https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6968

Bidco Africa Limited v Bee N Bee (KE) Limited (Commercial Arbitration Cause E022 of 2025) [2026] KEHC 6968 (KLR) (Commercial and Tax) (14 May 2026) (Ruling) Neutral citation: [2026] KEHC 6968 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Commercial Arbitration Cause E022 of 2025 MA Otieno, J May 14, 2026 Between Bidco Africa Limited Claimant and Bee N Bee (KE) Limited Respondent Ruling 1.Before me is a Chamber Summons application dated 21st March 2025 filed by the claimant pursuant to the provisions of Section 36(1) & (3) of the Arbitration Act, Rules 4 (1), (2), (6) & (9) of the Arbitration Rules 1997, Sections 1A, 3A & 59 (c) of the Civil Procedure Act, and all other enabling provisions of the law. The claimant sought an order recognizing the final arbitral award delivered by the Sole Arbitrator, Hon. Ms. Njeri Kariuki, C.Arb, FCIArb, dated 11th February 2025, as binding and adopting it as a judgment of the Court so as to make it enforceable as a decree of the Court. The applicant also prayed for leave of the Court to proceed with the enforcement of the arbitral award as a decree of this Court and for the costs and expenses incidental to the recognition, adoption, enforcement, and execution of the said arbitral award. 2.The application is premised on the grounds on the face of the summons and is supported by an affidavit sworn on the same day by Vimal Bhimji Shah, the chairman of the claimant company. Mr. Shah averred that the parties herein entered into a Trade Finance Agreement dated 23rd May 2023, which he executed on behalf of the claimant and which was also signed by the respondent’s representative. He further averred that the agreement contained an arbitration clause providing that any disputes arising therefrom would be resolved through arbitration under the Chartered Institute of Arbitrators (Kenya Branch), with the resulting award being enforceable by any competent Court. 3.Mr. Shah deposed that a dispute subsequently arose, leading the claimant to commence arbitration through its advocates, with the respondent participating through RONN Advocates LLP. Consequently, the Chartered Institute of Arbitrators appointed Hon. Ms. Njeri Kariuki, C.Arb, FCIArb, as sole arbitrator, who proceeded to hear and determine the dispute and issued a final award on 11th February 2025. He stated that the respondent has failed, refused, and/or neglected to comply with the arbitral award and has not indicated any intention to challenge it in Court. He asserted that this Court has jurisdiction under Section 36 of the Arbitration Act to recognize and enforce the said award, and that given the parties’ agreement to arbitration and conclusion of the process, it is just and fair for the Court to adopt and enforce the award as its own order. 4.In opposition thereto, the respondent filed a replying affidavit sworn on 15th October 2025 by Bulent Mehment Boytorun, a Director of the respondent company. Mr. Boytorun averred that he does not dispute the existence of the trade finance support agreement dated 23rd May 2023, the arbitration clause therein, or the fact that the arbitration proceedings were conducted, culminating in a Final Arbitral Award dated 11th February 2025. However, he contended that under the agreement, the respondent was obliged to convert Kshs. 102,437,500/= into USD. 745,000/= and remit the same by 24th May 2023, with a contractual penalty interest of 3% per month for any default. He explained that the respondent’s partial failure to perform arose from unforeseen circumstances involving a third-party supplier, Pershing VC Group Limited, and that only USD. 300,000/= was remitted, leaving a balance of USD. 445,000/=. 5.Mr. Boytorun stated that the arbitral tribunal awarded the Claimant USD. 445,000/= together with interest at 3% per month from 24th May 2023 until payment in full, plus costs. He further stated that the respondent opposes enforcement of the award on grounds of public policy, asserting that the compounded interest results in a grossly disproportionate liability unrelated to actual loss and is punitive in nature. He averred that the interest rate of 36% per annum is excessive and requires judicial intervention. Mr. Boytorun contended that enforcement of the arbitral award would produce an unconscionable financial burden, threaten the respondent’s viability and potentially lead to liquidation, contrary to public interest in sustaining businesses. He also stated that during the arbitration, the claimant instituted criminal proceedings against him and another individual based on the same facts giving rise to the arbitration, including charges of conspiracy to defraud, accompanied by the issuance of an arrest warrant. 6.Mr. Boytorun deposed that the said criminal proceedings amount to an abuse of process and an attempt to use the criminal justice system to coerce settlement of a civil debt, and that the allegations of fraud were neither pleaded nor determined in arbitration. He further deposed that this parallel criminal process impaired the respondent’s operations and ability to settle the outstanding sum and constituted improper re-litigation of issues already determined in arbitration. He therefore asserted that enforcement of the arbitral award would be contrary to public policy due to its alleged punitive and unconscionable nature and the ongoing criminal proceedings and urged the Court to vary the interest rate to 12% per annum, being the prevailing Court rate. 7.In rejoinder, the claimant filed a further affidavit sworn on 26th November 2025 by Vimal Bhimji Shah, the chairman of the claimant company. Mr. Shah deposed that the respondent does not dispute the existence of the trade finance support agreement, the arbitration clause contained therein, or its full participation in the arbitral proceedings. He cited the arbitration clause, which provided that all disputes arising out of or in connection with the said agreement were to be resolved through arbitration under the Chartered Institute of Arbitrators (Kenya Branch), with awards being enforceable in any Court of competent jurisdiction. He further deposed that parties are bound by the terms of their contract and that the Court should not rewrite contractual terms. 8.Mr. Shah contended that the respondent has not demonstrated coercion, fraud, or any basis capable of invalidating the arbitration agreement. He relied on the doctrine of separability and asserted that the arbitration clause is independent of the main contract and survives any alleged issues affecting the underlying agreement. He stated that by virtue of the arbitration clause, the parties herein were bound to arbitration and that the arbitral award is final and not subject to challenge by a party that voluntarily participated in the proceedings. He confirmed that a certified copy of the award has been filed in Court in compliance with the Arbitration Act. Mr. Shah rejected the respondent’s allegations that the claimant weaponized criminal proceedings and stated that any criminal investigations or prosecutions were conducted by independent constitutional bodies over which the claimant has no control. 9.The instant application was canvassed by way of written submissions. The claimant’s submissions were filed by the law firm of CNK Advocates LLP on 14th October 2025, while the respondent’s submissions were filed on 22nd October 2025 by the law firm of C. Koile & Company Advocates. 10.Mr. Torotwa, learned Counsel for the claimant, submitted that the instant application is properly before this Court pursuant to the provisions of Section 36 of the Arbitration Act, which vests this Court with jurisdiction to recognize and enforce arbitral awards. He argued that the application herein is premised on the final arbitral award issued on 11th February 2025. Counsel urged the Court to note that the respondent fully participated in the arbitral proceedings from commencement to conclusion. He relied on the case of Ruffoo v Ravine Park Limited [2024] KEHC 10238 (KLR) and stated that by actively participating in the arbitration proceedings through counsel, filing documents, and attending proceedings, the respondent submitted to the jurisdiction of the arbitral tribunal and is bound by its outcome. 11.Mr. Torotwa asserted that Courts will ordinarily enforce arbitral awards unless one of the statutory grounds for refusal is established. Learned Counsel submitted that in this case, none of the grounds for refusal of recognition or enforcement of an arbitral award provided for under section 37 of the Arbitration Act have been demonstrated by the respondent. He argued that the respondent was not under any incapacity, did not challenge the validity of the arbitration agreement, was duly notified and participated in the proceedings and does not contest the composition of the tribunal or the procedure adopted. He further stated that there is no allegation or proof that the impugned arbitral award was procured through fraud, bribery, corruption, or undue influence, nor has the award been set aside or suspended by any Court of competent jurisdiction. Counsel therefore maintained that there is no legal basis to decline enforcement of the impugned final arbitral award issued on 11th February 2025. 12.Ms. Koile, learned Counsel for the respondent, submitted that this Honourable Court has inherent jurisdiction to prevent abuse of its process. She contended that the claimant engaged in such abuse by weaponizing the criminal justice system to coerce a settlement in what is essentially a civil dispute. Counsel relied on the Supreme Court case of Jirongo v Soy Developers Ltd & 9 others [2021] KESC 32 (KLR) and argued that the claimant’s conduct in initiating criminal charges based on the same facts as the arbitration proceedings was a coercive tactic. Therefore, she urged the Court not to sanction such conduct by enforcing the impugned arbitral award. 13.Ms. Koile cited the case of and stated that the respondent anchors its opposition to the application herein on the provisions of Section 37(1) (b) (ii) of the Arbitration Act and stated that enforcement of the impugned arbitral award would be contrary to the public policy of Kenya. Learned Counsel cited the case of Christ for All Nations v Apollo Insurance Co. Ltd [2002] 2 EA 366 and submitted that public policy is violated where an award is contrary to justice or morality. He relied on the Court of Appeal case of Dhiman v Shah [2025] KECA 1264 (KLR) and contended that the impugned arbitral award is founded on an unconscionable and punitive contractual term, namely interest at 3% per month, translating to 36% per annum when compounded, which is excessive and oppressive. Counsel argued that the instant application is directly analogous and that enforcing such an award would offend equity and justice. 14.Ms. Koile submitted that this Court may refuse enforcement where the manner in which the arbitral decision was reached is contrary to public policy. She relied on the case of Njoroge v Baron Capital Limited & another [2023] KEHC 3711 (KLR) and contended that the Arbitrator erred by enforcing an illegal and unconscionable term based on the parties’ purported agreement, despite the principle that parties cannot validate terms that are contrary to public policy. Counsel further submitted that enforcement of the impugned arbitral award would risk conflicting judicial outcomes, as there are ongoing criminal proceedings arising from the same transaction, whereas public policy requires consistency in the administration of justice. He maintained that enforcing the arbitral award while criminal liability remains unresolved could lead to contradictory findings and undermine public confidence in the legal system. ANALYSIS AND DETERMINATION. 15.Upon consideration of the instant application, the grounds on its face and the affidavits filed in support thereof, the replying affidavit by the respondent, and the written submissions by Counsel for the parties, the issue that arises for determination is whether the instant application is merited.If the application herein is merited. 16.Recognition and enforcement of arbitral awards is provided for under section 36 of the Arbitration Act, which states that -1.A domestic arbitral award, shall be recognized as binding and, upon application in writing to the High Court, shall be enforced subject to this section and section 37.2.An international arbitration award shall be recognised as binding and enforced in accordance to the provisions of the New York Convention or any other convention to which Kenya is signatory and relating to arbitral awards.3.Unless the High Court otherwise orders, the party relying on an arbitral award or applying for its enforcement must furnish—a.the original arbitral award or a duly certified copy of it; andb.the original arbitration agreement or a duly certified copy of it.4.If the arbitral award or arbitration agreement is not made in the English language, the party shall furnish a duly certified translation of it into the English language.5.In this section. the expression “New York Convention” means the Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted by the United Nations General Assembly in New York on the 10th June, 1958, and acceded to by Kenya on the 10th February, 1989, with a reciprocity reservation. 17.Section 37 of the Arbitration Act No. 4 of 1995, on the other hand, provides for grounds upon which the High Court may decline to recognize and/or enforce an arbitral award at the request of the party against as hereunder -Grounds for refusal of recognition or enforcement1.The recognition or enforcement of an arbitral award, irrespective of the state in which it was made, may be refused only—a.at the request of the party against whom it is invoked, if that party furnishes to the High Court proof that—i.a party to the arbitration agreement was under some incapacity; orii.the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication of that law, under the law of the state where the arbitral award was made;iii.the party against whom the arbitral award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; oriv.the arbitral award deals with a dispute not contemplated by or not falling within the terms of the reference to arbitration, or it contains decisions on matters beyond the scope of the reference to arbitration, provided that if the decisions on matters referred to arbitration can be separated from those not so referred, that part of the arbitral award which contains decisions on matters referred to arbitration may be recognised and enforced; orv.the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, failing any agreement by the parties, was not in accordance with the law of the state where the arbitration took place; orvi.the arbitral award has not yet become binding on the parties or has been set aside or suspended by a court of the state in which, or under the law of which, that arbitral award was made; orvii.the making of the arbitral award was induced or affected by fraud, bribery, corruption or undue influence;b.if the High Court finds that—i.the subject-matter of the dispute is not capable of settlement by arbitration under the law of Kenya; orii.the recognition or enforcement of the arbitral award would be contrary to the public policy of Kenya.2.If an application for the setting aside or suspension of an arbitral award has been made to a court referred to in subsection (1)(a)(vi), the High Court may, if it considers it proper, adjourn its decision and may also, on the application of the party, claiming recognition or enforcement of the arbitral award, order the other party to provide appropriate security. 18.From the material placed before this Court, it is not in dispute that the parties entered into a valid arbitration agreement; that the dispute was referred to arbitration under the Chartered Institute of Arbitrators (Kenya Branch); that the respondent fully participated in the arbitral proceedings; and that a final arbitral award dated 11th February 2025 was duly issued by the Sole Arbitrator. The claimant has also complied with the requirements under Section 36(3) of the Arbitration Act by furnishing a certified copy of the arbitral award and the arbitration agreement. 19.The respondent opposes enforcement primarily on the ground that the award offends public policy pursuant to Section 37(1)(b)(ii) of the Arbitration Act. The respondent contended that the interest awarded at 3% per month is excessive, punitive, and unconscionable, and that enforcement would impose an oppressive financial burden. It is also argued that ongoing criminal proceedings arising from the same transaction render enforcement contrary to public policy. 20.The scope of the public policy exception under Section 37(1)(b)(ii) of the Arbitration Act is narrow and well-settled. In Christ for All Nations v Apollo Insurance Co. Ltd [2002] 2 EA 366, the Court held that an arbitral award will be contrary to public policy if it is inconsistent with the Constitution or other laws of Kenya, inimical to the national interest, or contrary to justice and morality. The Court cautioned that this ground should not be used to open a backdoor appeal against an arbitral award. 21.This position has been consistently affirmed in subsequent decisions, including Kenya Shell Ltd v Kobil Petroleum Ltd [2006] eKLR, where the Court emphasized that courts must resist the temptation to interfere with arbitral awards merely because they would have reached a different conclusion. 22.Further, the Supreme Court in Nyutu Agrovet Ltd v Airtel Networks Kenya Ltd & Another [2019] eKLR underscored the finality of arbitral awards and the limited scope of court intervention, holding that courts should only interfere in exceptional circumstances expressly provided for under the Act. 23.In the present case, the respondent’s challenge to the interest rate essentially invites this Court to re-evaluate the merits of the arbitrator’s decision and to rewrite the contract between the parties. However, it is settled that an arbitral tribunal’s interpretation of contractual terms, including interest clauses, falls squarely within its mandate, and the Court cannot substitute its own view unless the term is shown to be illegal or expressly prohibited by law. 24.Concerning the argument that the contractual interest rate of 3% per month is excessive and unconscionable, it is trite that courts will ordinarily uphold freely negotiated commercial terms unless they are shown to be illegal, fraudulent, or contrary to public policy in the strict sense. In National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & Another [2001] eKLR, the Court of Appeal held that courts cannot rewrite a contract for the parties, and are bound to enforce its terms as agreed. 25.Similarly, in Anne Mumbi Hinga v Victoria Njoki Gathara [2009] eKLR, the Court of Appeal emphasized that arbitration is a consensual process and that courts must respect the parties’ autonomy and the finality of arbitral awards. The Court stated that:“…..that any intervention by the court against the arbitral proceedings or the award can only be valid with the prior consent of the parties to the arbitration pursuant to Section 39 (2) of the Arbitration Act 1995. In the matter before us there was no such advance consent by the parties. Even where such consent is in existence the consent can only be on questions of law and nothing else. Again an appeal to this Court can only be on matters set out in Section 39 (2) with leave of the High Court or with leave of this Court. All these requirements have not been complied with and therefore the appeal is improperly before us and is incompetent.” 26.Further, the existence of parallel criminal proceedings does not, of itself, constitute a bar to enforcement of an arbitral award. Criminal proceedings are undertaken by the State, and their existence does not invalidate or suspend civil or arbitral obligations unless expressly determined by a competent court. The respondent has not shown that the arbitral award was procured by fraud, corruption, or undue influence, nor has it been set aside or stayed by any court. The argument that the award may lead to financial hardship or insolvency does not meet the legal threshold for refusal of enforcement. 27.The Court of Appeal in Kuria & 3 Others v Attorney General [2002] 2 KLR 69 held that the mere existence of criminal proceedings alongside civil disputes does not in itself amount to an abuse of process unless there is clear evidence of manipulation of the criminal justice system. In the present matter, no such evidence has been demonstrated. Moreover, as observed in Elasticity Kenya Ltd v Prime Bank Ltd [2019] eKLR, allegations of hardship or financial distress arising from enforcement do not meet the threshold of public policy under Section 37. 28.In the circumstances, I find that the respondent has failed to establish any of the statutory grounds under Section 37 of the Arbitration Act to warrant refusal of recognition or enforcement of the arbitral award. 29.Accordingly, the claimant’s application dated 21st March 2025 is merited. 30.The upshot is that the application is allowed on the following termsi.The Final Arbitral Award dated 11th February 2025 is hereby recognized as binding and is adopted as a judgment of this Court;ii.Leave is hereby granted to the claimant to enforce the said award as a decree of this Court;iii.The respondent shall bear the costs of this application, which is hereby assessed at Kshs. 50,000/. 31.It is so ordered. DATED, SIGNED, AND DELIVERED AT NAIROBI THIS 14TH DAY OF MAY 2026HON. MR. JUSTICE MOSES ADO JUDGE OF THE HIGH COURTIn the Presence of:Moses C/ATorotwa…………………for the ApplicantNdabuki h/b for Koile……for Respondent