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ELCDismissed· [2021] KEELC 2744 (KLR)

Kenard Limited v Julius Mwangi Kihara [2021] KEELC 2744 (KLR)

High Court of Kenya
1 July 2021
LGL. Gacheru
2,313 words in judgment
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The bottom line

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What this practically means

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Executive summary

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This was a ruling on a Notice of Motion dated 13th November 2020 by Julius Mwangi Kihara (styled Respondent/Applicant) seeking stay of execution of the Ruling of 24th September 2020, by which the Court adopted an Arbitrator's award against him in the sum of Kshs.1,736,290 with interest and costs, pending his intended appeal to the Court of Appeal. The application was brought under Order 42 Rule 6, Order 51 Rule 1 and Section 3A of the Civil Procedure Act. Esther W. Mbugua opposed it through a replying affidavit and a Notice of Preliminary Objection dated 24th November 2020, contending that the Court was functus officio, that the application offended Rule 5(2)(b) of the Court of Appeal Rules, and that it was frivolous and vexatious. The Court framed two issues: whether the application was merited and whether the preliminary objection was merited. On the application, it found all the Order 42 Rule 6 preconditions unsatisfied: no draft memorandum of appeal, no evidence of substantial loss, no security offered, and inordinate unexplained delay. On the objection, the Court held that the Arbitration Act, being a complete code by virtue of Section 10, ousted its jurisdiction; the award had become final and binding under Section 32A, and no appeal lay as contemplated. The preliminary objection was upheld and the application dismissed. The judgment was delivered virtually at Thika on 1st July 2021 by L. Gacheru J, with no express costs order in the disposition.

Key legal issues

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01

Whether the application for stay of execution pending appeal met the Order 42 Rule 6 preconditions

Holding

It did not: no draft memorandum of appeal, no security, no evidence of substantial loss, and inordinate unexplained delay of over a month

Reasoning

The Court found no commitment by the Applicant: no draft Memorandum of Appeal was attached, no security offered or proposal to settle, and no payment since the Ruling. Substantial loss was alleged but unsupported by evidence, and the delay from 24th September to 13th November 2020 was unexplained. The Applicant thus failed all preconditions.

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02

Whether the Court had jurisdiction to entertain the application given the functus officio objection and the Arbitration Act

Holding

The preliminary objection succeeded: the Court's jurisdiction was ousted by Section 10 of the Arbitration Act and it was functus officio after the Ruling of 24th September 2020

Reasoning

Arbitration is a consensual process and the Act is a complete code; Civil Procedure provisions do not apply to arbitral proceedings. The award became final and binding, no appeal lies against a refusal to set aside an award under Section 35, and courts should not grant orders in futility or unsupported by law.

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Legal principles established

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  • The Arbitration Act is a complete code; by virtue of Section 10 no court shall intervene in matters governed by the Act, and provisions of the Civil Procedure Act and Rules do not apply to arbitral proceedings
  • An arbitral award is final and binding and no recourse is available against it other than as provided by the Arbitration Act
  • An applicant for stay of execution must satisfy all the preconditions: substantial loss, no unreasonable delay, sufficient cause and security for due performance

Court orders

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  1. 1.The Respondent's Notice of Preliminary Objection dated 24th November 2020 is upheld
  2. 2.The Applicant's Notice of Motion dated 13th November 2020 is found not merited and accordingly fails
  3. 3.It is so ordered

Authorities

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Legislation

  • Civil Procedure RulesOrder 42 Rule 6(1) and (2)
  • Civil Procedure RulesOrder 51 Rule 1
  • Civil Procedure RulesOrder 21 rule 1
  • Civil Procedure ActSection 3A
  • Arbitration ActSection 10
  • Arbitration ActSection 32A
  • Arbitration ActSection 35(2)(b)
  • Arbitration ActSection 39(3)(b)
  • Court of Appeal RulesRule 5(2)(b)

Cases cited (3)

  • Mohamed Salim T/A Choice Butchery –vs- Nasserpuria Memon Jamat
    (2013) eKLR
  • M/S Portreitz Maternity –vs- James Karanja Kabia
    Civil Appeal No. 3 of 1997
  • Silverstein –vs- Chesoni
    [2002] 1 KLR 867
On appeal from
null (the Ruling of 24th September 2020 was delivered by this same Court; the Applicant has initiated an appeal to the Court of Appeal)
Jurisdiction invoked
Order 42 Rule 6 and Order 51 Rule 1 of the Civil Procedure Rules and Section 3A of the Civil Procedure Act, considered against Sections 10, 32A, 35 and 39 of the Arbitration Act

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, "Kenard Limited v Julius Mwangi Kihara [2021] KEELC 2744 (KLR)", Case Analysis (2021). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/2744/eng@2021-07-01

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