Lake Naivasha Crescent Camp Limited v Wagiciengo Holdings Limited & another; Bark & Associates Limited Company & another (Intended Defendant) (Environment & Land Case E38 of 2023) [2024] KEELC 352 (KLR)
The bottom line
#A Kenyan court refused to add new parties to a lease dispute heading for arbitration, but let the tenant park disputed rent in a neutral joint account.
What this practically means
#Executive summary
#Key legal issues
#Joinder of intended defendants under Order 1 Rule 10(2)
Application for joinder dismissed; the intended parties were not added.
The court held that the suit is pending arbitration and adding the purchasers at that stage would change the character of the case, which was between the plaintiff and the original defendants under the lease. The court found no evidence that ownership had changed hands and held it could not add parties to a suit whose substance was concluded upon the grant of the interim measure under Section 7 of the Arbitration Act.
Deposit of rent arrears and future rent pending arbitration
Allowed: arrears of Ksh.1,500,000 and future rent to be deposited in a joint interest-earning account of both parties' advocates within 30 days, failing which the interim protection lapses.
The court found that ownership of the leased premises is contested and unclear, so there is a threat to the subject matter. The plaintiff's apprehension had merit and it met the prerequisites for an interim measure of protection under Section 7 of the Arbitration Act, guided by the Portlink principles. Deposit of rent into a neutral joint account balances the competing claims pending arbitration.
Legal principles established
#- Once the court exercises its jurisdiction under Section 7 of the Arbitration Act by granting or declining an interim measure, the substance of the proceedings before the court is concluded save for the progress of the arbitration.
- It is not incompatible with an arbitration agreement for a party to request an interim measure of protection from the High Court before or during arbitral proceedings.
- In an application for interim measure of protection the court considers: existence of an arbitration agreement; whether the subject matter is under threat; the appropriate measure after assessing merits; and the period of the measure so as not to encroach on the tribunal's decision-making power.
Court orders
#- 1.The application dated 6th June 2023 (joinder) is dismissed; the arbitration to proceed with the original parties
- 2.The application dated 19th October 2023 is allowed in terms of prayer 5
- 3.The Plaintiff to deposit all rent arrears of Ksh.1,500,000/= and all future rent as contemplated in the Lease Agreement dated 2nd December 2011 into a joint interest-earning account in the names of the advocates for both parties pending the outcome of the arbitration proceedings within 30 days from the date of the ruling
- 4.Failure to comply, the orders of interim protection to lapse automatically
- 5.Interim measure of protection granted pending the hearing and determination of the arbitration proceedings
- 6.Costs of the application to abide the outcome of the arbitration
- Jurisdiction invoked
- Arbitration Act, 1995, Sections 6 and 7; Civil Procedure Rules Order 1 Rules 3 and 10(2)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Lake Naivasha Crescent Camp Limited v Wagiciengo Holdings Limited & another; Bark & Associates Limited Company & another (Intended Defendant) (Environment & Land Case E38 of 2023) [2024] KEELC 352 (KLR)", Case Analysis (2024). Not stated in the judgment (two Notices of Motion dated 6th June 2023 and 19th October 2023). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/352/eng@2024-01-31
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.