End To End v Chief Officer Trade & Enterprises Development 1st Defendant Cecm, Trade Enterprises Kwale County & Another & Another & Another & Another & Another & Another

4. According to the defendants, there was fundamental breach of the contract by the plaintiff which resulted in the defendant terminating the contract on 2/11/2021. The defendants content that, a dispute having arisen between the parties to the contract and instead of referring the matter to arbitration as provided for under the contract clause 14.0, the plaintiff filed suit herein and obtained the orders of injunction against the defendants at the ex-parte stage which are subsisting to-date. 5. The application is opposed through a replying affidavit sworn on 29/11/2021 and a supplementary affidavit sworn on 16/12/2024 by Abdirahman Mohamud Abdow, a director of the plaintiff/ respondent. He deposes that according to the arbitration clause, the dispute should first be referred to other modes of dispute resolution before proceeding to mediation, if at all. 6. The application was disposed of by way of written submissions filed by learned counsels for both parties. 7. I have considered the application, the response thereto and the submissions by learned counsels. The issue for determination is whether or not this matter should be referred to arbitration as by law provided. 8. Section 6 of the Arbitration Act under which this application is filed provides for how the court should proceed with a matter before it which is the subject of an arbitration agreement. It reads: "(1) 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 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. (2) Proceedings before the court shall not be continued after an application under subsection (1) has been made and the matter remains undetermined. (3) If the court declines to stay legal proceedings, any provision of the arbitration agreement to the effect that an award is a condition precedent to the bringing of legal proceedings in respect of any matter is of no effect in relation to those proceedings." 9. There is no dispute that there is a contract between the plaintiff and the CGK for Construction of Fresh Produce Wholesale Market at Kombani-Waa Ng'ombeni Ward, Kwale County. In his affidavit sworn on 16/11/2021 in support of the Chamber Summons Hassan Ngalaa under paragraph 4 thereof has annexed a copy of the said contract dated 4th April 2019 marked "HN 1." 10. However, the defendants in their supplementary affidavit sworn on 25/11/2021 annexed what is termed as the full contract between the CGK and the plaintiff and depose that the contract affirms that the dispute herein is wrongly and unlawfully before this court and should be referred to arbitration since the court does not have jurisdiction to adjudicate over it. 11. I have perused this "Full Contract" and unfortunately I do not find anywhere it is signed by both parties signifying their intention to be bound by the terms. It is an amalgamation of various documents which would if shown to be executed would indeed be considered as the contract document. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19690/eng@2025-01-15 2

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12. The properly executed agreement between the parties is dated 4th April 2019 and is exhibited as annexture "HN 1" on the affidavit sworn by Hassan Ngalaa under on 16/11/2021 in support of the Chamber Summons. 13. That agreement between the parties contains an arbitration clause in paragraph 15 in the following terms: “ Dispute Resolution" "The Contractor and Client recognize that disputes arising under this Agreement are best resolved at the working level by the parties directly involved. Both parties are encouraged to be imaginative in designing mechanism and procedure to resolve disputes at this level. Such efforts shall include the referral of any remaining issues in dispute to higher authority within each participating party's organization for resolution. Failing resolution of conflicts at the organizational level, the Constructor and Client agree that any remaining conflicts arising out of or relating to this Contract shall be submitted to arbitration. If the dispute is not resolved through arbitration, then the parties may take other appropriate action subject to the other terms of this agreement." 14. It is trite law that courts do not rewrite contracts between parties. In the case of Pius Kimaiyo Langat v Co-operative Bank of Kenya Ltd [2017] eKLR (Waki, Makhandia & Ouko JJA), the Court of Appeal said that it was not the business of courts to rewrite contracts between parties, and that parties were bound by the terms of their contracts, unless coercion, fraud or undue influence were pleaded and proved. None of those circumstances has been shown to exist in the case of the contract between the parties herein. 15. This court is therefore bound to go by what is provided in the contract signed by the parties on dispute resolution as exhibited in the defendants' supporting affidavit which is also the one exhibited by the plaintiff in their various affidavits herein. Indeed, learned counsel for the defendants/applicants in his submissions starts with referring to clause 15 as the valid arbitration clause. Clause 15 as the arbitration clause is found in the agreement annexed to the supporting affidavit only. It is later in his submissions that he refers to clause 37 of the agreement annexed to the supplementary affidavit. It is apparent that these are two different clauses on arbitration. I have indicated that the valid one, for the purposes of this application, is the former and not the later 16. It is apparent from section 6(1) of the Act that the time within which a party who wishes to invoke an arbitration clause in an agreement should raise the issue with the court is material as expounded in the cases cited by learned counsel for the applicants of Adrec Limited v Nation Media Group Limited [2017] KECA 106 (KLR) and Bedouin Enterprises Limited v Charles Njogu Lofty & Charles Mungai Gikonyo (t/a Garam Investments) [2008] KEHC 1139 (KLR). 17. It is not contested in this case that the defendants/applicants filed the present application at the appropriate time before they entered appearance in the matter. I also find that no issue has been raised with regard to matters agreed to be referred to arbitration. These are clear in the agreement even as learned counsel refers to the agreement annexed to the supplementary affidavit which I have found is not applicable in this case. Nothing therefore turns on these two issues. 18. The issue that requires determination is whether the arbitration agreement is null and void, inoperative or incapable of being performed. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19690/eng@2025-01-15 3

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19. As pointed out above, the defendants in their affidavits and their learned counsel in his submissions are referring to two agreements each bearing an arbitration clause which clauses, unfortunately are different from each other in content. Learned counsel for the plaintiff/respondent on his part submits that the agreement annexed to the defendants' supplementary affidavit is the wrong one, meaning that the arbitration clause therein is not applicable to this case. The fact of the defendants exhibiting two agreements each with a different arbitration clause in itself means that it would not be possible to determine which of the two the parties intended to follow. In that case, it is not clear which of the two clauses should be followed by the parties or even by this court. It would then follow that there is no arbitration clause capable of being considered by this court. The same would be found to be null and void, inoperative and incapable of being performed. 20. All the same, even if each of the agreements was considered to be valid and the arbitration clauses therein considered they each have a condition precedent to referring any dispute to arbitration. 21. Considering the arbitration clause in the agreement annexed to the applicants' supporting affidavit, which is also the agreement referred to by the plaintiff in all its pleadings and affidavits, which this court has found to be valid for purposes of this case, the condition precedent is that disputes arising under the agreement would be resolved at the working level by the parties directly involved. Both parties were encouraged to be imaginative in designing mechanisms and procedures to resolve disputes at this level. Such efforts would include the referral of any remaining issues in dispute to higher authority within each participating party's organization for resolution. 22. The plaintiff deposes that this arbitration clause is vague, ambiguous and inoperable. But that being what is contained in the parties' agreement, it is upon the defendants/applicants to show that it was the first step they took or attempted to take but the same could not work when the dispute arose. 23. As for the contract annexed to the defendants' supplementary affidavit, the arbitration clause therein at paragraph 37.3 and 37.4 respectively provide that prior to undertaking arbitration proceedings, there has to be issued a notice of a dispute or difference and that the arbitration shall not commence unless an attempt has in the first instance been made by the parties to settle such dispute or difference amicably with or without the assistance of third parties and proof of such attempt shall be required. 24. The defendants herein have not exhibited any notice of dispute or difference issued as provided by the arbitration clause and neither have they exhibited proof of attempts to settle the dispute amicably before asking for referral to arbitration. 25. Considering an arbitration clause in an agreement between parties on similar lines the High Court in the case of County Government of Kirinyaga v African Banking Corporation Ltd [2020] KEHC 5213 (KLR) said thus: “ Though the applicant has earnestly urged this court to find that clause 26 is the way to go, it is true to say that it failed to abide by the clause itself. Clause 26 states mandatorily that -----"(a dispute) shall be (A) initially settled within 10 days by mutual discussions, negotiations and agreement between a negotiation team comprising of persons nominated by either party in the event that such discussions do not resolve the dispute within the said terms period the dispute shall (B) finally settled by the most current rules of Arbitration ---." The applicant has not tendered evidence to prove that the parties attempted to settle the dispute if any through negotiations and that the negotiations failed. It goes back to what I have already pointed out that the applicant has not proved that there is a dispute or the nature of the dispute. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19690/eng@2025-01-15 4

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Clause 26(A) is a condition precedent and where it has not been complied with clause 26(B) has not come into force nor has it fallen due. It would therefore be premature to refer the matter to arbitration even if the court were to find that clause 26 applies. I refer to Nanchaing Foreign Engineering Company (K) Limited -v- Easy Properties Kenya Ltd 2014 eKLR. The parties had agreed that the first step was to attempt negotiations in an attempt to reach an amicable resolution of the dispute if any. Strict enforcement of clause 26 would require that negotiations be done and before that is done the matter is not ripe for referral to arbitration. The prayer to refer the matter to arbitration must fail." 26. I am persuaded to follow this decision and find that the defendants/applicants herein have not shown that they have satisfied the condition precedent to refer a dispute to arbitration set by the parties in their contract and therefore the prayer to refer the matter to arbitration must fail. 27. That being the prayer upon which the other prayers for stay of proceedings and for discharge of the orders of injunction was premised, it follows that these two must also fail. 28. Consequently, I find the application to refer this matter to arbitration to be without merit and the same is dismissed with costs to the plaintiff/respondent. 29. This court wishes to reiterate its earlier sentiments made in the earlier ruling on contempt of court on 22/11/2024 about the greater public interest in the matter. There can be no dispute that a market that is meant for use by the members of the public and which is practically completed in construction as indicated by the parties herein in their respective affidavits should not stay idle for so long due to this dispute. For instance, the plaintiff deposes in its supplementary affidavit in paragraph 8 and 9 that at the time of termination of the contract there was no pending work and all that was remaining to be resolved was the issue of VAT refund or exemption certificate. That as of 8/9 2021 the market was complete and ready for use and as a result the CGK placed an advertisement calling for interested persons to apply for allocation of stalls in the Daily Nation newspaper of that date as per the annexed copy. 30. The plaintiff deposes further that pursuant to the clause on dispute resolution in the contract, the parties appointed a mediation team in December 2022 in a bid to resolve any issues between the parties. Since there was no dispute as to the completion of the project and the pending payments to the plaintiff, the defendants were asked to pay the plaintiff KShs 26 million and ensure refund of all VAT payments to KRA since the contract was tax-exempt. 31. It is the plaintiff's position therefore that there is no dispute between the parties for referral to arbitration. Although this is not the basis upon which this court has determined the application, I find these depositions to be important first because they are supported by various annextures and they have not been contested by the defendants/applicants. Secondly, they go to show that this dispute can be resolved at once without taking up much time as seems to be happening now. 32. Then there is the fact of wastage where it is indicated that the structures are being vandalized meaning extra expense on the taxpayer besides the failure to utilize the facilities by members of the public who had already been invited to apply for allocation of stalls. This dispute needs to be resolved amicably at once and have the facilities utilized by the intended users, members of the public. 33. In order to expedite the hearing of this case and considering that the plaintiff's application dated 8/11/2021 has never been prosecuted and yet there are interim orders of injunction in force, this court issues the following direction: https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19690/eng@2025-01-15 5

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a. Rather than proceed with the pending application which will mean more time taken in resolving the case, the court will proceed to determine the main suit on its merits at the earliest opportunity. b. The defendants are directed to file their respective defences to the plaintiff' suit within 14 days from the date hereof. The plaintiff is at liberty to file a reply to defence within 7 days from the date of service of the statement of defence or after 21 days from today, whichever is the earlier. c. Mention on 12/2/2025 to confirm compliance and for pre-trial directions. DELIVERED, DATED AND SIGNED AT KWALE ON THE VIRTUAL PLATFORM, TEAMS THIS 15TH DAY OF JANUARY 2025. ANDAYI W. F. JUDGE In the presence of: Anjiko (Ms) h/b for Abdulaziz for Plaintiff/Applicant. Munuva (Ms) h/b for Kibaara for the Defendants/Respondents. Daniel Court Assistant. Signed by/for: HON. JUSTICE ANDAYI W.F. THE JUDICIARY OF KENYA. KWALE HIGH COURT DATE: 2025-01-17 11:53:44 https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19690/eng@2025-01-15 6

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