Afraha Flour Mills Ltd & 24 others v Ministry of Agriculture, Livestock & Fisheries & another

section 35(2) of the Arbitration Act. It is this decision that the applicants are seeking leave of the Court to appeal to this Court. 3. The applicants averred that this Court has the requisite jurisdiction to grant leave for the applicants to appeal to this Court against the impugned decision. The applicants assert that their intended appeal falls squarely within the exceptional circumstances that grants this Court residual jurisdiction to inquire into the unfairness of an arbitral award as enunciated by the Supreme Court in Nyutu Agrovet Limited vs. Airtel Networks Kenya Limited; Chartered Institute of Arbitrators Kenya Branch [2019] KESC 11 (KLR). The applicants contend that since the amount involved is substantial, and there being evident manifest unfairness, they should be given a chance to ventilate their appeal before this Court as envisaged in the Supreme Court’s decision of Synergy Industrial Credit Limited v. Cape Holdings Limited [2019] KESC 12 (KLR). 4. The applicants insist that the respondents will suer no prejudice because they did not le a defence to the claim or controvert any of the led, unsigned and unstamped invoices that is the subject of the intended appeal. The applicants contend that remitting back the Arbitral award to the sole arbitrator for review would ensure the ends of justice are met. The application is supported by the adavit of Stephen Ogallo the operations ocer of the Cereal Millers Association, an umbrella Association to which all the applicants are members. 5. The application is opposed. The respondents led a notice of preliminary objection by which they contend that this Court lacks jurisdiction to hear and determine the present application because it is res-judicata. They aver that enforcement proceedings regarding the same arbitral award has already been allowed by the High Court and consequently this application is barred. The respondents further contend that the applicants have not demonstrated any exceptional circumstances or manifest injustice in according with the dicta in Nyutu Agrovet Limited v. Airtel Networks Kenya Ltd, Chartered Institute of Arbitrators - Kenya Branch [2019] KESC 11 (KLR) to justify this Court to grant the leave to appeal as sought. They insist that the decision of the High Court was a negative order incapable of execution, therefore unappealable in the circumstances thus rendering the present application misconceived and an abuse of the due process of the Court. They urge the Court to strike out the application with costs to the respondents. 6. Prior to the plenary hearing of the application, both the applicants and respondents led written submissions in support of their respective positions. During the plenary hearing, this Court heard oral rival submissions made by Mr. Gichuhi Allen, SC for the applicants and Ms. Mary Murugi, learned counsel for the respondents. We have carefully considered the said submissions in light of the facts placed before us in the application and the notice of preliminary objection. 7. The issue before us for our determination is whether the applicants have established sucient grounds to enable this Court grant them leave to appeal to this Court against the refusal by the High Court to set aside part of the impugned arbitral award and/or remit it back to the sole arbitrator for further determination. As correctly acknowledged by both the applicants and the respondents, this Court has residual jurisdiction to hear and determine an appeal from the High Court in exercise of its discretion under Section 35(2) of the Arbitration Act provided the applicant is able to establish existence of exceptional circumstances. In Synergy Industrial Credit Ltd v. Cape Holdings Ltd [2019] KESC 12, the Supreme Court held thus: “ 84. Generally, therefore, once parties agree to settle their dispute through arbitration, the arbitral tribunal should be the core determination of their dispute. Once an award is issued, an aggrieved party can approach the High Court for setting aside the award, only on the specied grounds. And hence, https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1731/eng@2026-09-25 2

page 2 of 4

the purpose of section 35 is to ensure that courts are able to correct specic errors of law, which if left alone would lead to a miscarriage of justice. Therefore, even in promoting the core tenet of arbitration which is a quicker and ecient way of settling commercial disputes, that should not be at the expense of real and substantive justice. In the interest of safeguarding the integrity of the administration of justice and particularly in the absence of an express bar we, like the House of Lords in Inco-Europe Ltd & others (supra) hold that the Court of Appeal should have residual jurisdiction but only in exceptional and limited circumstances.” 8. The dispute between the applicants and the respondents was referred to arbitration pursuant to an arbitration clause contained in article 10.2 of the Agreement that was entered between the applicants and the respondents. Article 10.4 of the agreement provided that: “ The decision of the Arbitration Tribunal shall be nal and binding on the parties.” 9. The dispute was referred for determination by the agreement of the parties by a sole arbitrator, Prof. Githu Muigai. The dispute was in respect of maize our sold to the public pursuant to the maize our subsidy program by the Government of Kenya at the time. This program was introduced by the government in 2022 to cushion consumers from market forces that made the staple food prohibitively expensive to the majority of the citizenry due to various reasons, including maize supply shortage in the market. The applicants’ claim before the Arbitrator was that they raised invoices in the sum of Kshs. 4,233,430,752.72 and that the respondents made partial payment totaling Kshs. 1,651,247,401.75. They sought the balance of Kshs. 2, 582,110,035.42 plus interest. After hearing the parties, the sole arbitrator found in favour of the applicants and directed the respondents to pay the applicants the sum of Kshs. 2,313,855,953/= disallowing the sum of Kshs. 268,254,082.42. which the arbitrator found had been not proved on account of the fact that the invoices for the said sum were not stamped and/ or signed by the 1st respondent or its representatives to validate their authenticity. 10. The applicants were aggrieved by the Arbitral award made by the sole arbitrator. They led an application, essentially pursuant to section 35(2)(b) and (4) of the Arbitration Act and Rule 9 of the Arbitration Rules, 1997 seeking the setting aside of part of the said arbitral award that disallowed the applicants’ claim for the sum of Kshs. 268,254,082.4 and also sought to be awarded full costs and not the 50% of costs awarded by the Arbitrator. The applicants, in the alternative, urged the High Court to remit back to the Arbitral Tribunal part of the said arbitral award touching on the contested matters for appropriate review. The application was opposed by the respondents. 11. In its ruling, the High Court dismissed the application with costs. At the material part of the Ruling the learned Judge (P.M. Mulwa, J) held that: “ 14. In the present case, the applicants’ principal complaint concerns the Tribunal’s treatment of unstamped invoices, the failure to award interest, and the reduction of costs. From the record, these matters were extensively canvassed before the Tribunal. The disallowance of certain invoices was grounded on lack of documentary compliance, and though the applicants attribute this to clerical omission, such an evaluation falls squarely within the Tribunal’s factual and evidentiary jurisdiction.” https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1731/eng@2026-09-25 3

page 3 of 4

12. It is this decision that the applicants have sought leave to appeal to this Court. Does the intended challenge to the refusal by the High Court to set aside part of the impugned Arbitral award fall within the “exceptional and limited circumstances” that attracts the residual jurisdiction of this Court? Did the said Ruling cause a miscarriage of justice as to attract intervention by this Court pursuant to section 35(2)(b) of the Arbitration Act? We do not think so. It is clear to us that the applicants were seeking substitution by the High Court of the part of the arbitral award on the basis that the sole arbitrator had not properly evaluated the evidence and therefore erred and reached an unacceptable verdict. Such argument falls in the province of appeals and cannot form a basis for the setting aside of an arbitral award in circumstances where the parties chose to resolve any dispute relating to their commercial dispute by arbitration. We do not discern any breach of public policy or grounds that would lead us to conclude that the applicants’ application for leave to appeal falls within the “narrow” and “exceptional circumstances” envisaged by the Supreme Court in the Nyutu Agrovet case (supra). 13. It is evident from the above reasons that the application for leave lacks merit and is hereby dismissed with costs to the respondents. DATED AND DELIVERED AT NAIROBI THIS 25TH DAY OF SEPTEMBER, 2026. L. KIMARU ................................. JUDGE OF APPEAL MUNYAO SILA ................................. JUDGE OF APPEAL DR. J. O. OKELLO .................................. JUDGE OF APPEAL I certify that this is a true copy of the original. Signed DEPUTY REGISTRAR. https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1731/eng@2026-09-25 4

page 4 of 4