[2022] KEHC 27091 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

CIVIL SUIT NO. 47 OF 2018

DEVISHIBHAI & SONS LIMITED......PLAINTIFF

-VERSUS-

ALLIED PLUMBERS LIMITED.......DEFENDANT

RULING

1. The subject matter of this ruling is the notice of preliminaryobjection dated 22nd February, 2021 raised by the defendant as follows:

This honourable court lacks jurisdiction to entertain this suit by virtue of Section 10 of the Arbitration Act Cap 4 of 1995 and the Arbitration Clause stipulated in the agreement between the plaintiff and defendant. Clause 31. 0 to 31. 14 of the Agreement and Conditions of sub-contract for building works between the plaintiff and defendant directs parties to determine disputes by way of Arbitration.

2. Learned counsels recorded a consent order to have the notice ofpreliminary objection to be disposed of by written submissions.

3. I have considered the grounds stated on the face of the notice ofpreliminary objection and the rival written submissions plus the authorities cited.

4. It is the submission of the defendant that this court lacksjurisdiction to entertain this suit by virtue of Section 10 of the Arbitration Act no. 4 of 1995 and further by virtue of clause 31. 0 to 31. 14 of the Agreement and Conditions of sub-contract for building works between the plaintiff and the defendant. The defendant urged this court to dismiss the suit and make an order referring the parties to arbitration.

5. The plaintiff opposed the defendant’s notice of preliminaryobjection arguing that the defendant ought to have moved the court under Section 6 of the Arbitration Act at the time of entering appearance. The plaintiff further pointed out that the defendant’s act of filing a defence constitutes acknowledgement of the claim and therefore the defendant is deemed to have submitted itself to the jurisdiction of the court.

6. The background of this dispute can be discerned from thepleadings. The plaintiff entered into a sub-contract on 10th August 2010 with the defendant where the defendant was to carry our plumbing and drainage installation works at a residential house situated at Old Muthaiga, Nairobi.

7. It would appear the defendant duly performed its obligationsunder the contract and left site after switching off the plumbing system. It is said that the pump was switched on by someone who wanted to use the water from the tanks hence causing breakage of the ball valve thus letting water to overflow thus causing damage to the plaintiff’s house. The plaintiff blamed the defendant for the damage and proceeded to institute this suit seeking to be paid special damages in the sum of ksh.29,776,576/= plus interest and costs.

8. It is not in dispute that the agreement the plaintiff and thedefendant executed contains an arbitral clause. Clause 31. 0 of the contract binds the parties and requires them to refer disputes which have arisen to arbitration.

9. The provisions of Section 10 of the Arbitration Act stipulates asfollows:

“Except as provided in this Act, no court shall intervene in matters governed by this Act.”

10. The defendant urged this court to find that disputes between theparties in the instant suit ought to be referred to arbitration as stated in Clause 31. 14 of the contract. The provisions of Section 6 of the Arbitration Act gives the road on how arbitral proceedings can be commenced as follows:

“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 that 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 finds-

a. That the arbitration agreement is null and void, inoperative or incapable of being performed; or

b. That there is not in fact any dispute between the parties with regard to the matters agreed to be referred to arbitration.”

11. A careful reading of the provisions of Section 6 of the ArbitrationAct will reveal that a party which seeks to stay proceedings and have the dispute referred to arbitration must make a formal application at the time of entering appearance.

12. It is not in dispute that the defendant did not file a formalapplication at the time of entering appearance. It is also not in dispute that the defendant has gone ahead and filed a defence to deny the plaintiff’s claim. The defendant has through the notice of preliminary objection urged this court to dismiss the suit and refer the parties to arbitration.

13. In the case of Charles Njogu Lofty =vs= Bedouin EnterprisesLtd (2005) eKLRthe Court of Appeal stated inter alia that:

“In our minds filing a defence constitutes acknowledgement of a claim within the meaning of the provision “On the plain reading of that Section, before the court can consider the issues raised in Paragraphs (a) and (b) of section 6(1) of the Act, the court has to satisfy itself that the party applying for reference to arbitration has applied to the court:- ...no later than the time when that party enters appearance or files any pleadings or takes any other step in the proceedings.......” in such a case the court cannot ignore the conditions set out in Section 6(1), which must be satisfied before the dispute is referred to arbitration.”

14. It is clear to this court that the defendant has not complied withthe conditions set out under Section 6(1) of the Arbitration Act. I am persuaded by the plaintiff’s submission that the defendant has already submitted itself to the jurisdiction of this court when it filed a defence and other pleadings.

15. In the end, I find no merit in the preliminary objection. The sameis dismissed with costs abiding the outcome of this suit.

DATED, SIGNED AND DELIVERED ONLINE VIA MICROSOFT TEAMS AT NAIROBI THIS 10TH DAY OF MARCH, 2022

………….…………….

J. K. SERGON

JUDGE

In the presence of:

……………………………. for the Plaintiff

……………………………. for the Defendant