High Court 1836 of 2026

2. vi. The Respondent shall reimburse the Claimant all costs paid on its behalf in this matter, in any event. vii. All other prayers not specifically allowed by the Tribunal stand dismissed. On 26th June, 2024, the Arbitrator made and published an additional award on quantum of costs as follows: i. 3. The total amount taxed and allowed is Ksh.23,030,746.56/-. Following the delivery and publication of the award and additional award, the Applicant filed the application by motion on notice dated 26th June, 2024 which sought the following orders: 1. That….[Spent]. 2. That….[Spent]. 3. That the arbitral final award dated the 15th February, 2024 and the additional award on quantum of costs dated 26th June, 2024 by Dr. Wilfred Mutubwa OGW LL.D. C.Arb FCIArb, be set aside. 4. THAT costs of this application be provided for. 4. A response to the application dated 26th June, 2024 was filed by the Respondent. 5. The record of this court bears it that the Respondent filed the chamber summons application dated 30th September, 2024 in which the following orders were sought: 1. That….[Spent]. 2. That….[Abandoned]. 3. That….[Abandoned]. 4. That….[Spent]. 5. That the Honourable Court be and is hereby pleased to issue an order adopting and recognizing the subject arbitral award made and published on 15th February, 2024 and 26th June, 2024 as a judgement of the High Court of Kenya. 6. That the Honourable court be and is hereby pleased to award costs to the Applicant on a full indemnity basis. 6. Directions were issued that the two applications be canvassed by way of written submissions and my sister Shariff J. on 18th December, 2024, issued further directions that the parties highlight their respective submissions. 7. The parties complied with the directions to file their respective submissions and proceeded to highlight the same on 19th February, 2025. 8. Where a party files an application for the setting aside of an arbitral award and the opposing party files an application for the recognition of the same award, the proper route for the court to take is the one that I discussed in the case of County Government of Kisumu v Coretec Systems & Solutions Limited https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 2

page 2 of 24

(Commercial Arbitration Cause E001 of 2023) [2025] KEHC 13909 (25 September 2025) (Ruling) in which I made the following observations: “ 34. In a nutshell, the argument fronted by the Applicant is that, it is irregular for the court to hear an application for recognition and enforcement of an arbitral award before hearing and determining a pending application to set aside the same award and that if the court did so, that would contravene both the Arbitration Act and Article 50 of the Constitution, which provides for the right to a fair hearing. 35. While Section 36 of the Arbitration Act provides for recognition and enforcement of an arbitral award, Section 37 of the Act allows a party to apply for setting aside an arbitral award on specific grounds. 36. Notably, Section 36(2) provides that: “An arbitral award shall be recognized as binding and enforced in accordance with the provisions of this section unless it is set aside or suspended by a court of competent jurisdiction.” (Underlined emphasis). 37. This, in my view, implies that recognition and enforcement can only proceed if the award is not subject to a pending setting aside application, or unless the court determines that such an application is unmeritorious. 38. Courts have generally held that applications for recognition and enforcement and applications to set aside should be considered together or that the setting aside application should be determined first. This, I think is meant to avoid a possibility of conflicting decisions and premature enforcement of an award that might be invalidated and to avoid undermining the right to challenge an award under Section 37. 39. In the case of Christ for All Nations v Apollo Insurance Co Ltd [2002] 2 EA 366 the Court of Appeal held that where an application to set aside an arbitral award has been filed, it is prudent for the court to defer enforcement proceedings until the setting aside application is heard and determined. The court stated that: “ It would be imprudent for the High Court to recognize and enforce an award that is under challenge.” 40. 9. The correct approach would in my view therefore be for the court to either order for the consolidation of the two applications (for recognition/ enforcement and for setting aside), or to hear them together or to determine the one seeking for the setting aside of the award first, then proceed with enforcement if the award survives.” The foregoing being the position in law, I will proceed first to determine the Applicant’s application for setting aside the award dated 26th June, 2024 and the determination will then guide me on the one dated 30th September, 2024, as the former will have a direct bearing on the latter. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 3

page 3 of 24

B. The Notice of Motion Dated 26th June, 2024. 10. The grounds upon which the Applicant’s motion is premised are reproduced here below: a. b. The arbitral final award conflicts with public policy and is inimical to the national interests of Kenya in that: i. It is contrary to the evidence Act and rules of evidence by shifting the burden of proof of the Claim to the Applicant. ii. It is contrary to the Evidence Act by diminishing the role and/or evidence of the Applicant’s expert witness. iii. By determining issues that were outside the scope of the arbitration proceedings and/ or not agreed upon and/or not raised by the parties during the hearing contrary to the Arbitration Act and Rules. iv. By expanding the scope of the arbitration proceedings without the agreement of and/ or notice to the parties. v. The arbitral award in dismissing the Applicant’s counterclaim failed to consider the evidence in support of the same and thus exposed the Kenyan Government and taxpayer to loss of national funds. The Arbitrator in issuing his final award and/or operative award exhibited open bias in that: i. The Arbitrator shifted the burden of proof of the claim to the Applicant. ii. The Arbitrator diminished the role and/or evidence of the Applicant’s expert witness. iii. The Arbitrator determined issues that were outside the scope of the arbitration proceedings and/or not agreed upon and/or not raised by the parties during the hearing contrary to the Arbitration Act and Rules. iv. The Arbitrator expanded the scope of the arbitration proceedings without the agreement of and/or notice to the parties. c. The arbitral additional award on costs is contrary to the Advocates Remuneration Order and laid down principles of taxation of party and party bill of costs. d. It is in the interest of justice that the court grants the orders sought. 11. As I have stated before, the Respondent herein was the Claimant in the arbitration proceedings while the instant Applicant was the Respondent. 12. The application is supported by the affidavit sworn on 26th June, 2024 by Michael Okuk, who describes himself as the Applicant’s Deputy Director Legal Services. 13. In precis, the said deponent stated on oath that the parties herein entered into a form agreement on 8th May, 2013 which was duly executed by the parties, whereby the Respondent was to construction for the Applicant a mall at an initial agreed contract sum of Ksh.2,451, 035,643/-. 14. The deponent described in detail the history and/or genesis of the transaction between the parties, which, well after the handover of the mall by the Respondent to the Applicant, resulted in a dispute being declared by the Respondent, pursuant to which this matter was referred to arbitration in https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 4

page 4 of 24

accordance to Clause 37.2 of the tender document that provided that all disputes between the parties under the contract be referred to arbitration. 15. 16. In furtherance to the declaration of a dispute and the referral thereof to arbitration, the Chartered Institute of Arbitrators appointed Dr. Wilfred A. Mutubwa OGW LL.D. C.Arb FCI Arb as the sole arbitrator to determine any dispute or claim arising out of or relating to the contract. In its statement of claim, the Respondent prayed for the following reliefs: i. A declaration that the Respondent has breached its contract with the Claimant. ii. An order compelling the Respondent to take over the loan facility at Cooperative Bank of Ksh.2,500,000,000/- as contracted within 14 days of the award. iii. In default of (b) above, the loan facility at the Cooperative Bank to automatically transfer to the Respondent within 30 days of recognition of the award by the High Court and the relevant forms to be executed by the Deputy Registrar of the High Court. iv. An award of special damages of Ksh.645,992,862.91/- plus interest accrued since the date of the invoice Part Two B at 14% per annum until settlement in full. v. General and exemplary damages. vi. Costs plus interest thereof of the arbitration proceedings. vii. Any other relief that this Honourable Tribunal may deem just and expedient. The deponent stated in the supporting affidavit that the Applicant herein resisted the claim in the arbitration proceedings and to that end filed a statement of defence and counterclaim. The pleadings that the parties filed are annexed to the affidavit in support of the application. During the hearing of the dispute, the Respondent called Mr. Zeyun Yang as its witness while the Applicant called one Mr. Matengo as its witness. The arbitrator set out the following issues for determination: i. Whether the variation of the contract/bid price was properly authorized. ii. Which party is to blame for the non-establishment of the escrow account. iii. Whether the Respondent should be directed to take over the Ksh.2,500,000,000/- bank facility at Cooperative Bank of Kenya. iv. Whether the Claimant violated Clause 36 of the tender document by engaging in corrupt activities. v. Whether the amounts sought under invoices Part 2B dated 4th May, 2018 is payable to the Claimant. vi. Whether the Respondent’s counterclaim is merited. vii. Who bears the costs of the arbitration. 17. The deponent stated that the arbitrator proceeded to hear and determine the claim and issued his final award dated 15th February, 2024, in the terms reproduced above. On 26th June, 2024, the arbitrator issues an additional award on the quantum of costs whereby he assessed party and party costs payable to the Respondent at Ksh.23,030,746.56/-. 18. The position taken by the Applicant, as expressed in the deponent’s supporting affidavit is that the award and additional award should be set aside on the ground that the arbitrator exhibited open bias for the following reasons (verbatim, as per the deponent’s depositions): https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 5

page 5 of 24

a. The Arbitrator in determining and awarding that the interest accrued from the KCB Bank facility failed to consider the totality of the evidence placed before him by failing to take into consideration the Expert Report by Matengo Githae & Associates (hereinafter the Matengo Report), which report was filed by the Authority, on grounds that the Matengo report was unsigned and undated and thus did not have evidentiary probative value: This is the despite the fact the author, Mr. Meshack Matengo, testified as RW-2 and produced the said report without any objection by the Respondent. b. In furtherance to the foregoing the Arbitrator failed to consider that the purpose of the KCB Bank facilities was to finance Working Capital Requirements, which could be anything but the Construction of the Mall. A comparison between KCB Bank Letters of Offer dated 13th May, 2014 and 4th June, 2015 to the Co-operative Bank of Kenya letter of Offer on Pg 58, and 68 of Further List of Documents dated 21st July, 2022 and annexed herewith as WO-5 where the purpose of the facilities was for performing the Lake Basin Development Authority Contract. c. I have further been advised by the Authority’s Advocates that the fact the report was unsigned and undated was not an issue brought up by the Respondent and/or the Tribunal during the hearing of the claim or it’s written submissions thus the actions of the Arbitrator in dismissing the said evidence is tantamount to open bias against the Authority. d. In furtherance to the foregoing, the Arbitrator totally failed to consider that the Respondent having had sight of the Report by Mr. Meshack Matengo failed and/or neglected to file its own report to rebut the findings in the Matengo report. The RespoNdeNt’s witness when asked on whether they had filed a Financial Report having been served with the Matengo report, stated that it was not necessary. (Reference is made to page 51 of the Transcript annexed herewith as WO-18) e. Further, the Arbitrator failed to take into consideration that Mr. Matengo in his testimony and report indicated that he had indeed scrutinized the bank statements concerning the facility and his findings were that the interest claimed by the Respondent should not be allowed. f. In furtherance to the foregoing, the Arbitrator failed to consider that in support of its claim for interest resulting from the borrowing and/or drawdown from the loan facilities accorded to it by Development Bank, KCB Bank and Cooperative Bank, the Respondent only provided bank statements in support of the same. A perusal of the Bank statements provided, showed there is no indication and/or any entry in relation to the construction of the mall, in fact, there are various transaction details/entries which are in no way related to the construction of the mall, (We make reference to pages 98-574 of the Respondent’s Further List of Documents dated 1st August, 2022 annexed herewith as WO-5). g. In further demonstration of bias, the Applicant having raised the above highlighted entries as having no nexus to the construction of the Mall, the Respondent did not in any way, either by way, of evidence and/or written submissions, rebutting the facts that the statements of accounts provided showed had no entries evidencing payments towards the construction of the Mall. h. In awarding interest accrued from KCB Bank, the Arbitrator failed to consider the expert testimony of Mr Matengo who in his report noted, that following the execution of the Form of Agreement, the Authority made a downpayment of Kshs 335,000,000.00, the Arbitrator completely ignored that from the bank statements provided and adduced, the KCB Bank account began running in August 2014 even before the Form of Agreement was varied, and https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 6

page 6 of 24

during this period the total expenditure of the project up to May 2015 was adequately covered by the Co-operative Bank Loan that secured a sum of Kshs 2,500,000,000.00 this can be confirmed from the first six project’s architects' certificates totaling to Kshs 2,100,000,000.00 (We make reference to pages 98-574 of the Respondent’s Further List of Documents dated 1st August, 2022 annexed herewith as WO-5) 19. i. The Arbitrator in awarding the Respondent was biased by stating that the Authority supported the borrowing by Kenya Commercial Bank and further provided two properties as securities for the facility. This is not the case as the Respondent did not adduce any evidence in support of this and no property was provided by the Authority as security for the borrowing. j. In furtherance to the foregoing, the Respondent’s Witness My Yang Zeyun in his testimony did confirm that the Authority did not sanction the Borrowing from the KCB Bank. (We make reference to pages 53-54 of the transcript annexed herewith as WO-18) k. In further demonstration of open bias, the Arbitrator proceeded to dismiss the Authority’s Counterclaim without due consideration of the Authority’s claims as averred in the foregoing paragraphs and the same being contrary to public policy and inimical to national interests as captured in Paragraph 27b of this Supporting Affidavit. The second ground upon which the Applicant sought for the setting aside of the award and additional award was that the same are against public policy as public funds are involved. On that ground, the deponent stated as follows in his affidavit: a. The Award as issued contravenes Section 47(5) of Public Finance Management Act No. 18 of 2012, which provides that funds received in the form of grants or donations ought to be spent only in accordance with Articles 221 and 223 of the Constitution of Kenya 2010 and the Authority having fully paid the contract sum in terms of the Final Certificate issued by the Project’s Architect’s. b. Further, the Respondent has received the sum of Kshs 4,509 551,168.30 from the Exchequer and Co-operative Bank of Kenya for the construction of the Mall, which sum is excessively beyond the contract sum, of Kshs 3, 860,000,000.00 and/or the Final Account Certificate submitted by the Quantity Surveyor being Kshs 4,138, 895, 104.89. c. The foregoing fact was not disputed by the Respondent’s director during the hearing of the claim and therefore awarding the Respondent an additional sum of Kshs 344, 494, 952.49 to be paid out by the taxpayer is against public policy and is inconsistent with Article 201 of the Constitution of Kenya which requires that public money shall be used prudently and responsibly. d. In support of the borrowings of the KCB Bank, Development Bank and Co-operative Bank the Respondent provided Bank statements and I have been advised by my advocates that if the Arbitrator had perused the said Bank Statements, he would have noted that there are no indication and/or any entries in relation to the construction of the Mall. e. The Final Award is inimical to the national interest as the Respondent should not have been awarded the Kshs. 344, 594,952.49 together with interest Kshs 107,722,499.60 as it results in unjust enrichment of the Respondent and is contrary to public policy as it promotes unfair and unconscionable commercial practices. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 7

page 7 of 24

f. 20. The Additional Award is inimical to the National interest as the assessed costs are exorbitant and is contrary to the Advocate Remuneration Order and laid down principles of taxation of party and party bill of costs. Further citing the ground of the award being inimical to the national interests of Kenya and in conflict with public policy, the deponent stated as follows in his affidavit: a. The Award is biased and impartial against the Authority and in favour of the Respondent as it failed to consider the evidence on record, selectively considering evidence and shifting the burden of proof to the Authority thus being in total contravention of the well-settled principle; “he who alleges must prove” and to Section 23(3) of the Arbitration Act which states that a tribunal has “the power to determine the admissibility, relevance, materiality and weight of any evidence and to determine at what point an argument or submission in respect of any matter has been fairly and adequately put or made”. b. In furtherance to the foregoing, I am advised by the Authority’s Advocates, which advise I verily believe to be true that the Arbitrator shifted the burden of proof to the authority to show that the borrowing and/or drawdowns by the Respondent from KCB Bank facility, had not been applied to the construction of the Mall, and not the Respondent to prove the same. The onus was on the Respondent to show the nexus of the borrowing and/or drawdown to the construction of the Mall. For instance, no payment vouchers, Local Purchase orders, subcontractors and/or receipts were produced as evidence as proof that then said borrowing and/or drawdown was pursuant to a component of the construction of the Mall. 21. On the basis of the foregoing grounds, the Applicant sought that the final and additional awards be set aside. 22. In response to the application, the Respondent’s Managing Director Zeyun Yang filed a replying affidavit that he swore on 30th September, 2024. 23. The said deponent took issue with the grounds that the Applicant proffered as the basis for setting aside the arbitral award, urging that in setting aside an arbitral award under Section 35 of the Arbitration Act the court is only required to address itself to process failures and not to the merits of the arbitral award itself, is in tandem with the principle of party autonomy, guaranteeing that parties are satisfied with results of arbitration.He took the position that the application is an invitation to the court to consider the merits and/or value considerations of the awards published on 15th February, 2024 and 26th June 2024 and is in effect it is an impermissible appeal guised as an application to set aside. 24. On the ground of failing to follow the rules of evidence, while reiterating that the same amounted to a merit decision that was not subject to setting aside proceedings, the Respondent stated that under Section 20(3), Arbitration Act, the power of the arbitral tribunal under subsection (2) (on determination of rules of procedure) includes the power to determine the admissibility, relevance, materiality and weight of any evidence and to determine at what point an argument or submission in respect of any matter has been fairly and adequately put or made. 25. The deponent to the replying affidavit stated that that the allegations that the Applicant’s evidence was not considered; that the Arbitrator shifted the burden of proof to the Applicant; that the Arbitrator exceeded the scope of the arbitration and considered issues not submitted to arbitration; that the assessment of costs was contrary to the Advocates Remuneration Order; were all groundless as the material presented in support thereof was merit considerations that the Arbitrator addressed. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 8

page 8 of 24

26. With regard to the additional award on quantum of costs, the deponent to the replying affidavit stated that the Arbitrator considered the applicable law being Rule 10(2) of the Arbitration Rules, 1997 as read with Schedule 6 of the Advocates Remuneration Order, 2014 vis-à-vis various decided cases on taxation of costs, before arrival at the additional award. 27. On the ground’s presented by the Applicant that the Arbitrator contravened public policy and national interest and exhibited open bias against the Applicant, the deponent stated that the Applicant failed to demonstrate such contravention of public policy and national interest, or open bias against the Respondent. 28. He stated that during the arbitration proceedings, both parties made their submissions, had a chance to examine and cross examine the respective witnesses and produce their bundle of documents with evidence supporting their respective cases. 29. The deponent further stated that each party was granted an equal opportunity to present their cases and evidence before the Arbitrator unrestrained and that moreover, the Arbitrator gave the parties 7 days after the arbitration proceeding transcripts were ready to raise any issues therein, which allowed parties to ensure the correct information was recorded to prevent any misrepresentations which could be prejudicial to the parties and that the Applicant never raised any issue and/or concern(s), as to the substance of what had been admitted and/or was submitted before the Arbitrator for determination. 30. The deponent further noted, in respect of the Applicant’s allegation that the Arbitrator went beyond the scope of the reference, that no particulars or specifics have been identified, pleaded or tendered as proof of any such matter, issue or dispute which the arbitrator admitted and determined which was not part of the reference to the arbitration. 31. The deponent noted that the Applicant had, without dispute, reproduced the issues that the Arbitrator set down for determination, which the Applicant did not dispute were within the reference and whose determinations the Applicant did not demonstrate, went outside such scope. He stated that in any event, had the Applicant properly identified that part of the awards that contained decisions on matters not referred to in the reference, the court, under Section 35(2)(iv) of the Arbitration Act had the power to sever and set aside only that impugned part of the arbitral award. C. Submissions on the application dated 26th June, 2024. 32. The parties canvassed the application dated 26th June, 2024 by way of written submissions and were allowed to highlight the same. Parties also filed their respective lists of authorities. I have had the opportunity of perusing and considering the submissions. 33. Mr. Ogejo, learned Counsel for the Applicant stated that the Arbitrator shifted the burden to the Applicant to prove the existence of a loan facility and that in so doing, he went against the rule of evidence that requires that the alleging party provides evidence to prove its case. He further stated that the Arbitrator thus failed to treat the parties equally, effectively contravening Sections 19 and 20(4) of the Arbitration Act and Rule 50 of the Arbitration Rules. 34. Mr. Ogejo further submitted that the finding of the Arbitrator that the Matengo Report, was unsigned and undated and thus did not have evidentiary probative value exhibited bias on the part of the Arbitrator for the reason that none of the parties raised the issue of the report being unsigned during the arbitration proceedings. Counsel pointed out to the court that the finding was made despite Mr. Meshack Matengo, having testified as RW-2 and having produced the said report without any objection by the Respondent. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 9

page 9 of 24

35. Counsel thus proffered the view that the Arbitrator violated the rules of evidence by shifting the burden of proof to the Applicant and by making findings on the Matengo report that were adverse to the Applicant, which violation in his view resulted to an award that was contrary to public policy, in that the law of evidence was allegedly not followed. 36. In conclusion, Counsel submitted that the application for setting aside the award be allowed and consequently, that for recognition and adoption be dismissed. 37. In response. Mr. Lusi, learned Counsel for the Respondent stated that the application for recognition and adoption of the arbitral award should be allowed as there were no tenable grounds placed before the court warranting the setting aside of the award. 38. Counsel for the Respondent, stated that the grounds based on allegations of failure to abide by the rules of evidence and of bias as presented by the Applicant are alien to Section 35 of the Arbitration Act, as that provision specifically focuses on the grounds of procedural fairness, jurisdictional limits, integrity and public policy. He stated that Section 35 does not include general dissatisfaction with evidence, misapplication of law or disagreement with the merits of the award or perceived bias. In Counsel’s opinion, the Applicant, vide the application seeking to set aside the arbitral award and additional award is now inviting this court to irregularly sit on appeal by asking the court to relook at and reevaluate the evidence that was placed before the Arbitrator. 39. Mr. Lusi stated that the parties were treated with equality during the arbitration proceedings and were each party shall, given a fair and reasonable opportunity to present their respective cases in line with Section 19 and 20 of the Act. 40. Counsel further stated that the Applicant had all along failed to cooperate and had the intention of frustrating the proceedings and pointed out instances which included the Applicant’s failure to participate in the appointment of the Arbitrator, failure to pay the Respondent’s and the Arbitrator’s costs, despite orders having been made to that effect. D. Issues for Determination. 41. Having carefully considered the notice of motion dated 26th June, 2024, the affidavits filed in support and in opposition thereto, the written and oral submissions by learned counsel for the parties, the authorities cited and the applicable law, the court is of the view that the determination of the Applicant’s application for setting aside the arbitral award turns on the following issues. 42. The first issue for determination is whether the Applicant has established any of the statutory grounds for setting aside an arbitral award as contemplated under Section 35 of the Arbitration Act, and in particular, whether the impugned arbitral award dated 15th February, 2024 and the additional award on costs dated 26th June, 2024 fall within the limited and well-defined circumstances under which the court may intervene in arbitral proceedings. 43. Flowing from the foregoing, the second issue for determination is whether the Applicant has demonstrated that the Arbitrator exceeded the scope of the reference by determining matters that were not submitted to arbitration, or by expanding the scope of the arbitral proceedings without the agreement of the parties, in contravention of the arbitration agreement and the Arbitration Act. 44. The third issue for determination is whether the Applicant has proved, to the threshold required in law, that the Arbitrator exhibited bias or partiality in the conduct of the arbitral proceedings or in the rendering of the final award, including whether the allegations relating to the treatment of evidence, the https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 10

page 10 of 24

burden of proof and the evaluation of expert testimony amount to proof of bias or merely constitute dissatisfaction with the merits of the award. 45. The fourth issue for determination is whether the arbitral award is in conflict with the public policy of Kenya and inimical to the national interest, as alleged by the Applicant, particularly in light of the involvement of public funds, the provisions of the Public Finance Management Act, the Constitution and the Applicant’s contention that the award results in unjust enrichment and imprudent use of public resources. 46. The fifth issue for determination is whether the additional award on quantum of costs offends the Advocates Remuneration Order and the settled principles governing taxation of party and party costs, and if so, whether such alleged impropriety constitutes a valid ground for setting aside the additional award under Section 35 of the Arbitration Act. 47. The sixth issue for determination is whether the complaints raised by the Applicant, taken either individually or cumulatively, relate to procedural irregularities and jurisdictional errors warranting judicial intervention, or whether they amount to an impermissible invitation to this court to re-evaluate the evidence, reassess factual findings and sit on appeal over the merits of the arbitral award. 48. Finally, the court must determine, contingent upon its findings on the foregoing issues, whether the Applicant’s application for setting aside the arbitral award is merited, and consequently, whether the Respondent’s application for recognition and adoption of the arbitral award as a judgment of the court should be allowed or declined, and how costs should be borne. E. Analysis and findings. 49. The starting point for the determination of this issue is a correct restatement of the statutory framework, which is Section 35(1) and (2) of the Arbitration Act. 50. Section 35(1) of the Act provides that: “ 35(1). Recourse to the High Court against an arbitral award may be made only by an application for setting aside the award under subsections (2) and (3).” 51. Section 35(2) then enumerates the only circumstances in which an arbitral award may be set aside. These include where the party making the application proves that it was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings, or was otherwise unable to present its case; that the award deals with a dispute not falling within the terms of the reference; that the composition of the tribunal or arbitral procedure was not in accordance with the parties’ agreement; or that the award was induced by fraud, bribery, undue influence or corruption. 52. Additionally, Section 35(2)(b) provides that an arbitral award may be set aside if the court finds that “the subject‑matter of the dispute is not capable of settlement by arbitration under the law of Kenya” or “the award is in conflict with the public policy of Kenya.” 53. These provisions together circumscribe the exclusive grounds for judicial interference with arbitral awards and must be interpreted restrictively so as not to convert a challenge on an award into an appeal on merits. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 11

page 11 of 24

54. The purpose of Section 35 is therefore to limit judicial intervention in arbitral awards to exceptional situations. Indeed, the High Court observed in the case of Cale Infrastructure Construction Co Ltd v Synoniem Company Limited [2025] KEHC 1485 (KLR) that: “ If that were so, arbitral awards would be impeached and set aside on all manner of grounds outside the confines of section 35 of the Arbitration Act.” 55. In that case the court noted that the Supreme Court in Synergy Industrial Credit Ltd v Cape Holdings Ltd [2019] eKLR reaffirmed the closed nature of the grounds under Section 35 and stressed that the court may not sit on appeal over the arbitral award. The court in Cale Infrastructure held that the High Court must be vigilant not to exceed the clearly defined scope of Section 35 when adjudicating challenges to arbitral awards. 56. Similarly, in the case of Mahindra & Mahindra South Africa (PTY) Ltd v Yash Commodities Limited & 2 others [2025] KEHC 16499 (KLR), the High Court stated with clarity the foundational principle underpinning Section 35, and observed 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.” 57. The court went on to state 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.” 58. This exposition reflects a consistent line of authority cautioning that disagreement with the outcome of an arbitral award does not, without more, engage any of the statutory grounds unless supported by cogent evidence of a defect contemplated under Section 35. 59. This court cannot therefore regard an Applicant’s mere dissatisfaction with the tribunal’s factual or legal analysis as a basis for setting aside the award. The Applicant must demonstrate specific statutory defects such as jurisdictional overreach or procedural injustice as contemplated by Section 35. 60. Having restated the statutory scheme and the guiding principles from our jurisprudence, I will now turn to the application at hand. The gravamen of the Applicant’s case is that the Arbitrator erred in the evaluation of evidence (in particular the Matengo Report and bank statements), improperly shifted the burden of proof, determined issues allegedly outside the scope of the reference and issued awards that are contrary to public policy in a manner inimical to the national interest. 61. These criticisms that the Applicant presented, though elaborate, essentially challenge the merits of the arbitral award. As a matter of law, an aggrieved party is not entitled to use Section 35 as a vehicle for relitigating or re‑weighing evidence or for substituting the court’s own view for that of the arbitral tribunal. The law does not permit this court to function as an appellate forum over arbitral decisions on issues of fact or legal interpretation where none of the statutory grounds under Section 35 is established. 62. With respect to the burden of proof, it is not a statutory ground for setting aside that an Arbitrator applied the burden differently from what a party prefers. Indeed, the Arbitration Act itself empowers the tribunal to determine the admissibility, relevance, materiality and weight of evidence and to decide https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 12

page 12 of 24

the manner in which such evidence is evaluated. Thus, disagreement with the Arbitrator’s evidential rulings does not equate to a defect in procedure or jurisdiction under Section 35. 63. Similarly, the Applicant’s complaints that the Arbitrator did not consider certain evidence or gave inadequate weight to it are, in substance, attacks on the merits of the award and not on any of the recognised statutory grounds for setting aside. 64. On the public policy ground, while Section 35(2)(b)(ii) permits setting aside of an arbitral award if it is in conflict with the public policy of Kenya, this court must apply the well‑established formulation of public policy. As Ringera J. (as he then was) explained in Christ for All Nations v Apollo Insurance Co. Ltd [2002] 2 EA 366: “ An award could be set aside … 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.” 65. This authoritative exposition has been repeatedly applied in subsequent decisions to mean that a mere disagreement with the result of an award or a perception that the outcome is unfavourable to public finances does not, of itself, meet this high threshold. 66. In this case, the Applicant’s allegations of impropriety and public policy violations are not accompanied by evidence of any fundamental illegality, absence of jurisdiction, fraud, corruption or manifest inconsistency with constitutional or statutory provisions. The fact that public funds are involved and that the outcome imposes a financial burden on the taxpayer, without more, does not bring the award within the narrow definition of public policy described in Christ for All Nations. 67. Unless an award is shown to be inconsistent with a constitutional or statutory command, inimical to the national interest in a legally cognizable way or contrary to justice and morality, the High Court will not interfere. 68. In precis, the Applicant has failed to establish that the arbitral award dated 15th February, 2024 and the additional award on costs dated 26th June, 2024 fall within the limited and specific circumstances under Section 35 of the Arbitration Act warranting interference by this court. 69. The complaints raised, taken individually or cumulatively, amount to disagreements with the Arbitrator’s factual and legal evaluations rather than demonstrable defects in the arbitral process or jurisdiction. The statutory conditions for setting aside the awards, have not been satisfied. 70. Accordingly, this court finds that the Applicant has not established any statutory ground for setting aside the arbitral awards under Section 35 of the Arbitration Act, and the first issue is accordingly resolved against the Applicant. 71. Section 35(2)(a)(iv) of the Arbitration Act clearly states that an arbitral award may be set aside if “the arbitral award deals with a dispute not contemplated by or not falling within the terms of the reference to arbitration or contains decisions on matters beyond the scope of the reference to arbitration….”. This is a distinct statutory ground aimed at preventing an arbitral tribunal from deciding matters outside the parties’ agreed submission to arbitration. 72. The provision further cautions that if the tribunal makes decisions outside the reference, only the offending part may be severed and set aside. The inclusion of this sub‑paragraph underscores that courts can intervene where the tribunal’s award goes beyond the boundaries agreed by the parties. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 13

page 13 of 24

73. In assessing whether the arbitral tribunal has addressed a dispute that was not envisaged or included within the terms of the reference, or whether its award comprises determinations on issues exceeding the scope of the arbitration reference, the arbitration clause or agreement is of central importance. Additional factors to consider, without suggesting an exhaustive list, include the nature of the subject matter, the pleadings and submissions of the parties as well as the parties’ conduct during the arbitration.The arbitration clause in the contract serves as the primary reference point for defining the scope of the tribunal’s powers. Although the pleadings and the parties’ conduct are important factors, the central question in such an inquiry is whether the award has gone beyond the bounds of the arbitration agreement, rather than whether it has gone beyond the scope of the parties’ pleadings. 74. Whether a tribunal has exceeded the scope of the reference depends on whether it determined matters that the parties never consented to submit to arbitration, rather than merely interpreting or applying the evidence in a way that is adverse to one party. 75. A concrete example of a tribunal exceeding its mandate is found in Maina v Francis & 10 others [2025] KEHC 6322 (KLR). In that case, the High Court held that: “ The court … finds and holds that the arbitrator exceeded his mandate by resolving a dispute beyond the scope of authority donated by the parties. That satisfies the requirement of section 35(2)(iv) of the Act and as a matter of duty … the award is thus set aside.” 76. This judicial pronouncement confirms that if an arbitrator acts beyond the authority conferred by the parties, the award, or the specific part of it that exceeds that authority, must be set aside. 77. The Maina decision clarifies the reason for judicial intervention: that an Arbitrator’s jurisdiction is not unlimited or unfettered but constrained by the powers granted by the parties. Accordingly, the court stressed that the tribunal’s mandate is limited to the issues the parties agreed to submit to arbitration and any action beyond that mandate invites intervention under Section 35(2)(a)(iv). 78. This clear judicial statement confirms that where an arbitrator ventures beyond the power donated by the parties, the award or offending part thereof must be set aside. 79. Importantly, a finding of excess must be specific and concrete. It is not sufficient for a party to claim that the Arbitrator simply reached an unfavourable or incorrect decision. As the High Court noted in the case of Dar Iman Limited v Clasico Builders (K) Limited [2021] KEHC 13263 (KLR), in interpreting Section 35(2)(a)(iv): “ Whether the arbitrator was right or wrong in his approach on this issue is not within the province of the court… since it cannot intervene merely because it would have reached a different conclusion.” 80. I understand the court to mean that a mistake on the merits of a dispute does not amount to exceeding jurisdiction; what constitutes exceeding jurisdiction is where the arbitrator makes determinations on issues that were not properly submitted for resolution, rather than simply misinterpreting or misapplying the law or the facts. 81. In precis, for an Applicant to succeed on this ground, he must show that the award contains decisions on matters that were not part of the arbitration agreement or the parties’ reference to arbitration. Mere disagreement with how the Arbitrator evaluated evidence does not suffice. The focus is on whether the tribunal decided issues not agreed to be arbitrated, not whether it decided issues in a manner unfavourable to one party. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 14

page 14 of 24

82. Applying the above positions to the present case, the Applicant has identified various aspects of the award that it criticizes, such as treatment of evidence, burden of proof and findings on certain claims. However, these are disputes about the correctness of the tribunal’s analysis, not assertions that the Arbitrator assumed jurisdiction over issues that the parties never submitted to arbitration. 83. There is no discrete finding by the Arbitrator in the award that deals with a completely unrelated controversy or a matter beyond the express or implicit terms of the agreed reference. The issues determined, contract variations, liability, counterclaim and costs, all fell within the scope of the arbitration reference as reflected in the pleadings and agreed issues. 84. Accordingly, in the absence of any clear finding that the Arbitrator ventured beyond the terms of the arbitration agreement and resolved matters never submitted to arbitration, the statutory conditions of Section 35(2)(a)(iv) are not satisfied. The Applicant’s criticisms are legitimate as disagreements with the tribunal’s assessment, but they do not demonstrate that the Arbitrator exceeded his mandate in the sense contemplated by the Arbitration Act. 85. For the foregoing reasons, the court finds that the Applicant has not established that the Arbitrator exceeded the scope of the reference under Section 35(2)(a)(iv) of the Arbitration Act in a manner that would warrant setting aside the award. 86. The third issue for determination is whether the Applicant has established that the Arbitrator exhibited bias, partiality or lack of impartiality in the conduct of the arbitration proceedings and in the making of the arbitral awards. This issue directly engages the fundamental principles of procedural fairness, natural justice and impartiality in arbitral proceedings, which are core to the integrity of arbitration and this court’s oversight jurisdiction under the Arbitration Act. 87. Although the Act does not explicitly state “bias” as one of the enumerated grounds under Section 35(2), impartiality and absence of bias are intrinsic aspects of due process. Where a tribunal’s conduct raises justifiable doubts as to impartiality or independence, such conduct can, in appropriate cases, constitute a ground for setting aside an award as being contrary to public policy and natural justice. 88. In the case of Sheikh v Mwangi & another [2023] KEHC 17837 (KLR) the High Court articulated the applicable test for establishing bias in arbitration challenges. In that case the court adopted the standard from appellate authority Philip K. Tunoi & another v Judicial Service Commission & another [2016] eKLR, stating that: “ the test to be applied in all cases of apparent bias was the same, namely, whether in all the circumstances of the case, there appeared to be a real danger of bias… so that justice required that the decision should not stand.” 89. In the case of Kalpana H. Rawal v Judicial Service Commission & 2 others [2016] the Court of Appeal while dealing with an application for recusal/bias, explained the test for judicial bias in clear terms. The court held that the relevant legal test is the “reasonable apprehension of bias” test, an objective standard. It emphasized that the question the court must ask is whether, looking at the circumstances, a reasonable, fair‑minded and informed member of the public would conclude that there was a real possibility that the judge would not decide the case impartially. The court stated: “ We think the objective test of reasonable apprehension of bias is good law … do the circumstances give rise to a reasonable apprehension, in the mind of the reasonable, fair‑minded and informed member of the public, that the judge did not (will not) apply his mind to the case impartially.” https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 15

page 15 of 24

90. This standard is objective and applied from the viewpoint of a reasonable and informed observer. It is not enough that a party subjectively feels unfairly treated. The perception of bias must be reasonable and based on the tribunal’s conduct as shown on the record. 91. What I understand the courts in the cases above to be saying is that any apprehension of bias must be sensible and justified, shared by reasonable and right‑thinking individuals who have applied themselves to the question and reviewed the pertinent facts. A real chance of bias must be shown. Mere speculation is inadequate. 92. Although the quoted passages arose in judicial bias contexts, they are relevant in arbitration challenges where due process and fair hearing principles mirror constitutional guarantees and are part of public policy under Section 35(2)(b)(ii) of the Arbitration Act. 93. In considering whether the Arbitrator in the present case exhibited bias, it is important to distinguish between legitimate disagreement with the tribunal’s evaluation of evidence and actual conduct demonstrating lack of impartiality. 94. In the case of Nairobi Academy (Holdings) Limited v Angar [2023] KEELRC 1469 (KLR), the High Court emphasized that: “ the mere failure by an adjudicator to agree with the position taken by a party to a dispute does not imply bias... There must be evidence of conduct on the part of the adjudicator that stirs the feeling in a reasonable bystander of preferential treatment accorded by the adjudicator to one of the parties.” 95. The passage above makes clear that unfavorable findings, unpopular judgments or errors of fact or law alone do not amount to evidence of bias. 96. In the present case, the Applicant’s allegations of bias centre on assertions that the Arbitrator “diminished” certain evidence, shifted burden of proof and failed to consider expert testimony. However, even on the face of the arbitral award and the record, there is no demonstrated conduct by the Arbitrator that would lead an informed and reasonable observer to conclude that there was a real likelihood or probability of bias. Rejection of a party’s submissions or unfavourable rulings do not, in themselves, amount to bias. There must be evidence of conduct that actively prejudices one party or shows preferential treatment. 97. Furthermore, the Applicant’s complaints about evidential rulings and burden of proof amount to mere disagreement with how the tribunal evaluated evidence. An arbitration tribunal has discretion to determine the admissibility, relevance and weight of evidence and such decisions cannot ordinarily support a finding of bias unless there is clear evidence of unfair or unequal treatment. 98. In the absence of concrete evidence that the Arbitrator’s conduct created a reasonable apprehension of bias, that is, evidence that a reasonable, informed observer would conclude there was a real danger of lack of impartiality, the Applicant’s allegations remain unsupported. Mere allegations that the award is adverse, or that the tribunal favoured one party’s evidence over another’s, fall well short of the high threshold that is established in the above cited case law. 99. For these reasons, the court finds that the Applicant has not established that the Arbitrator exhibited bias, partiality or lack of impartiality such that the arbitral awards should be set aside under the Arbitration Act or under the broader principle of public policy and natural justice. The threshold for demonstrating bias is high and the record before the court does not support such a finding. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 16

page 16 of 24

100. The fourth issue for determination is whether the Applicant has satisfied the heavy burden of showing that the arbitral award dated 15th February, 2024 and the additional award on costs dated 26th June, 2024 are contrary to the public policy of Kenya and inimical to national interest within the meaning of Section 35(2)(b)(ii) of the Arbitration Act. 101. Section 35(2)(b)(ii) provides that an arbitral award may be set aside by the High Court if the High Court finds that…the award is in conflict with the public policy of Kenya. 102. This provision recognises public policy as an independent, though narrowly construed, ground for judicial intervention, reflecting the constitutional and statutory commitment to uphold the rule of law and the public interest even in privatised dispute resolution mechanisms such as arbitration. 103. The leading Kenyan authority on the meaning and scope of “public policy” in the context of setting aside arbitral awards remains the decision in Christ for All Nations (supra). As the High Court restated it in Safaricom Limited v Abiero & another [2024] KEHC 15743 (KLR): “ Public policy is a broad concept incapable of precise definition. An award can be set aside under Section 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 any other law of Kenya whether written or unwritten, or (b) inimical to the national interest of Kenya, or (c) contrary to justice and morality.” 104. This tripartite formulation is authoritative in our jurisdiction and has been upheld in subsequent decisions emphasizing that public policy must involve fundamental legal or constitutional values and not mere dissatisfaction with the outcome of a dispute. 105. In Safaricom Limited v Abiero, the High Court further held that: “ Public policy as a ground for setting aside an arbitral award must be narrow in scope and the 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 relied on and must then show which part of the award conflicts with that policy.” 106. This means that a challenge on public policy cannot succeed merely by alleging unfairness or that the award is commercially disadvantageous. Rather, the Applicant must pinpoint the specific constitutional or statutory norm, national interest or principle of justice or morality that the award threatens. 107. In the case of Riro v Kahonge & 4 others [2025] KEHC 13503 (KLR), the High Court similarly reaffirmed the jurisdictional requirement that a party relying on public policy must demonstrate how the award undermines Kenya’s legal order or national interest. The court emphasized that the jurisdiction to set aside is deliberately limited and that public policy must be interpreted narrowly to cover only awards that are fundamentally inimical to the justice system. 108. The emphasis on the narrowness of this ground was also reflected in the case of Mwikali v Sauti Cooperative Savings & Credit Society Limited [2025] KEHC 13194 (KLR), where the court noted that while the Applicant argued that the award was contrary to public policy because it disregarded evidence and contractual terms, the court observed that the public policy of Kenya “loudly pronounces https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 17

page 17 of 24

the intention of giving finality to arbitral awards” and that allowing courts to review every asserted unfairness would be contrary to that public policy. The court stated: “ The public policy of Kenya leans towards Finality of Arbitral Awards and parties to Arbitration must learn to accept Awards, warts and all, subject only to the right of challenge within the narrow confines of Section 35 of the Arbitration Act.” 109. I understand the above phrase to mean that the public policy exception is not intended as a means to re-evaluate or challenge the substantive merits of an arbitral award. 110. Applying the position in the foregoing authorities, to succeed on the public policy ground the Applicant must show that the impugned awards contravene the Constitution or written law, are inimical to the national interest, or are contrary to justice and morality as understood in the Kenyan context. Bare assertions that the award is unfair, excessive or detrimental to public funds, without tangible evidence of a fundamental legal violation or constitutional breach, are insufficient. 111. In the present application, the Applicant principally argues that the awards are inconsistent with the Public Finance Management Act, Articles 201 and 223 of the Constitution and are inimical to national interest because they require payment of large sums from public funds beyond the contract sum. However, such arguments, even if sympathetic from a public expenditure perspective, are in my view essentially policy or budgetary concerns and do not demonstrate that the awards contravene a constitutional provision or written law, or that they undermine the national interest in the narrow legal sense required for public policy intervention. The authorities cited above consistently warn against conflating commercial imprudence or fiscal complaints with public policy grounds for setting aside. 112. The Applicant has not identified any specific constitutional or statutory norm that the Arbitrator’s award is shown to have violated, nor has it demonstrated, with clear evidence, that enforcement of the award would be contrary to justice, morality or so inimical to national interest as to shock the legal conscience of the court. The mere fact that taxpayers bear a cost, even if unfavourable, is not equivalent to the award being contrary to public policy. As the court noted in Safaricom Limited v Obiero (supra) the mere contestation of the correctness of the arbitral award does not amount to a demonstration of public policy contravention. 113. For all these reasons, the court finds that the Applicant has not demonstrated that the arbitral awards are contrary to public policy or inimical to national interest as required under Section 35(2)(b)(ii) of the Arbitration Act. The Applicant’s contentions amount to disagreement with the tribunal’s findings and concerns about public expenditure, which do not meet the high threshold required for setting aside on public policy grounds. 114. Accordingly, the fourth issue is resolved against the Applicant. 115. The fifth issue for determination is whether the additional award on quantum of costs dated 26th June, 2024, which assessed party and party costs, is contrary to the Advocates (Remuneration) Order (“ARO”) and the established principles governing the taxation or assessment of costs so as to justify setting aside that part of the award. 116. This issue raises important questions about the proper legal framework for assessing costs in arbitral proceedings, the tribunal’s powers and whether a misapplication of applicable cost scales or legal principles can amount to a ground for judicial intervention under Section 35 of the Arbitration Act. 117. The ARO is a statutory instrument that governs the remuneration of advocates and the taxation of costs as between party and party in contentious matters, including where costs are awarded by a court or taxed upon an award. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 18

page 18 of 24

118. Rule 50 of the ARO provides that a bill of costs in proceedings in the High Court shall be taxable in accordance with Schedule 6 unless otherwise directed and Rule 66 expressly provides that costs may be taxed upon an award in an arbitration notwithstanding that the time for setting aside the award has not elapsed. 119. Thus, the ARO contemplates that costs awarded in litigation or upon arbitral awards must ordinarily be assessed and taxed according to the statutory scales unless there are specific reasons to depart therefrom. 120. The general principle underpinning the ARO and taxation jurisprudence is that party and party costs should indemnify the successful party for costs necessarily and reasonably incurred and that courts or tribunals should apply the applicable scale of fees with reasonable regard to the nature and complexity of the matter. The award of costs must reflect the correct schedule in the ARO, for example, Schedule 6 rather than Schedule 5, and that the misapplication of the applicable schedule by an arbitrator could render the cost award susceptible to review. In that case, the court considered that the arbitrator erred by adopting the wrong schedule, resulting in a reduction of legal fees contrary to established principles. 121. On the point of judicial enforcement and review of cost assessments, M/S Nyaundi Tuiyott & Co. Advocates v Tarita Development Ltd [2016] KEHC 5211 (KLR) (although the same addressed the taxation of an advocate’s bill of costs following arbitration), the High Court held that the taxing master erred by not using the arbitral award to determine the value of the subject matter for assessing instruction fees, thereby misapplying the principle that where costs are awarded upon an arbitral award, the amount awarded should ordinarily guide the subject matter for taxation. 122. Although this case did not set aside an arbitral award itself, it demonstrates that a cost assessment may be reviewed where there is an error in principle in applying the ARO. 123. Similarly, in Mungai v Mwangi Keng’ara & Co. Advocates (Civil Application E407 of 2022) [2023] KECA 1329 (KLR), the Court of Appeal considered a reference to the High Court challenging a taxation decision in the context of arbitral proceedings and highlighted that taxation of costs is subject to the principles and scales contained in the ARO and that a taxing officer must apply the correct legal standards when assessing bills of costs arising from arbitration‑related proceedings. 124. Although that case did not involve an arbitral tribunal’s award itself, it affirmed that errors in principle in cost assessment processes can be corrected by the High Court, particularly where the ARO controls. 125. It follows that if an arbitral tribunal’s award on costs was made in contravention of the ARO or applied scales or legal principles incorrectly, and such misapplication can be demonstrated to be fundamental, then a challenge to that part of the award may be sustainable under Section 35(2) of the Arbitration Act, particularly on the ground that the award is contrary to Kenya’s public policy under Section 35(2) (b)(ii) or that it amounts to a manifest procedural irregularity affecting the fairness of the award. 126. Public policy challenges may arise where a cost award is assessed in a manner incompatible with statutory requirements, though such challenges must be specific and not merely general complaints about quantum. 127. The application before this court alleges that the additional award on quantum of costs is contrary to the ARO and laid‑down principles of taxation of costs because the Arbitrator purportedly applied an inappropriate scale, failed to consider applicable scales or erred in principle in determining the costs awarded. This is fundamentally a challenge to the method and correctness of the costs assessment. However, to meet the high threshold for judicial intervention under Section 35, the Applicant must show that the costs award itself was assessed in a manner that is incompatible with the statutory scheme https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 19

page 19 of 24

or that the tribunal’s determination was so unreasonable and contrary to established legal principles that it offends statutory requirements or public policy. 128. In examining the arbitral award and additional award on costs in the present case, there is no clear evidence that the Arbitrator applied an entirely incorrect legal regime for assessing costs or that the costs were awarded outside the scope of the parties’ agreement or statutory scales. The award’s additional costs assessment appears to have been made by reference to the general power of the tribunal to award costs (as sanctioned by the Arbitration Act and applicable arbitration rules) and Schedule 6 of the ARO, with consideration to the complexity and outcome of the arbitration. The Arbitrator applied the correct schedule and correctly determined and applied the value of the sum awarded in the final award as the reference of the instruction fees. Indeed, this mode was adopted in determining the reference for calculation of instruction fees in the case of Insurance Regulatory Authority v Waweru Gatonye & Co. Advocates [2021] eKLR where the court held as follows: “ It is trite law that instruction fees is determined based on the value of the subject matter of a suit determined from the pleadings, judgement or settlement and that where the matter has not been concluded then the value of the subject matter is pegged on the pleadings. However, once the matter is concluded or settled, the value for purposes of taxation is the judgement or the settlement sum.” 129. I understand the court in the above phrase to mean that instruction fees are assessed with reference to the value of the subject matter of a suit as disclosed in the pleadings, the judgment, or any settlement reached. Where the matter is still pending, the value of the subject matter is derived from the pleadings. Conversely, once the dispute has been determined or compromised, the applicable value for purposes of taxation is the amount awarded in the judgment or agreed upon in the settlement. The learned Arbitrator therefore acted judiciously in using the value of the sum awarded in the final award as the reference. 130. With respect to interest, the learned Arbitrator appreciated that there were conflicting decisions on whether to include interest awarded as part of the subject matter. He however noted that the final award was inclusive of interest and saw no reason as to why the same would be excluded in the computation of the instruction fees. A challenge on the findings of the Arbitrator regarding the aspect of interest would in my view be one on the merits of the decision, that cannot be accommodated under Section 35 of the Act. The same applies to the award of costs on the counterclaim. 131. Being of the foregoing persuasion, the result I reach is that the Applicant has not demonstrated an obvious misapplication of the ARO’s schedules or an egregious error of principle that would warrant setting aside the costs award. 132. It is also relevant that the ARO expressly contemplates the taxation of costs upon an award and provides the framework for such taxation. Rule 66 of the ARO states that costs may be taxed upon an award in an arbitration notwithstanding the pendency of any setting‑aside proceedings. This indicates that the statutory scheme anticipates the determination and taxation of costs in arbitration contexts, thus reinforcing that arbitral tribunals have a lawful basis to determine costs, subject to the applicable scales and rules. 133. The mere fact that the parties may disagree with the quantum of costs or the manner in which the tribunal exercised its discretion does not, in itself, qualify as a ground for setting aside the award absent a demonstration that the tribunal fundamentally misapplied the statutory cost scales or legal principles in a manner that is inconsistent with Kenya’s law or public policy. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 20

page 20 of 24

134. The Applicant has therefore not established that the additional award on costs is contrary to the ARO or the principles of taxation of party and party costs in a manner that would justify setting aside that part of the arbitral award under Section 35 of the Arbitration Act. 135. Accordingly, the fifth issue is resolved against the Applicant. The additional award on costs dated 26th June, 2024 does not offend the ARO or established principles of cost taxation in a way that would justify judicial interference under the Arbitration Act. 136. The sixth and final issue for determination is whether, having resolved the preceding issues against the Applicant, the court should grant the reliefs sought in the application dated 26th June, 2024 to set aside the arbitral award dated 15th February, 2024 and the additional award on costs dated 26th June, 2024, and whether the court should grant the Respondent’s application dated 30th September, 2024 to recognize and adopt the arbitral awards as judgment of this court. 137. In approaching this issue, the court notes the settled statutory scheme in the Arbitration Act. Once a court finds that a challenge to set aside an arbitral award has no merit, the counter‑application for recognition and enforcement (or adoption as a judgment) ordinarily follows automatically under the statute. Section 36(1) of the Arbitration Act provides that: “ 36(1). 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.” 138. This provision imposes a mandatory duty on the High Court to recognize and enforce a domestic arbitral award unless one of the limited grounds in Section 37 is established. It thus confirms that recognition and enforcement is the norm rather than the exception. 139. Section 37, sets out the exclusive grounds on which recognition and enforcement may be refused, which grounds mirror the setting‑aside grounds and include incapacity, invalidity of the arbitration agreement, lack of proper notice, awards not falling within the reference, improper tribunal composition, the award having been set aside, fraud, or recognition being contrary to public policy. The statute provides: “ 37. Grounds for refusal of recognition or enforcement (1) The recognition or enforcement of an arbitral award, irrespective of the state in which it was made, may be refused only — (a) at the request of the party against whom it is invoked, if that party furnishes to the High Court proof that — (i) a party to the arbitration agreement was under some incapacity; or (ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication of that law, under the law of the state where the arbitral award was made; https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 21

page 21 of 24

(b) (iii) the party against whom the arbitral award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; (iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the reference to arbitration, or it contains decisions on matters beyond the scope of the reference to arbitration, provided that if the decisions on matters referred to arbitration can be separated from those not so referred, that part of the arbitral award which contains decisions on matters referred to arbitration may be recognized and enforced; (v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, failing any agreement by the parties, was not in accordance with the law of the state where the arbitration took place; (vi) the arbitral award has not yet become binding on the parties or has been set aside or suspended by a court of the state in which, or under the law of which, that arbitral award was made; or (vii) the making of the arbitral award was induced or affected by fraud, bribery, corruption or undue influence; if the High Court finds that — (i) the subject-matter of the dispute is not capable of settlement by arbitration under the law of Kenya; or (ii) the recognition or enforcement of the arbitral award would be contrary to the public policy of Kenya. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 22

page 22 of 24

140. In precise terms, therefore, the High Court has no general discretion to refuse recognition and enforcement of an arbitral award. Rather, refusal is only permissible where one of the statutory grounds in Section 37 has been established. 141. As noted in the case of Mwai v Gichiri [2025] KEELC 139 (KLR), the statutory wording of Section 37: “ Provides an elaborate framework on the statutory grounds upon which this court may decline to recognize or enforce an arbitral award.” 142. Importantly, the High Court has held that the grounds for setting aside and those for refusing recognition and enforcement are strict and exhaustive. As the court stated inReliable Concrete Works v Ngewanji Company Ltd (Civil Case 69 of 2016) [2022] KEHC 12594 (KLR) (28 July 2022) (Ruling) when discussing Section 35 and Section 37: “ Section 35(2) of the Arbitration Act circumscribes the grounds upon which an arbitral award can be set aside… and Section 37 sets out the grounds upon which recognition or enforcement of an award may be refused… the High Court has no other jurisdiction outside what is provided in the Arbitration Act.” 143. In support of the above principle, the court in the case ofIbrahim & 2 others v Monarch Insurance Company Limited & 2 others (Civil Suit 388 of 2012 & Miscellaneous Application E216 of 2021 (Consolidated)) [2022] KEHC 13766 (KLR) (12 October 2022) (Ruling) stated that: “ Part VI of the Arbitration Act… has a heading under the title ‘Recourse to High Court against Arbitral Awards’ and the implication is that the High Court has no other power against an arbitral award outside the provisions of Section 35 and 37 of the Arbitration Act…the superior court did not have jurisdiction to intervene in any manner not specifically provided for in the Arbitration Act.” 144. The above phrase means that the High Court’s authority to deal with arbitral awards is strictly limited to what is expressly provided under Sections 35 and 37 of the Arbitration Act. Consequently, the High Court lacks jurisdiction to interfere with or review an arbitral award in any other way not provided for by the Act. 145. Having addressed each of the issues for determination, the court now finds that since the application to set aside is unmeritorious, there is no basis under Section 37 for refusing recognition and enforcement of the awards. The Respondent’s application to recognize and adopt the arbitral awards as a judgment of the High Court must accordingly succeed. In Safaricom Limited v Abiero (supra) the High Court reaffirmed that once an award is binding, the court is under a mandatory duty to recognize and enforce it, except where one of the Section 37 grounds is established. The court stated as follows: “ Under Section 36 of the Arbitration Act, the High Court has the power to recognize and enforce domestic arbitral award… subject to Section 37… which sets out the grounds upon which the High Court may decline to recognize and/or enforce an arbitral award.” 146. It follows then, that the Respondent’s prayer for an order adopting and recognizing the subject arbitral award made and published on 15th February, 2024 and 26th June, 2024 as a judgment of the High Court is properly made and should be granted in accordance with the statutory directive in Section 36 and the settled jurisprudence interpreting it. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 23

page 23 of 24

147. On the question of costs, the general rule is that costs follow the event. In arbitral award setting‑aside and enforcement proceedings, where a challenge to set aside fails and the successful party obtains recognition and enforcement, the successful party is entitled to costs unless there are special circumstances justifying a different order. The court sees no such special circumstances here. The Applicant’s challenge was comprehensive but unsubstantiated under the statutory framework. F. Disposition and orders. 148. The result of all the foregoing is that: a. The application dated 26th June, 2024 seeking to set aside the arbitral award and additional award made and published on 15th February, 2024 and 26th June, 2024 respectively is dismissed. b. The Respondent’s application dated 30th September, 2024 seeking to recognize and enforce and/or adopt the arbitral award and additional award made and published on 15th February, 2024 and 26th June, 2024 respectively as a judgment of this court is allowed and the arbitral award dated 15th February, 2024 and the additional award dated 26th June, 2024 are hereby accordingly recognized and enforced and/or adopted as the judgment of this Honourable Court. c. The Applicant shall pay the costs of both applications to be taxed if not agreed. 149. This file is hereby closed. 150. Orders accordingly. DELIVERED (VIRTUALLY) DATED & SIGNED THIS 27TH DAY OF JANUARY, 2026. JOE M. OMIDO JUDGE For Applicant: Ms. Odipo for Mr. Ogejo. For the Respondent: Mr. Lusi. Court Assistant: Mr. Ngoge. Ms. Odipo: I seek 60 days stay of execution. The Applicant is a government institution and we need to relay the judgement to the Attorney General and budgetary committee. Mr. Lusi: I oppose the application. The cases of Nyutu Agrovet and Geochem are clear that the court is rendered functus once it pronounces itself. Applications for stay of execution and leave to appeal can only be made to the Court of Appeal. Court: The Applicant is at liberty to file a formal application before the proper forum. JOE M. OMIDO JUDGE https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1836/eng@2026-01-27 24

page 24 of 24