Registered Trustees of the Management University of Africa Trust v Eskindir Habte Debessay (t/a) and Another
The bottom line
#Contractual negotiation clauses must be followed, but failure to settle does not automatically invalidate the right to proceed to arbitration.
What this practically means
#Executive summary
#Key legal issues
#Whether the arbitral proceedings were premature for non-compliance with the amicable settlement requirement in Clause 18(1)
The proceedings were not premature; Clause 18(1) must be read with Clause 18(2), which limits amicable settlement to 30 days, after which either party may elect arbitration. Negotiations had collapsed and arbitration was initiated more than 9 months after the Notice of Default.
The court read Clauses 18(1) and 18(2) together: the amicable settlement process was time-limited to 30 days unless extended by agreement. The parties attempted settlement without success, and the 1st defendant engaged in talks for six months before requesting appointment of an arbitrator. The plaintiff voluntarily attended the preliminary meeting and confirmed the arbitrator's jurisdiction by consent. Citing National Bank of Kenya v Pipe Plastic Samkolit, the court held parties are bound by their contract and it cannot compel unwilling parties to negotiate.
Whether the arbitrator had jurisdiction notwithstanding the plaintiff's objection
The arbitrator had jurisdiction; the plaintiff voluntarily participated at the preliminary meeting where jurisdiction was confirmed by consent, and the appointment followed the contractual mechanism.
The court found the arbitrator was duly appointed by the Chairman of the Chartered Institute of Arbitrators, Kenya Branch, in line with the Agreement's dispute resolution mechanism after the parties failed to agree. At the preliminary meeting the parties' representatives agreed the arbitrator had jurisdiction. The court was not persuaded that the plaintiff established that the arbitrator lacked jurisdiction to hear and determine the dispute.
Whether the court could set aside the arbitrator's preliminary ruling of 20th August 2019
The ruling could not be set aside; the plaintiff failed to make out a case for setting it aside.
The plaintiff's challenge rested on alleged non-compliance with Clause 18(1). The court, having found that negotiations collapsed and that it cannot compel unwilling parties to negotiate, held that the plaintiff's own affidavit showed a meeting was held where concerns were raised but the 1st defendant refused further negotiations. This necessitated the 1st defendant's decision to subject the dispute to arbitration, so the preliminary ruling stood.
Legal principles established
#- A court of law cannot rewrite a contract between parties; parties are bound by the terms of their contract unless coercion, fraud or undue influence are pleaded and proved
- A party who knows of non-compliance with the arbitration agreement and proceeds with arbitration without objecting without undue delay is deemed to have waived the right to object (Section 5, Arbitration Act)
- A plea that the arbitral tribunal lacks jurisdiction must be raised not later than the submission of the statement of defence (Section 17(2), Arbitration Act)
Court orders
#- 1.The Originating Summons is dismissed
- 2.Costs of the Originating Summons awarded to the defendants
- Jurisdiction invoked
- Original civil jurisdiction of the High Court over an Originating Summons concerning arbitral proceedings under the Arbitration Act, 1995
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Registered Trustees of the Management University of Africa Trust v Eskindir Habte Debessay (t/a) and Another", Case Analysis (2020). Originating Summons dated 18th September 2019. Source:
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.