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Court of AppealAllowedMotion on Notice arising from ELRC Cause No. E573 of 2021 (Notice of Appeal against ruling of Gakeri, J. delivered 27th July 2023)

Nairobi West Hospital v Krishnamurthy (Civil Application E220 of 2024) [2024] KECA 1190 (KLR)

Court of Appeal
20 September 2024
3,014 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~12 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal allowed the Nairobi West Hospital to appeal a ruling that threw out its challenge to a Kshs 20 million-plus arbitral award, because disputed dates cannot be decided on a preliminary objection.

What this practically means

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Executive summary

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A final arbitral award published on 15th December 2022 declared The Nairobi West Hospital's termination of Narayanan Krishnamurthy's employment unfair and ordered payment of USD 141,465.16 and Kshs. 9,955,356 with interest and costs. The respondent moved the ELRC to recognise and enforce the award, while the hospital sought to set it aside. The respondent took a preliminary objection that the set-aside application, filed beyond the three-month period in section 35(3) of the Arbitration Act, was statute-barred. On 27th July 2023 Gakeri, J. upheld the objection, and the hospital filed a Notice of Appeal. Before the Court of Appeal, the hospital sought leave to appeal, arguing that the dates of receipt of the award and of filing were hotly contested factual issues that could not be resolved on a preliminary objection, and that the Judge had impermissibly investigated the e-filing portal errors suo motu. The respondent maintained that the application was filed late and that under Nyutu Agrovet the Court of Appeal's jurisdiction over section 35 determinations is confined to decisions so grave and manifestly wrong as to close the door of justice. The Court, applying Nyutu Agrovet and Synergy Industrial Credit and reiterating the Mukisa Biscuits doctrine on preliminary objections, held that the Judge should not have determined contested factual issues through a preliminary objection and that this raised an arguable point on appeal, satisfying the narrow threshold for leave. The Motion was allowed with costs in the appeal.

Questions the Court framed

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

  1. 1.Whether the applicant is deserving of the Court's discretion to grant leave to appeal to the Court of Appeal from the decision of the High Court (ELRC) in a matter arising from arbitral proceedings
  2. 2.Whether the determination of contested factual issues through a preliminary objection closed the door of justice to the applicant, satisfying the narrow threshold in Nyutu Agrovet

Key legal issues

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01

Whether leave to appeal should be granted from the ELRC ruling upholding a preliminary objection that the application to set aside the arbitral award was filed out of time

Holding

Leave was granted because determining contested factual issues (when the award was received and when the application was filed) through a preliminary objection is an arguable point and arguably closed the door of justice to the applicant.

Reasoning

The Court applied the Supreme Court's guidance in Nyutu Agrovet and Synergy Industrial Credit that appeals from section 35 determinations lie only in the clearest of cases where the High Court stepped outside section 35 and committed a grave error closing the door of justice. Here, the Judge resolved disputed facts about receipt and filing dates via preliminary objection without hearing the parties, including by independently checking the e-filing portal. The applicant was thus not heard on whether it was entitled to set aside the award on section 35 grounds. That conduct, the Court held, satisfied the narrow threshold for leave.

p. 6
02

The nature and limits of a preliminary objection

Holding

A preliminary objection raising limitation must rest on agreed or undisputed facts; where parties take opposite positions on when the award was received and when the application was filed, the objection improperly raises facts requiring ascertainment.

Reasoning

Relying on the classic statements in Mukisa Biscuits, the Court reaffirmed that a preliminary objection is a point of law pleaded or arising by clear implication from the pleadings, argued on the assumption that the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or where judicial discretion is sought. Since the parties disputed the date of receipt of the award and the date of filing, the limitation objection could not properly be determined as a preliminary point; the Judge should have allowed the parties to address him on those contested issues.

p. 5

Legal principles established

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  • A preliminary objection cannot be used to determine contested factual issues; it raises only a pure point of law on assumed facts.
  • Appeals lie from the High Court to the Court of Appeal on determinations under section 35 of the Arbitration Act only where the High Court stepped outside the grounds in section 35 and made a decision so grave and manifestly wrong that it completely closed the door of justice; this jurisdiction is narrow and to be exercised sparingly.
  • A party asserting that an application to set aside an arbitral award was filed out of time under section 35(3) must establish the date of receipt of the award and the date the application to set aside was made; where these facts are disputed, they cannot be resolved on a preliminary objection.

Court orders

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  1. 1.Leave granted to the applicant to lodge its appeal against the rulings of Justice Dr. Jacob Gakeri delivered on 27th July 2023
  2. 2.The Motion on Notice is allowed
  3. 3.Costs will be in the appeal

The bench

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

majority
majority
On appeal from
Employment and Labour Relations Court
ELRC Cause No. E573 of 2021
Jurisdiction invoked
Article 164(3) of the Constitution read with section 35(3) of the Arbitration Act and the Appellate Jurisdiction Act; leave to appeal under the narrow jurisdiction recognised by the Supreme Court in Nyutu Agrovet v Airtel Networks Kenya Limited

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.

It was wrong for the Judge to determine the contested issues through a preliminary objection and this is an arguable point on appeal.
p. 5Preliminary objection on disputed facts
the only instance that an appeal may lie from the High Court to the Court of Appeal on a determination made under Section 35 is where the High Court, in setting aside an arbitral award, has stepped outside the grounds set out in the said Section and thereby made a decision so grave, so manifestly wrong and which has completely closed the door of justice to either of the parties.
p. 5Scope of appellate jurisdiction under section 35 Arbitration Act
a preliminary objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings, and which if argued as a preliminary point may dispose of the suit.
p. 5Definition of preliminary objection
In those premises we think that the applicant has satisfied the narrow threshold for grant of leave to appeal to this Court. We allow the Motion. Costs will be in the appeal.
p. 6Final orders - leave granted

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, "Nairobi West Hospital v Krishnamurthy (Civil Application E220 of 2024) [2024] KECA 1190 (KLR)", Case Analysis (2024). Motion on Notice arising from ELRC Cause No. E573 of 2021 (Notice of Appeal against ruling of Gakeri, J. delivered 27th July 2023). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1190/eng@2024-09-20

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