Muhamed v Deltar M.N. Properties Limited (Cause E1018 of 2023) [2025] KEELRC 1692 (KLR)
The bottom line
#A Kenyan employment court ruled that an unfair termination claim can go to court even when the employment contract contains an arbitration clause.
What this practically means
#Executive summary
#Key legal issues
#Whether the dispute fell within the scope of the arbitration clause (clause 21)
It did not; the Claimant's action for unfair termination and violation of fair labour practices went beyond interpretation of contract terms, so the arbitration clause was not triggered.
The arbitration clause covered disputes about the interpretation, rights, obligations and/or implementation of the contract's provisions. The gravamen of the Claimant's suit was unfair termination and violation of rights to fair labour practices under the Constitution and the Employment Act. Although clause 10 dealt with termination on notice, her assertions required examination of legal breaches, not mere contract interpretation. She therefore did not breach the arbitration clause by filing suit.
The desirability of alternative dispute resolution
ADR is desirable before invoking the Court's jurisdiction, and the Court may refer a dispute to ADR on its own motion, but no reference was made here.
The Court noted obiter that attempting ADR before invoking the Court's jurisdiction is always desirable, and that it can even refer a dispute to ADR fora on its own motion. However, having found the dispute outside the arbitration clause, the Court did not exercise that power and dismissed the application.
Legal principles established
#- A party does not breach an arbitration clause by going to court where the dispute raised extends beyond the interpretation, rights, obligations or implementation of the contract and requires examination of legal breaches (such as unfair termination and constitutional/statutory violations).
- Courts encourage alternative dispute resolution, and may even refer disputes to ADR fora on their own motion.
Court orders
#- 1.The Summons dated 18 January 2024 is dismissed with costs in the cause.
- Jurisdiction invoked
- Original employment and labour relations jurisdiction; the application was brought under the Arbitration Act and the contract's arbitration clause (clause 21)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Muhamed v Deltar M.N. Properties Limited (Cause E1018 of 2023) [2025] KEELRC 1692 (KLR)", Case Analysis (2025). Chamber Summons dated 18 January 2024 (Cause number not stated in the judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1692/eng@2025-06-12
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.