Valere Business Sytems v Cementers Ltd (Commercial Claim E18906 of 2024) [2025] SCC 37 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Whether the Preliminary Objection founded on the arbitration clause was merited
The Preliminary Objection was dismissed because the Respondent/Applicant, by acknowledging the claim and taking steps towards settlement without filing a stay/referral application under section 6(1) of the Arbitration Act, had submitted to the court's jurisdiction.
The court applied the exhaustion doctrine and section 6(1) of the Arbitration Act as construed in Adrec Limited and National Irrigation Authority v Satom SA. A stay application must be made not later than when the party enters appearance or otherwise acknowledges the claim, ideally simultaneously with the notice of appointment of advocates or a protest notice. Here the Respondent/Applicant only gave notice of the objection in its Response to the Statement of Claim dated 7 March 2025, never filed a stay application, acknowledged the claim and took steps towards settlement. Having submitted to jurisdiction, it could not resile and invoke the arbitration clause.
Legal principles established
#- A party seeking referral to arbitration under section 6(1) of the Arbitration Act must apply not later than the time of entering appearance or otherwise acknowledging the claim; the right is lost once a party takes steps in the proceedings.
- Courts ought to be fora of last resort; where a dispute resolution mechanism exists outside courts it should be exhausted first, but a party who submits to the court's jurisdiction cannot later invoke the arbitration clause.
Court orders
#- 1.The Respondent/Applicant's Preliminary Objection is dismissed
- 2.No order as to costs
- Jurisdiction invoked
- Small Claims Court jurisdiction under the claim; dispute arises from a Lease Agreement dated 26 February 2022 containing an arbitration clause (paragraph 25)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Valere Business Sytems v Cementers Ltd (Commercial Claim E18906 of 2024) [2025] SCC 37 (KLR)", Case Analysis (2025). Kitale SCC Claim No. E173 of 2024. Source: https://new.kenyalaw.org/akn/ke/judgment/scc/2025/37/eng@2025-09-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.