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Court of AppealStruck OutCivil Appeal 8 of 2009

Anne Mumbi Hinga v Victoria Njoki Gathara

Court of Appeal
13 November 2009
6,566 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~26 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal confirmed that once an arbitral award is issued, you have only three months and very limited grounds to challenge it.

What this practically means

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Executive summary

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This appeal arose from a sale agreement dated 14th January 1998 containing an arbitration clause. A sole arbitrator published an award on 19th October 1999 in favour of the vendor, ordering specific performance. The purchaser (appellant) later applied to the High Court by notice of motion dated 25th April 2008 seeking, among other things, to set aside the decree enforcing the award, alleging she was never served with notice of the reading of the award, the award itself, or the enforcement application. Kimaru, J dismissed the application, finding service was duly effected. The Court of Appeal identified four issues: service of the notice of making of the award, of the award, of the enforcement application, and the right of recourse to the superior court. Re-evaluating the documentary evidence, the court found all documents were served and that, in any event, post-award non-service is not a ground of challenge under the Arbitration Act. More fundamentally, the court held that the Arbitration Act is a complete code: the High Court had no jurisdiction to entertain the application because none of its grounds fell within sections 35 or 37, the Civil Procedure Rules did not apply, and the application was barred by the three-month limit in section 35(3). The court also held the appeal itself incompetent under section 39, there being no agreement confining recourse to questions of law and no leave granted. Citing Lillian S, Deutsche Schachtbau, Hall Street and Eastern Seaboard, the court emphasised finality of arbitral awards, struck out the appeal, set aside the High Court ruling, struck out the application, and awarded costs to the respondent both here and below.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether a notice of the publication or the making of the award had been served and the effect of failure to serve
  2. 2.Whether the award was served
  3. 3.Whether the application to enforce the award was served
  4. 4.Whether there was a right of recourse to the superior court or this Court

Key legal issues

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01

Service of the notice of making of the award, the award and the enforcement application

Holding

On the documentary evidence all three sets of documents were served on the appellant or her advocates, and service was sufficient under section 32 of the Arbitration Act; in any event post-award non-service is not a ground of challenge.

Reasoning

The court re-evaluated the correspondence: Ouna & Company were informed of the publication of the award, mentions were fixed and notices issued, the arbitrator sent copies of the award to both advocates with a copy to the appellant, and the appellant admitted receiving the letter of 15th November 1999 and a copy of the award in September 2000. Her admission that she instructed counsel to appeal against the award was inconsistent with non-service.

p. 7
02

Jurisdiction of the High Court to entertain the application of 25th April 2008

Holding

The High Court had no jurisdiction; the application invoked provisions (Civil Procedure Act and Rules) that do not apply to arbitral proceedings, and none of its grounds fell within sections 35 or 37 of the Arbitration Act.

Reasoning

Section 10 of the Arbitration Act makes it a complete code excluding judicial intervention except as provided. Part VI confines recourse against awards to sections 35 and 37. Rule 11 of the Arbitration Rules does not import the Civil Procedure Rules wholesale. The applications should have been struck out suo motu, following the jurisdiction principle in Owners of the Motor Vessel 'Lillian S'.

p. 9
03

Time bar under section 35(3)

Holding

Section 35 bars any challenge, even for a valid reason, after three months from receipt of the award; the last date for challenge was 15th February 2008 and all applications were incompetently brought.

Reasoning

The award was published on 19th October 1999 and the appellant admitted receiving a copy by September 2000. The application of 25th April 2008 was filed years outside the three-month window, so the superior court lacked jurisdiction to entertain it regardless of the merits of the grounds alleged.

p. 10
04

Competence of the appeal to the Court of Appeal

Holding

No appeal lies to the Court of Appeal in the circumstances; section 39 requires prior agreement of the parties confined to questions of law, and leave of the High Court or special leave of the Court of Appeal, none of which existed.

Reasoning

Section 39(3) permits an appeal to the Court of Appeal only against a High Court decision under section 39(2), where the parties agreed that an appeal should lie and leave is granted. There was no advance consent and no leave; the appeal was therefore improperly before the Court and incompetent.

p. 11
05

Public policy exception

Holding

The alleged public policy ground failed; nothing in the award involved illegality, injury to the public good, or offence to the reasonable fully informed member of the public.

Reasoning

Public policy cannot be exhaustively defined and must be approached with extreme caution; recognition may be refused only where enforcement involves illegality or is injurious to the public good or wholly offensive to the ordinary reasonable and fully informed member of the public, per Deutsche Schachtbau. The award disclosed none of these features.

p. 11

Legal principles established

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  • The Arbitration Act is a complete code; no court may intervene in matters governed by it except as provided in the Act, and the High Court has no power against an arbitral award outside sections 35 and 37.
  • Failure to serve any process after an award has been made is not a ground for setting aside an award or any subsequent judgment or decree; due-process challenges must arise before the making of the award.
  • An application to set aside an arbitral award cannot be grounded outside section 35 of the Arbitration Act and is barred after three months from receipt of the award.
  • An appeal to the Court of Appeal in arbitral matters lies only under section 39(3) with the parties' agreement and leave of the High Court or special leave of the Court of Appeal; absent these, an appeal is incompetent.
  • Rule 11 of the Arbitration Rules 1997 has not imported the Civil Procedure Rules wholesale; Civil Procedure Rules apply to enforcement only where appropriate, and not where their effect would deny an award finality and speedy enforcement.

Court orders

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  1. 1.The appeal to the Court of Appeal is struck out
  2. 2.The ruling and order of the High Court (Kimaru, J) dated 24th September 2008 is set aside
  3. 3.In substitution, the application dated 25th April 2008 is struck out
  4. 4.Costs of the appeal and of the application in the superior court are awarded to the respondent

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority
majority
majority
On appeal from
High Court of Kenya at Nairobi, Milimani Commercial Courts
Miscellaneous Application No. 617 of 2000
Jurisdiction invoked
Section 39 of the Arbitration Act 1995 (appeals in arbitral matters); appeal held incompetent for non-compliance with section 39(1) and (3)

Relief refused

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All relief sought in the notice of motion dated 25th April 2008 (stay of execution, setting aside the decree, declarations on non-service, injunction and directions to the arbitrator)

The High Court had no jurisdiction to entertain the application; none of the grounds fell within sections 35 or 37 of the Arbitration Act and the application was out of time and an abuse of process

p. 11

Costs

Costs to the respondent both here and below

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

we have no hesitation in striking out this appeal and also hereby set aside the superior court ruling and in substitution strike out the application dated 25 th April, 2008 with costs to the respondent both here and below. It is so ordered.
p. 12Final orders - appeal struck out, High Court ruling set aside, application struck out with costs
Except as provided in this Act no court shall intervene in matters governed by this Act
p. 9Section 10 - Arbitration Act as a complete code excluding judicial intervention
Failing to serve any process after an award has been made, is not one of the grounds for setting aside an award or any subsequent judgment or decree.
p. 8Post-award non-service is not a ground for setting aside
no application of the Civil Procedure Rules would be regarded as appropriate if its effect would be to deny an award finality and speedy enforcement both of which are major objectives of arbitration
p. 10Limited importation of Civil Procedure Rules into arbitration
by entering into an arbitration agreement a party necessarily gives up most rights of appeal and challenge to the award in exchange for the virtue of finality of the award
p. 12Finality of arbitral awards - lesson of Hall Street
All these requirements have not been complied with and therefore the appeal is improperly before us and is incompetent.
p. 11Incompetence of appeal under section 39

Issues in the judgment

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minor

Gender of appellant inconsistently stated

minor

Date of the enforcement application inconsistently given as 26th September 2001 and 29/9/2001

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Anne Mumbi Hinga v Victoria Njoki Gathara", Case Analysis (2009). Civil Appeal 8 of 2009. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2009/466/eng@2009-11-13

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.