[2018] KEHC 7430 (KLR)

[2018] KEHC 7430 (KLR)

The court found that a genuine dispute exists between the parties as to whether there was an agreement for the conversion of debt to equity under the Loan Agreement. The dispute centers on the interpretation and effect of the parties' correspondence and the terms of the agreement. Clause 24 of the Loan Agreement expressly provides that all disputes arising out of or in connection with the agreement are to be referred to arbitration. The court held that the existence of the arbitration clause and the real dispute between the parties require the court to stay the proceedings and refer the matter to arbitration. The court emphasized that the dispute cannot be resolved by the court at this...

Citation
[2018] KEHC 7430 (KLR)
Parties
Plaintiff: AFVEST LIMITED; Defendant: MICRO MOBILE LIMITED
Court
High Court
Court Station
High Court at Nairobi (Milimani Law Courts)
Jurisdiction
Kenya
Judgment Date
5 February 2018
Case Number
Civil Suit 353 of 2017
Procedural Posture
Stay Application / Ruling on Application for Stay Pending Reference to Arbitration
Outcome
Application allowed; proceedings stayed and dispute referred to arbitration.
Legal Topics
Arbitration Clauses, Debt to Equity Conversion, Loan Agreements, Specific Performance, Contractual Disputes
Source Language
English
Commercial and Corporate Alternative Dispute Resolution Arbitration Clauses Debt to Equity Conversion Loan Agreements Specific Performance Contractual Disputes

Case Brief

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Parties

AFVEST LIMITED

Plaintiff

MICRO MOBILE LIMITED

Defendant

Procedural Posture

Stay Application / Ruling on Application for Stay Pending Reference to Arbitration

Legal Issues

  1. 1 Whether there exists a dispute between the parties regarding the conversion of debt to equity under the Loan Agreement.
  2. 2 Whether the dispute falls within the scope of the arbitration clause in the Loan Agreement.
  3. 3 Whether the proceedings should be stayed and the matter referred to arbitration.

Ratio Decidendi

The court found that a genuine dispute exists between the parties as to whether there was an agreement for the conversion of debt to equity under the Loan Agreement. The dispute centers on the interpretation and effect of the parties' correspondence and the terms of the agreement. Clause 24 of the Loan Agreement expressly provides that all disputes arising out of or in connection with the agreement are to be referred to arbitration. The court held that the existence of the arbitration clause and the real dispute between the parties require the court to stay the proceedings and refer the matter to arbitration. The court emphasized that the dispute cannot be resolved by the court at this...

Court Disposition

Application allowed; proceedings stayed and dispute referred to arbitration.

Orders

  • These proceedings are stayed forthwith.
  • The dispute is referred to arbitration by a single arbitrator to be agreed upon by the parties, or appointed by the Chairman of the Chartered Institute of Arbitrators if no agreement is reached within 30 days.