[1997] KECA 219 (KLR)
The Court of Appeal held that Scott vs Avery arbitration clauses, though widely and mandatorily framed, are nevertheless subject to Section 6 of the Arbitration Act. The court reaffirmed its earlier decision in Corporate Insurance Company vs Loise Wanjiru Wachira, emphasizing that Kenyan courts are not obliged to...
Source-derived case information.
- Citation
- [1997] KECA 219 (KLR)
- Parties
- Appellant: Kisumuwalla Oil Industries Limited; Respondent: Pan Asiatic Commodities Pte Limited; Respondent: East African Shortage Company Limited
- Court
- Court of Appeal
- Court Station
- Court of Appeal at Malindi
- Jurisdiction
- Kenya
- Case Number
- ? 100 of 1995
- Procedural Posture
- Civil Appeal / Judgment
- Outcome
- appeal dismissed
- Legal Topics
- Arbitration Clauses, Scott Vs Avery Clauses, Application of Common Law, Statutory Interpretation
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Kisumuwalla Oil Industries Limited
Appellant
Pan Asiatic Commodities Pte Limited
Respondent
East African Shortage Company Limited
Respondent
Procedural Posture
Civil Appeal / Judgment
Legal Issues
- 1 Whether the court should depart from its previous decision regarding the effect of Scott vs Avery arbitration clauses under Kenyan law.
- 2 Whether Section 6 of the Arbitration Act overrides Scott vs Avery clauses in commercial contracts.
Ratio Decidendi
The Court of Appeal held that Scott vs Avery arbitration clauses, though widely and mandatorily framed, are nevertheless subject to Section 6 of the Arbitration Act. The court reaffirmed its earlier decision in Corporate Insurance Company vs Loise Wanjiru Wachira, emphasizing that Kenyan courts are not obliged to follow English common law where it conflicts with Kenyan statutes or local circumstances. The appellant's argument to overturn the prior decision was rejected, as the court found the previous interpretation to be correct and consistent with Kenyan law. The appeal was therefore dismissed, and the court's order was that the appeal fails with costs to the respondents.
Court Disposition
appeal dismissed
Orders
- The appeal is dismissed with costs to the respondents.
Full Case Text
Judgment text and source record
17 paragraphs
REPUBLIC OFN KENYA
IN THE COURT OF APPEAL AT MOMBASA CORAM: OMOLO, PALL, JJ.A. & BOSIRE AG. J.A. CIVIL APPEAL NO. 100 OF 1995
BETWEEN
KISUMUWALLA OIL INDUSTRIES LIMITED ................. APPELLANT
AND
PAN ASIATIC COMMODITIES PTE LIMITED ................ 1ST RESPONDENT
EAST AFRICAN SHORTAGE COMPANY LIMITED .............. 2ND RESPONDENT
(Appeal from an order of the High Court of Kenya at Mombasa (Justice Mbaluto) dated 25th May, 1993 in H.C.C.C. NO. 84 OF 1993) ****************
JUDGMENT OF OMOLO, J.A.
I had the advantage of reading in draft form the judgments of Pall, J.A. and Bosire, Ag. J.A. I am in entire agreement with them. Mr. Inamdar for the appellant, strenuously pressed upon us that this Court's recent decision inCORPORATE INSURANCE COMPANY VS LOISE WANJIRU WACHIRA, Civil Appeal NO. 151 OF 1995. (Unreported), was erroneous and that the Court ought to depart from it. That decision was a reserved and well considered verdict of this Court. It considered Section 6 of the then Arbitration Act in relation to what are commonly known as SCOTT VS AVERY arbitration clauses. The Court concluded in the CORPORATE INSURANCE COMPANY case, Supra, that such clauses though framed in wide and mandatory terms, are nevertheless subject to the provisions of Section 6. That is undoubtedly correct and I personally find it strange that Mr. Inamdar should contend to the contrary. As Bosire, Ag. J.A. correctly points out in his judgment, in England SCOTT VS AVERY clauses have assumed the status of long-standing common law and can only be altered by direct legislation by Parliament. In Kenya, common law is only applicable subject to statutes passed by the National Assembly and subject to the circumstances of the inhabitants of Kenya.
The courts in Kenya are not obliged to apply wholesale the substance of the common law as applied by their counter-parts in England. In my view, it is very brave of anyone to ask this Court to overturn a well considered decision of its own merely because the party against whom the decision has been rendered thinks that the decision is in conflict with some long-settled interpretation given by English courts. We will continue to give English or any other foreign decisions, particularly on commercial matters, their due place of honour, but it is unreasonable for any one to expect that we will slavishly apply those decisions without looking at our own statutes and circumstances. I have myself no doubt that theCORPORATE INSURANCE COMPANYCase was correctly decided in accordance with our law as it then stood. That being the unanimous view of the three of us and further that being the only substantial point raised before us, this appeal fails and the order of the Court shall be that it be dismissed with costs as proposed by Bosire, Ag. J.A.
Dated and delivered at Nairobi this 14th day of February, 1997.
R. S. C. OMOLO
---------------
JUDGE OF APPEAL
I certify that this is a true copy of the original.
DEPUTY REGISTRAR