Gatimu & 8 others v Kanyi t/a Kenya Projects Budget & Executive Homes
The bottom line
#Kenya's Environment and Land Court sent a housing dispute to arbitration because the sale agreements required it, despite timing questions.
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 Preliminary Objection raised by the Defendant/Applicant dated 16th August, 2022 meets the threshold of an Objection
- 2.Whether there is a competent Preliminary Objection before the Court
- 3.Whether the court should refer this matter to arbitration in accordance with provisions of Section 6 of the Arbitration Act of 1995
- 4.Who will bear the costs of the Notice of Motion application and the Preliminary Objection
Key legal issues
#Whether the preliminary objection met the Mukisa Biscuit threshold
The objection raised pure points of law (jurisdiction/arbitration clause) and was properly before the court
Applying Mukisa Biscuit Manufacturing and the Supreme Court's decision in Hassan Ali Joho, the court held that an objection to jurisdiction founded on an arbitration clause is a pure point of law argued on the assumption that the pleaded facts are correct, and may dispose of the suit. The issues were neither fanciful nor remote and required no ascertainment of facts.
Whether the suit should be stayed and referred to arbitration under Section 6 of the Arbitration Act
Yes - the proceedings were stayed and the dispute referred to arbitration under Clause R, the court holding it lacked jurisdiction in the interim
The court found Clause R of the Sale Agreements was a clear, binding arbitration agreement. Relying on party autonomy, Article 159(2)(c) and Section 6(1), it held the parties' choice of forum must be given effect. It accepted the Defendant had raised the arbitration issue promptly and that the Plaintiffs had not invoked the contractual mechanism by applying to the Chartered Institute of Arbitrators.
Timeliness of the Section 6 application
The court held the Defendant raised the arbitration issue promptly, notwithstanding the Plaintiffs' evidence that appearance was entered on 1st August 2022 and the application filed 17th August 2022
The court acknowledged the prevailing jurisprudence that a party who does not apply within the Section 6(1) timelines loses the right to a stay, citing Charles Njogu Lofty, Niazsons and Eunice Soko Mlagui. Yet it found the Defendant 'raised the issue of Arbitration promptly' without expressly resolving the conflicting chronology, and noted the Defendant's own 'reluctance and lethargy' in driving the arbitration process.
Legal principles established
#- A party seeking to invoke an arbitration agreement to stay proceedings and refer a dispute to arbitration must apply not later than the time of entering appearance or otherwise acknowledging the claim
- Where parties consensually agree on arbitration as their dispute resolution forum, courts are obliged to give effect to that agreement
- A preliminary objection is not the proper procedure to seek a stay of proceedings under Section 6 of the Arbitration Act
Court orders
#- 1.The Preliminary Objection dated 16th September, 2022 be and is hereby found to have merit and is upheld
- 2.The Notice of Motion application dated 16th September, 2022 is found to have merit and is allowed entirely
- 3.The Court in the meanwhile lacks jurisdiction to hear and determine the dispute as canvassed in the underlying suit in the Plaint dated 8th June, 2022
- 4.The issue in this suit ought to be referred to and determined by arbitration, with the arbitration process to be initiated by the Defendant/Applicant
- 5.The Defendant/Applicant is granted thirty (30) days from delivery of the Ruling to initiate and finalise identification and settlement of a mutually agreed Arbitration Institution or individual; in default the matter will proceed before this Court
- 6.The instant proceedings are stayed and the dispute is referred to Arbitration under Clause R of the Special Conditions of the Sale Agreement under Section 6 of the Arbitration Act
- 7.Mention on 13th November, 2023 to ascertain full compliance
- 8.There shall be no orders as to the costs of the Notice of Motion application and the Preliminary Objection
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Original jurisdiction of the Environment and Land Court under the Environment and Land Court Act; the court determined it lacked jurisdiction in the interim by virtue of Section 6(1) of the Arbitration Act and Clause R of the Sale Agreements
Relief refused
#Costs of the application and preliminary objection
Although the Defendant's application succeeded, the court in its discretion declined to award costs
Costs
There shall be no orders as to the costs of the Notice of Motion application and the Preliminary Objection dated 16th September, 2022.
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.
That the instant proceedings are stayed and the dispute is referred to Arbitration under Clause R of the Special Conditions of the Sale Agreement by the Parties under the provision of Section 6 of Arbitration Act.
That the Defendant/Applicant be granted a grace period of thirty (30) days from the date of the delivery of this Ruling to have initiated and nalized the full process of identication and settlement on an a mutually agreed upon Arbitration Institution or individual to undertake the Arbitration process without fail.
where parties to a contract consensually agree on arbitration as their dispute resolution forum of choice, the courts are obliged to give eect to that agreement.
A preliminary Objection is in the nature of what used to be a demurer it raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct.
Jurisdiction is everything. Without it, a court has no power to make one more step.
Issues in the judgment
#Date of the application/objection inconsistent: pleaded as 16th August 2022 but analysed and ordered as 16th September 2022
Plaint date inconsistent: filed 8th July 2022 per submissions, but orders refer to Plaint dated 8th June 2022
Court found the application 'prompt' despite its own recital that appearance was entered 1st August 2022 and the application filed 17th August 2022
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Gatimu & 8 others v Kanyi t/a Kenya Projects Budget & Executive Homes", Case Analysis (2023). Environment & Land Case E075 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/20659/eng@2023-10-04
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.