Binsbergen v Engelmann (Environment and Land Case Civil Suit E159 of 2022) [2022] KEELC 3015 (KLR)
The bottom line
#A Kenyan court confirmed that a lease's arbitration clause survives termination and protected a tenant from eviction pending arbitration.
What this practically means
#Executive summary
#Key legal issues
#Whether the arbitration clause survives termination of the tenancy agreement
Yes - the arbitration clause survives termination and either party may still invoke it.
The court found it common ground that the parties executed a tenancy agreement containing clause 9 embodying arbitration. The defendant issued a breach notice and termination notice, raising the question whether the clause survived. The court held that the clause, freely and voluntarily agreed, survives termination, so either party may still implead and rely on it despite the termination notice.
Whether allegations of breach of the tenancy agreement fall to be determined by the arbitrator
Yes - issues of breach, its extent and culpability are for the arbitrator, not the court.
Applying the competence-competence principle as stated in Safaricom Ltd v Ocean View Beach Hotel, the court held that questions of default in rent payment, structural alterations and general breach of the tenancy agreement must be canvassed before the arbitrator. It was accordingly not open to the defendant to issue a termination notice after being notified of the plaintiff's intention to refer the dispute to arbitration.
Whether the Applicant is entitled to interim measures of protection pending arbitration
Yes - the Applicant met the conditions for interim protection under section 7 of the Arbitration Act.
Relying on the four essentials set out in Elite Earthmovers Limited v Machakos County Government - existence of an arbitration agreement, threat to the subject matter, the appropriate measure, and the period of the measure - the court found that the defendant's threatened termination and eviction would defeat the substratum of the intended arbitral proceedings, warranting an injunction preserving quiet possession pending arbitration, subject to commencement of arbitration within 90 days.
Legal principles established
#- An arbitration clause embodied in a contract survives the termination of the contract and either party may still invoke it.
- Where an arbitration agreement exists, disputes as to breach of the contract are for the arbitrator, and a party may not terminate the contract once notified of an intention to refer the dispute to arbitration.
- The essentials for granting interim measures of protection pending arbitration are: existence of an arbitration agreement; threat to the subject matter; the appropriate measure in the special circumstances; and the period for which the measure should be granted.
Court orders
#- 1.Application allowed in terms of prayer 3 - temporary injunction restraining the Respondent from interfering with the Applicant's quiet possession of L R No 7785/85 pending the hearing and determination of the arbitral proceedings
- 2.Interim measures of protection to subsist pending hearing and determination of the arbitral proceedings, conditional on the intended arbitral proceedings being commenced within Ninety (90) days from the date of the order
- 3.Costs of the Application to abide the outcome of the arbitral proceedings
- Jurisdiction invoked
- Section 7 of the Arbitration Act, 1995 (as read with rule 2 of the Arbitration Rules, 1997) - interim measures of protection pending arbitration
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Binsbergen v Engelmann (Environment and Land Case Civil Suit E159 of 2022) [2022] KEELC 3015 (KLR)", Case Analysis (2022). Notice of Motion Application dated May 4, 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/3015/eng@2022-06-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.