[2022] KEHC 181 (KLR)

Bill Investments Limited v Total Kenya Limited (Miscellaneous Application E644 of 2019) [2022] KEHC 181 (KLR) (Commercial and Tax) (14 March 2022) (Ruling)

Neutral citation: [2022] KEHC 181 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Miscellaneous Application E644 of 2019

A Mabeya, J

March 14, 2022

Between

Bill Investments Limited

Applicant

and

Total Kenya Limited

Respondent

Ruling

1. This ruling is on a Notice of Motion brought under section 35(2) (b) (ii) of the Arbitration Act (“the Act”). The applicant sought to have the arbitral award dated 26/9/2019 set aside. The award was made by the sole arbitrator, Hon. Kyalo Mbobu.

2. The application was based on the grounds that; the applicant was aggrieved by the award as it failed to address the issues for determination as filed by the parties and the reliefs as prayed for in the statement of claim.

3. The applicant contended that the failure to address the key issues for determination that were before the arbitrator offended public policy and was contrary to justice.

4. The respondent opposed the application vide a replying affidavit sworn on 10/2/2020 by Rosemary Wakaba, its legal officer. She averred that the applicant had abandoned some issues for determination which meant that the tribunal would not rule on them; that it was therefore unacceptable for the applicant to suddenly make a u - turn and claim that the award was against public policy for failure to determine issues that were not before the tribunal. That in the premises, this was an attempt by the applicant to have a second bite at the cherry.

5. The Court has considered the pleadings and submissions on record. The issue for determination is whether the award violated the public policy of Kenya therefore calling for its setting aside.

6. The application was based on the contention that the award was contrary to public policy and therefore susceptible to be set aside for being contrary to public policy. In Cape Holdings Limited v Synergy Industrial Credit Limited [2016] Eklr, the court observed: -“I need not reinvent the wheel about what constitutes ‘Contrary to Public Policy’’ as a ground to set aside an arbitral award. Ringera J (as he then was) in the case of Christ for All Nations v Apollo Insurance Co Ltd, Nairobi HCCC No. 477 of 1999 stated that;‘… I take the view that although public policy is a most broad concept incapable of precise definition, … an award will be set aside under section 35(2) (b) (ii) of the Arbitration Act as being inconsistent with the Public Policy of Kenya if it was shown that it was either (a) inconsistent with the constitution or other laws of Kenya, whether written or unwritten; or (b) inimical to the national interest of Kenya; or (c) contrary to justice and morality. The first category is clear enough.…”

7. The applicant submitted that both parties in the arbitration submitted a different list of issues for determination by the arbitrator and that the arbitrator did not address all of them as well as the reliefs sought by it which violated public policy.

8. The defendant on the other hand contended that the arbitrator determined all the issues as were collapsed by the applicant via its submissions.

9. Under the constitution each party has a right to be heard, therefore it would be against public policy if, as claimed, the issues raised by the applicant were ignored by the tribunal.

10. The first issue that the applicant alleged not to have been considered by the tribunal was a finding on the loss of income by the applicant in the sum of Kshs. 47,062,067/. The applicant contended that this should have flowed from the fact that the arbitrator made a finding that the respondent did not honour its contractual obligation of maintaining the equipment and hence occasioned abnormal losses.

11. Paragraphs 83-95 of the award dealt with this issue. The tribunal found that the claimant had shown that there were losses occasioned to it due to the respondent’s inaction in maintaining the equipment.

12. However, under paragraph 93-95 the tribunal found that it was a claim for special damages but the applicant had failed to specifically plead and prove the damages claimed. That the applicant had only staked a claim for Ksh.50 million for loss and damage but had not calibrated the actual loss. As such, the applicant’s claim for Ksh.50 million failed.

13. It is therefore clear from the record that it is not true that the award failed to deal with the said issue as contended by the applicant.

14. The second issue that the applicant alleged was not considered by the tribunal was a pronouncement on whether the margins paid by the respondent were below that which is prescribed by the Energy Regulatory Commission (as it then was) and contrary to the Energy (Petroleum Pricing) Regulations 2010.

15. A reading of the award shows that under paragraphs 74-82 of the award, the tribunal dealt with this issue. At paragraph 79, the tribunal stated: -“In any event, the issue before the tribunal is not whether the ERC pronouncements are legally binding or simply prescriptive. The issue at hand is the allegation that the respondent underpaid the build-up margins to the claimant. The respondent has opposed the claim by stating that the margins paid were a reflection of the fact that the respondent advanced products to the claimant on credit for 6 days on a weekly basis payable on the 7th day when fresh products would be stocked.”

16. The third issue that the applicant alleged was not considered by the tribunal was a finding on whether the applicant suffered losses owing to the delay by the respondent to assess the complaints by the applicant that the equipment was leaking.

17. The tribunal dealt with this issue under paragraphs 83-95 when it held that the applicant had failed to strictly plead and prove the actual loss which was a special damage.

18. The fourth issue that the applicant alleged was not considered by the tribunal was to make a pronouncement on breach of the Marketing License Agreement dated 17/2/2017.

19. The applicant pleaded in its statement of claim that the respondent had breached the 2017 Marketing License Agreement. The breach was based on the respondent engaging in unconscionable conduct and illegal margins and underpayments.

20. Under paragraphs 101-107 of the final award, the arbitrator dealt with the issue of unconscionable conduct.

21. The fifth issue that the applicant alleged was not considered by the tribunal was a declaration that the respondent engaged in illegal conduct.

22. In the applicant’s statement of claim dated 17/9/2018, the instances of alleged illegality by the respondent were set out. They were illegal VAT levied on the applicant, illegally charged rent on the applicant and illegally charged “miscellaneous rent”.

23. A reading of the award shows that at pages 13 and 20, the tribunal dealt with these issues and made a determination therein finding the claims to be unmerited.

24. The court agrees with the respondent’s submissions in that the tribunal dealt with these issues and found the m unmerited. In this regard, there arises no need for a finding that there was illegality.

25. The last issue that the applicant alleged was not considered by the tribunal was a declaration on reimbursement of Kshs.1,154,801/51 and a loss of shop stock.

26. The amount of Kshs.1,154,801/51 was not sought in the applicant’s statement of claim nor any submissions lodged to justify the amount. The sum of Ksh. 2,000,000/- as loss of stock was pleaded in the statement of claim, however the same was not pursued and/or submitted on by the claimant. Evidence failing to be led on it, the tribunal was not obliged to make any finding on it.

27. The upshot of the foregoing is that the arbitrator considered all fronts of the applicant’s case. Having found that it was not proved, he dismissed the whole claim which meant that each of the prayers sought were dismissed. The arbitrator could not then be expected to find on each relief sought as contended by the applicant.

28. In this regard, I find the application to be without merit and dismiss the same with costs to the respondent.It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 14TH DAY OF MARCH, 2022. A. MABEYA, FCIArbJUDGE