[2013] KEHC 1005 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

MILIMANI COMMERCIAL & ADMIRALTY DIVISION

CIVIL CASE NO. 421 OF 2013

HAUSRAM LIMITED ………..……………….. PLAINTIFF/APPLICANT

VERSUS

NAIROBI CITY COUNTY ………….…… DEFENDANT/RESPONDENT

R U L I N G

Before this Court is the Plaintiff’s Application by way of Notice of Motion dated 25th September 2013. The Application is brought under the provisions of Article 47 of the Constitution, Order 40 Rules 1 and 2 of the Civil Procedure Rules 2010, Sections 78 and 79 of the Public Procurement and Disposal Act and the Regulations thereunder as well as the County Government Act No. 17 of 2012. The Application seeks the following Orders:

“1. THAT the Application be certified urgent and heard in priority.

2. THAT service on the Defendant/Respondent be dispensed with in the first instance.

3. THAT a mandatory order do issue against the Defendant/Respondent to immediately pay Kenya Shillings Twenty Million Three Hundred and Seventy One Thousand Four Hundred Shillings (KSHS. 20,371,400) being the operational expenses incurred by the Plaintiff/Applicant from September 2012 to July 2013.

4. THAT a mandatory injunction do issue restraining the Defendant/Respondent its servants, agents and or employees from harassing and or interfering with the operations of the Plaintiff/Applicant pending the hearing and determination of this suit.

5. THAT a mandatory injunction do issue to the Defendant/Respondent ordering it to forthwith withdraw the advertisement for Tender to supply implement and maintain an electronic revenue collection and payment solution advertised in the Daily Nation Newspaper on 17th September 2013 pending the hearing and determination of this application.

6. THAT a mandatory injunction do issue against the Defendant/Respondent from engaging with any other consultant or supplier of E-Payment Platform Solutions pending the hearing and final determination of this suit.

7. The Defendant/Respondent do pay the Plaintiff/Applicant a sum of Kenya Shillings One Billion Five Hundred Million in the following manner:

Kenya Shilling Twenty Million Three Hundred and Seventy One Thousand Four Hundred Shillings (KSHS.20,371,400) being Operational Expenses from September 2012 to July 2013;

Eight Hundred and Forty Million (KSHS. 840,000,000/-) being Two (2%) Percent of the anticipated revenue collection until the year 2015;

Kenya Shillings One Hundred Million (KSHS. 100,000,000/-) being the quantifiable opportunity lost as a result of delay in rolling out the E-Payment System to the market.

Kenya Shillings Two Hundred Million (KSHS.200,000,000/-) being the injury suffered by the reputation of the Plaintiff/Applicant being a leading company in the Information Communications and Technology (ICT).

IN THE ALTERNATIVE

8. THAT an order do issue that this matter be referred to a neutral arbitrator as anticipated in the Operationalization Contract dated 23rd July 2012.

9. Costs of this Application be provided for”.

The Application is brought on the following grounds:

“1. The Defendant/Respondent without any justification whatsoever terminated the contract with the Plaintiff/Applicant in July 2013. This has led to the grounding of the Electronic Bill Presentation and Payment Platform also known as the E-Payment Platform thereby causing the Plaintiff/ Applicant loss of money and time.

2. The Tender advertisement and subsequent operationalization contract executed with the Plaintiff/Applicant was for the fiscal years 2010 to 2015 and the said period has not expired.

3. The Defendant/Respondent has failed, refused and or neglected to give any reasons for the said termination and has systematically and deliberately refused to cooperate with the Plaintiff/Applicant to ensure that the E-Payment Platform is deployed to the market as had been anticipated in the contract.

4. Pursuant to Clause 10 of the Operationalization Contract date 23rd July 2012 each party is bound to terminate the contract after issuing a six (6) months notice. Therefore the purported termination is illegal and intended to undermine the established principles of contract law.

5. Plaintiff/Applicant has entered into binding bi-lateral non-disclosure agreements with several other third parties including Safaricom, Family Bank, YU Company, Equity Bank on behalf of the Defendant/Respondent to entrench them into the E-Payment platform ready for deployment to the market and as such its reputation in the Information Communication Technology Industry has suffered.

6. The E-Payment Platform Project being exceptional, unique, highly innovative involving Intellectual Property and specific to the Kenya Market the Plaintiff/Applicant will suffer a substantial loss towards this investment.

7. The Defendant/Respondent’s actions are unlawful, discriminatory, without any justification, politically motivated and solely aimed at frustrating the Plaintiff/Applicant’s operations.

8. The Defendant/Respondent has since advertised in the Daily Nation Newspaper dated 17th September 2013 for the expression of interest to supply, implement and maintain an electronic revenue collection and payment solution, similarly and exact e-payment services being rendered by the Plaintiff/Applicant with the sole intention of rewarding cronies with the said tender.

9. Further the Defendant/Respondent actions and conduct from January 2013 demonstrate a well co-coordinated effort to unduly frustrate Plaintiff/Applicant.

10. The objects of this Application would be defeated by any further delay and the urgency of this matter is further disclosed in the Affidavit of Gideon Magak Omodho sworn in support hereof”.

The said Affidavit of Gideon Magak Omodho was sworn on 25th September 2013. Over 22 pages the deponent set out the history of the relationship between the parties and noted that there had been 4 contracts for a period of 5 years entered into being (a) a Customisation Contract (b) an Operationalisation Contract (c) a Deployment Contract involving the rollout of the e-payment platform and (d) a Financial Contract. Particularly pertinent to the Application was the section of the Affidavit regarding the tenure of the Nairobi City County Governor and the Plaintiff’s formal engagement with that office which led to what the Plaintiff termed “illegal termination of the contract” as per the Defendant’s letter dated 29th of July 2013. The deponent went on to say that he had been advised by the Plaintiff’s Advocates that the letter of termination was illegal and was unfounded because clause 20. 0 of the Operationalisation Contract was still in force requiring either party to give six months’ notice in five different circumstances. The deponent also noted that by an advertisement in the Daily Nation 16th September 2013 edition, the Defendant had sought for expressions of interest to supply implement and maintain an Electronic Revenue Collection and Payment solution. Again, the deponent had been informed by the Plaintiff’s Advocate on record that the advertisement for expressions of interest was illegal since the Plaintiff had won the tender for a term of five years.

The initial reaction of the Defendant to the Plaintiff’s Application was to file a Notice of Preliminary Objection dated 2nd October 2013. Such detailed that this Court lacked the jurisdiction in this matter in view of the valid arbitration agreement between the parties being clause 19. 0 of the Deployment Contract aforesaid. It also filed a Chamber Summons again dated 2nd October 2013 seeking Orders that all further proceedings in this Court be stayed and the matter referred to arbitration. Finally, the Defendant filed a Replying Affidavit sworn by its ICT director Benter Ogot also dated 2nd October 2013. The deponent stated that she was aware that clause 19. 0 of the operationalisation contract set out a valid arbitration agreement as between the parties. She then embarked on three pages detailing what she had been advised by the advocates on record for the Defendant, including details of authorities. All these matters are more pertinent to submissions and have no place in an Affidavit of this nature. The deponent then went into detail, very much as the Supporting Affidavits to the Application, in relation to the negotiations between the parties which ended up in the 4 said contracts. She then related the situation where the Defendant became disenchanted with the rollout of the e-payment operation. The particular complaint of the Defendant was the inability of the Plaintiff to train the Defendant’s staff as to the use of the e-payment system. She noted that in December 2012, the Defendant had paid to the Plaintiff Shs. 4. 3 million for the purchase of 300 smart phones, 9 tablets and 2 iPhones to facilitate the piloting of the project but the Plaintiff had failed to supply. Further, the Plaintiff had removed the Defendant’s servers from its premises and collocated the servers of the Defendant to the Kenya Data Network, to its detriment. She noted that the contractual sum for the customisation phase of the project was worth Shs. 11,795,580/-whereas the Plaintiff had, to date, drawn from the Defendant over Shs. 93,421,640/-. The Defendant had not gained any value whatsoever from the project despite the large amount of money paid to the Plaintiff. It had not made even a single e-payment even at the pilot stage.

At first instance, this Court refused to grant any interlocutory Ordersex parte. However, both parties appeared before Court on 2nd October 2013 when Mr. Okoth for the Defendant apologised that although it had filed the Replying Affidavit, the Grounds of Objection and the Preliminary Objection, it had failed to serve the same upon the Plaintiff’s advocates in time. Having given the parties a fresh date for the hearing of the Plaintiff’s said Application as well as the Preliminary Objection, it was beholden upon the Court to declare that the status quo would be maintained pending theinter-partes hearing and determination which was defined as meaning that the Defendant would not progress matters towards the tender and acceptance of new contracts of the same nature that the Plaintiff had placed before the Court in its said Application. At that stage, both parties opted to file written submissions in respect of the Plaintiff’s said Application and the Preliminary Objection of the Defendant. However, the Plaintiff was given an opportunity for its Managing Director to file a Further Affidavit in response to the Replying Affidavit of Benter Ogot. That Further Affidavit did not lend much to these proceedings and it was quite obvious that there was bad blood between the deponents of the said Affidavits. In paragraph 9 of the Further Affidavit, Mr. Omodho expressed disappointment at the averments made by Ms Ogot claiming that there were baseless, unfounded, false and meant to mislead this Court. Further, he maintained that Ms Ogot had been one of the hindrances to the successful implementation of the project. She had continually frustrated the Plaintiff’s efforts to deliver because of her general critical attitude towards the project accompanied by a lack of proper understanding of what the project entailed.

The Plaintiff’s Submissions were filed herein on 30th October 2013 and immediately identified what it considered to be the issues for determination by this Court. These were as follows:

“a. Whether there was material breach of the Operationalisation Contract by the Defendant/ Respondent;

b. Whether the Plaintiff/Applicant is entitled to Twenty Million Three Hundred and seventy-one thousand shillings (Kshs 20,371,400) being the Operational Expenses incurred in maintaining the e-payment system.

c. Whether the Plaintiff/Applicant has established a clear case to warrant the granting of the mandatory orders sought.

d. Whether this matter can, in the circumstances of this suit be referred to arbitration as sought in Prayer 8. ”

The submissions then went into a synopsis of the detailed background relating to the dispute between the parties which was basically a summary of the Supporting Affidavit to the Plaintiff’s Application. At page 8 of the Submissions, the Plaintiff addressed the issue of the termination by the Defendant of the Contract on the Establishment of an Electronic Bill Presentation and Payment Platform. It set out the provisions of clause 20 of the Operationalization Contract as follows:

“20. 0 TERMINATION

The contract may be terminated by either party giving six (6) months notice in writing to the other only in the following circumstances:

Where the Client breaches the terms of the contract with the S.P. to use the software.

Where the S.P. is in material or continuing breach of any of its obligations under the Contract.

If the Client fails to make any payment due to the S.P. under the Contract.

With immediate effect from the date of service on the S.P. if a resolution is passed or an order is made for the winding up of the S.P. or the S.P. becomes subject to an administration order or a receiver or administrative receiver is appointed over or an encumbrancer takes possession of any of the S.P.’s property.

Where the parties mutually agree to terminate the contract without any reasonable cause that is without any breach from either party, the Client shall pay to the S.P. a just and fair amount taking into consideration the investments made by the S.P. and benefits of the software to the Client.

Should the Client however wish to terminate the contract based on a reason that is not contractual or due to political expediency then it shall pay compensation for premature termination based on expected lost income for the S.P. and gains of the Client as at the date of termination”.

As the Court reads this clause, it was almost as if the Plaintiff had anticipated that the Defendant would prematurely terminate the Operationalization Contract. The Defendant commented that such provided for the 6 months’ notice, was not for a fixed term but that the Defendant was at liberty to terminate the Contract due to political expediency but would necessarily have to compensate the Plaintiff for any such premature termination.

The Plaintiff in continuing its submissions analysed whether there had been a material breach of the Operationalization Contract by the Defendant as well as considering whether there were any implied terms in any of the four Contracts. I saw no relevance in these musings in relation to the Application before this Court, at all. As such it was not until page 15 of the submissions that the Plaintiff finally got down to submitting in relation to the guiding principles for the granting of injunctions as per theGiella v Cassman Brown authority. It referred this Court to and quoted from the cases ofEast African Fine Spinners Ltd & 3 Ors v Bedi Investments Ltd Civil Application No. 72 of 1994 andRedland Bricks Ltd v Morris (1970) AC 652 but failed to attach copies of these authorities for the benefit of the Court. However, it maintained that such authorities had been referred to in the case ofGrace Omanga v Erick Ongau & anor (2013) e KLR. Certainly there was mention of theRedland Brick case but the Plaintiff seems to have ignored the authoritative decision ofMegarry J inShepherd Homes Ltd v Shadahu (1971) 1 Ch 34 where the learned Judge stated as follows in relation to mandatory injunctions:

“It is plain that in most circumstances a mandatory injunction is likely other things being equal, to be more drastic in its effect than a prohibitory injunction. At the trial of the action, the court will of course grant such injunction as the justice of the case requires; but at the interlocutory stage, when the final result of the case cannot be known and the court has to do the best it can, I think the case has to be unusually strong and clear before a mandatory injunction can be granted even if it is sought to enforce a contractual obligation.”

The Plaintiff wrapped up its submissions by referring the Court to the Court of Appeal decision inShah v Tinga Traders Ltd Civil Appeal No. 326 of 2002 (unreported) but again failed to attach a copy of that authority to its submissions. As regards referral of this matter to arbitration, the Plaintiff made the extraordinary submission that the Defendant had withdrawn its Application by way of Chamber Summons dated 2nd October 2013. Perusing the Court record as well as the documents filed on the Court file, there is nothing to show that the Defendant withdrew the said Application apart from what it has detailed in its submissions in this regard. However, referral to arbitration is an alternative prayer in the Plaintiff’s Notice of Motion before this Court. The Plaintiff then referred the Court to the case of Kisumuwalla Oil Industries Ltd v Pan Asiatic Commodities PTE Ltd & Anor (1997) eKLR but again, failed to attach a copy of that authority to its submissions, relying upon the copy provided by the Defendant, attached to its submissions. However, according to the same as quoted by the Plaintiff, the Court of Appeal had held in that case that:

“The parties can of course expressly agree to ignore or disregard the (Arbitration) clause. They may also do so by conduct. Once the parties have submitted to the jurisdiction of the court, they cannot blow hot and cold and subsequently without consent of each other rely upon the condition precedent of the arbitration clause….”

The Court believes that this authority was cited by the Plaintiff in order to justify its statement:

“Parties have thus by conduct abandoned the arbitral process and chosen this court as the proper forum to hear and determine this dispute.”

As a result, the Plaintiff maintained that it had abandoned prayer 8 of the Application since the Defendant had now fully submitted to the jurisdiction of this Court.

In its turn, the Defendant outlined in its submissions filed on 11th October 2013, what it understood to be the mandatory orders of injunction sought by the Plaintiff. The Defendant then commented upon its notice of termination under the provisions of clause 20 (ii) of part 2 of the Service Agreement. It pointed out that the notice had been issued due to serious breach of the terms and conditions of the contract as the Plaintiff had wilfully and negligently failed to fulfil its obligations as specified in the contract. However, the Defendant seemed to overlook the fact that termination under that clause required the giving by either party of six months’ notice in writing. It pointed out that the clause relating to termination was important for two reasons – firstly that the contract was not for a fixed term and consequently any justifiable ground under the termination clause would entitle either party to terminate the contract. Secondly, the Defendant would be entitled to terminate the contract where the Plaintiff was in material continuing breach of the same. To this end, the Defendant had notified the Plaintiff three months previously, of its failure to provide, for example, 100 cell phones only supplying 18. To my mind, these submissions by the Defendant had no bearing on the Application before Court and seemed to be an attempted justification on the Defendant’s part as regards its termination of the contract. Further, the Defendant set out what it considered to be the issues for determination as far as the Application before Court was concerned. These were as follows:

“(a) Whether this Court can rewrite a contract between the Applicant and the Respondent, or read into the Contract an implied term that was not expressed by the parties in the Contract;

(b) Whether there were material breaches of the Contract by the Applicant to warrant issuance of a termination notice to the Applicant by the Respondent;

(c) Whether the Applicant establishes a clear and summary case to warrant granting of mandatory orders as sought in prayers 3-6 of the Application;

(d) Whether a party seeking damages as sought by the Applicant in prayers 3 and 7 of the Application is entitled to an order of injunction and whether the damages sought are capable of granting at this interim stage; and

(e) whether this matter can, in the circumstances of this suit, be referred to arbitration as sought in prayer 8 of the Application”.

So far as this Court is concerned, it does not view issues (a) and (b) above as having anything to do with the Application but would be relevant for consideration at the hearing of this suit in due course. As a result, the Court does not consider that the cases ofGithinji T/A Limpopo Snacks v Kenya Commercial Finance Ltd HCCC No. 1209 of 2001, Gimalu Estates Ltd & 4 Ors v International Finance Corporation & Anor. HCCC No. 606 of 2003,and Muchemi v Agricultural Finance Corporation HCCC No. 165 of 2001 to be of any relevance to the Application before it.

However, when it comes to whether the Plaintiff has established a clear and summary case to warrant the granting of mandatory Orders, the Defendant pointed out the restatement of the law on mandatory injunctions in the case of Kenya Breweries Ltd & 2 Ors v Washington Okeyo (2002) eKLR in which the Court of Appeal declared:

“The test whether to grant a mandatory injunction or not is correctly stated in Vol. 24 Halsbury’s Laws of England 4th Edition paragraph 948 which reads:

‘A mandatory injunction can be granted on an interlocutory application as well as at the hearing, but, in the absence of special circumstances, it will not normally be granted. However, if the case is clear and one which the court thinks it ought to be decided at once, or if the act done is a simple and summary one which can be easily remedied, or if the defendant attempted to steal a march on the plaintiff …. a mandatory injunction will be granted on an interlocutory application’.

Also in Locabail International Finance Ltd. V. Agroexport and others [1986] 1 All ER 901 at page 901 it was stated:

‘A mandatory injunction ought not to be granted on an interlocutory application in the absence of special circumstances, and then only in a clear case either where the court thought that the matter ought to be decided at once or where the injunction was directed at a simple and summary act which could be easily remedied or where the defendant had attempted to steal a march on the plaintiff. Moreover, before granting a mandatory interlocutory injunction the court had to feel a high degree of assurance that at the trial it would appear that the injunction had rightly been granted, that being a different and higher standard than was required for a prohibitory injunction’.

The principles of law enunciated by these decisions have received full approval by the court within our jurisdiction. See the cases of Belle Maison Limited vs. Yaya Towers Limited H.C.C.C. 2225 of 1992, per Bosire, J. (as he then was) and the Ripples Limited vs. Kamau Mucuha H.C.C.C. No. 4522 1992 per Mwera, J.”

As regards the principles of granting interlocutory injunctions as per theGiella v Cassman Brown case, the Defendant cited the Court of Appeal’s decision in Tende Drive Villas Ltd v David Kamau & 4 Ors (2005) eKLR as follows:

“First the applicant must show aprima facie case with a probability of success at the trial. Secondly an interlocutory injunction will not be granted unless the applicant would suffer an injury which cannot be compensated in damages. Thirdly if the court is in doubt, it should decide the application on a balance of convenience. It must be appreciated that an interlocutory injunction is a discretionary equitable remedy and accordingly, the same will not be granted where it is shown that the applicant’s conduct with respect to matters pertinent to the suit does not meet the approval of a court of equity.”

The Defendant maintained that by the Plaintiff unequivocally seeking damages as prayed in prayers 3 and 7 of the Application, it had removed itself from the realm of consideration for the granting of an interlocutory injunction. Further, the Defendant maintained that the damages sought as against it by the Plaintiff were speculative and incoherent and pleaded in a matter that fell well short of the test as restated by the Court of Appeal in the case ofCharles Sande v Kenya Cooperative Creameries Ltd Civil Appeal No. 154 of 1992 to the extent that special damages must be pleaded specifically and strictly proved.

Finally in its submissions, the Defendant posed the question as to whether, in the circumstances of this suit, the same could be referred to arbitration as per prayer 8 of the Application. It pointed out that it had acquiesced to the jurisdiction of this Court by filing a Defence and Counterclaim to the Plaintiff’s Plaint which by this action alone also indicated its acquiescence to the jurisdiction of the Court in this matter. The Defendant maintained that the effect of both parties’ acquiescence to the Court’s jurisdiction rendered clause 19 of the Contract superfluous. It cited the decision inDowning v Al Tameer Establishment & Anor (2002) EWCA Civ 721 as at its authority in relation to this submission. It also quoted the Australian case ofLa Donna Pty Ltd v Wolford AG (2005) VSC 359 to this end. It further quoted from the Ruling of Pall JA in the case ofKisumuwalla Oil(supra) as referred to by the Plaintiff above. It concluded by stating that the parties by conduct had abandoned the arbitral process and as a result, the said prayer in the Plaintiff’s Application was incapable of being granted and ought to be dismissed.

I have carefully perused the Plaintiff’s Notice of Motion dated 25th September 2013. As regards prayer 3 thereof, I share the Defendant’s viewpoint that the Plaintiff’s claim for payment of Shs. 20,371,400/-is by way of special damages and I am not prepared to grant any mandatory Order that the Defendant should pay the same. In this connection, the Court is acutely aware of the Defence and Counterclaim filed by the Defendant more precisely the monetary claims detailed therein, which are well in excess of the amount claimed by way of special damages by the Plaintiff. I adopt a similar position with regard to prayer number 7 of the Application and here again find that such is a claim for general and special damages and cannot form any part of an Order by way of mandatory injunction. As regards the other prayers sought by the Plaintiff for mandatory injunction, I have perused Exhibits “GMO 7”, “GMO 10a” and “GMO 10b” of the Affidavit in support of the Plaintiff’s said Application. These are three out of the four contracts above referred to. Exhibit “GMO 7” contains the said clause 20. 0 Termination clause as above imposing a requirement of six months’ notice to terminate that particular contract.

Certainly, the letter dated 29th July 2013 addressed to the Plaintiff and emanating from the Defendant’s Interim County Secretary terminating the Contract did not detail any 6 month period but did, however, refer to clause 10. 1.2 of Part I of the Contract as read with the aforesaid clause 20 of Part II of the Contract. Clause 10. 1.2 is contained in Exhibit “GMO 10a” as above and reads, under the definition of an event of default, as follows:

“10. 1.2. Either party continuously fails to perform or under-performs any obligation(s) of the Company in terms of or arising from this agreement which non-performance or under-performance shall be consistent with the inference that the Party is unable or unwilling to perform such obligation/s in terms of the provisions of this agreement; or”

Clause 10. 2 then reads:

“Upon the occurrence of an event of default by a Party, the other Party shall be entitled, at their sole discretion and without prejudice to any other rights that they may have in terms of this agreement or in law, either to claim specific performance of the terms of this agreement or to terminate this agreement by written notice forthwith, without prejudice to its rights to claim damages.”

As a consequence of the above clause 10 under the heading of Breach, it will be for the arbitrator or trial court in due course to decide whether termination of the contract as between the Plaintiff and the Defendant was proper or otherwise. This Court is only concerned as to whether, as a result of the termination letter as above from the Defendant, the Plaintiff is entitled to an interim measure of relief by way of mandatory injunctive Orders as prayed for. In my view, it is not so entitled for the simple reason, (quite apart from prayers 3 and 7 of the Application), that in accordance with the second principle expounded inGiella v Cassman Brown, the Plaintiff would be entitled to compensation for any breach of contract by the Defendant, in damages.

I now come to the alternative prayer 8 of the Application in which the Plaintiff’s seeks an order that this matter be referred to a neutral arbitrator as anticipated in the Operationalization Contract dated 23rd July 2012. I have noted that in all three of the Contracts above referred to that there are Dispute Resolution clauses clearly demarcated. In my opinion, the Plaintiff has come before this Court seeking interlocutory Orders under Order 40 Rules 1 and 2 of the Civil Procedure Rules, 2010 and in relation to section 7of the Arbitration Act (Chapter 49, Laws of Kenya). I do not accept the submissions of both parties hereto that by choosing to come before Court by Plaint as the Plaintiff has done, as well as the filing of a composite Defence and Counterclaim by the Defendant, that they have abandoned the arbitral process. It cannot be disputed that the Contractual terms and conditions, as above, stipulated that any dispute between the parties to those contracts were to be resolved by arbitration. The Arbitration Act and the Arbitration Rules provide for both the substantive and procedural manner in which matters referred to arbitration are to be dealt with. The role of the Court is only supervisory, and its jurisdiction may only be invoked in very specific situations as stipulated in the Arbitration Act. Section 10 of the Act provides that:

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

By this Section, the jurisdiction of the Court is limited and restricted and may only be invoked in very clear and certain circumstances. This Section, as I read it, provides that the arbitral tribunal shall determine the matter referred to it and the intervention of the Court will be limited. In the Ruling of my learned brotherOgola J inNairobi High Court Miscellaneous Civil Application No. 130 of 2011 Kay Construction Co. Ltd v AG & Anor (which this Court adopts) it was found:

“It was held by the Court of Appeal in the case ofEast African Power Management Ltd v Westmount (K) Ltd [Nairobi Civil Appeal No. 55 of 2006] that the Court under Section 10 of the Arbitration Act had a limited role in intervening in matters where parties have agreed to refer matters to arbitration except where the Act specifically provided for such intervention. The Court consequently held that the said provision was mandatory and that the Court’s role in arbitration matters was merely a facilitative one.”

In my opinion, it is quite clear from the said three Contracts as between the parties above referred to that they had entered into agreements in which their disputes were to be resolved by Arbitration. Once the parties had decided on this alternative mode of dispute resolution, which has been clearly recognised under Article 159 (2) (c) of the Constitution of Kenya, 2010, the Court as reiterated in the case ofKenya Shell Ltd v Kobil Petroleum Ltd (2006) eKLR will let the process take its course. The Court’s intervention, in the process proper or the arbitral award thereafter, is limited and restricted to matters that are provided for under the Arbitration Act. The authorities quoted to this Court from England and Australia are merely persuasive. Further, the Judgement of Pall JA in theKisumuwalla case (supra) was delivered (as a single Judge of Appeal) on 14th February 1997. This is well before the Court of Appeal decisions that I have referred to above, namely theEast African Power Management andKenya Shell cases. I believe that these authorities have superseded Pall JA’s said Judgement. Further, I am of the belief that Article 159 (2) (c) of the Constitution, 2010 is expressed in mandatory terms and this Court is under a duty to promote alternative forms of dispute resolution. This is all the more so when the parties themselves have chosen the forum as is the case here. This Court, as the Defendant has pointed out in its submissions, cannot rewrite the Contracts already entered into between the parties and, as a result, it has no alternative but to grant the alternative prayer 8 of the Plaintiff’s said Application. To this end, and if not by the Motion of the Plaintiff, the Court takes cognizance of the provisions of Order 46 rule 20 (1) of the Civil Procedure Rules which reads:

“Nothing under this order may be construed as precluding the court from adopting and implementing, of its own motion or at the request of the parties, any other appropriate means of dispute resolution (including mediation) for the attainment of the overriding objective envisaged under sections 1A and 1B of the Act.”

As a result, and bearing in mind that the parties themselves in the dispute resolution clauses in the said contracts have nominated the Chartered Institute of Arbitrators (Kenya Chapter) as the appointing body, I direct that the Chairman of that Institute shall, within 21 days from the date of this Ruling, appoint a suitable arbitrator to consider and determine the disputes between the parties herein.

The up-shot of the above is that the prayer 8 of the Plaintiff’s Notice of Motion is granted as above and the prayers 1 to 7 are dismissed. In the circumstances, the costs of the Application will be as for the costs of the Arbitration in due course.

DATED and delivered at Nairobi this 7th day of November, 2013.

J. B. HAVELOCK

JUDGE