https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7577

Clearwater Industries Limited v Camusat Kenya Limited (Commercial Case E325 of 2025) [2026] KEHC 7577 (KLR) (Commercial & Admiralty) (28 May 2026) (Ruling) Neutral citation: [2026] KEHC 7577 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Admiralty Commercial Case E325 of 2025 PM Mulwa, J May 28, 2026 Between Clearwater Industries Limited Plaintiff and Camusat Kenya Limited Defendant Ruling 1.Before the Court is the Chamber Summons Application dated 3rd July 2025 by the Defendant seeking principally that this suit be struck out and the dispute herein be referred to arbitration and, in the alternative, that these proceedings be stayed pending mediation and/or arbitration pursuant to Clause 17 of the Collaboration Agreement executed between the parties. The application was supported by the affidavit of Josphat Ngugi Mwangi, sworn on 3rd July 2025. It was opposed by the Plaintiff’s replying affidavit, sworn on Abdi Dara, sworn on 28th October 2025. 2.The suit arises from a Collaboration Agreement entered into between the Plaintiff and the Defendant for the implementation of an electrification project for Kenya Power and Lighting Company Limited. The Plaintiff alleges breach of the said agreement by the Defendant and consequently instituted the present proceedings seeking relief arising therefrom. 3.The Defendant contends that Clause 17 of the Collaboration Agreement contains a binding dispute resolution mechanism requiring disputes arising from the agreement to be referred to mediation and/or arbitration. It is argued that the institution of this suit is contrary to the parties’ agreement and the provisions of the Arbitration Act. 4.The application was canvassed by way of written submissions and oral highlights by learned counsel, which I have carefully considered together with the pleadings and authorities cited. 5.The issue falling for determination is whether this Court should stay the proceedings and refer the dispute to arbitration. 6.It is now settled that parties are bound by their agreements, and it is not the business of courts to rewrite those agreements. In Wringles Company (East Africa) –v- Attorney General & 3 Others (2013) eKLR, the court held that:“Courts cannot rewrite what has already been agreed upon by the parties as set out in the agreement. The parties had agreed that in the case of a dispute arising as to the validity of the agreement, the same would be subject to arbitration and the court cannot re-write the same.” 7.The law governing stay of proceedings pending arbitration is found under Section 6 (1) of the Arbitration Act which provides:A court before which proceedings are brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than the time when the party enters appearance or otherwise acknowledges the claim against which the stay of proceedings is sought, stay the proceedings and refer the parties to arbitration unless it findsa.That the arbitration agreement is null and void, inoperative or incapable of being performed; orb.That there is not in fact any dispute between the parties with regard to the matters to be referred to arbitration. 8.From the foregoing provision, the court is obligated to determine whether the applicant has made the application “not later than the time when the party enters appearance or otherwise acknowledges the claim and, secondly, whether the arbitration clause is valid, and, lastly, whether a dispute exists in regard to the matters agreed to be referred to arbitration. 9.In Niazsons (K) Ltd v China Road & Bridge Corporation Kenya [2001] eKLR the Court of Appeal held as follows:“…The Court will then be obliged to consider three basic aspects. First, whether the applicant has taken any step in the proceeding other than the steps allowed by the said section. Second, whether there are any legal impediments on the validity, operation or performance of the arbitration agreement. Third, whether the suit indeed concerns a matter agreed to be referred.” 10.In the present case, the Defendant filed a Notice of Appointment together with the instant application on 3rd July 2025. The Defendant had filed no defence or other substantive pleading before invoking the arbitration clause. In my view, the filing of a Notice of Appointment, without more, does not constitute a step in the proceedings inconsistent with the right to arbitrate. 11.I am therefore satisfied that the application was brought promptly and in compliance with Section 6(1) of the Arbitration Act. 12.On whether there exists a valid arbitration agreement, Clause 17 of the Collaboration Agreement provides for consultation in good faith, failure to which the dispute be referred to mediation and finally to arbitration in the event of disputes arising between the parties. Neither party has challenged the validity, legality or enforceability of the said clause. 13.I therefore find that there exists a valid and enforceable arbitration agreement between the parties and there has been no demonstration that the clause is null and void, inoperative or incapable of being performed. 14.The dispute falls from the alleged breach of the collaborative agreement between the parties. I thus find that the dispute is one contemplated by the dispute resolution mechanism agreed upon by the parties. 15.The Court is enjoined to uphold party autonomy and give effect to arbitration agreements except in the limited circumstances provided under Section 6 of the Arbitration Act. 16.Consequently, I find merit in the application dated 3rd July 2025 and proceed to make the following orders:i.These proceedings are hereby stayed pending mediation and/or arbitration in accordance with Clause 17 of the Collaboration Agreement.ii.The parties are hereby referred to mediation and/or arbitration in terms of the said agreement.iii.The costs of the application shall abide by the outcome of the arbitration.It is so ordered. RULING DELIVERED VIRTUALLY, DATED AND SIGNED AT NAIROBI THIS 28TH DAY OF MAY 2026.P.M. MULWAJUDGEIn the presence of:Mr. Owino for Plaintiff/RespondentMr. Wachira for Defendant/ApplicantCourt Assistant: Lispa