[2021] KEHC 13270 (KLR)
The court held that the inquiry into damages pursuant to an undertaking as to damages, which was given as a condition for the grant of an injunction, must be conducted by the court and not referred to arbitration. The court reasoned that such undertakings are made to the court itself, not to the parties, and...
Source-derived case information.
- Citation
- [2021] KEHC 13270 (KLR)
- Parties
- Applicant: Christopher Thiongo Waweru; Applicant: James Mwangi Kabugi; Respondent: Waiyaki Way Developers Limited; Respondent: Virji Meghji Patel; Respondent: Muigai Phares Thumbi; Respondent: Waiyaki Ridge Gardens Limited; Respondent: N. K. Mugo & Company Advocates
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Civil Suit E806 of 2020
- Procedural Posture
- Civil Suit / Ruling on Enforcement of Undertaking as to Damages After Discharge of Injunction
- Outcome
- Application for inquiry into damages to be heard by the court; directions issued for filing of affidavits and mention date set.
- Judges
- DAS Majanja
- Legal Topics
- Injunctions, Undertaking as to Damages, Arbitration Referral, Jurisdiction of Court, Enforcement of Undertakings
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Christopher Thiongo Waweru
Applicant
James Mwangi Kabugi
Applicant
Waiyaki Way Developers Limited
Respondent
Virji Meghji Patel
Respondent
Muigai Phares Thumbi
Respondent
Waiyaki Ridge Gardens Limited
Respondent
N. K. Mugo & Company Advocates
Respondent
Procedural Posture
Civil Suit / Ruling on Enforcement of Undertaking as to Damages After Discharge of Injunction
Legal Issues
- 1 Whether the inquiry into damages pursuant to an undertaking as to damages should be conducted by the court or referred to arbitration.
- 2 Whether the arbitrator has jurisdiction over undertakings given to the court in the course of proceedings.
- 3 What procedure should be followed for the assessment of damages following discharge of an injunction.
Ratio Decidendi
The court held that the inquiry into damages pursuant to an undertaking as to damages, which was given as a condition for the grant of an injunction, must be conducted by the court and not referred to arbitration. The court reasoned that such undertakings are made to the court itself, not to the parties, and therefore fall outside the scope of the arbitration agreement. The arbitrator's jurisdiction is confined to matters expressly covered by the arbitration agreement, and enforcement or inquiry into undertakings given to the court is not contemplated therein. Consequently, the court directed that the Respondent file evidence of damages and the Applicants respond, with the matter to be...
Court Disposition
Application for inquiry into damages to be heard by the court; directions issued for filing of affidavits and mention date set.
Orders
- The Respondent shall file and serve an affidavit annexing all documents of proof within 14 days.
- The Applicant shall file a Replying Affidavit within 14 days of service.
Full Case Text
Judgment text and source record
28 paragraphs
IN THE HIGH COURT OF KENYA AT NAIROBI
MILIMANI LAW COURTS
COMMERCIAL AND TAX DIVISION
CORAM: D. S. MAJANJA J.
CIVIL SUIT. NO. E806 OF 2020
IN THE MATTER OF THE ARBITRATION ACT NO. 4 OF 1995
BETWEEN
CHRISTOPHER THIONGO WAWERU......................................................................1ST APPLICANT
JAMES MWANGI KABUGI....................................................................................... 2ND APPLICANT
AND
WAIYAKI WAY DEVELOPERS LIMITED.............................................................1ST RESPONDENT
VIRJI MEGHJI PATEL.............................................................................................. 2ND RESPONDENT
MUIGAI PHARES THUMBI.....................................................................................3RD RESPONDENT
WAIYAKI RIDGE GARDENS LIMITED................................................................4TH RESPONDENT
N. K. MUGO & COMPANY ADVOCATES............................................................5TH RESPONDENT
RULING NO. 2
1. This court issued an injunction in favour of the Applicants on 8th July 2020 restraining the Respondents from transferring any interest in Waiyaki Way Developers Limited and Waiyaki Way Ridge Gardens Limited pending determination of the application brought under section 7of the Arbitration Actseeking to refer the dispute between the parties to arbitration on condition that the Applicants execute an undertaking as to damages.
2. The Applicants duly executed the undertaking as to damages on 26th August 2020. The court dismissed the application for injunction on 26th November 2021 and discharged the injunction. The Respondent now seeks to enforce the undertaking as to damages by way of the Chamber Summons dated 28th April 2021 as amended on 2nd June 2021.
3. The Applicants oppose the application on the ground that the arbitrator should conduct the inquiry as to damages. I disagree. In the case of Nguruman Limited v Jan Bonde Nielsen [2020] eKLR,the court cited with approval Cheltenham and Gloucester BS v Ricketts and Others [1993] 4 All ER 276where the court held that, “'The undertaking is not given to the party enjoined but to the court." In this case the court ordered the undertaking as a condition for the grant of the injunction. The inquiry as damages must therefore proceed before this court.
4. An arbitrator does not have jurisdiction to determine any matters apart from those within the purview of the arbitration agreement. An undertaking given to the court in proceedings before it is not a matter contemplated within the arbitration agreement and is outside the jurisdiction of the arbitrator.
5. Whether the Respondent suffered any damages as a result of the injunction is a matter of evidence. The matter shall therefore be set down for hearing in due course hence I direct as follows:
(a) The Respondent file and serve an affidavit annexing all the documents of proof within 14 days
(b) The Applicant shall file a Replying Affidavit in response thereto within 14 days of service.
(c) Mention on 22. 09. 2021 for directions and further orders.
(d) Costs in the cause.
DATEDandDELIVEREDatNAIROBIthis29th day of JULY 2021
D. S. MAJANJA
JUDGE