[2016] KEHC 1294 (KLR)

[2016] KEHC 1294 (KLR)

The court held that the recusal of the appointed arbitrator did not terminate the arbitration clause. The intention of the parties, as evidenced by the contract, was to resolve disputes through arbitration. The Arbitration Act provides for the appointment of a substitute arbitrator when the original arbitrator's mandate is terminated. The court's role is to facilitate the parties' intention to arbitrate, not to defeat it. Therefore, the proceedings in court should be stayed, and the parties should be given an opportunity to agree on a substitute arbitrator. If they fail to agree within 30 days, the court will direct the Chartered Institute of Arbitrators to appoint an arbitrator. The...

Citation
[2016] KEHC 1294 (KLR)
Parties
Plaintiff: Mellech Engineering & Construction Limited; Defendant: David M. Galaty
Court
High Court
Court Station
High Court at Nairobi (Milimani Commercial Courts)
Jurisdiction
Kenya
Judgment Date
25 July 2016
Case Number
Civil Case 427 of 2015
Procedural Posture
Stay Application / Ruling on Application for Stay of Proceedings and Referral to Arbitration
Outcome
application allowed
Judges
A Mbogholi-Msagha
Legal Topics
Arbitration Clause Enforcement, Stay of Proceedings, Appointment of Substitute Arbitrator
Source Language
English
Civil Procedure Alternative Dispute Resolution Arbitration Clause Enforcement Stay of Proceedings Appointment of Substitute Arbitrator

Case Brief

Summary, issues, holding and outcome

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Parties

Mellech Engineering & Construction Limited

Plaintiff

David M. Galaty

Defendant

Procedural Posture

Stay Application / Ruling on Application for Stay of Proceedings and Referral to Arbitration

Legal Issues

  1. 1 Whether the recusal of the appointed arbitrator terminates the arbitration clause in the contract.
  2. 2 Whether the court should stay proceedings and refer the dispute to arbitration despite the recusal of the named arbitrator.
  3. 3 Whether the parties can appoint a substitute arbitrator in accordance with the Arbitration Act.

Ratio Decidendi

The court held that the recusal of the appointed arbitrator did not terminate the arbitration clause. The intention of the parties, as evidenced by the contract, was to resolve disputes through arbitration. The Arbitration Act provides for the appointment of a substitute arbitrator when the original arbitrator's mandate is terminated. The court's role is to facilitate the parties' intention to arbitrate, not to defeat it. Therefore, the proceedings in court should be stayed, and the parties should be given an opportunity to agree on a substitute arbitrator. If they fail to agree within 30 days, the court will direct the Chartered Institute of Arbitrators to appoint an arbitrator. The...

Court Disposition

application allowed

Orders

  • Proceedings are stayed pending arbitration.
  • Parties to agree on a substitute arbitrator within 30 days of the ruling.