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Case Brief · caselaw.co.ke
Court of AppealDismissedNairobi HCComm Misc. No. E230 of 2021 (application for leave to appeal, Notice of Motion dated 9th December 2022)· [2023] KECA 544 (KLR)

Bomas of Kenya Limited v Standard Investment Bank Limited

Court of Appeal
12 May 2023
3,829 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~15 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal confirmed that missed arbitration deadlines cannot be rescued later, and refused Bomas of Kenya permission to appeal an award's enforcement.

What this practically means

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Executive summary

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Bomas of Kenya Limited sought leave to appeal, and stay, from a ruling of the High Court (Mabeya, J.) dated 25th November 2022, which struck out its application to set aside an arbitral award as incurably time barred under section 35(3) of the Arbitration Act and allowed the respondent's application for recognition and enforcement of the award. The award, published on 4th May 2020, had not been challenged within the three-month window. The applicant moved under section 39(3)(b) of the Arbitration Act, Rule 5(2)(b) of the Court of Appeal Rules and Article 164(3)(a) of the Constitution, arguing the judge erred in law and failed to consider its objections founded on section 37 of the Act. The Court of Appeal (Okwengu, Ali-Aroni and Mativo, JJA) held in a single unanimous judgment that section 39(3)(b) permits an appeal only from a High Court decision made in the exercise of jurisdiction under section 39(2); because the High Court was exercising jurisdiction under sections 35, 36 and 37, the section 39(3)(b) gateway was unavailable and the application was incompetent. The Court further applied the Supreme Court's Nyutu Agrovet and Synergy Industrial Credit decisions, holding that not every section 35 decision is appealable and that the applicant could not bypass the section 35(3) time bar by seeking refuge in section 37, which only provides grounds for refusal of recognition or enforcement. The Court also noted the notice of appeal did not challenge the order allowing enforcement. Leave and stay were refused, and the motion was dismissed with costs to the respondent.

Key legal issues

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01

Whether section 39(3)(b) of the Arbitration Act confers jurisdiction on the Court of Appeal to grant leave to appeal from a High Court ruling on setting aside and enforcement of an award under sections 35, 36 and 37

Holding

No. The section 39(3)(b) gateway applies only to High Court decisions made under section 39(2); the impugned ruling was made under sections 35, 36 and 37, so the intended appeal is incompetent.

Reasoning

The Court applied its own earlier decisions in Kenyatta International Convention Centre v Congress Rental South Africa and Okeno & Sons Building Contractors v Bukura Agricultural College, which hold that section 39 appeals to the High Court require prior agreement between the parties and that appeals to the Court of Appeal under section 39(3) lie only from decisions of the High Court exercising appellate jurisdiction under section 39(2). Since the High Court here was setting aside and enforcing an award under sections 35, 36 and 37, section 39(3)(b) was not available.

p. 6
02

Whether, even if jurisdiction existed, the applicant satisfied the exceptional-circumstances threshold for leave to appeal under the Supreme Court's Nyutu Agrovet and Synergy Industrial Credit decisions

Holding

The applicant did not demonstrate exceptional circumstances; the plea for leave failed.

Reasoning

The Court applied the Supreme Court's holdings that judicial intervention in matters not specifically provided for by the Arbitration Act can only be countenanced in exceptional instances, and that an intended appeal not anchored within the four corners of section 35 should not be admitted. The applicant could not show the High Court stepped outside section 35. Additionally, the notice of appeal challenged only the dismissal of the set-aside application, not the order allowing enforcement.

p. 7
03

Whether the applicant's time-barred set-aside application could be sustained under section 37 of the Act in opposition to enforcement

Holding

No. Section 37 provides grounds only for refusal of recognition or enforcement and cannot be used to bypass section 35's time limit.

Reasoning

The Court noted that section 35(3) imposes a three-month limit on applications to set aside an award, and that the applicant did not apply within that period. Following the Supreme Court's Nyutu Agrovet guidance, section 37 only provides grounds for refusal of recognition or enforcement of an award; it does not provide an alternative route to set aside an award for a party that missed the section 35(3) window. The summary nature of enforcement proceedings and the policy of minimal court intervention under section 10 of the Act reinforce this.

p. 7
04

Whether stay of the High Court ruling should be granted pending the intended appeal

Holding

Stay was not considered because, leave having been refused, there was no appeal before the Court under Rule 5(2)(b).

Reasoning

The Court held that once the prayer for leave failed, addressing the prayer for stay would serve no utilitarian value. The Court's discretion under Rule 5(2)(b) presupposes an appeal before it; since the intended appeal could not properly be instituted, the stay application necessarily fell away with the motion.

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Legal principles established

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  • An appeal to the Court of Appeal under section 39(3)(b) of the Arbitration Act lies only from a decision of the High Court made in the exercise of its jurisdiction under section 39(2); decisions under sections 35, 36 and 37 fall outside that gateway.
  • A party caught by the three-month time bar in section 35(3) of the Arbitration Act cannot circumvent that failure by seeking refuge in section 37 of the Act in resistance to enforcement of the award.
  • Not every decision of the High Court under section 35 of the Arbitration Act is appealable to the Court of Appeal; an intended appellant must demonstrate that the High Court went beyond the grounds set out in section 35.

Court orders

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  1. 1.The applicant's Notice of Motion dated 9th December 2022 is dismissed with costs to the respondent
On appeal from
High Court of Kenya
Nairobi HCComm Misc. No. E230 of 2021
Jurisdiction invoked
Section 39(3)(b) of the Arbitration Act; Rules 5(2)(b), 39(a), 42 & 43 of the Court of Appeal Rules, 2010; Article 164(3)(a) of the Constitution

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Bomas of Kenya Limited v Standard Investment Bank Limited", Case Analysis (2023). Nairobi HCComm Misc. No. E230 of 2021 (application for leave to appeal, Notice of Motion dated 9th December 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/544/eng@2023-05-12

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