Commercial and Tax Division v Production Limited

3. Nation filed the chamber summons dated 18.6.2025 under section 35 of the Arbitration Act seeking the setting aside of the arbitral award of 21.5.2025 by Mr. Allen Gichuhi. 4. The application is supported by the affidavit sworn by Sekou Owino on 18.6.2025. 5. It is opposed by the respondent through a replying affidavit sworn by its director, Alison Ngibuni on 25.8.2025. Section 36 application 6. AIOP filed a chamber summons dated 25.8.2025 under section 36 of the Arbitration Act seeking the recognition, adoption and enforcement of the award. It is supported by an affidavit sworn by Alison Ngibuni on 25.8.2025. Directions 7. On 24.9.2025, the court directed the parties to file submissions with respect to the two applications. 8. Nation and AIOP filed written submissions dated 16.1.2026 and 22.12.2025 respectively. 9. AIOP filed rejoinder submissions dated 19.1.2026. Background 2

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10. The parties entered into an agreement dated 19.5.2011 for collaboration and broadcast of a television program. The agreement was varied through a deed of variation on 20.2.2012. 11. AIOP produced 295 episodes of the television program titled Mali, previously, Divide and Rule, for broadcast within East Africa in accordance with the agreed schedule. Each episode was 24 minutes with an additional 6 minutes for commercial airtime. The procurement, placement and broadcast of the advertisements was within the exclusive control of Nation, subject to the applicable rate card. 12. A dispute ensued after AIOP noted that advertisements were running during the broadcast of the program. It requested Nation for disclosure of the revenue generated. Nation issued a report covering the period from the commencement of the program in May 2013. 13. AIOP was dissatisfied with the report as it only featured Nivea sponsorship revenue, leaving out any other revenue derived from other advertisements. It elected to procure the data through independent assessors, Ipsos Limited and Reelforge 3

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Systems Limited that carried out independent assessments of advertising expenditure by Nation’s clients during the airing of the series between 2013 and 2016. The assessors issued their reports showing a substantial difference from the Nation’s report in the actual revenue generated. 14. AIOP therefore demanded that Nation provides full disclosure of how commercial airtime was used and all revenue generated from the series including sponsorships, product placements and spot buys. 15. According to AIOP, Nation did not comply with the said demand prompting it to attempt discussions aimed at amicable settlement of the dispute. Still, Nation was non-responsive and declined to remit AIOP’s claim. 16. The dispute was referred to arbitration pursuant to Clause 11.2 of the Agreement. On 16.10.2015, Mr. Allen Waiyaki Gichuhi was duly appointed as the Sole Arbitrator by the Chartered Institute of Arbitrators (CIArb) Kenya Branch. 17. The parties agree that during the hearing, issues concerning the accuracy of reports by AIOP’s assessors arose. 4

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18. On 28.6.2017, the arbitrator issued a peremptory order directing Nation to provide reconciliation logs and invoices for 2011-2016 and to render a full account of payments made to AIOP. 19. On 18.10.2019, there was a need to have an independent expert review the documentary evidence comprised of broadcast logs and available episodes of the program to determine the revenue due to AIOP. 20. On 1.11.2019, the parties by consent agreed to appoint an independent expert to conduct audit and verification of advertising spots of all advertisements that aired before and during the airing of the Mali Program on NTV Kenya, NTV Uganda and QTV between 2011 and 2016. 21. AIOP filed an application dated 13.2.2020 seeking the appointment of an independent expert witness. Nation opposed the application. 22. The arbitrator issued a 2nd interim award of 22.5.2020 on the appointment of an independent expert selected from a list provided by AIOP. He appointed Mr. Kuria Muchiru and found that by a letter dated 9.12.2019, Nation effectively admitted 5

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acceptance of the appointment of an independent expert. Orders 4, 5 and 6 of the 2nd interim award were peremptory orders directed at Nation to produce 23. The independent expert provided multiple reports and was cross-examined; interrogatories were also issued. 24. The Arbitrator published the Final Award dated 21.3.2025 which was released to the parties on 23.5.2025 following settlement of the tribunal’s fees by all parties. It upheld AIOP’s claims for breach of the agreement. It found that Nation failed to provide the records of revenue generated even after it was issued with a peremptory order. It also found that for that reason, adverse inference would be drawn against it. 25. The Arbitrator awarded AIOP a total sum of Kshs. 320,000,000/- broken down as follows: (1) Kshs. 160,553,042.00 with simple interest thereon at 12% from 18.7.2019 until payment in full. (2) costs of independent assessors - Kshs. 25,321,221.97 with simple interest at 14% if not paid within 30 days (3) AIOP’s costs of the reference – Kshs. 4,384,192/- with simple interest at 14% if not paid within 30 days 6

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(4) Taxed party and party costs - Kshs. 4,546,300/- with simple interest at 14% if not paid within 30 days (5) Claims for aggravated, exemplary and punitive damages dismissed. Nation’s case 26. Nation raised the following grounds for setting aside the award: (1) Lack of evenhandedness- The arbitrator failed to consider its case with respect to the handling and determination of the independent expert and his reports. (2) but No reasons for rejection - He considered AIOP’s case rejected Nation’s case without any meaningful consideration. (3) Public policy – failure to consider and address relevant evidence. (4) Violation of right to fair trial under Article 50 of the Constitution 27. Nation relied on the following cases: - 7

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(1) Flannery v Halifax Estate Agencies Ltd t/a Colley's Professional Services [2000] 1 WLR 377 as quoted in the Authority Kiptum v Birir & another (Civil Appeal 66 of 2020) [2023] KECA 482 (KLR). (2) Nanyuki Ranching Limited v Rock stocks Holding Limited (Miscellaneous Application E197 OF 2024 [2024] KEHC 9220 (KLR) (3) Charles Gatheca v Atlas Copco CMT Management Ltd & 2 others [2019] eKLR (4) Nyutu Agrovet Limited v Airtel Networks Kenya Ltd (Civil Appeal (Application) 61 of 2012) [2024] KECA 523 (KLR) Response 28. AIOP contended that: (1) Nation does not raise any genuine public policy issue but is instead an attempt to re-argue the merits of the dispute and invite the Court to sit on appeal over the arbitral award. 8

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(2) The issues now complained of, including revenue sharing, broadcasting costs, agency fees, repeat broadcasts and alleged uneven treatment, were fully pleaded, canvassed in evidence and addressed in submissions during the arbitration. (3) Nation was afforded a full and fair opportunity to present its case, participated throughout the proceedings, and cannot now claim procedural unfairness simply because it is dissatisfied with the Tribunal's findings. (4) The findings in the award were grounded in the express terms of the agreement made between the parties, particularly Clause 8 on revenue sharing, and in the evidentiary record placed before the arbitrator. (5) data The applicant's own failure to disclose primary revenue necessitated independent assessment and reconciliation, and any adverse outcome flowed from its own conduct rather than from any defect in the arbitral process. (6) Public policy in Kenya favours the finality enforcement of arbitral awards, and (7) No basis has been laid for the Court's intervention. 9 and

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29. AIOP urged the court to dismiss the setting aside application, and to allow its application for recognition, adoption and enforcement of the award. 30. AIOP relied on: (1) Christ for All Nations v Apollo Insurance Co. Ltd [2002] 2 E. A. 366 (2) Mall Developers Limited v Postal Corporation of Kenya [2014] eKLR (3) Kenya Airports Authority v World Duty Free Company Limited t/a Kenya Duty Free Complex [2018] eKLR (4) Kenya Oil Company Limited & another v Kenya Pipeline Company NRB CA Civil Appeal No. 102 of 2012 [2014] eKLR (5) Continental Homes Limited v Suncoast Investments 6 Limited [2018] eKLR (6) Agriculture Finance Corporation & another v Kenya Alliance Insurance Company Ltd & another [2002] eKLR (7) Republic vs Institute of Certified Public Secretaries of Kenya Ex-parte Mundia Njeru Geteria (2010) eKLR 10

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(8) Anne Mumbi Hinga v Victoria Njoki Gathara [2009] eKLR (9) Kenya Shell Limited v Kobil Petroleum Limited [2006] eKLR (10) Mahan Limited v Villa Care Limited [2019] KEHC 1341 (KLR) (11) Samuel Mureithi Murioki v Michael Njoroge Gachuhi; Uncle Sam's 12 Githurai Limited (Third Party); Maiko Investments Limited (Interested Party) [2020] KEELC 2706 (KLR) (12) BSC Kenya Limited v Frick India Limited (Miscellaneous Application Arbitration E049 & E056 of 2023 (Consolidated)) [2024] KEHC 5947 (KLR) (Commercial and Tax) (24 May 2024) (Ruling) (13) Mahican Giovanni Investments Gaida & Limited Others and (NRB HC 3 others Misc. v Civil Application No. 792 of 2004) [2005] eKLR (14) Nairobi Golf Hotels Ltd v Linotic Floor Company Ltd [2015] eKLR Analysis and Determination 11

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31. The global issue for determination is whether the award of 21.3.2025 should be set aside or be recognized as binding and enforceable as a judgment of the court. Guiding principles 32. Arbitration is constitutionally recognized as an alternative form of dispute resolution in Kenya. Article 159 (2) (c) of the Constitution commands that (c) ‘alternative forms of dispute resolution including reconciliation, mediation, arbitration and traditional dispute resolution mechanisms shall be promoted, subject to clause (3).’ 33. Clause (3) provides for what is commonly referred to as ‘rail guards’ in the practice of, as well as grounds for review by the courts of a resolution by alternative forms of dispute resolution. 34. The Constitution is founded on freedom and accountability. It reinforces and guarantees party autonomy and personal agency to choose the forum for dispute resolution, yet, subject to clause 3 of article 159 thus, supplying accountability. 35. The duty of the judiciary to promote alternative forms of dispute resolution has been unbundled in the human rights 12

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lingual and practice to mean; duty to respect (let it be); duty to protect (do no harm and defend); and duty to transform (make it better for the purpose). The Alternative Justice Systems Baseline Policy. 36. Thus, the Constitution obligates the Judiciary not to avoid, control, or extend its hegemony over people's choices. Rather, it asks it to advance by promoting them. The Constitution, therefore, entrenches the principle of non-interference with or limited intervention in alternative justice systems by the courts to the extent permitted by law. 37. Section 10 of the Arbitration Act provides that no court shall intervene in matters governed by the Act except as provided by the Act. This is existing law which continues to be in force except it must be construed in accordance with the section 7 of the Transitional provisions under the Constitution. 38. Hence, within that framing, section 10 of the Arbitration Act is in perfect harmony with article 159(2)(c) & (3) of the Constitution in limiting court intervention in Arbitral process and resolutions except as provided in law. 13

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39. Further, section 35, 36 and 37 of the Arbitration Act are also in conformity with the duty of the judiciary to promote alternative forms of dispute resolution and also provide for limited grounds for review in accordance with article 159(2) (c) & (3) of the Constitution. 40. The foregoing constitutes the constitutional basis as well as the functional foundation for the application of the Arbitration Act post promulgation of the Constitution of Kenya, 2010. 41. Under section 35, the court does not consider the merits of the parties’ cases as it does not sit on appeal over the award but only exercises the power of review within the limited grounds provided in the law. Note the wording of section 35 of the Arbitration Act ‘no court shall intervene in matters governed by the Act except as provided by the Act’. [underlining mine]. Acts or course of action taken by the court contrary to the Arbitration Act and the Constitution amounts to interference. Thus, ‘To interfere would place the court in the position of the Court of Appeal, which the whole intent of the Act is to avoid.’ 14 Mahican

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Investments Limited and 3 others vs Giovanni Gaida & Others [2005] eKLR Grounds for setting aside 42. Section 35 (2) sets out the grounds for setting aside an award as follows: “(2) An arbitral award may be set aside by the High Court only if— (a) The party making the application furnishes proof— (i) that 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, the laws of Kenya; or (iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or (iv)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, provided that if the decisions on matters referred to arbitration can be separated from those not so referred, only that part of the arbitral award which contains decisions on matters not referred to arbitration may be set aside; or 15

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(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless that agreement was in conflict with a provision of this Act from which the parties cannot derogate; or failing such agreement, was not in accordance with this Act; or (vi) the making of the award was induced or affected by fraud, bribery, undue influence or corruption; (b) 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 award is in conflict with the public policy of Kenya.” 43. The first ground raised by Nation is the arbitrator’s alleged lack of evenhandedness. Synonyms of evenhanded include impartial and fair. Merriam Webster Dictionary. Therefore, this ground may fall under section 35 (2) (a) (iv) on arbitral procedure. It may also fall under section 35 (2) (b) (ii) on public policy. 44. The second and third grounds are on violation of the public policy of Kenya by failing to consider and address relevant evidence and violation of the right to fair trial under Article 50 of the Constitution. These fall under section 35 (2) (b) (ii) on public policy. 16

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Public policy 45. Public policy is an indeterminate and fluid concept which evolves from time to time. Kenyatta International Convention Centre (KICC) v Greenstar Systems Limited [2018] KEHC 8936 (KLR) 46. In Christ for All Nations v Apollo Insurance Co. Ltd [2002] 2 E.A 366, Rtd. Justice Ringera underscored some elements of public policy in the context of a section 35 application thus: “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, (c) contrary to justice and morality”. Impartiality 47. An arbitrator or arbitral tribunal ought to be independent and impartial. UNCITRAL Commercial Model Arbitration. Law Lack 17 of on International independence or

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impartiality are grounds for challenging an arbitrator’s appointment. 48. Section 13 (3) of the Arbitration Act provides that an arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as to his impartiality and independence, among others. 49. The challenge procedure is given under section 14. A challenge ought to be raised within 15 days of becoming aware of the composition of the arbitral tribunal or after becoming aware of the circumstances under section 13 (3). 50. While Nation challenges the arbitrator’s impartiality, there is no indication that it raised a challenge regarding the arbitrator’s impartiality as per section 14. 51. In my considered view, the failure to challenge the arbitrator’s impartiality in accordance with section 14, greatly undermines the ground of impartiality as raised in the setting aside application. Unless, such cogent, succinct and compelling details and evidence are adduced to prove impartiality, as well as showing that it was raised immediately upon becoming aware of the circumstances leading to impartiality, the ground 18

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remains an afterthought. Nonetheless, I will consider and determine the ground also under fair hearing. Fair hearing 52. Article 50 (1) of the Constitution states that every person has the right to have any dispute that can be resolved by the application of law decided in a fair and public hearing before a court or, if appropriate, another independent and impartial tribunal or body. It includes the right to adduce and challenge evidence. 53. Nation faults the Arbitrator for failing to consider its case and address relevant evidence. It also faults the Arbitrator for failing to give reasons why it rejected its case. 54. Conversely, AIOP asserts that findings in the award were grounded in the evidentiary record placed before the arbitrator. That Nation was afforded a full and fair opportunity to present its case. That any adverse outcome was due to Nation’s failure to disclose primary revenue data. 55. I have read the final award dated 21.3.2025. The arbitrator highlighted the submissions and digest and list of authorities 19

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filed by the respective parties. He noted that Nation filed submissions dated 23.7.2024 and a list of authorities. He further identified the issues for determination at para. 26. 56. The arbitrator found that: “43. The Respondent had exclusive control over broadcasting of the series, which included the advertisements that would air during the commercial airtime. This encompassed decisions regarding broadcast days, time allocation, content type, and advertisement duration. Consequently, any discrepancies in the duration of commercial airtime, whether exceeding or falling short of stipulated durations, were solely within the Respondent’s control, as affirmed by Sekou Owino during his oral testimony. 44. The Respondent failed to disclose to the Claimant any information regarding the utilization of the Commercial Airtime or duly account for the revenues generated, despite a formal demand having been made. This is notwithstanding the admission by the Respondent’s witness during his examination in chief that the series was co-owned by both parties in equal shares, and any dealings relating to the series should have been mutually agreed upon.” 57. The arbitrator at para. 47 observed that the respondent had at various stages of the proceedings attempted to vary certain terms of the agreement of 19.5.2011 to accommodate its preferred position on various issues. 20

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58. The arbitrator also captured in summary some of the respondent’s submissions. For instance, at paras 49 and 62. 59. As regards, evidence, the arbitrator found that: “133. It is on record that the Respondent did not comply with the orders and directions in both the Interim Awards with regard to the production of documents to evidence the revenues received arising from the commercial airtime.” 60. The arbitrator further held that: “135…. I agree that Section 26 (g) of the Arbitration Act empowers me to draw such adverse inferences from the noncompliance as the (sic) of the peremptory order as the circumstances justify.” 61. The arbitrator dismissed Nation’s claim that it was only required to keep records for 1 year under section 461 of the Kenya Information and Communications Act. He observed: “151. My reading of Section 461 (h) of the Act does not come to the aid of the Respondent on the question of the alleged time bar of one year for keeping records for revenue account for the following reasons. (a) The section is strictly confined to “program log or machine readable record of its programming for a period of one year after the date of broadcasting” which has no correlation to keeping advertisements. 21 records of commercial

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(b) Section 2 of the Kenya Information and Communications Act defines programme as follows: “means sound, vision or a combination of both intended to inform, educate or entertain, but does not include text or data” By its very definition of programme, it can only extend to the soap show ‘Mali’ and not to the commercial airtime that relates to revenue generation. 62. The arbitrator also reasoned that the limitation period for breach of contract is 6 years under section 4 of the Limitation of Actions Act. He also noted that section 43 of the Value Added Tax (VAT) Act imposes a 5-year limitation period for keeping records of transactions including copies of tax invoices, credit and debit notes and purchase invoices. 63. The arbitrator further noted that by a demand letter dated 5.8.2014, which it ignored, Nation was put on notice that an account was to be rendered. 64. The arbitrator found that Nation bore the responsibility of accounting for revenue arising from the commercial advertisements but failed to discharge its burden by not adducing any evidence in accordance with clause 8. That the respondent’s failure to adduce evidence entitled him to draw an adverse inference against it. 22

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65. From the above, I find that the arbitrator considered both Nation and AIOP’s cases, the available evidence and the law applicable. I also find that the arbitrator meaningfully considered and gave reasons for rejecting Nation’s case. 66. Nation has not demonstrated the arbitrator’s lack of evenhandedness, impartiality or fairness. There is nothing to show that the arbitrator was not impartial or fair. He made the decision based on evidence and the law. 67. Nation did not demonstrate that due process requirements or procedural fairness was breached. It has also not demonstrated that its right to fair trial was violated and that the arbitral award is contrary to public policy. 68. Therefore, on the whole, I find no merit in Nation’s setting aside application. Section 36 application 69. Section 36 of the Arbitration Act provides that: “36. Recognition and enforcement of awards (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. (2) …. 23

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(3) Unless the High Court otherwise orders, the party relying on an arbitral award or applying for its enforcement must furnish— (a) the original arbitral award or a duly certified copy of it; and (b) the original arbitration agreement or a duly certified copy of it.” 70. AIOP exhibited a copy of the arbitration agreement contained in Clause 11.2 of the Agreement 19.5.2011. It also exhibited a copy of the Final Award dated 21.3.2025. 71. AIOP has met the prerequisites for recognition and enforcement of the final award under section 36 of the Arbitration Act as an order of the court. 72. Nation has not demonstrated any ground for refusal of recognition or enforcement of the award under section 37 of the Arbitration Act. Disposal 73. In conclusion, I make the following orders: (1) Nation’s application dated 18.6.2025 is dismissed for want of merit. No order as to costs. (2) AIOP’s application dated 25.8.2025 is allowed. The award is recognized and shall be enforced as judgment of the court. No orders as to costs as there was no response. 24

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Dated, signed and delivered at Nairobi through Microsoft Teams online application this 2nd day of July, 2026 ------------F. Gikonyo M Judge In the presence of: Jan for Nation Media Ms. Mathagani/Regeru for respondent CA- Ivan/Aggrey 25

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