https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7223

China Railway Construction Engineering Group Limited v Automated Entrance Systems Limited (Commercial Civil Suit E802 of 2025) [2026] KEHC 7223 (KLR) (Commercial and Tax) (21 May 2026) (Ruling) Neutral citation: [2026] KEHC 7223 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Commercial Civil Suit E802 of 2025 BK Njoroge, J May 21, 2026 Between China Railway Construction Engineering Group Limited Applicant and Automated Entrance Systems Limited Respondent Ruling 1.This Ruling is in respect of a Notice of a Preliminary Objection by the Defendant dated 23rd January, 2026. It attacks the jurisdiction of this Court while at the same time raising the issue of res judicata as well as sub judice. Background Facts 2.The Applicant filed the Notice of Motion dated 4th December 2025 and sought the following orders;1.Spent.2.Spent.3.Spent.4.Spent.5.That pending the hearing and determination of this suit this Honourable Court be pleased to issue an order staying the Arbitral Proceedings relating to the Commission/Finder's fee agreement dated 6th February 2024.6.Spent.7.Spent.8.That this Honourable Court be pleased to issue an order directing the Director of Criminal Investigation to undertake a forensic document examination of the Commission/Finder's fee agreement dated 6th February 2024 and file the report in Court.9.That costs of this application be provided for. 3.The Application was supported by the grounds on the face of it and by the Affidavit of Wu Haibo. He deponed that in or around November 2024, it was served with pleadings in Milimani HCOS No. E615 of 2024. In that suit the Defendant sought interim relief under Sections 7 and 12 of the Arbitration Act pending commencement of arbitral proceedings. The Defendant sought orders compelling disclosure of documents relating to a tender awarded to the Plaintiff by the Republic of Zambia. The withholding of 10% of the tender payments. The amendment of the arbitral clause to provide for a sole arbitrator. All these were all founded upon a purported Commission/Finder’s Fee Agreement dated 6th February, 2024. 4.The Applicant averred that the impugned agreement is a forgery and invalid for want of execution by any authorized official of the Plaintiff. It is averred that the alleged signature of one Wu Haibo and the Plaintiff’s stamp imprint appearing on the agreement are forged. That that the said official was not in Kenya on the alleged execution date. That there exists no correspondence or material evidencing any transaction or engagement between the parties in relation to the Zambia tender. The Applicant further stated that it commissioned a document examiner who confirmed the alleged signatures and stamp imprint were forged. 5.Although the Defendant obtained a conflicting forensic report, the same was prepared without the Plaintiff providing any signature or stamp samples, thereby necessitating an independent forensic examination by the Directorate of Criminal Investigations. It was contended that the validity of the impugned agreement, being the foundation of the arbitral proceedings and the tribunal’s jurisdiction, must first be determined before the arbitration can proceed. Consequently, the Applicant urged that the arbitral proceedings be stayed pending such determination. This is so as to avoid proceedings being conducted in vain and to prevent unnecessary costs. 6.In response to the Application, the Respondent filed the Replying Affidavit, sworn on 23rd January, 2026, as well as a Preliminary Objection dated 23rd January, 2026. 7.The Preliminary Objection was raised on the following grounds;a.Lack of JurisdictionThe Court lacks jurisdiction to hear and determine the instant suit as the issues raised herein were fully, finally, and conclusively determined in arbitration pursuant to a valid arbitration agreement between the parties, culminating in the issuance of the Final Arbitral Award dated 18th December 2025, together with a Final Award Correcting Memorandum dated 7th January 2026.b.Finality of Arbitration and Statutory Bar to InterventionBy virtue of Sections 10 and 32A of the Arbitration Act, the jurisdiction of the Court is strictly limited, and the Final Arbitral Award dated 18th December 2025, together with a Final Award Correcting Memorandum dated 7th January 2026 is final and binding upon the parties. This Court is therefore barred from re-opening, re-litigating, or re-adjudicating issues already determined by the arbitral tribunal, save as expressly permitted under the Arbitration Act.c.Impermissible Collateral Attack on an Arbitral AwardThe Plaint constitutes an indirect and collateral attack on a valid and subsisting arbitral award, contrary to the Arbitration Act, the doctrine of party autonomy, and the principle of finality of arbitral proceedings. The Plaintiff has not invoked any of the limited statutory mechanisms available under the Act, including an application to set aside the award under Section 35 of the Arbitration Act.d.Res Judicata and Issue EstoppelThe issues raised in this suit, particularly the validity, enforceability, and legal effect of the Agreement, were directly and substantially in issue before the arbitral tribunal, were fully canvassed, and were conclusively determined. The Plaintiff is therefore barred by the doctrines of res judicata and issue estoppel from re-litigating the same issues before this Court.e.Sub Judice and Multiplicity of ProceedingsThe issues of recognition and enforcement of the arbitral award are currently pending before the High Court in HCCOMM ARB E002 of 2026: Automated Entrance Systems Limited v China Railway Construction Engineering Co. Limited & Trade Mark Africa, which court is seized of exclusive jurisdiction over all matters relating to the award. The filing of the present suit offends the sub judice rule and amounts to impermissible parallel proceedings.f.Abuse of the Court ProcessThe Plaint is calculated to delay, obstruct, and frustrate the Defendant’s lawful right to enjoy the fruits of the arbitral award, and constitutes a blatant abuse of the court process, forum shopping, and misuse of judicial time.g.Suit is Incompetent and Unsustainable in LawThe Plaint discloses no reasonable cause of action capable of being entertained by this Court in light of the arbitral award and the pending enforcement proceedings, and is therefore incompetent, misconceived, and bad in law. Issues for determination 8.The Court issued directions on 9th February, 2026 that it would hear the Preliminary Objections first. The Court has considered the Preliminary Objection, the written submissions thereto and the oral highlights by Counsel for the parties. The only issue for determination is;a.Whether the Preliminary Objection is merited. Analysis 9.A Preliminary Objection must only raise issues of law as set out by the Court of Appeal in the case of Mukisa Biscuit Manufacturing Co. Ltd vs. West End Distributors Ltd [1969] EA 696. At page 700, Law, JA stated: -“A Preliminary Objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings and which if argued as a preliminary point may dispose of the suit. Examples are an objection to the Jurisdiction of the Court or a plea of limitation, or a submission that the parties are bound by the contract giving rise to the suit to refer the dispute to arbitration.”At page 701, Sir Charles Newbold, P added: -“A Preliminary Objection is in the nature of what used to be a demurrer. It raises a pure point of law which is usually on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion…” 10.The Objector’s grounds included the Court’s lack of jurisdiction, Finality of Arbitration and Statutory Bar to Intervention, Impermissible Collateral Attack on an Arbitral Award, Res Judicata and Issue Estoppel, Sub Judice and Multiplicity of Proceedings and Abuse of the Court Process. 11.The Applicant pointed out that the preliminary objection does not meet the threshold. It wholly places reliance on facts; facts which are largely disputed. The Defendant mentions three (3) separate proceedings that are factual in nature that the Plaintiff disputes their actual position. To make a determination thereof, the Court has to look at the facts from both sides first and examine them and then render a decision. 12.The Supreme Court reiterated in Hassan Ali Joho & Another vs. Suleiman Said Shahbal & 2 Others (2013) eKLR, as follows:“… a point of law which has been pleaded or which arises by clear implication out of pleadings and which if argued as a preliminary point may dispose of the suit… it cannot be raised if any fact has to be ascertained….” 13.Going by the above decisions, it is not proper to raise the grounds of res judicata and sub judice by way of preliminary objection. This is for the sole reason that the facts need to be ascertained, thus ceasing to be a pure point of law. As it has been said time and again, the best way to raise a ground of res judicata is by way of Notice of Motion, where pleadings are annexed. This is to enable the Court to determine whether the current suit is res judicata. (George Kamau Kimani & 4 others v County Government of Trans-Nzoia & another [2014] KEELC 104 (KLR)) 14.The upshot is that the Preliminary Objection lacks merit and is hereby dismissed. 15.As to costs, the same lie at the discretion of the Court and follow the event. The same are awarded to the Applicant. Determination 16.The Notice of Preliminary Objection dated 23rd January, 2026 raised by the Defendant is overruled and struck out. 17.The Costs thereof are awarded to the Plaintiff. 18.It is so ordered. DATED, SIGNED AND DELIVERED AT MILIMANI THIS 21ST DAY OF MAY, 2026.NJOROGE BENJAMIN K.JUDGEIn the presence of;Mr. Okullu for Plaintiff/Applicant.Miss Kabura holding brief for Kimathi for the Defendant/Respondent.Ms. Susan Nzioka - Court Assistant.