https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/6839

Enterprise Generale Malta Forrest v Kenya Electricity Transmission Company Limited (Miscellaneous Application E150 of 2025) [2026] KEHC 6839 (KLR) (Commercial and Tax) (14 May 2026) (Ruling) Neutral citation: [2026] KEHC 6839 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Miscellaneous Application E150 of 2025 F Gikonyo, J May 14, 2026 Between Enterprise Generale Malta Forrest Applicant and Kenya Electricity Transmission Company Limited Respondent Ruling 1.Before me are two applications. 2.One by the applicant; a chamber summons dated 11.2.2025 under section 36 of the Arbitration Act seeking the recognition, adoption and entry of judgment for Kshs. 6,523,447.27 in terms of the final award dated 18.11.2024 by Mr. Simon Saili Malonza, C. Arb., FCIArb. 3.The other by the respondent; a chamber summons dated 18.3.2026 primarily seeking stay of the recognition and enforcement proceedings. 4.The stay application is anchored on the respondent’s pending party and party bill of costs application dated 12.6.2025 seeking Kshs. 24,813,299/- in HCCC 350 of 2017; Ennterprise Generale Malta Forrest v Isolux Ingeneria SA & Another v Kenya Electricity Transmission Company, which was dismissed in its favour, with costs to be borne by the applicant. The respondent indicated that it is scheduled for a ruling on 26.3.2026. 5.The applicant’s application was slated for ruling prior to the filing of the respondent’s application. However, on 14.4.2026, Mr. Odhiambo, holding brief for Mr. Mulondo for the respondent requested time to allow the parties to engage in out-of-court negotiations. 6.The court directed the applicant to file its response to the respondent’s application while the parties negotiated and scheduled the respondent’s application for ruling. Grounds 7.The respondent’s application is supported by an affidavit sworn by its acting company secretary and manager of legal services, Lydia Wanja on 18.3.2026. 8.The respondent’s core argument is that it stands to suffer substantial prejudice if the recognition and enforcement proceedings proceed as the applicant will commence execution against it yet its bill of costs is for a higher amount. 9.The respondent expounded that unless stay is granted, the taxation proceedings would be rendered nugatory, and it will be exposed to execution of public funds. 10.The respondent claimed that the applicant has no known offices, assets or funds within the court’s jurisdiction of the court and that it will be unable to execute against the applicant if it is successful in HCCC 350 of 2017. 11.The respondent also highlighted the pendency of another matter between the parties: Nairobi HCCC No. 433 of 2018 consolidated with HCCC E279 of 2020; Enterprise Generale Malta Forrest S.A.S v KETRACO (Consolidated suit) where the applicant seeks payment of Kshs. 274,757,491.75 with interest at 10% to a direct payment agreement dated 18.1.2017. 12.The respondent submitted that the balance of convenience tilts in favour of preserving the status quo as the applicant would not suffer prejudice that cannot be compensated in costs if the orders sought are granted. Response 13.The applicant opposed the application through a replying affidavit sworn by its business controller, Jonathan Van Eetvelde, on 13.4.2026. 14.The salient point raised by the applicant is that there is no legal or procedural basis to stay the recognition and enforcement of the arbitral award pending the alleged taxation proceedings in HCCC 350 of 2017 or the anticipated judgment in the consolidated suit. 15.The applicant contended that the respondent’s application is premature as it does not have a decree or claim of money equal to or more than the amount awarded by the arbitrator. It denied knowledge or service of the party and party bill of costs in HCCC 350 of 2017. 16.The applicant asserted that the respondent is precluded from raising any objections to the recognition and enforcement of the award as it did not challenge the award within 3 months of publication as per section 35 (3) of the Arbitration Act. 17.The applicant contended that the orders sought would unjustly deny it the right to enjoy the fruits of its judgment. 18.The applicant deposed that the negotiations with the respondent did not yield any fruit due to the respondent’s lack of willingness to resolve the matter. Submissions 19.The applicant filed written submissions dated 27.4.2026. I did not find the respondent’s submissions on the Judiciary’s case tracking system. Analysis and Determination 20.The specific issue that arises for determination is; whether an award of costs in a separate civil suit is a ground for stay of recognition and enforcement of an arbitral award. 21.Section 36 of the Arbitration act provides in part: -“ 36.Recognition and enforcement of awards1.A domestic arbitral award, shall be recognized as binding and, upon application in writing to the High Court, shall be enforced subject to this section and section 37.2.…3.Unless the High Court otherwise orders, the party relying on an arbitral award or applying for its enforcement must furnish—a.the original arbitral award or a duly certified copy of it; andb.the original arbitration agreement or a duly certified copy of it.” 22.Section 37 of the Arbitration act provides in part: -(1)The recognition or enforcement of an arbitral award, irrespective of the state in which it was made, may be refused only—(a)at the request of the party against whom it is invoked, if that party furnishes to the High Court proof that—(i)a party to the arbitration agreement was under some incapacity; or(ii)the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication of that law, under the law of the state where the arbitral award was made;(iii)the party against whom the arbitral award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or(iv)the arbitral award deals with a dispute not contemplated by or not falling within the terms of the reference to arbitration, or it contains decisions on matters beyond the scope of the reference to arbitration, provided that if the decisions on matters referred to arbitration can be separated from those not so referred, that part of the arbitral award which contains decisions on matters referred to arbitration may be recognised and enforced; or(v)the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, failing any agreement by the parties, was not in accordance with the law of the state where the arbitration took place; or(vi)the arbitral award has not yet become binding on the parties or has been set aside or suspended by a court of the state in which, or under the law of which, that arbitral award was made; or(v)the making of the arbitral award was induced or affected by fraud, bribery, corruption or undue influence;(b)if the High Court finds that—(i)the subject-matter of the dispute is not capable of settlement by arbitration under the law of Kenya; or(ii)the recognition or enforcement of the arbitral award would be contrary to the public policy of Kenya.” 23.The respondent’s application is brought under section 36 (3) of the Arbitration Act. 24.From the above, section 36 (3) deals with the documents that ought to be furnished by an applicant seeking enforcement and recognition of an arbitral award. 25.However, the respondent’s application is for stay of the enforcement and recognition proceedings. Hence, reliance on section 36 (3) is misplaced, unless the respondent is challenging compliance with the requirements. 26.The respondent anchors its application on the party and party bill of costs filed in HCCC 350 of 2017 which is pending ruling. 27.Section 37 of the Arbitration Act provides the grounds for refusal of recognition or enforcement of an arbitral award. Award of costs in another suit is not among the substantive grounds for refusal of recognition and enforcement of an award. 28.This brings me to discuss the subject of seeking stay of arbitral awards in proceedings other than under the Arbitration Act. 29.Arbitration is one of the methods or mechanisms for dispute resolution in article 159(2)(c) of the Constitution. Therefore, constitutionally-sanctioned and recognized. 30.The people of Kenya in exercise of their sovereign authority (art.1 of the Constitution) recognized and restated relevance of alternative justice systems for dispute resolution within our legal system (art.159(2)(c)); and created an obligation upon; the judiciary to promote alternative forms of dispute resolution; and ‘Every person has an obligation to respect, uphold and defend this Constitution (art.3(1) of the Constitution). Thus, any act that detracts from, stalls without a lawful justification or demeans or devalues or insubordinates these mechanisms or their resolutions is inconsistent with the Constitution. 31.The mechanisms under article 159(2)(c) of the Constitution are constituted and operated by the parties or the people deploying them adopting such procedure agreed between them or set out in some statute enacted for that purpose. This buttresses party autonomy which cannot be restricted except as agreed between the parties or provided in law. 32.Arbitration Act is a complete code on arbitration and it being an existing law, is to be construed and applied in a manner that is consistent with the Constitution. Clause 7 of the Sixth Schedule of the Constitution. 33.The important mission under article 159(2)(c) of the Constitution is to promote alternative forms dispute resolution. The etymological development of the word ‘promote’ traces its genealogy from human rights framing and practice to entail three duties; the duty to respect, protect and transform. AJS Policy. 34.The duty to respect denotes; ‘Let it be and pay deference’. The duty to protect means; ‘Do no harm and defend’ and, the duty to transform; ‘Make it better for purpose’. 35.Therefore, any order issued by the court in respect of alternative dispute mechanisms-the process as well as outcomes- should be in accordance with the duty to promote AJS. Hijacking or supplanting or restricting the party autonomy departs from the duty to promote. Similarly, interfering with the AJS processes and outcomes other than in a manner permitted in the agreement, the Constitution or law is inconsistent with the duty to promote AJS. There many other examples, but these suffice for the sake of this decision. 36.The doctrine that equity follows the law emphasizes that equitable considerations cannot be invoked to defeat clear statutory provisions. The respondent’s contentions that it is entitled to costs from the applicant in another suit and the alleged lack of known assets held by the applicant for execution, are equitable in nature but serve a different remedy of say; mareva injunction or attachment before judgment or attachment of a decree or set-off or satisfaction of decrees. These are not statutory bars to adoption and enforcement of an arbitral award under the Arbitration Act. 37.The law provides for set-off between cross-decrees in appropriate circumstances (Order 22 Rule 14 of the Civil Procedure) as well as for attachment of decrees (O.22 rule 47 of CPR). However, in the circumstances, the arbitral award is yet to be recognized and adopted as a judgment of the court. An award is not a decree of the court. The respondent’s bill of costs is also pending ruling. It is also not a decree. 38.I highly doubt application of order 22 rule 25 of the CPR before adoption and recognition of an arbitral award. 39.For these reasons, the court is not persuaded that the existence of an order for costs in separate proceedings or a bill of costs, constitutes any lawful or sufficient cause to stay recognition and enforcement proceedings under the Arbitration Act. 40.A party may, inter alia, only apply for the setting aside of the arbitral award (s.35 of the Arbitration Act), or refusal of recognition or suspension of an award (s.37 of the Arbitration Act). Once an award has been adopted as the judgment of the court, a decree may be drawn upon it and be subject to ordinary process of execution unless otherwise provided in the agreement of the parties or the award. 41.Furthermore, the court’s intervention in arbitration is limited. Section 10 of the Arbitration Act. The court is obligated to promote arbitration. Article 159 (2) (c) of the Constitution Disposal 42.The upshot is that the respondent’s application for stay of recognition and enforcement of the award is unmerited. It is therefore dismissed with costs. The court shall fix a date for ruling on the application on section 36 of the Arbitration Act. DATED, SIGNED AND DELIVERED AT NAIROBI THROUGH MICROSOFT TEAMS ONLINE APPLICATION THIS 14TH DAY OF MAY, 2026-----------------------F. GIKONYO MJUDGEIn the presence of: -Muriithi for ApplicantMs. Odhiambo for Mulondo for RespondentCA-Ivan/Aggrey