[2023] KEELRC 783 (KLR)
The court held that section 6 of the Arbitration Act, 1995 is mandatory and requires the court to stay proceedings and refer the parties to arbitration where there is a valid arbitration agreement. The existence of an arbitration clause in the employment contract reflects the parties' mutual intention to resolve...
Source-derived case information.
- Citation
- [2023] KEELRC 783 (KLR)
- Parties
- Applicant: Mary Wanjiru Karunda; Respondent: Keekorok Capital Ltd
- Court
- Employment and Labour Relations Court
- Court Station
- Employment and Labour Relations Court at Nairobi
- Jurisdiction
- Kenya
- Case Number
- Cause E064 of 2023
- Procedural Posture
- Preliminary Objection / Ruling on Preliminary Objection Regarding Jurisdiction and Referral to Arbitration
- Outcome
- preliminary objection allowed; proceedings stayed and parties referred to arbitration
- Judges
- DKN Marete
- Legal Topics
- Arbitration Clauses in Employment Contracts, Jurisdiction of Employment and Labour Relations Court, Stay of Proceedings, Referral to Arbitration
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Mary Wanjiru Karunda
Applicant
Keekorok Capital Ltd
Respondent
Procedural Posture
Preliminary Objection / Ruling on Preliminary Objection Regarding Jurisdiction and Referral to Arbitration
Legal Issues
- 1 Whether the Employment and Labour Relations Court has jurisdiction to hear the dispute in light of an arbitration clause in the employment contract.
- 2 Whether section 6 of the Arbitration Act, 1995 mandates a stay of proceedings and referral to arbitration.
- 3 Whether statutory and constitutional provisions override the arbitration agreement in employment disputes.
Ratio Decidendi
The court held that section 6 of the Arbitration Act, 1995 is mandatory and requires the court to stay proceedings and refer the parties to arbitration where there is a valid arbitration agreement. The existence of an arbitration clause in the employment contract reflects the parties' mutual intention to resolve disputes through arbitration, and this intention must be respected. The court found no basis to disregard the arbitration agreement, as there was no evidence that the agreement was null, void, inoperative, or incapable of being performed. Consequently, the court allowed the preliminary objection and referred the parties to arbitration, declining jurisdiction over the matter at...
Court Disposition
preliminary objection allowed; proceedings stayed and parties referred to arbitration
Orders
- The preliminary objection is allowed.
- The proceedings are stayed.
Full Case Text
Judgment text and source record
24 paragraphs
Karunda v Keekorok Capital Ltd (Cause E064 of 2023) [2023] KEELRC 783 (KLR) (28 March 2023) (Ruling)
Neutral citation: [2023] KEELRC 783 (KLR)
Republic of Kenya
In the Employment and Labour Relations Court at Nairobi
Cause E064 of 2023
DKN Marete, J
March 28, 2023
Between
Mary Wanjiru Karunda
Claimant
and
Keekorok Capital Ltd
Respondent
Ruling
1. This is an application by way of preliminary objections dated February 17, 2023. It comes out that:“This Honourable court lacks jurisdiction pursuant to the provisions of section 6 of the Arbitration Act.”
2. The claimant/respondent opposes the application vide grounds of opposition dated February 22, 2023 terming the objection a non-starter and frivolous.
3. It is the claimant/respondent’s further contention and submission that this being a court matter, it cannot be subjected to Arbitration as per section 75 of the Labour Relations Act, 2007.
4. Again, she argues and submits that section 6 of the Arbitration Act, 1995 or even clause 9 of the Employment contract cannot oust the jurisdiction of this court as conferred under article 162 of the Constitution and section 15 of the Employment and Labour Relations Court Act, 2011. This is a choice by the Claimant instead of Arbitration.
5. The Parties came to court for submissions of their various positions and reiterated their respective cases as set out.
6. Section 6 of the Arbitration Act, 1995 comes out as follows;Stay of Legal proceedings“(1)A court before which proceedings are brought in a mater which is the subject of an arbitration agreement. 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 orb.That there is not in fact any dispute between the parties with regard to the matters agreed to be referred to arbitration.(2)Proceedings before the court shall not be continued after an application under subsection (1) has been made and the matter remains undetermined.(3)If the court declines to stay legal proceedings any provision of the arbitration agreement to the effect that an award is a condition precedent to the bringing of legal proceedings in respect of any matter is no effect in relation to those proceedings.”
7. This is a straight forward matter. The application of section 6 of the Arbitration Act, 1995 is a primal and mandatory. This is because the Arbitration agreement or clause dictates the choice of the parties on matters touching on the contract. It must therefore be respected.
8. The law on section 6 of Arbitration Act, 1995 is succinct. No party would run away, evade or escape the intention and import of an arbitration agreement or clause where this refers matters of mutuality to arbitration in the first instance. Courts would be foolhardy to ignore this.
9. I am therefore inclined to allow the preliminary objection and return the parties to their initial and mutual agreement; arbitration.
DELIVERED, DATED AND SIGNED THIS 28THDAY OF MARCH 2023. D.K. NJAGI MARETEJUDGEAppearances1. Mr. Munene instructed by Akide and Company Advocates for the Respondent/Applicant2. Mr. Maina instructed by James Denis Law Advocates for the Claimant/Respondent.