Timothy Mwangi Kuria v African Management Initiative (AMI) Kenya Limited

3. The application is anchored on the grounds which are set out on the face thereof. It is also supported by the affidavit of one Isaac Kinuu, the Respondent’s Chief Financial Officer. 4. The affiant to the affidavit avers that the Claimant’s contract of service has a clause which obligates the parties to refer all disputes which may arise from the contract to arbitration. As such, he contends that the instant dispute ought to have been referred to arbitration. 5. The affiant avers that the law empowers the court to stay the case and refer the dispute to arbitration in accordance with the arbitration agreement between the parties. Hence the request that the proceedings be stayed and the matter referred to arbitration. 6. The Claimant has opposed the application. He has filed the affidavit dated 19th December 2025 to anchor his objection to the motion. 7. The Claimant’s contention is that:a) The arbitration agreement between the parties has been rendered inoperative owing to the Respondent’s conduct. b) Enforcement of the arbitration agreement will be contrary to constitutional principles and public policy. c) The court has exclusive jurisdiction to determine the instant dispute. 8. The Claimant avers that the Respondent did not invoke the arbitration clause in the contract immediately the dispute between them crystalized. He avers that the Respondent’s CAUSE NO. E1184 OF 2025 2

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overall conduct pointed to its rejection of amicable settlement of the dispute. As such and on this basis, he posits that the arbitration agreement has been rendered inoperative. 9. The Claimant further contends that enforcing the arbitration agreement between the parties would be contrary to public policy. He relies on the decision of the court in the case of Okeyo v Board of Directors HHI Management Service Ltd & another [2024] KEELRC 1006 (KLR) to contend that arbitration is not suitable for resolving employment disputes. 10. The Claimant contends that arbitration clauses in employment contracts are typically imposed by employers and cannot be invoked to oust the court’s jurisdiction to determine employment disputes. He further avers that arbitration is only suitable for resolving commercial disputes. 11. The Claimant avers that the court has already held that section 15 of the Employment and Labour Relations Court Act does not recognize arbitration as a mechanism for resolving employment disputes. As such, he contends that this court should reject the Respondent’s plea on this basis. 12. The Claimant contends that the cost of arbitration is a barrier to enjoyment of the right to access justice. He contends that the requirement that both parties to an arbitration process bear the cost of the process is likely to CAUSE NO. E1184 OF 2025 3

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deny him access to justice having regard to the fact that he is no longer in employment. 13. The Claimant avers that the dispute between the parties is not merely contractual. It is his case that the dispute raises critical grievances relating to breach of his employment rights, a matter which he contends only this court is entitled to inquire into. 14. The Claimant avers that the impugned arbitration agreement was inserted in a standard form contract of service leaving him with no option but to accept it. He contends that the agreement was presented on a ‘’take or leave’’ basis. He further avers that at the point of signing the agreement, he had no meaningful opportunity to negotiate it. As such, he avers that it will be unconscionable to enforce the agreement. Analysis 15. There is no doubt that the contract between the parties has an arbitration agreement. The agreement requires the parties to subject disputes from the contract to arbitration. 16. The challenge is whether the agreement is enforceable. Whilst the Respondent contends that it is, the Claimant expresses a contrary position. 17. Section 6 (1) of the Arbitration Act provides as follows:‘’A court before which proceedings are brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than the time when CAUSE NO. E1184 OF 2025 4

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that party enters appearance or otherwise acknowledges the claim against which the stay of proceedings is sought, stay the proceedings and refer the parties to arbitration unless it finds:(a) that the arbitration agreement is null and void, inoperative or incapable of being performed; or (b) that there is not in fact any dispute between the parties with regard to the matters agreed to be referred to arbitration.’’ 18. The Respondent has invoked this provision to pray for stay of proceedings and referral of the dispute to arbitration in terms of clause 11 of the agreement between the parties. As such, the application has been rightfully presented. 19. The general position in law is that a court is not entitled to re-write a contract between parties. Its role is confined to enforcing the terms of the contract (Langat v Co-operative Bank of Kenya Ltd [2017] KECA 152 (KLR)). 20. Notwithstanding the foregoing, a court may decline to enforce a contract which is unconscionable. In doing so, it will not be re-writing the terms the contract. 21. Speaking to this matter in the case of Select Management Services Limited v Maobe [2025] KEHC 14916 (KLR), the court expressed itself as follows:‘’ In a recent case, Dhiman v Shah [2025] KECA 1264 (KLR), the Court of Appeal opined thus: CAUSE NO. E1184 OF 2025 5

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“Kenyan courts have consistently used the doctrine of unconscionability in contract law as a safeguard against contracts that are so unfair or one-sided that enforcing them would offend the sense of justice. At its core, the doctrine allows a court to refuse to uphold a contract, or specific terms of it, if they were imposed in a way that took undue advantage of one party’s vulnerability, ignorance, or lack of bargaining power. This doctrine looks at two broad aspects: how the contract was made, and the nature of its terms. The first — called procedural unconscionability— examines whether the weaker party had a meaningful choice in the matter, that is, whether the terms [are] hidden in fine print or whether there was deception, pressure, or a clear imbalance in knowledge or power or unequal bargaining power during the negotiations. The second aspect - substantive unconscionability — focuses on the terms themselves: whether they are harsh, oppressive, manifestly unjust, or unreasonably favoring one side. Courts typically require at least some measure of both elements before declaring a contract unconscionable. The goal is never to rewrite bad CAUSE NO. E1184 OF 2025 6

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bargains by parties, but to ensure that contracts are not used as instruments of injustice. In Kenya, the doctrine of unconscionability — though not always expressly named — is recognized and applied through general principles of equity, fairness, and public policy under the law of contract. In National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & another [2001] eKLR this Court emphasized that while courts do not interfere with parties’ freedom to contract, they will not enforce a contract that is illegal, immoral, or unconscionable. ....... In short, as the above authorities demonstrate, a court can interfere with a contract even where parties have agreed on the terms if the resulting agreement is highly oppressive or unfair as to offend an objective sense of justice. “ 22. The place of arbitration in employment disputes remains a controversial matter. Whilst some courts hold the view that it (arbitration) is not suitable for resolving these disputes (see Okeyo v Board of Directors HHI Management Service Ltd & another [2024] KEELRC 1006 (KLR)), others express the view that parties to an employment dispute can legitimately invoke arbitration to adjudicate the dispute (see CAUSE NO. E1184 OF 2025 7

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Karunda v Keekorok Capital Ltd [2023] KEELRC 783 (KLR)). 23. In my view, the decisions which reject the use of arbitration to resolve employment disputes are influenced by the notion of unconscionability of arbitration agreements in employment contracts. This notion is founded on the perceived imbalance of power between the employer and the employee at the time of negotiating the terms of a contract of service. 24. Often, an employee’s concern at this time is to conclude the contract in order to secure the employment. As such, he may not give much thought to the import of the arbitration clause at the time (see Okeyo v Board of Directors HHI Management Service Ltd & another (supra)). 25. Other considerations which have been invoked to reject arbitration as a mechanism for resolving employment disputes include: the cost of arbitration which may sometimes surpass the cost of conventional court processes thereby impeding access to justice; the fact that an arbitration clause may sometimes be hidden in a contract of service thus denying the employee the opportunity to discern it; and the fact that the arbitrator may lack specialized understanding of employment law, a matter which may distort the outcomes of the arbitration process (see Maina v Kenya Commercial Bank PLC & another [2024] KEELRC 2287 (KLR)). CAUSE NO. E1184 OF 2025 8

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26. Despite these misgivings, arbitration agreements in employment contracts remain lawful. This reality was reiterated by the South African Supreme Court in the case of VJ v VJ and Another (258/2023) [2024] ZASCA 92 (11 June 2024) when the court restated that arbitration contracts are not contra bonos mores. As such, their enforcement cannot, of itself, be said to offend public policy as contended by the Claimant. 27. The court has considered the contrasting positions taken by the parties on the matter under consideration. The contract between the parties has an arbitration clause. Absent evidence that the clause was procured through fraud or undue influence, it binds the parties. 28. However, the court remains alive to the need to facilitate enjoyment of the right to access justice. The court takes note of the Claimant’s position that having lost employment, he may not be able to comply with the requirement that he shares the arbitration costs equally. He contends that this will effectively drive him from the seat of justice. Determination 29. Having regard to the foregoing, I make the following orders:a) The Respondent’s request to stay proceedings in the cause and refer the dispute to arbitration is allowed. b) However, the Respondent shall pay 75% of the cost of the proposed arbitration whilst the Claimant shall pay the balance (25%). CAUSE NO. E1184 OF 2025 9

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c) Costs of this application shall be in the cause. Dated, signed and delivered on the 25th day of September, 2026 B. O. M. MANANI JUDGE In the presence of: …………….for the Applicant …………….for the Respondent ORDER In light of the directions issued on 12 th July 2022 by her Ladyship, the Chief Justice with respect to online court proceedings, this decision has been delivered to the parties online with their consent, the parties having waived compliance with Rule 28 (3) of the ELRC Procedure Rules which requires that all judgments and rulings shall be dated, signed and delivered in the open court. B. O. M MANANI CAUSE NO. E1184 OF 2025 10

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