High Court 16499 of 2025

4. The arbitral dispute emanated from various commercial contracts between the parties for the supply of agricultural commodities, including rice, pulses, beans, and maize, between 2016 and 2018. 5. After hearing the dispute, the learned Sole Arbitrator rendered a Final Award on 30th October 2023, finding that the Applicant was liable to pay the Respondents a principal sum of KES. 287,195,500.09, with interest at 14% per annum from the date of filing the claim until payment in full, together with party-and-party costs. The Arbitrator further issued an Additional Award on 11th April 2024 correcting certain aspects of the Final Award, and subsequently made a Costs Award on 25th September 2024. 6. Aggrieved, the Applicant moved this Court seeking to set aside the awards, while the Respondents, in turn, seek their recognition and enforcement. Analysis and determination 7. Having considered the pleadings, affidavits, and submissions by both parties, the following issues arise for determination: i. Whether the Applicant’s Chamber Summons dated 11th July 2024 meets the threshold for setting aside an arbitral award under Section 35 of the Arbitration Act. ii. Whether the Respondents’ Notice of Motion dated 4th October 2024 for recognition and enforcement of the arbitral awards is merited. Whether the Application dated 11th July 2024 is merited 8. The Application dated 11th July 2024 is premised on Section 35(2)(b)(ii) of the Arbitration Act, 1995, which allows a court to set aside an arbitral award if it is found to be in conflict with the public policy of Kenya. 9. The Applicant contends that the awards are contrary to public policy as they impose an unreasonable and disproportionate financial burden, and that the Arbitrator failed to apply principles of fairness and reasonableness in arriving at his decision. 10. On the other hand, the Respondents argue that the Applicant has not demonstrated any of the statutory grounds for setting aside the award, and that the application is in essence an appeal disguised as a challenge under Section 35. 11. Section 35 (2)(b)(ii) of the Arbitration Act under which the application dated 117th July 2024 is premised provides that an Award may be set aside where the High Court finds that the “the award is in conflict with the public policy of Kenya.” 12. The parameters of judicial intervention under Section 35 are now well settled. In Nyutu Agrovet Limited v Airtel Networks Kenya Limited [2015] eKLR, the Court of Appeal emphasized that: “ The rationale behind the limited intervention of courts in arbitral proceedings and awards lies in the principle of party autonomy. Once parties have chosen arbitration as their mode of dispute resolution, court intervention must be the exception rather than the rule.” https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/16499/eng@2025-10-21 2

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13. Likewise, in Reliable Concrete Works v Ngewanji Company Limited [2022] eKLR, the court held that Section 35(2) strictly circumscribes the jurisdiction of the High Court in setting aside arbitral awards, and an applicant must bring himself squarely within those statutory bounds. The Court stated that: “ Courts have taken the position that the grounds for setting aside of an arbitral award as set out under the above section of the Act are strict and spell out the jurisdiction of the court in setting aside an Arbitral Award. This is the position that was taken in Midco Holdings Limited v Summit Textiles (EA) Limited [2014] e KLR where it was held: “… Section 35 (2) of the Arbitration Act circumscribes the grounds upon which an arbitral award can be set aside, and an applicant seeking to set aside an arbitral award must bring himself strictly within the legal bounds of that Section. See the case of Transword Safaris Ltd V Eagle Aviation Ltd & 3 Others Nbi Misc Application No. 238 OF 2003, Nyamu J. (as he then was).” 14. On the meaning of “public policy,” Ringera J. (as he then was) stated in Christ for All Nations v Apollo Insurance Co. Ltd [2002] EA 366 that: “ An award could be set aside under page 35(2) (b) (ii) of the Arbitration Act as being inconsistent with the public policy of Kenya if it is shown that it was either (a) inconsistent with the Constitution or to other laws of Kenya, whether written or unwritten or (b) Inimical to the national interest of Kenya or (c) contrary to justice or morality.” 15. In the present case, it is clear from the record that the Applicant and the Respondents entered into commercial arrangements for the supply of agricultural commodities. A dispute arose between the parties, which was referred to arbitration pursuant to the arbitration agreement dated 7th December 2020, entered into by the parties. 16. Pursuant to the arbitration agreement, a sole arbitrator, Dr. Wilfred Mutubwa OGW LL.D C.Arb FCIArb. , was appointed as the Sole Arbitrator to hear and determine the dispute between the parties. Consequently, the Arbitrator published his Final Award on 30th October 2023 and an Additional Award dated 12th April 2024. Both of the awards are annexed in the Respondents’ replying affidavit as ‘RKS-2’ and ‘RKS-3’. 17. The Operative Award in Additional Award awarded as follows: a. The Claimant shall pay the Respondents the amount of Kshs. 287,195,500.09 b. The above principal sum shall attract simple interest at the rate of 14% per annum from the date of filing this claim, until payment in full. c. The interest accrued on the principal sum as the date of the Final Award is Kshs. 112,140,007.32. The principal sum of Kshs. 287,195,500.09 shall also continue attracting interest at the rate of Kshs. 110,157.18 per day, for every day from the date of the Final Award that the same remains unpaid. d. The Claimant shall bear both the Respondent's party and party costs; and the Arbitrator’s costs. The costs are to be agreed upon within 14 days of this Additional award, failing which the Respondents shall be at liberty to file their bill of costs for taxation by the Tribunal. e. All other prayers not specifically addressed by the Tribunal stand dismissed. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/16499/eng@2025-10-21 3

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18. The Applicants, in their affidavit in support of the application, contended that the Final and Additional Arbitral Awards violated Kenya’s public policy. It was argued that the sole arbitrator failed to apply the principles of fairness and reasonableness, resulting in disproportionate financial hardship to the Applicant despite having gained no benefit from the destroyed maize. According to the Applicants, enforcement of the awards would threaten their business viability and amount to an unjust, punitive, and oppressive outcome, leading to unjust enrichment of the Respondents. 19. The Applicant further claimed that the awards infringed its constitutional right to property under Article 40, produced inequitable results contrary to justice and fairness, and undermined Kenya’s national and economic interests by discouraging investment. It was also alleged that the arbitrator ignored crucial evidence and submissions, thereby rendering an inequitable and punitive decision. 20. While the Applicant opined that the awards were unreasonable, unfair, and resulted in disproportionate financial hardship, these reasons, in my view, do not form the basis for an award to be set aside under section 35(2)(b)(ii) of the Arbitration Act. 21. This Court aligns with the view taken by the Court (Majanja J) in Dinesh Construction Limited & KPLC Retirement Benefit Scheme v Aircon Electra Services (Nairobi Limited) Misc. Application No. E1301 of 2020, where it was held that although framed broadly, public policy, as a ground for setting aside an arbitral award, must be narrow in scope. 22. An assertion that an award is contrary to the public policy of Kenya cannot be vague and generalized. A party seeking to challenge an award on this ground must identify the public policy which the award allegedly breaches and then must show which part of the award conflicts with that public policy. 23. The Applicant has not demonstrated that the arbitral award falls within any of the categories identified in the case of Christ for All Nations v Apollo Insurance Co. Ltd (supra). The Arbitrator’s findings arose from a detailed analysis of the parties’ commercial agreements and the Applicant’s admitted breach. The mere dissatisfaction with the outcome or the quantum of sums awarded does not, without more, constitute a violation of public policy. 24. Courts have consistently warned against converting Section 35 proceedings into an appellate process. In Mahican Investments Ltd & 3 Others v Giovanni Gaida & Others [2005] eKLR, the court observed: “ A court will not interfere with the decision of an Arbitration even if it is apparently a misinterpretation of a contract, as this is the role of the Arbitrator. To interfere would place the court in the position of a Court of Appeal, which the whole intent of the Act is to avoid. The purpose of the Act is to bring finality to the disputes between the parties.” 25. I concur with the authorities above. The Applicant is dissatisfied with the Arbitrator’s Award, but its grounds are not sufficient to set aside the award as stipulated under section 35 of the Arbitration Act. This court is barred from reevaluating the findings of an arbitrator and can only interfere under the strict circumstances set out in the Arbitration Act. 26. The upshot is that the Applicant’s application dated 11th July 2024 lacks merit and therefore fails to meet the threshold of Section 35 of the Arbitration Act. accordingly, the same is hereby dismissed with costs. ii. 27. Whether the Respondents’ Application for Recognition and Enforcement has merit The Respondents in their application seek recognition and enforcement of the Final Award, the Additional Award, and the Additional Award on Quantum of Party and Party Costs made by Dr. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/16499/eng@2025-10-21 4

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Wilfred A. Mutubwa on 30th October 2023, 12th April 2024, and 25th September 2024, respectively, as judgments of this Court under Section 36 of the Arbitration Act. 28. Section 36 (1) of the Arbitration Act states: “ A domestic arbitral award shall be recognized as binding and, upon application in writing to the High Court, shall be enforced subject to this section and section 37.” 29. Subsection (3) thereto states: “ Unless the High Court otherwise orders, the party relying on an arbitral award or applying for its enforcement must furnish— (a) the original arbitral award or a duly certified copy of it; and (b) the original arbitration agreement or a duly certified copy of it.” 30. The application was grounded on the assertions that the Applicant was indebted to the Respondents as per the Arbitral Awards, that it had failed or neglected to settle the amounts due, and that it was therefore necessary for the court to recognize and adopt the awards to facilitate their enforcement. The Respondents contended that it was in the interest of substantive justice for the court to grant the orders sought. 31. The Respondents filed a further affidavit sworn on 28/4/2025 by Rita Kamal Shah, a director of the 2nd Respondent. She produced certified copies of the Arbitration Agreement dated 7th December 2020 (RKS-1a), the final award dated 30th October 2023 (RKS-1b), the Additional Award dated 12th April 2024 (RKS-1c), and the Award on quantum of party-and-party costs dated 25th September 2024 (RKS-1d). 32. The general rule is that arbitral awards are to be recognized and enforced unless grounds exist under Section 37 for refusal, such as incapacity, invalidity of the arbitration agreement, lack of notice, excess of jurisdiction, or conflict with public policy. 33. Having found that the Applicant has not demonstrated any of those grounds, and given that the awards were issued by a competent tribunal pursuant to a valid arbitration agreement, there is therefore no legal impediment to their recognition. 34. In line with the principle of finality of arbitral awards, and in the absence of any evidence of impropriety or illegality, this Court is bound to uphold the same. Disposition 35. In view of the foregoing analysis, I find as follows: i. The Applicant’s Chamber Summons dated 11th July 2024 is without merit and is hereby dismissed. ii. The Respondents’ Notice of Motion dated 4th October 2024 is allowed. iii. The Final Award dated 30th October 2023, the Additional Award dated 12th April 2024, and the Award on Quantum of Costs dated 25th September 2024 are hereby recognized and adopted as decrees of this Court. iv. The Respondents are granted leave to enforce the said awards as decrees of this Honourable Court. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/16499/eng@2025-10-21 5

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v. 36. Costs of both applications shall be borne by the Applicant. It is so ordered. SIGNED, DATED, AND DELIVERED IN VIRTUAL COURT THIS 21ST OCTOBER 2025 ADO MOSES JUDGE In the presence of: C/A – Moses Ms. Wameyo h/b for Kuyo…………..for the Applicant Ms. Nkatha h/b for Mumia………….... for the Respondent https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/16499/eng@2025-10-21 6

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