https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7679

CS Corporation E.A Ltd v Kenya Forestry Research Institute (Miscellaneous Civil Application E393 of 2021) [2026] KEHC 7679 (KLR) (Civ) (4 June 2026) (Judgment) Neutral citation: [2026] KEHC 7679 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Law Courts) Civil Miscellaneous Civil Application E393 of 2021 JN Mulwa, J June 4, 2026 Between CS Corporation E.A Limited Plaintiff and Kenya Forestry Research Institute Defendant Judgment 1.Before the court for determination is the Originating Summons dated 16/08/2021 filed by CS Corporation E.A Ltd (hereafter the Applicant) against Kenya Forestry Research Institute (hereafter the Respondent) pursuant to Section 3(1) & 12(3)(a) of the Arbitration Act and Section 3A of the Civil Procedure Act (CPA) seeking inter alia-:-a.That the Court refers the matter to a suitable Arbitrator or Mediator in order to settle the dispute between the parties herein;b.That the Respondent be compelled to take part in the Arbitration or Mediation proceedings; andc.That costs of the application, be borne by the Respondent. 2.The grounds on the face of the application are amplified by the supporting affidavit sworn by Benson Otieno Opiyo, on even date, who cites being a Director of the Applicant therefore competent to depose. The gist of his affidavit is that the parties hereto entered into an agreement for services dated 29/05/2020. That the Applicant offered the contracted services as per the agreement however the Respondent has since failed and or refused to pay for the services offered. He goes on to state that as it stands the sums due and owing to the Applicant is Kshs. 1,332,951.36/-. 3.That due to the Respondent's failure to pay, the Applicant wrote a letter demanding the amount while proposing that the parties agree on an Arbitrator as per the contract. However, the Respondent has not been willing to have the matter arbitrated whereas the Court ought not to be the first port of settling the dispute given the arbitration clause in the agreement. 4.He states that the Applicant has always been willing to have the dispute resolved though the Respondent has been out to frustrate the process through its officials, by withholding payments, which has the net effect of impacting negatively on the Applicant's business. He concludes by deposing that it would be beneficial for both parties if the Court appoints a qualified Arbitrator in order to settle the matter expeditiously. 5.The Respondent on its part opposes the application by way of grounds of opposition dated 04/04/2022 on the premise-:a.That the Honorable Court is not vested with jurisdiction to grant the orders sought in the application.b.That the Applicant’s application is a non-starter as the same does not disclose any dispute against the Respondent.c.That the dispute resolution clause incorporated in the contract between the parties is incompetent as the same does not prescribe the appointing authority of a suitable mediator or arbitrator therefore it is unenforceable.d.That the orders sought offend the doctrine of freedom of contract and should the said orders be granted the same will be tantamount to the Honorable Court re-writing the contract entered into by the parties.e.The orders sought vide the application are vague and ambiguous consequently the said orders are unenforceable and therefore ought not to be granted.f.That the application is therefore an abuse of the process of the Court.g.That the application is bereft of merit. 6.The summons was heard orally, with Benson Otieno Opiyo, testifying as PW1, on behalf of the Applicant. Identifying himself as a consultant, he proceeded to adopt the contents of his affidavit in support of the summons, as his evidence in chief. 7.On cross-examination, he stated that the contract between the parties hereto has an Arbitration/Mediation clause. That despite counsel writing to the Chartered Institute of Arbitrators requesting for appointment of an Arbitration, he did not know why the institute failed to appoint an Arbitrator. He denied that the arbitration clause was ambiguous as to the appointment of an Arbitrator whereas he was alive to the fact that such appointment ought to be by consensus. He went on to state that despite the matter being referred to Mediation by the Court, the Respondent failed to attend with the result that the matter was referred back to Court. 8.In re-examination, he maintained that the parties had agreed vide the contract on an Alternative Dispute Resolution (ADR) mechanism. He concluded by stating that the Respondent had equally written to the Institute however he was unaware why the latter declined to appoint an Arbitrator. 9.The Respondent did not call any evidence but rather opted to rely on its grounds of opposition. 10.Upon the close of the hearing, directions were taken on filing of submissions. Only the Respondent complied with the said directions. Analysis and determination 11.The Court has duly considered the rival material, oral evidence and submissions on record, upon which the following issues were flagged for determination-a.Whether the Court ought to refer the dispute between the parties herein for Arbitration?b.Who bears the costs of the application? Whether the Court ought to refer the dispute between the parties herein for Arbitration? 12.In presenting the instant applicant, the Applicant relies on Section 3A of the CPA, which specifically reserves “the inherent power of the court “to make such orders as may be necessary for ends of justice or to prevent abuse of the process of the court”. This Court’s inherent powers was judiciously addressed by the Court of Appeal in Rose Njoki Kingau & another v Shaba Trustees Limited & another [2010] KECA 87 (KLR) and requires no restatement. Alongside the above, the Applicant cites Section 3(1) and 12(3)(a) of the Arbitration Act. 13.However, before proceeding any further, the Respondent has called upon this Court to determine whether there is a valid arbitration clause, capable of enforcement by way of referring the dispute between the parties hereto, for arbitration. 14.As earlier noted, the Respondent opted to file grounds of opposition in response to the present proceedings. The Court of Appeal in Blue Thaitian SRL (Owners of the Motor Yacht ‘Sea Jaguar’) v Alpha Logistics Services (EPZ) Limited [2022] KECA 1240 (KLR) succinctly observed that the effect of filing grounds of opposition in response to an application confines a party to issues of law and legal arguments only. 15.That said, this Court observes that arbitral proceedings as an alternative form of dispute resolution are codified in Article 159(2)(c) of the Constitution and operationalized by the Arbitration Act. As to the nature of an arbitral clause, the Court of Appeal in Synergy Industrial Credit Limited v Cape Holdings Limited [2020] KECA 208 (KLR), while referencing in brief to Section 17 of the Arbitration Act observed that: -“As we stated earlier, the primary consideration in determining the scope of the reference is the arbitral clause or agreement. It is in the arbitral agreement that the parties have agreed to submit their dispute to arbitration and it is that agreement therefore which provides the basis of the arbitration. By dint of section 17 of the Arbitration Act, the arbitral agreement in a contract is an independent agreement, separate and independent from the other terms of the contract and a finding that the contract is void does not invalidate the arbitral agreement.” 16.That said, Section 3(1) of the Arbitration Act describes an “arbitration agreement" as an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. Section 4 of the same Act provides for the forms of arbitration agreements while Section 6 provides for stay of legal proceedings before a Court where reference to arbitration is sought. 17.To the foregoing end, the Court of Appeal in UAP Provincial Insurance Company Ltd v Michael John Beckett [2013] KECA 205 (KLR) while addressing itself on the purport of Section 6(1)(b) of the Arbitration Act observed thus-;“It is clear from this provision that the enquiry that the court undertakes and is required to undertake under section 6(1)(b) of the Arbitration Act is to ascertain whether there is a dispute between the parties and if so, whether such dispute is with regard to matters agreed to be referred to arbitration. In other words, if as a result of that enquiry the court comes to the conclusion that there is indeed a dispute and that such dispute is one that is within the scope of the arbitration agreement, then the court refers the dispute to arbitration as the agreed forum for resolution of that dispute. If on the other hand the court comes to the conclusion that the dispute is not within the scope of the arbitration agreement, then the correct forum for resolution of the dispute is the court.” 18.Here, while the legal dispute instituted before Court is in respect to the agreement for services dated 29/05/2020, it appears upon presentation of what the Applicant thought to be a purported dispute, it sought to refer the matter for arbitration of the dispute by dint of Clause 9 of the Agreement which provides that-;Dispute Resolution“Any dispute arising out of this Contract that cannot be amicably settled between the parties shall be referred for Mediation/Arbitration in accordance with the Laws of Kenya.” 19.The Respondent by its submission argues that the aforestated clause is defective as it does not -: specify whether mediation or arbitration is mandatory; establish which dispute resolution process takes precedence; provide a mechanism for appointment of an arbitrator; and does not identify an appointing authority whereas the wording of the clause rendered the mode of ADR elective rather than mandatory. 20.Counsel goes on to posit that given that arbitration is contractual and consensus, where the parties fail to provide an appointment mechanism, the arbitration clause becomes inoperative and incapable of implementation, and is further buttressed by annexure “BOO4” where the Institute explicitly stated that the clause does not provide for the procedure for resolving the dispute and appointing authority, therefore the clause in incomplete, incapable of performance and does not amount to a valid arbitration agreement under the Arbitration Act. 21.The decisions in Kenya Pipeline Company Limited v Datalogix Limited & Another [2007] KEHC 2585 (KLR), Wanjala & 2 Others v Registrar of Companies & 2 Others; OkoaFinance Limited (Interested Party) [2011] KEHC 48 (KLR), Danki Ventures Limited v Sinopec International Petroleum Services Limited [2014] KEHC 8319 (KLR) and Wringles Company (East Africa) v Attorney General & 3 Others [2013] eKLR were called to aid in the forestated regard. 22.As to the competency of the application, while placing reliance on the decisions in Danki Ventures Ltd v Sinopec International Petroleum Services Ltd [2014] eKLR, Anne Mumbi Hinga v Victoria Njoki Gathara [2009] KECA 466 (KLR) and Pitstop Technologies Limited v Dynamic Branding Ventures Limited [2020] KEHC 2768 (KLR), counsel argued that the application is indecisive as to the mode of ADR sought, as it contemporaneously seeks to refer the dispute for mediation and or arbitration. The Respondent equally emphasized that the Arbitration Act does not confer original jurisdiction upon the High Court to create or supply an appointment mechanism of an Arbitrator where the parties themselves omitted one. 23.In conclusion the Respondent counsel cited the decision in County Government of Kirinyaga v African Banking Corporation Ltd [2020] KEHC 5213 (KLR) to submit that there is no actual dispute capable of being referred to arbitration between the parties whereas the application fails to meet the muster under Order 46 Rule 1 & 2 of the CPR, thereby seeks for dismissal of the application with costs. 24.With the above in reserve, the Court must now revisit the earlier question it had coined for consideration. In so doing, the Court concurs with the rendition of Mativo, J. (as he then was) in Euromec International Limited v Shandong Taikai Power Engineering Company Limited [2021] KEHC 93 (KLR) where he observed that -;65……An arbitration agreement may also be null, where the clause's language is so vague or ambiguous, that the parties’ intention cannot be decided. However, defective arbitration clauses, may nonetheless be interpreted by a Court to give meaning to it, to save the parties’ intention to arbitrate, as Courts tend to interpret these clauses narrowly, to avoid giving a ‘back door,’ for a party wishing to escape the arbitration agreement. Thus, the ‘null and void’ language must be read narrowly given a presumption of enforceability of agreements to arbitrate.66…67…….Commercial arbitration is a private form of binding dispute resolution, conducted before an impartial tribunal, which emanates from the agreement of the parties. The law requires the parties to honour their contractual obligation to arbitrate. The law also provides for limited judicial intervention in arbitral proceedings, and supports the enforcement of arbitral awards in a manner similar to that for national court judgments. National laws generally recognize and support arbitration as a mutually exclusive alternative to litigation as a means of finally resolving disputes. 25.Meanwhile, as rightly cited by the Respondent, the Court of Appeal in Anne Mumbi Hinga (supra) noted that-;……Section 10 of the Arbitration Act makes the Arbitration Act a complete code …. 26.It is not in dispute that the agreement for services dated 29/05/2020 contained an arbitral clause. That said, it is well-trodden within our jurisdiction that a Court cannot re-write a contract between parties, that its role is limited to interpretation of the contract because contracting parties are free to specify the terms and conditions of their agreement. See National Bank of Kenya Ltd vs Pipeplastic Samkolit (K) Ltd & Another [2001] eKLR. 27.Here, it can be garnered from the aforementioned agreement that there was an intention by the parties to resolve any dispute arising out of the contract that could not be amicably settled between them, by way of ADR, either by mediation or arbitration, in accordance with the Laws of Kenya. Patently, going by PW1’s evidence and annexures to the affidavit in support, a dispute arose concerning settlement of the Applicant’s outstanding dues in the sum of Kshs. 1,332,951.36/- on the backdrop of the agreement dated 29/05/2020. 28.I also note from the correspondence exchanged between the parties appearing in the annexures in the affidavit in support, that the Applicant invoked the arbitration clause and went to the extent of proposing arbitrators. However, it is noted that the Respondent failed to take up the invitation and on its own resorted to write to the Chartered Institute of Arbitrators, Kenya Chapter to appoint an Arbitrator in respect of the dispute. 29.In my estimation, considering the above events, both parties recognized the Arbitration clause in the agreement as to its enforceability, by their undisputed actions, to wit, initiating the arbitration proceedings albeit each on its behalf. The Respondent’s position from the said correspondence, that the Applicant’s threat to initiate arbitration proceedings without its consent, appears to be disingenuous given that it willfully executed the service agreement that included a dispute resolution clause. 30.That said, while the agreement did not provide for the precedence of the ADR mechanism, I equally note from the record that this Court had earlier, through Ongeri, J, referred the parties to attend Court annexed mediation however the same failed to yield any success, hence the instant proceedings. Therefore, given the foregoing can the arbitral clause be deemed to be inoperable, given its wording and conduct of the parties in the matter? 31.Faced with similar situation, as to ambiguity of an arbitral clause, specifically on the issue of appointment of an Arbitrator, the late Majanja, J. in Wanjala & 2 Others v Registrar of Companies & 2 Others (supra) noted that an arbitration clause may be rendered inoperative where it is so vague, incomplete, or uncertain that the Court cannot ascertain the intended mechanism for appointment of the arbitrator or implementation of the arbitral process. He further observed that Section 12 of the Arbitration Act only provides a default facilitative mechanism where parties have already provided a workable framework for appointment, but one party fails to comply with it; it does not empower the Court to rewrite the parties’ agreement or invent an appointment procedure where none exists. That where the arbitration clause fails to specify or sufficiently identify the mode of appointment of the arbitrator and the clause is otherwise incapable of practical operation, the Court may decline to enforce it as inoperative. 32.Similarly, faced with the same question, Sewe, J. In Re Application for Appointment of an Arbitrator [2022] KEHC 13294 (KLR) observed that the Court’s jurisdiction to intervene in the appointment of an arbitrator under Section 12 of the Arbitration Act is strictly facilitative and can only be invoked after parties have exhausted the statutory appointment procedure provided under the Act. She went on to address the fact that arbitration remains a consensual process requiring parties to first agree on the arbitrator or appointing authority, and where no agreement exists or a stalemate arises, parties must comply with the elaborate mechanism under Section 12(3) to (9) of the Act before seeking judicial intervention. 33.Therefore, in my considered view an application for the Court to appoint an Arbitrator filed before exhausting the statutory procedure is premature and offends both Section 10 of the Arbitration Act and the doctrine of exhaustion.Juxtaposing the above two (2) decisions alongside the facts of this case, and the rationale in Euromec International Limited (supra), I am of the view that the arbitral clause in this matter was inoperable given the application of Section 10 as read with Section12 of the Act. Reasonably, if this Court were to proceed and grant the reliefs as sought for by the Applicant, it would be an affront to the dicta in National Bank of Kenya Ltd vs Pipeplastic Samkolit (K) Ltd & Another [2001] eKLR and invocation of Section 10 of the Arbitration Act. 34.The scope of a Court intervention in arbitral proceedings is quite limited considering the comprehensiveness of the Arbitration Act, as stated in Anne Mumbi Hinga (supra). Section 12 of the Act is elaborate had the Applicant opted to conclusively pursue Arbitration. Whereas, if the Respondent was uncooperative as to the questions on arbitration of the dispute, the solution thereof lay bare in the latter provision, without any need for premature intervention from this Court, as present invoked by the instant summons. 35.For the aforestated, it is this court's finding that the Applicant’s Originating Summons is without merit and ought to suffer the unfortunate fate of dismissal. Meanwhile, applying my mind to the provisions of Section 27 of the Civil Procedure Act (CPA) I deem it justifiable to direct that each party bears its own costs of the summons.Orders Accordingly. DELIVERED DATED AND SIGNED AT NAIROBI THIS 4TH DAY OF JUNE 2026.……………………….JANET MULWA.JUDGE