[2021] KEHC 9729 (KLR)
The court held that the applicant had satisfied all statutory pre-conditions for enforcement of the arbitral award by providing certified copies of the arbitration agreement and the final award. The court rejected the respondent's argument that the award was not binding due to the pending determination of costs,...
Source-derived case information.
- Citation
- [2021] KEHC 9729 (KLR)
- Parties
- Applicant: Moeish Consult Limited; Respondent: National Bank of Kenya Limited
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Miscellaneous Application E747 of 2020
- Procedural Posture
- Miscellaneous Application / Ruling on Application for Recognition and Enforcement of Arbitral Award
- Outcome
- application allowed
- Judges
- DAS Majanja
- Legal Topics
- Arbitral Award Enforcement, Recognition of Awards, Arbitration Act Application, Costs of Arbitration
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Moeish Consult Limited
Applicant
National Bank of Kenya Limited
Respondent
Procedural Posture
Miscellaneous Application / Ruling on Application for Recognition and Enforcement of Arbitral Award
Legal Issues
- 1 Whether the applicant has met the pre-conditions for enforcement of the arbitral award under section 36 of the Arbitration Act.
- 2 Whether the pendency of a costs determination or a notice of appeal affects the enforceability of the arbitral award.
Ratio Decidendi
The court held that the applicant had satisfied all statutory pre-conditions for enforcement of the arbitral award by providing certified copies of the arbitration agreement and the final award. The court rejected the respondent's argument that the award was not binding due to the pending determination of costs, holding that the Arbitration Act defines an arbitral award to include interim awards and does not restrict enforcement based on the finality of costs. The court further held that the filing of a notice of appeal does not automatically stay enforcement of an arbitral award, as a stay must be specifically ordered by the court. Accordingly, the court recognised and enforced the...
Court Disposition
application allowed
Orders
- The final arbitral award dated 11th October 2019 and published on 6th March 2020 is recognised and shall be enforced as a decree of this court.
- The respondent shall bear the costs of the application.
Full Case Text
Judgment text and source record
38 paragraphs
IN THE HIGH COURT OF KENYA
AT NAIROBI
MILIMANI LAW COURTS
COMMERCIAL AND TAX DIVISION
CORAM: D.S. MAJANJA J.
MISC. APPLICATION NO. E747 OF 2020
IN THE MATTER OF AN APPLICATION FOR SETTING ASIDE
AN ARBITRAL AWARD
BETWEEN
MOEISH CONSULT LIMITED ...........................APPLICANT
AND
NATIONAL BANK OF KENYA LIMITED......RESPONDENT
RULING NO. 2
1. The application for consideration is the Applicant’s Chamber Summons dated 20th November 2020 made under section 36(1) of the Arbitration Act, 1995 (“the Act”) and Rule 9 of the Arbitration Rules seeking an order that the final arbitral award dated 11th October 2019 and published on 6th March 2020 by Mr Collins O. Adipo, the Arbitrator (“the Final Award”) be recognised and enforced as a decree of this court.
2. The application is supported by the affidavit of the Applicant’s Managing Director, Isha Kasule, sworn on 20th November 2020. The Respondent (“the Bank”) opposed the application through grounds of opposition. The application was urged orally by counsel for the parties.
3. Under section 32(A) of the Act, an arbitral award is final and binding upon the parties and no recourse is available against the award otherwise than in the manner provided by the Act. The High Court, under section 36 of the Act, has the power to recognise and enforce domestic arbitral award in the following terms:
36 (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.
(4) ……
(5) ……
4. The Applicant’s case is that it has met all the pre-conditions for enforcement of an award as it has provided the certified copies of the Transaction and Fee Agreement dated 4th January 2014 (“the Agreement”) which contains the arbitration clause and a certified copy of the Final Award. The Agreement and Final Award are not in dispute as this court has already determined the Bank’s application to set aside the Award under section 35 of the Act and dismissed it by a ruling dated 20th November 2020. The only question then is whether the grounds of opposition raised by the Bank are valid.
5. The Bank has argued that the application is premature as the Final Award is not yet binding as the arbitral tribunal has not concluded the issue of costs pursuant to direction number 5 of the Final Award. I think, and without belabouring the point, this objection is answered by section 3(1) of the Act which states:
“arbitral award” means any award of an arbitral tribunal and includes an interim arbitral award
This means that any award whether interim or otherwise is an award and may be enforced as it is an award within the provisions of section 36(1) of the Act. Further, section 36 does not qualify what kind of award may or may not be enforced.
6. The Bank also contends that it has filed a Notice of Appeal against the ruling dated 20th November 2020 dismissing its application to set aside the Final Award. It is trite law that a Notice of Appeal does not operate as a stay of proceedings and or indeed a stay of enforcement of an arbitral award. This is the import of the applicable law stipulated at Rule 6 of Order 42(1) of the Civil Procedure Ruleswhich states in part that, “No appeal or second appeal shall operate as a stay of execution or proceedings under a decree or order appealed from except insofar as the Court appealed from may order ……”The fact that the Bank seeks to pursue its appeal does not affect the Applicant’s right to enforce the award unless there is an affirmative order of stay.
Disposition
7. I allow the Chamber Summons dated 20th November 2020 on the following terms:
a. The final arbitral award dated 11th October 2019 and published on 6th March 2020 by Mr Collins O. Adipo, the Arbitrator (“the Final Award”) be and is hereby recognised and shall be enforced as a decree of this court.
b. The Respondent shall bear the costs of the application.
DATEDandDELIVEREDatNAIROBIthis15th day of JANUARY 2021
D. S. MAJANJA
JUDGE
Court Assistant: Mr M. Onyango
Mr Onyambu instructed by Nyaundi and Tuiyott Advocates for the Applicant.
Mr Mutua instructed by Mutua and Molo Advocates for the Respondent.