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ELRCDismissedNot stated in the judgment as provided· [2023] KEELRC 1476 (KLR)

Muchura v Safari Collection Limited (Petition E216 of 2022) [2023] KEELRC 1476 (KLR)

Employment and Labour Relations Court of Kenya
8 June 2023
1,886 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~8 min to read original · ~4 min brief

The bottom line

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A Kenyan employment contract's arbitration clause cannot force constitutional rights claims into arbitration; the Employment and Labour Relations Court kept the case.

What this practically means

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Executive summary

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The Petitioner, a former employee whose contract of employment dated July 30, 2021 was terminated on September 23, 2022, filed a petition alleging, among other things, violations of rights in the Bill of Rights, including freedom of expression and freedom from torture and degrading treatment under articles 29 and 33 of the Constitution. The Respondent applied on December 30, 2022 for a stay of proceedings and referral of the dispute to arbitration under section 6 of the Arbitration Act, invoking clause 17 of the employment contract, which required disputes first to be mediated and, failing resolution, referred to a single arbitrator. The court held that although party autonomy requires courts to be hesitant in assuming jurisdiction over disputes earmarked for arbitration, an arbitration agreement is inoperative where the dispute does not fall within its scope or where it is incapable of being performed. Following the Supreme Court's decision in Bia Tosha Distributors Limited v Kenya Breweries Limited, the court held that breaches of the Constitution fall outside arbitrators' jurisdiction, and that article 165(2)(b) confers exclusive jurisdiction over Bill of Rights claims on the High Court and courts of equal status, including the ELRC in employment contexts. Article 159(1)(c) on ADR does not dilute that jurisdiction. The Gulf Energy decision was not followed as it conflicted with the binding Supreme Court position under article 163(7). Splitting the single transaction's issues between court and arbitration would be undesirable and inconvenient to the efficient administration of justice. The application dated December 30, 2022 was declined, with costs of the application to abide the outcome of the case.

Key legal issues

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01

Whether an arbitration clause in an employment contract compels referral of a petition alleging constitutional rights violations

Holding

No. Claims alleging violation of rights in the Bill of Rights render the arbitration agreement inoperative at least in respect of those constitutional issues, and fall within the court's jurisdiction under article 165(2)(b) as exercised by the ELRC in employment disputes.

Reasoning

The court, following the Supreme Court in Bia Tosha, held that arbitrators' jurisdiction is founded on party autonomy and cannot extend to breaches of the Constitution. Rights such as freedom of expression and freedom from torture and degrading treatment under articles 29 and 33 can only be enforced by the High Court or courts of equal status; where such violations arise in an employment relationship, the ELRC is empowered. The arbitration clause is inoperative for these claims.

p. 4
02

Whether the entire dispute should be stayed and referred to arbitration notwithstanding the constitutional claims

Holding

No. Isolating and pigeonholing constitutional claims from contractual claims would be highly undesirable and inconvenient to the efficient administration of justice; as all issues arise from one transaction, the court should determine all of them.

Reasoning

While the Respondent may insist on arbitrating issues unrelated to constitutional violations, separating the claims would be undesirable and inconvenient. Since all issues arise from a single employment transaction and the court has jurisdiction over the constitutional questions, judicial efficiency favours the court determining the whole dispute.

p. 4
03

The effect of conflicting superior-court authority (Gulf Energy v Rubis versus Bia Tosha)

Holding

The court is bound by the Supreme Court's decision in Bia Tosha under article 163(7) of the Constitution, and relied on it in preference to the High Court's Gulf Energy decision.

Reasoning

The judge noted that Gulf Energy appears to suggest disputes raising constitutional questions must go to arbitration, a view inconsistent with the Supreme Court in Bia Tosha. Under article 163(7), Supreme Court pronouncements bind all courts, so the Bia Tosha position prevails. The Court of Appeal decision in Kenya Breweries v Bia Tosha relied on by the Respondent had been set aside by the Supreme Court.

p. 4

Legal principles established

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  • An arbitration agreement purporting to refer alleged Bill of Rights violations to arbitration is rendered inoperative to the extent of those constitutional claims, which fall within the exclusive jurisdiction of the High Court and courts of equal status under article 165(2)(b) of the Constitution
  • Article 159(1)(c) of the Constitution (fostering ADR) does not dilute the exclusive original jurisdiction to adjudicate on Bill of Rights disputes
  • Where issues arise from one transaction and the court has jurisdiction over the constitutional issues, it is sensible that the court determines all of them rather than splitting claims between court and arbitration

Court orders

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  1. 1.The application dated December 30, 2022 is declined
  2. 2.Costs of the application shall abide the outcome of the case

Authorities

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Legislation

  • Arbitration Actsection 6
  • Constitution of Kenya, 2010article 159(1)(c)
  • Constitution of Kenya, 2010article 165(2)(b)
  • Constitution of Kenya, 2010article 163(7)
  • Constitution of Kenya, 2010articles 29 and 33
  • Employment and Labour Relations Court (Procedure) RulesRule 28(3)

Cases cited (5)

  • Bia Tosha Distributors Limited v Kenya Breweries Limited & 6 others (Petition 15 of 2020) [2023] KESC 14 (KLR)
    [2023] KESC 14 (KLR)
  • Lipisha Consortium Limited & another v Safaricom Limited [2015] eKLR
    [2015] eKLR
  • Gulf Energy Limited v Rubis Energy Kenya PLC [2021] eKLR
    [2021] eKLR
  • Pamoja Women Development Programme & 3 others v Jackson Kihumbu Wangombe & another [2016] eKLR
    [2016] eKLR
  • Kenya Breweries Limited & another v Bia Tosha Limited & 5 others [2020] eKLR
    [2020] eKLR
Jurisdiction invoked
Article 165(2)(b) of the Constitution (enforcement of the Bill of Rights) as exercised by the Employment and Labour Relations Court where the violation arises in an employment context; Article 162(2) ELRC jurisdiction

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, "Muchura v Safari Collection Limited (Petition E216 of 2022) [2023] KEELRC 1476 (KLR)", Case Analysis (2023). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1476/eng@2023-06-08

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