TROY MEDICARE PHARMACY LIMITED & 10 others v NISHAPA INVESTMENTS LIMITED & 4 others
The bottom line
#A Nairobi court refused to reopen a lease dispute it had already sent to arbitration, confirming that parties must honour arbitration agreements.
What this practically means
#Executive summary
#Key legal issues
#Functus officio
The application violated the functus officio principle because the court had, in its ruling of 13th December 2023, already referred the matter to arbitration and issued interim measures under section 7(1) of the Arbitration Act
The orders sought to be lifted flowed from the court's own ruling of 13th December 2023. Once that decision was given it was final and conclusive and could not be revoked or varied by the decision-maker. The Plaintiff, if dissatisfied, had to seek review or appeal. The application, though framed as review, was an invitation to the court to sit on appeal against its own ruling, which the doctrine of functus officio forbids.
Whether the arbitration agreement is inoperative
The arbitration agreement was not rendered inoperative; the dispute is about termination of the lease, which is arbitrable
The Plaintiff merely relabelled 'unlawful eviction' as 'unlawful termination of the lease' to bring the dispute under Part XI of the Land Act. The eviction was incidental to the termination of the lease, and the arbitral tribunal, not the court, must determine whether the termination was lawful. Objections to the validity of the arbitration agreement must be raised before the tribunal under section 17 of the Arbitration Act, which confers competence on the tribunal to rule on its own jurisdiction.
Limited court intervention in arbitration
Courts may intervene in arbitration only in circumstances expressly permitted by the Arbitration Act, reflecting party autonomy
Section 10 of the Arbitration Act restricts judicial intervention to matters provided for by the Act, typifying party autonomy. The Supreme Court in Nyutu Agrovet affirmed that parties who freely choose arbitration to avoid long, tedious and expensive litigation must honour their agreement and embrace its consequences. The Act incorporates UNCITRAL Model Law principles of finality, limited intervention, severability and Kompetenz/Kompetenz.
Legal principles established
#- A court that has delivered a ruling referring a matter to arbitration is functus officio and cannot vary or revoke that decision on a subsequent application
- Under section 10 of the Arbitration Act, court intervention in matters governed by the Act is limited only to circumstances expressly permitted by the Act
- An arbitration clause should be construed on the presumption that parties intended all disputes arising out of their relationship to be decided by the same tribunal
- Under the doctrine of Kompetenz/Kompetenz, an arbitral tribunal can rule on both the validity of the arbitral clause and the underlying contract
Court orders
#- 1.The Plaintiff's Notice of Motion dated 18th December 2023 is dismissed
- 2.Costs of the application awarded to the Defendants and the 2nd interested party
- 3.The court file to be marked as closed
- Jurisdiction invoked
- Arbitration Act, 1995 (Sections 6(1)(a), 10, 17) and Civil Procedure Act (Sections 1A, 1B & 3A), Order 11 Rule 3(1)(d) and Order 40 Rules 1 and 2 of the Civil Procedure Rules, Article 50(1) of the Constitution
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "TROY MEDICARE PHARMACY LIMITED & 10 others v NISHAPA INVESTMENTS LIMITED & 4 others", Case Analysis (2024). Not stated in excerpt (ruling on Plaintiff's Notice of Motion dated 18th December 2023). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/4401/eng@2024-05-23
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.