https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11531

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **MILIMANI LAW COURTS** **COMMERCIAL AND TAX DIVISION** **MISC E366 OF 2023** **J & K INVESTMENTS KENYA LIMITED......................................................APPLICANT** **VERSUS** **NATIONAL WATER HARVESTING AND STORAGE AUTHORITY.............................................................................................RESPONDENT** **RULING** 1. The chamber summons dated 2.5.2023, made under **section 36(1) of the Arbitration Act** seeks recognition of the arbitral award dated 25.8.2022 published by the **Hon. Justice E. Torgbor, Sole Arbitrator** and leave to enforce the arbitral award against the respondent in the sum of Kshs.397,440,203.93. 2. The application is supported by an affidavit sworn by the applicant’s managing director, **Li Shunkang** on 2.5.2023. The applicant further filed initial and supplementary written submissions dated 24.10.2023 and 13.3.2026. 3. The respondent filed a replying affidavit sworn by its acting chief executive officer, **Engineer Julius Mugun**, on 10.3.2026 on the grounds set out under section 37 of the Arbitration Act. It also filed written submissions dated 17.3.2026. **Applicant’s case** 1. The applicant deposed that the parties entered into a contract dated 18.3.2020 for the construction of the **Turkana Peace Dam-Naku’etum Site** in **Turkana County**. That the contract amount was Kshs. 231,114,402.64 only. After signing the contract, the respondent handed over the site on 17.4.2020 instead of the original 31.3.2020. This impacted the first 100 days for completion of works. 2. On 20.6.2020, the respondent suspended the works indefinitely over alleged investigations into the procurement process. 3. Due to the delayed works, the parties signed an addendum to the contract dated 14.10.2020 revising the project implementation date. 4. The works were eventually completed after several delays which it attributed to the respondent. 5. A dispute ensued after the respondent took possession and use of the dam but failed to issue the applicant with a taking over certificate; failed to pay it the costs of suspension of the works, time extensions occasioned by the extensions and payment of interim certificates. 6. The applicant stated that it issued demands to the respondent but the respondent did not comply. It also wrote severally to the respondent for the appointment of a Dispute Adjudication Board but the respondent failed to respond. 7. It therefore elected to invoke **Special Condition 20.6 (a) (b) and (c)** of the agreement on appointment of an arbitrator from the **Chartered Institute of Arbitrators**. 8. Upon the appointment of an arbitrator, the respondent raised a preliminary objection challenging the process of his appointment, arguing that the matter had not been referred to an adjudicator under **Special Conditions 20 (1), (1) and (3)** of the agreement. 9. The arbitrator dismissed the preliminary objection, reasoning that the option of arbitration became available because the adjudication was not mandatory and there was evidence that the several attempts at amicable settlement and establishment of a DAB by the applicant had failed due to the respondent’s lack of co-operation. 10. The arbitrator thereafter determined the other issues raised and published his award on 25.8.2022 allowing the applicant’s claim against the respondent in the sum of Kshs. 384,647,770.80 together with costs of Kshs. 12,792,433.12. 11. The applicant asserted that the application is merited and made in line with section 36 of the Arbitration Act. It further asserted that the award does not offend section 37 (1) of the Arbitration Act. **Response** 1. The respondent opposed the recognition and enforcement of the award on the following grounds: - 2. The arbitral process was undertaken without jurisdiction; 3. Recognition and enforcement of the award would be contrary to public policy under section 37 of the Arbitration Act. 4. The arbitrator failed to give due regard to its objection to irregular commencement of the arbitral proceedings and proceeded to assume jurisdiction contrary to the express provisions of the contract. 5. The award of 25.8.2022 as rectified on 30.11.2022 is incurably defective and should not be recognized and enforced. 6. The respondent being a state corporation is funded by taxpayers and therefore, enforcing the award of Kshs. 397,440,203.93 together with costs shall result in unjust enrichment of the applicant at the expense of the taxpayer’s money against public policy. 7. Under special conditions, Sub-Clause 20, the multi-member Dispute Adjudication Board is abolished and replaced by a single adjudicator, altering the dispute resolution structure agreed by the parties. 8. The arbitral procedure was not in accordance with the agreement as no adjudicator was jointly appointed by the parties or appointed by the CIArb Kenya Branch as per SCC **Sub Clause 20.2** and no written decision of an adjudicator was issued. **Submissions** 1. The applicant urged the court to grant its application. It relied on **Boleyn Magic Wall Panel Limited v Nesco Services Limited [2020] eKLR** and **Castle Investments Company Limited v Board of Governors – Our Lady of Mercy Girls Secondary School [2019] eKLR** on the principle of finality of arbitral awards. 2. The applicant relied on **Registered Trustees of the Management University of Africa Trust v Solyana Company Limited & another [2020] KEHC 2962 (KLR)** to assert that the respondent cannot attempt to re-write the contract between parties at this stage while deliberately forgetting that it contributed 100% to the failure of the same process it now claims was unfollowed. 3. The applicant further relied on **Christ for All Churches vs Apollo Insurance Co. Ltd [2002]** **2 (E.A) 366** to argue that the respondent’s claim does not fall within the meaning of contravention of public policy; **Lalji Meghji Patel & Co. Limited v Nature Green Holdings Limited [2017] eKLR** and **Tanzania National Agency v Kudahsigh Construction Ltd [2012] eKLR** to support the submission that since the respondent has not demonstrated grounds under section 37, the award ought to be recognized and enforced. 4. The respondent urged the court to dismiss the application. It relied on **Nyutu Agrovet Limited v Airtel Networks Kenya Limited [2019] eKLR** on the centrality of party autonomy in arbitration and the limited role of courts in interfering with arbitral processes. It also relied on **UAP Provincial Insurance Company Limited v Michael John Beckett [2013] eKLR** on the sanctity of contractual dispute resolution mechanisms and the need for courts to respect the procedures agreed on by the parties. 5. The respondent also relied on **Abwoga v Checkups Medical Center Ltd & another [2024] KEELRC 123 (KLR)** to support its point on the importance of following the prerequisite steps before arbitration; **Owners of Motor Vessel ‘Lillian S’ v Caltex Oil (Kenya) Ltd [1989] KLR 1** on jurisdiction and **Christ for All Nations v Apollo Insurance Co. Ltd [supra]** on public policy. **Analysis and Determination** 1. **Section 37 of the Arbitration Act** provides: - ***“37. Grounds for refusal of recognition or enforcement*** ***(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*** ***(vii)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.*** 1. The respondent’s response is anchored on the grounds set out under **section 37 of the Arbitration Act**. In particular**, (1) (a) (v)**-arbitral procedure was not in accordance with the agreement and **1 (b) (ii)** -contravention of public policy. **Breach of contractual dispute resolution hierarchy** 1. The respondent has challenged the arbitrator’s jurisdiction based on the alleged breach of contractual dispute resolution hierarchy in its section 35 application for setting aside the award. The respondent’s application was considered by this court in the ruling of 19.2.2026. 2. At paragraphs 47 and 48 of the said ruling, this court observed that: - ***“47. In my understanding of the provision, the parties could refer the dispute directly to arbitration if there was no DAB in place. In my view, the above provision was put in place as it was foreseeable that there was a possibility that the parties could fail to agree on the appointment of an adjudicator hence the inclusion of the words “or otherwise”.*** ***48. Based on the foregoing, I am inclined to agree with arbitrator’s finding that since the parties did not appoint the DAB in the prescribed manner and within the timelines, the dispute could be referred directly to arbitration.”*** 1. There is no other evidence or urging that may compel a different or departure from the above finding. Informed by the material before the court this ground fails. **Public policy** 1. The respondent contended that the recognition or enforcement of the arbitral award would be contrary to the public policy of Kenya. 2. The respondent claimed that since it is a state corporation, is funded by taxpayers, enforcing the award of Kshs. 397,440,203.93 together with costs shall result in the applicant’s unjust enrichment of the applicant at the expense of the taxpayer’s money against public policy. 3. The respondent similarly raised this issue before the court through its application for setting aside. This court observed that: - ***“54. The applicant contended that award sum of Ksh. 517,430,001.30 (post-variation) significantly exceeds the original contract sum of Ksh. 231,114,402.64, leading to the unjust enrichment of the respondent at the expense of taxpayers.*** ***55. The applicant made a generalized claim that the significant difference after variation was against public policy for it led to unjust enrich of the respondent at the expense of the tax payers without demonstrating how the variation was illegal or fraudulent as to amount to unjust enrichment. The applicant has not shown how the award was contrary to the Constitution, written law or defined moral or legal principles or illegal. Christ for All Nations v Apollo Insurance Co. Ltd [supra],*** ***56. Therefore, I find that the applicant has not made out a case for the setting aside of the award on grounds of public policy.”*** 1. I do not find any evidence or urging that could compel a different finding or departure from the above finding. Thus, the ground that the the recognition or enforcement of the arbitral award would be contrary to the public policy of Kenya also fails. 2. Before I leave this space, but not related to this case, it has been noted by the court a demented practice by public officers who cause or prompt delays in implementation of, or a breach in order to cancel a contract and get an opportunity to enter into another one at a personal gain-bribes and inducements. Some of such induced delays cause huge losses to the government. It is time to give full effect to article 226(5) of the Constitution that: - **(5) If the holder of a public office, including a political office, directs or approves the use of public funds contrary to law or instructions, the person is liable for any loss arising from that use and shall make good the loss, whether the person remains the holder of the office or not.** **Recognition and enforcement of award** 1. **Section 36 of the Arbitration Act** provides that: - ***“36. Recognition and enforcement of awards*** ***(1) 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; and*** ***(b) the original arbitration agreement or a duly certified copy of it.”*** 1. The applicant exhibited a copy of the arbitration agreement contained in **Special Condition 20.6.** It also exhibited a copy of the Final Award dated25.8.2025. 2. The applicant has met the prerequisites for recognition and enforcement of the final award under section 36 of the Arbitration Act as an order of the court. 3. The respondent has not demonstrated any ground for refusal of recognition or enforcement of the award under **section 37 of the Arbitration Act**. **Disposal** 1. In conclusion, the applicant’s application dated **2.5.2023** is allowed.More specifically, thatthe arbitral award dated 25.8.2022 published by the **Hon. Justice E. Torgbor, Sole Arbitrator** is recognized and shall be enforced as an order of this court. **Dated, signed and delivered through Microsoft Teams online application this 23rd day of July, 2026** **-----------------** **F. Gikonyo M** **Judge** **In the presence of: -** Ms Olendo for Applicant Ms. Kyumu for Respondent Walukwe for Interested Party Gichana for Garnishee CA- Aggrey