Transmara Sugar Company Limited v Oino
The bottom line
#Kenya's Court of Appeal ruled that an arbitration clause naming abolished offices and tribunals is unenforceable, so the farmer's lawsuit proceeds in court.
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 arbitration clause under Clauses 9.1 to 9.4 of the Sugar Growing and Supply Contract was rendered inoperable on account of the repeal of the Sugar Act, 2001 by the Crops Act, 2013
Key legal issues
#Whether repeal of the Sugar Act, 2001 by the Crops Act, 2013 rendered the contractual arbitration clause inoperable
Yes. The clause referenced a committee including the District Officer and an appeal to the Sugar Arbitration Tribunal, all of which were non-existent when the contract was executed in 2014, so the clause cannot be enforced.
The contract was executed on 24th July 2014, after the Sugar Act had been repealed by the Crops Act assented to on 14th January 2013. The Constitution of 2010 had also abolished the Provincial Administration including the District Commissioner. Clause 9.4 provided for appeal to the Sugar Arbitration Tribunal, which had been abolished. The parties could have adopted succeeding legislation and institutions by addendum but did not. The clause therefore designated a legally non-existent mechanism ab initio and cannot be rendered valid.
Whether transitional provisions in the Constitution and the Agriculture, Fisheries and Food Authority Act saved the arbitration clause
No. Transitional provisions could not save a clause that was already inoperative at execution; the parties could have included succeeding legislation and institutions as an addendum but did not.
The court accepted that transitional provisions exist in the Constitution and the AFFA Act, but the conundrum was that by the time of execution the Sugar Act was already repealed and the 2010 Constitution already in place. The first appellate judge's holding that the parties could have included succeeding legislation and institutions as an addendum was endorsed. The clause was therefore legally non-existent ab initio.
Legal principles established
#- An arbitration clause that designates a dispute resolution mechanism and institutions that were legally non-existent at the time of execution of the agreement cannot be enforced or rendered valid.
- A second appellate court confines itself to matters of law and will not delve into matters of fact unless the courts below considered or failed to consider relevant matters or the decision is perverse.
Court orders
#- 1.The appeal is dismissed
- 2.No orders as to costs, since the respondent did not participate in the appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Migori
- Civil Appeal No. 88 of 2018
- Jurisdiction invoked
- Second appeal to the Court of Appeal under the Constitution, Article 164 and the appellate jurisdiction over the High Court; the court invoked its second-appeal mandate confined to matters of law
Relief refused
#Appellant's prayer to uphold the trial court's order staying the suit and referring the dispute to arbitration
The arbitration clause provided for a dispute resolution process that was legally non-existent ab initio and cannot be rendered valid
Costs
No orders as to costs since the respondent did not participate in this appeal
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 arbitration clause in the said agreement provided for a process of dispute resolution which was legally non-existent ab initio, and cannot therefore be rendered valid.
We are in agreement with the holding of the learned rst Appellate Judge that if the parties intended to be bound by the succeeding legislation and institutions, nothing would have been di cult than for them to include it as an addendum to the agreement.
We have said enough to show that this appeal is not merited. We accordingly dismiss it. We make no orders as to costs since the respondent did not participate in this appeal.
Issues in the judgment
#Judgment states the agreement 'was governed by the Sugar Act, 2001' while also holding the Act was already repealed at execution.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Transmara Sugar Company Limited v Oino", Case Analysis (2025). Civil Appeal E004 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/2259/eng@2025-12-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.