Set and Sit Contractors Ltd v Mare Nostrum Limited
The bottom line
#Kenyan courts strongly uphold arbitral awards, meaning challenging them based on factual errors or procedural disagreements is extremely difficult.
What this practically means
#Executive summary
#Key legal issues
#Whether the arbitrator exceeded the scope of the reference
The arbitrator determined only the issues in the agreed list of issues and did not go beyond the scope of reference
The court compared the agreed list of issues dated 22nd June 2017 with the arbitrator's determinations and found each issue was addressed. The award of USD 1,258,231.67 was within the amounts claimed. The owner failed to show the arbitrator went on a frolic of his own dealing with matters unrelated to the dispute.
Whether reliance on undisclosed site-visit observations violated the right to be heard and offended public policy
No violation: the site visit was agreed, the site became evidence, and the arbitrator's findings flowed from evidence, legal principles and the contract, not solely his observations
The owner received notice, called six witnesses and filed submissions. The court held that requiring an arbitrator's observations to be cross-examined would make the arbitrator a witness. The arbitrator gave reasons for rejecting both experts' reports and applied a percentage-completion methodology grounded in legal principle (ERDC Group v Brunel University) and the contract bills of quantities.
Whether the award was contrary to public policy under Section 35(2)(b)(ii)
The award was not inconsistent with the Constitution, laws, national interest, justice or morality; the owner's complaint amounted to an impermissible appeal on errors of fact and law
Applying Christ for All Nations v Apollo Insurance, the court found the impugned findings neither an affront to the Constitution nor inimical to justice and morality. It would be contra-public policy to allow an owner who admittedly did not pay its contractor to retain the benefit of the works. Errors of fact or law are not grounds for setting aside.
Whether the arbitrator failed to give reasons under Section 32(3) of the Act
The arbitrator provided reasons for his findings, including his rejection of both parties' expert reports
The court quoted the arbitrator's explanation that neither expert provided a scientific methodology for completion percentages, and that the tribunal would rely on other evidence and the contract. The court found the challenge untenable since the arbitrator is the master of the facts.
Legal principles established
#- Once parties agree to a site visit, the site becomes part of the evidence like any other evidence, and an arbitrator's observations thereon need not be subjected to cross-examination by the parties
- An error of fact or law by an arbitrator cannot be said to be inconsistent with the public policy of Kenya; public policy leans towards finality of arbitral awards
- To show that an arbitrator went beyond the scope of the reference, the applicant must show beyond doubt that the arbitrator went on a frolic of his own
Court orders
#- 1.Dismissal of the application dated 4th November 2019 with costs to the contractor
- 2.Allowance of the application dated 26th September 2019 with costs to the Contractor
- 3.Recognition and enforcement of the Final Arbitral Award dated 5th August 2019 as a judgment of the court
- Jurisdiction invoked
- Section 35 of the Arbitration Act, 1995 (recourse to the High Court against an arbitral award)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Set and Sit Contractors Ltd v Mare Nostrum Limited", Case Analysis (2020). Miscellaneous Application No. 431 of 2019. Source:
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.