KISUMUWALLA OIL INDUSTRIES LTD vs PAN ASIATIC COMMODITIES PTE LIMITED & ANOTHER [1997] KECA 219 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that arbitration clauses in contracts must still follow Kenya's own arbitration law, not just English precedent.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the Court of Appeal's decision in Corporate Insurance Company v Loise Wanjiru Wachira, that Scott v Avery arbitration clauses are subject to Section 6 of the then Arbitration Act, was correctly decided and should stand
Key legal issues
#Whether the Court should depart from its own recent precedent in Corporate Insurance Company v Loise Wanjiru Wachira on the effect of Scott v Avery arbitration clauses
The Court declined to depart from its precedent, affirming that Scott v Avery clauses are subject to Section 6 of the then Arbitration Act notwithstanding their wide and mandatory terms.
The earlier decision was a reserved and well-considered verdict of the Court. In England, Scott v Avery clauses have long-standing common law status alterable only by Parliament; in Kenya, common law applies only subject to statutes passed by the National Assembly and local circumstances. The Court will honour foreign commercial decisions but will not slavishly apply them without regard to Kenyan statutes and circumstances. The appeal's only substantial point therefore failed.
Legal principles established
#- Scott v Avery arbitration clauses, however widely and mandatorily framed, are subject to the provisions of Section 6 of the (then) Arbitration Act.
- Kenyan courts are not obliged to apply English common law wholesale; foreign decisions receive due respect but must yield to Kenyan statutes and local circumstances.
Court orders
#- 1.Appeal dismissed with costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Mombasa
- H.C.C.C. No. 84 of 1993
- Jurisdiction invoked
- First appeal to the Court of Appeal under the then-applicable appellate framework (not expressly stated in the judgment text)
Relief refused
#Appellant's invitation to depart from and overturn the Court's own decision in Corporate Insurance Company v Loise Wanjiru Wachira
The Court held that the earlier decision was a reserved, well-considered verdict correctly decided in accordance with Kenyan law as it then stood, and that Kenyan courts are not bound to apply English common law wholesale.
Costs
Appeal dismissed with costs to the respondents
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
The Court concluded in the CORPORATE INSURANCE COMPANY case, Supra, that such clauses though framed in wide and mandatory terms, are nevertheless subject to the provisions of Section 6.
We will continue to give English or any other foreign decisions, particularly on commercial matters, their due place of honour, but it is unreasonable for any one to expect that we will slavishly apply those decisions without looking at our own statutes and circumstances.
this appeal fails and the order of the Court shall be that it be dismissed with costs as proposed by Bosire, Ag. J.A.
Issues in the judgment
#The judgment as supplied contains only the judgment of Omolo, J.A., which refers in draft to separate judgments of Pall, J.A. and Bosire, Ag. J.A. that are not reproduced in the text; their reasoning is therefore not directly quotable.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "KISUMUWALLA OIL INDUSTRIES LTD vs PAN ASIATIC COMMODITIES PTE LIMITED & ANOTHER [1997] KECA 219 (KLR)", Case Analysis (1997). Civil Appeal No. 100 of 1995. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1997/219/eng@1997-02-14
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.