David Kamau Ngure v Total Kenya Limited [2021] KEELRC 413 (KLR)
The bottom line
#A Kenyan court refused to pause an employment case for arbitration because the company never identified the actual dispute or followed the contract's notice steps.
What this practically means
#Executive summary
#Key legal issues
#Whether the dispute between the parties falls within the arbitration clause of the YDMLA
The Applicant failed to prove that the dispute is subject to the arbitration clause; the dispute does not concern the construction, meaning or effect of the Agreement
The arbitration clause covered 'any dispute, difference or question relating to the construction, meaning or effect' of the Agreement. The Applicant did not state what dispute had arisen or who the aggrieved party was. The suit was triggered by a notice to show cause and its consequences, which are not matters of construction of the Agreement. The burden of proving that the dispute falls within the clause lay on the Applicant and was not discharged.
Whether non-compliance with the conditions precedent in the arbitration clause (21 days' written notice) barred reference to arbitration
Non-compliance with the 21 days' notice condition precedent made a reference premature
The clause required an aggrieved party to give written notice of not less than 21 days before appointment of an arbitrator. Neither party had given such notice; indeed it was the Respondent's notice to show cause that triggered the suit. The court therefore held it premature to stay the proceedings and refer the matter to arbitration.
The burden of proof on an application for stay of proceedings under Section 6 of the Arbitration Act
The burden lies on the applicant, who must specify the dispute and its nature
Applying County Government of Kirinyaga v African Banking Corporation Ltd, the court held that the onus of proving that the matters in dispute fall within a valid and subsisting arbitration clause is on the party applying for a stay, and the applicant must specify the dispute and the nature of the dispute. The Applicant here failed to do so.
Legal principles established
#- The onus of proving that matters in dispute fall within a valid and subsisting arbitration clause lies on the party applying for a stay of proceedings, and once discharged the burden shifts to the opposing party to show cause why effect should not be given to the arbitration clause.
- An applicant for a stay under Section 6 of the Arbitration Act must specify the dispute and its nature; a general invocation of an arbitration clause is insufficient.
Court orders
#- 1.The application dated 29th January 2021 seeking a stay of proceedings and referral to arbitration was dismissed
- 2.Costs of the application awarded to the Claimant
- Jurisdiction invoked
- Reference to arbitration and stay of proceedings under Section 6 of the Arbitration Act; the arbitration clause in Article VIII (iv) of the Young Dealer Marketing Licence Agreement; Article 159(2)(c) of the Constitution of Kenya
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "David Kamau Ngure v Total Kenya Limited [2021] KEELRC 413 (KLR)", Case Analysis (2021). Cause No E6462 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/413/eng@2021-11-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.