Kopo Kopo Inc & 2 others v Christopher Kahwai & 1 other

(1) The learned magistrate erred in fact and law by failing to consider that the parties agreed to be governed by the laws of and the exclusive jurisdiction of the courts of New York State. (2)The learned magistrate erred in fact and in law by failing to consider that the parties agreed to mandatory arbitration for claims under $10,000 where there is no claim for equitable relief such as an injunction. (3)The learned magistrate erred in law by failing to consider the principle of lex fori, respecting the agreed forum. (4)The learned magistrate erred in fact and in law by stating that the Appellant failed to adopt the right procedure to dispute jurisdiction under Section 6 of the Arbitration Act. (5)The learned magistrate erred in fact by failing to consider that the Appellant only filed a notice of appointment protest followed by a Objection seeking to have under Preliminary the suit dismissed because the Respondent failed to take out a summons to enter appearance contrary to Order 5 rule 1(6) of the Civil Procedure Rules and then proceeded to make an application for interlocutory judgement Appellant and thereafter, 2 against the following the

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dismissal of the Preliminary Objection, the Appellant filed the application to refer the matter to arbitration. (6)The learned magistrate erred in fact and in law by failing to consider that the Appellant by filing a notice of appointment under protest signalled to the court and the other parties that it disapproved and did not submit to the jurisdiction of the court. (7)The learned magistrate erred in fact by failing to consider that the Appellant did not enter appearance, nor file a defence in the suit nor acknowledge the claim by the respondent therefore fulfilling the requirement under Section 6(1) of the Arbitration Act regarding the time of filing the application seeking to refer the dispute to arbitration. (8)The learned magistrate erred in law by failing to consider Section 17 of the Arbitration Act which states that the arbitral tribunal may rule on its own jurisdiction. (9) The learned magistrate erred in law by disregarding the affidavit, authorities and submissions presented by the appellant’s counsel and, therefore, basing the ruling on the wrong principles. 3

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3. The appellant urged the court to allow its appeal with costs; to issue a stay of proceedings pending arbitration; to refer the dispute between the parties to arbitration and alternatively, to order that the Magistrates Court does not have jurisdiction to determine the suit. Submissions 4. The appeal was canvassed through written submissions. 5. The appellant filed primary and supplementary written submissions dated 8.12.2025 and 27.1.2026. 6. The appellant urged the court to allow the appeal with costs. It submitted that the trial court erred by finding that it failed to adopt the jurisdiction right procedure to dispute under section 6 of Arbitration Act. 4 the

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7. The appellant contended that it complied with the requirements under section 6 (1) by filing a notice advocate under chamber summons of appointment protest of and filing a seeking stay of proceedings and referral of the dispute to arbitration. 8. The appellant relied on Hassan Zubeidi v Active Partners Group Ltd & 3 others [2018] eKLR where the court affirmed that a party disputing the court’s jurisdiction on the bases of an exclusive jurisdiction clause ought to enter a conditional appearance or an appearance under protest. It cited Adrec Limited v Nation Media Group Limited [2017] KECA 106 (KLR) to assert that the right to seek and obtain stay under section 6 (1) is lost the moment the defence is filed. 5

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9. The appellant faulted the trial court for failing to consider that the parties agreed to be governed by the laws of and exclusive jurisdiction of the courts of New York State. 10. The appellant highlighted that the respondent’s claim arises from his till being shut down in June 2021. It asserted that at the time of shutdown, the terms and conditions agreed upon by the parties was the user agreement last updated on 4.1.2017 and that as per paragraph 20 of the user agreement, the parties agreed that their relationship is governed by the laws of New York State and that any legal action must be brought before the courts in New York State. 11. On the rule of respecting the agreed forum unless there is sufficient reason to depart, the appellant 6 relied on Dari

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Limited & 5 others v East African Development Bank KECA 454 (KLR), Finejet Limited Five Forty Aviation Limited [2012] eKLR, Areva T & D India Limited v Priority Electrical Engineers & Another [2012] eKLR, Raytheon Aircraft Credit Corporation & Another [2005] v Air eKLR and Al-Faraj Limited Fairdeal Upvc Aluminium & Glass Ltd v Ase Europe N. V. [2020] KEHC 8227 (KLR). 12. The 1st respondent filed written submissions dated 28.12.2025. It urged the court to dismiss the appeal with costs. 13. The 1st respondent asserted that the appellant acknowledged his claim and voluntarily submitted to the court’s jurisdiction. 14. The 1st respondent pointed out the 5month period from when the appellant 7

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filed a notice of appointment and when it applied for stay. It also highlighted that the appellant had filed two other applications for the trial court’s determination after which it raised the question of jurisdiction. It therefore argued that the appellant failed to adopt the right procedure to dispute jurisdiction under section 6 as it took substantial steps in the mater. It relied on Adrec Limited v Nation Media Group Limited [supra]. 15. The 1st respondent contended that Hassan Zubeidi v Active Partners Group Ltd 3 Others [supra] & specifically addressed the memorandum of appearance under protest, not a notice of appointment of advocates as in the instant matter, which is distinct. 16. The 1st respondent relied on the doctrine of estoppel to assert that the appellant is 8

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barred from taking a position contrary to its earlier one. It relied on Ogelo v Crawford Capital Pipeline Company Limited; Ltd & Kenya another (Interested Parties) [2025] KEHC 475 (KLR). 17. The 1st respondent asserted that under clause 34 of the terms and conditions produced by it, provides that any dispute arising shall be dealt with in the courts of law in Kenya. It highlighted that the user agreement last updated on 4.1.2017 were in operation in 2017 and were subsequently updated by the appellant itself on 1.10.2022 and that the terms and conditions were operational at the time of the dispute. 18. The 1st respondent submitted that the terms and conditions relied on by the appellant were not 9 supported by a

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certificate of electronic evidence. It relied on County Assembly of Kisumu & 2 Others v Kisumu County Assembly Service Board & 6 Others [2015] eKLR 19. In rejoinder, the appellant denied filing two applications invoking the trial court’s jurisdiction. It stated that it first filed a preliminary objection dated 8.5.2023 and a notice of motion dated 15.5.2023 both on grounds that 1st the respondent had neither collected for service nor served summons to enter appearance on it. 20. The appellant relied on the Adero & Another v Ulinzi Sacco Society Limited [2002] 1 KLR 577 to assert that jurisdiction cannot be conferred by consent of the parties or assumed on the grounds that parties have acquiesced in action. 21. The appellant beseeched the court to rely on recent decisions from 2018 - 2023, not 10

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the earlier ones of Eunice Soko Mlagui v Suresh Parmar & 4 others [2017] eKLR and Lofty v Bedouin Enterprises Ltd [2005] 2 EA relied on by the 1st respondent. Analysis and Determination 22. I have considered the record of appeal, the submissions and authorities cited. 23. The issue before the court is whether the dispute between the parties ought to be stayed and the dispute referred to Arbitration Act arbitration. 24. Section 6 of the (1) A court provides: “6 before which proceedings are brought in a matter which is the subject of an arbitration agreement shall, if a party so applies no later than the time when that party enters appearance or files pleadings or 11

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takes any other step in the proceedings, stay the proceedings and refer the parties to arbitration unless it finds that: (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.” 25. The purport of the above provision is that, the party ought to apply for stay of proceedings, no later than the time when the party enters appearance or files pleadings or takes any other step in the proceedings. 26. In this matter, the appellant confirmed that after it filed a notice of appointment under protest it filed a preliminary objection dated 8.5.2023 and a notice of 12

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motion dated 15.5.2023 both on grounds that the 1st respondent had neither collected for service nor served summons to enter appearance on it. 27. The appellant these actions strongly did not asserted that amount to submission to the jurisdiction of the trial court. 28. Courts have held that the application for stay of proceedings and referral of the dispute to arbitration ought to be made at the time of entering appearance or is made after the filing of the defence. This provision defers to party autonomy and the principle of justice that justice shall be administered without delay. It does not aid an indolent party wishing to use arbitration to temporize resolution between the parties. 13 of disputes

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29. In Charles Njogu Lofty v Bedouin Enterprises Ltd [supra] the Court of Appeal held that even if the conditions set out in paragraphs (a) and (b) of section 6 (1) are satisfied the court would still be entitled to reject an application for stay of proceedings and referral thereof to arbitration if the application to do so is not made at the time of entering an appearance, or if no appearance is entered, at the time of filing any pleading or at the time of taking any step in the proceedings. 30. In the Eunice Soko Mlagui v Suresh Parmar & 4 others [supra] the Court of Appeal found that the appellant who were the defendants in the dispute, had not complied with section 6 (1) as they had already filed their respective defences. 14

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31. The application ought to be made promptly and at the earliest stage of the proceedings. 32. Although the appellant beseeched the court not to rely on the pre-2018 decisions, there is nothing to show that the pre-2018 decisions of the Court of Appeal are not good law or are not binding on this court. 33. The appellant has not demonstrated that the situation obtaining here is distinguishable. It relied on the Adrec case [supra] which is distinguishable from the present matter as the respondent therein merely filed a notice of appointment of advocates and proceeded to apply for stay of the suit. 34. The court finds that the appellant failed to comply with section 6 (1) by taking steps other than applying for stay of proceedings and seeking referral of the 15

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suit to arbitration at the time that it filed the notice of appointment. The 1st respondent pointed out the 5-month period from when the appellant filed a notice of appointment and when it applied for stay is inordinate and unexplained. 35. Thus, the court finds that the trial court did not err in its findings. Disposition 36. In the upshot, the appeal is dismissed with costs to the 1st respondent. Dated, signed and delivered at Nairobi through Microsoft Teams online application this 14th day of May, 2026 ----------------------F. Gikonyo M 16

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Judge In the presence of: Ms. Moturi for Appellant Masibo for Respondent MMAN Advocates Absent CA-Ivan/Aggrey 17

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