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ELRCDismissedNot stated in judgment· [2022] KEELRC 343 (KLR)

Mathew Ekisa Ekirapa v Oku Kaunya & another [2022] KEELRC 343 (KLR)

Employment and Labour Relations Court
24 March 2022
JKJ. W. Keli
1,675 words in judgment
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The bottom line

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A Kenyan employer lost its chance to send an employment dispute to arbitration by raising it too late, so the court case continued.

What this practically means

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Executive summary

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This ruling of the Employment and Labour Relations Court (J. W. Keli, J) determines a Notice of Motion dated 8th November 2021 by the 1st Respondent seeking a stay of proceedings and referral of the dispute to arbitration on the strength of Clause 9 of the Claimant's employment contract, invoking Section 6(1) of the Arbitration Act, Section 59 of the Civil Procedure Act, Order 46 Rule 1 of the Civil Procedure Rules and Article 159 of the Constitution. The Claimant opposed, contending the application was misconceived, an abuse of process, and that the Applicant had waived the right to arbitrate. The court framed two issues: whether an arbitration clause existed, and whether the application was meritorious. On the first, the court found Clause 9 contained a valid arbitration agreement. On the second, the court held that Section 6(1) requires an application to be made not later than entry of appearance, filing of pleadings or taking any other step in the proceedings. The 1st Respondent's response to the memorandum of claim did not raise the arbitration clause, and the application was filed only after the closure of the Claimant's case; submissions could not cure this. Relying on Charles Njogu Lofty v Bedowin Enterprises Ltd and applying Diocese of Marsabit Registered Trustee v Technotrade Pavilion Ltd, the court held the Applicant forfeited the right to refer the matter to arbitration and dismissed the application with costs to the Claimant. The Wringles Company decision was distinguished as there was no dispute over the validity of the agreement.

Key legal issues

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01

Existence of an arbitration clause

Holding

There was an arbitration clause in the employment contract (Clause 9).

Reasoning

The Applicant annexed the Claimant's employment contract, whose Clause 9 provided that any controversy or claim arising out of or relating to the contract, or the breach thereof, shall be referred to arbitration in accordance with the Arbitration Act. On that documentary basis the court answered the first issue in the affirmative.

p. 2
02

Whether the application satisfied Section 6(1) of the Arbitration Act as to timeliness

Holding

The application was out of time, filed after closure of the Claimant's case, and the Applicant forfeited the right to refer the dispute to arbitration.

Reasoning

Section 6(1) requires an application for stay and reference to arbitration to be made not later than the time of entering appearance, filing pleadings or taking any other step in the proceedings. The 1st Respondent's response to the memorandum of claim did not raise the arbitration clause, and the application was filed only after the closure of the Claimant's case. Submissions cannot cure the absence of a plea in pleadings. Following Diocese of Marsabit Registered Trustee v Technotrade Pavilion Ltd, the Applicant forfeited the right.

p. 3

Legal principles established

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  • A party seeking a stay and referral to arbitration must apply not later than the time of entering appearance, filing pleadings or taking any other step in the proceedings; failing which the right is forfeited.
  • An indolent party who applies late should not be allowed to circumvent the other party's recourse to the judicial process.

Court orders

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  1. 1.The Application dated 8th November 2021 is dismissed.
  2. 2.Costs of the application to the Claimant/Respondent.

Authorities

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Legislation

  • Constitution of KenyaArticle 159 (also Articles 159(2)(c) and 159(2)(d) as cited in the authorities)
  • Arbitration ActSection 6(1); Section 26(1) (identified by the court as an error for 6(1))
  • Civil Procedure ActSection 59
  • Civil Procedure Rules 2010Order 46 Rule 1

Cases cited (3)

  • Wringles Company ( East Africa -vs- Attorney General & 3 others
    (2013) eKLR
  • Charles Njogu lofty -vs Bedowin Enterprises Ltd
    Civil Appeal NO. 253 of 2003
  • Diocese of Marsabit Registered Trustee -vs- Techno trade Pavilion Ltd
    ( 2014) eKLR
Jurisdiction invoked
Article 159 of the Constitution; Section 6(1) of the Arbitration Act (Cap 49); Section 59 of the Civil Procedure Act; Order 46 Rule 1 of the Civil Procedure Rules 2010

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, "Mathew Ekisa Ekirapa v Oku Kaunya & another [2022] KEELRC 343 (KLR)", Case Analysis (2022). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/343/eng@2022-03-24

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