[2015] KEHC 8258 (KLR)

[2015] KEHC 8258 (KLR)

The court held that the arbitration clause in the Equipment Purchase Agreement was broad, covering all claims and disputes arising under the agreement. Both the claim for the unpaid balance and the claim for general damages were found to arise from the defendant's alleged default under the agreement and were thus within the scope of the arbitration clause. The court rejected the plaintiff's argument that only disputes, and not claims, could be referred to arbitration, finding that the wording of the clause expressly included both. Accordingly, under Section 6 of the Arbitration Act, the court stayed all further proceedings and referred the matter to arbitration as per the parties' agreement.

Citation
[2015] KEHC 8258 (KLR)
Parties
Plaintiff: Harrison Gitu Macharia t/a Hajama Enterprises; Defendant: Arrow Developers Limited
Court
High Court
Court Station
High Court at Nairobi (Milimani Commercial Courts)
Jurisdiction
Kenya
Judgment Date
30 June 2015
Case Number
Civil Suit 153 of 2015
Procedural Posture
Civil Suit / Ruling on Application to Strike Out Plaint and Refer Dispute to Arbitration
Outcome
Application allowed; proceedings stayed and matter referred to arbitration.
Legal Topics
Arbitration Clauses, Contractual Disputes, Equipment Purchase Agreements, Stay of Proceedings
Source Language
English
Commercial and Corporate Alternative Dispute Resolution Arbitration Clauses Contractual Disputes Equipment Purchase Agreements Stay of Proceedings

Case Brief

Summary, issues, holding and outcome

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Parties

Harrison Gitu Macharia t/a Hajama Enterprises

Plaintiff

Arrow Developers Limited

Defendant

Procedural Posture

Civil Suit / Ruling on Application to Strike Out Plaint and Refer Dispute to Arbitration

Legal Issues

  1. 1 Whether the existence of an arbitration clause in the Equipment Purchase Agreement requires the dispute to be referred to arbitration.
  2. 2 Whether the plaintiff's claims, including for unpaid balance and general damages, fall within the scope of the arbitration clause.
  3. 3 Whether the court should stay proceedings and refer the matter to arbitration under Section 6 of the Arbitration Act.

Ratio Decidendi

The court held that the arbitration clause in the Equipment Purchase Agreement was broad, covering all claims and disputes arising under the agreement. Both the claim for the unpaid balance and the claim for general damages were found to arise from the defendant's alleged default under the agreement and were thus within the scope of the arbitration clause. The court rejected the plaintiff's argument that only disputes, and not claims, could be referred to arbitration, finding that the wording of the clause expressly included both. Accordingly, under Section 6 of the Arbitration Act, the court stayed all further proceedings and referred the matter to arbitration as per the parties' agreement.

Court Disposition

Application allowed; proceedings stayed and matter referred to arbitration.

Orders

  • All further proceedings in this case are stayed.
  • The matters in issue, including the plaintiff's claims and disputes, if any, are referred to arbitration in accordance with the arbitration clause in the Equipment Purchase Agreement dated 13th December 2014.