under Article 162(2) have jurisdiction to hear applications to set aside arbitral awards under section 35 of the Arbitration Act where the dispute falls within their statutory mandate
Court orders
#- 1.The Preliminary Objection on jurisdiction is dismissed, the Court finding it has jurisdiction over applications from arbitral awards involving matters listed under Section 13 of the Environment and Land Court Act
- 2.The Applicant's Chamber Summons dated 31st March 2021 seeking to set aside the award is dismissed
- Jurisdiction invoked
- Article 162(2)(b) of the Constitution and sections 4 and 13 of the Environment and Land Court Act, 2011
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Dartstar Limited v Kilifi Boatyard Limited [2022] KEELC 1613 (KLR)", Case Analysis (2022). Chamber Summons dated 31st March 2021 (arising from award of Arbitrator Klaus Von Mitzlaff dated 2/03/2021). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/1613/eng@2022-02-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.