Sheffield Steel Systems Limited v Okumu (Cause E489 of 2023) [2024] KEELRC 2034 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Whether an arbitration clause renders the court bereft of jurisdiction such that a Preliminary Objection may dispose of the suit
No. An arbitration agreement does not deny the court jurisdiction; the correct route is a stay application under Section 6(1), which must be made at the time of entering appearance or before acknowledging the claim. The Respondent filed a Response, witness statement and documents before raising the objection, and made no referral application.
The court applied the definition of a Preliminary Objection in Mukisa Biscuit and the Court of Appeal decisions in Agip and Eunice Soko Mlagui holding that a stay application cannot be disguised as a preliminary point of law. Section 6(1) fixes a strict timing requirement; filing a defence is an acknowledgement of claim. The Respondent breached the timelines and invoked a procedure unknown in law, so the objection was ill advised and overruled.
Legal principles established
#- A Preliminary Objection cannot be used as a disguise for an application for stay of proceedings pending arbitration under Section 6 of the Arbitration Act
- Filing a defence constitutes acknowledgement of a claim within the meaning of Section 6(1) of the Arbitration Act, and a party must seek referral to arbitration at the time of entering appearance or before such acknowledgement
- An arbitration agreement does not oust a court's jurisdiction; it merely affords a defence in the nature of a stay application
Court orders
#- 1.The Respondent's Preliminary Objection dated 12th February 2024 is overruled
- 2.Costs of the Preliminary Objection to the Claimant, costs in the cause
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over a Memorandum of Claim; ruling on a Notice of Preliminary Objection invoking Section 6(1) of the Arbitration Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Sheffield Steel Systems Limited v Okumu (Cause E489 of 2023) [2024] KEELRC 2034 (KLR)", Case Analysis (2024). Cause No E489 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2034/eng@2024-07-25
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.