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ELCDismissedNot stated in judgment· [2024] KEELC 699 (KLR)

Kathenge & another v Shamalla (Environment and Land Appeal E209 of 2023) [2024] KEELC 699 (KLR)

Environment and Land Court
8 February 2024
JOJudy Omange
1,709 words in judgment
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The bottom line

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Kenya's Environment and Land Court dismissed land buyers' bid for an injunction, because their money was refunded and only a calculable interest claim remained for arbitration.

What this practically means

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Executive summary

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By an amended Notice of Motion dated 12th July 2023, the Plaintiffs/Applicants sought injunctions stopping termination of two agreements for sale dated 27th December 2020 over Land Reference No. 2259/519 and 2259/520 (title I.R 117618), and restraining the Defendant from wasting, alienating, selling or transferring the suit properties, first pending the application and then pending arbitration under clause 23.2 of the sale agreements. The Applicants, who claimed to have paid Kshs 14,952,000 and Kshs 9,296,000 respectively, contended that the Defendant transferred the parcels to third parties without consent while the agreements subsisted, and invoked section 7 of the Arbitration Act (and Safaricom v Oceanview Beach Hotel) to urge the court to grant interim protection. The Respondent replied that the agreements were terminated for the Applicants' delay and non-completion, that the Applicants accepted refunds of the principal sums, and that only the question of interest remained for arbitration; she also objected that third parties would be condemned unheard. The court framed a single issue: whether the application met the threshold for injunctive orders. Applying section 7(1) of the Arbitration Act and NCC International AB v Alliance Concrete, it held that interim measures are discretionary, to be granted cautiously and only in the clearest of cases, and that an applicant must show the arbitral outcome would be prejudiced without preservation. The Respondent's uncontroverted evidence showed termination and full refund, leaving only a quantifiable interest claim requiring no protection. The application was dismissed with costs.

Key legal issues

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01

Threshold for interim measures of protection under section 7 of the Arbitration Act

Holding

The Applicants failed to show the arbitration would be prejudiced; the only outstanding issue (interest) is quantifiable and needs no preservation orders, so the application was dismissed.

Reasoning

The court held that agreements with arbitration clauses oust court jurisdiction except under the limited window of section 7(1). An interim measure requires proof that the arbitral outcome would be prejudiced without preservation. The uncontroverted evidence showed the agreements were terminated, principal sums refunded and only interest remained, which an arbitrator can quantify without court intervention. Interim relief is discretionary and reserved for exceptional cases such as grave injustice or likelihood the subject matter will be wasted.

p. 4

Legal principles established

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  • Under section 7 of the Arbitration Act, a party seeking an interim measure of protection must show that without the order the outcome of the arbitration will be prejudiced and the subject matter preserved.
  • Where parties have agreed to arbitration, the court exercises restraint and intervenes only in the clearest of cases, so as not to usurp the arbitral tribunal's role.

Court orders

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  1. 1.The amended Notice of Motion application dated 12th July 2023 is dismissed
  2. 2.Costs of the application awarded to the Respondent

Authorities

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Legislation

  • Arbitration Act, No. 4 of 1995Section 7(1)
  • Civil Procedure ActOrder 40
  • Arbitration RulesRule 2

Cases cited (2)

  • Safaricom Limited v Oceanview Beach Hotel Ltd & 2 others
    [2010] eKLR
  • NCC International AB vs Alliance Concrete Singapore Pte Ltd
    (Supra)
Jurisdiction invoked
Section 7(1) of the Arbitration Act, No. 4 of 1995 (interim measures of protection)

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, "Kathenge & another v Shamalla (Environment and Land Appeal E209 of 2023) [2024] KEELC 699 (KLR)", Case Analysis (2024). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/699/eng@2024-02-08

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