[1989] KEHC 65 (KLR)

[1989] KEHC 65 (KLR)

The court held that although the parties had agreed to refer disputes to arbitration, the plaintiff was justified in seeking interim relief from the court to protect his interest in the suit property, as the arbitration process did not provide for such relief. The defendant had also failed to invoke the arbitration clause when the dispute arose and instead threatened to cancel the sale transaction. The law allows the court to grant auxiliary relief, including interim injunctions, to preserve the status quo pending arbitration. Therefore, the proceedings should be stayed, but the plaintiff is entitled to interim injunctive relief to prevent the defendant from acting on the impugned letter...

Citation
[1989] KEHC 65 (KLR)
Parties
Plaintiff: Alividza; Defendant: LZ Engineering Construction Ltd
Court
High Court
Court Station
High Court at Nairobi (Milimani Law Courts)
Jurisdiction
Kenya
Judgment Date
28 February 1989
Case Number
Civil Suit 417 of 1989
Procedural Posture
Stay Application / Ruling on Application for Stay of Proceedings and Interim Injunction Pending Arbitration
Outcome
Application allowed in part; proceedings stayed and interim injunction granted.
Legal Topics
Arbitration Clauses, Stay of Proceedings, Interim Injunctions, Preservation of Property, Contractual Disputes
Source Language
English
Civil Procedure Commercial and Corporate Alternative Dispute Resolution Arbitration Clauses Stay of Proceedings Interim Injunctions Preservation of Property Contractual Disputes

Case Brief

Summary, issues, holding and outcome

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Parties

Alividza

Plaintiff

LZ Engineering Construction Ltd

Defendant

Procedural Posture

Stay Application / Ruling on Application for Stay of Proceedings and Interim Injunction Pending Arbitration

Legal Issues

  1. 1 Whether the proceedings should be stayed pending reference to arbitration as per the agreement between the parties.
  2. 2 Whether the plaintiff is entitled to interim injunctive relief to preserve the suit property pending arbitration.
  3. 3 Whether the court has jurisdiction to grant auxiliary relief despite the existence of an arbitration clause.

Ratio Decidendi

The court held that although the parties had agreed to refer disputes to arbitration, the plaintiff was justified in seeking interim relief from the court to protect his interest in the suit property, as the arbitration process did not provide for such relief. The defendant had also failed to invoke the arbitration clause when the dispute arose and instead threatened to cancel the sale transaction. The law allows the court to grant auxiliary relief, including interim injunctions, to preserve the status quo pending arbitration. Therefore, the proceedings should be stayed, but the plaintiff is entitled to interim injunctive relief to prevent the defendant from acting on the impugned letter...

Court Disposition

Application allowed in part; proceedings stayed and interim injunction granted.

Orders

  • Proceedings in this suit are stayed until the matter has been referred to arbitration and determined or further orders of the court.
  • The defendant is restrained from acting upon the letter dated 5.1.89 until further orders of the court.