[2008] KEHC 4030 (KLR)

[2008] KEHC 4030 (KLR)

The court found that the loan agreement between the parties contained a valid arbitration clause requiring all disputes to be resolved by arbitration under the Rules of Conciliation and Arbitration of the International Chamber of Commerce. The plaintiff conceded the existence of this clause and did not oppose reference to arbitration, but sought court directions on the arbitral process. The court held that its jurisdiction under Section 6 of the Arbitration Act, 1995, is limited to staying proceedings and referring the parties to arbitration, and it cannot issue directions regarding the conduct or timelines of the arbitration. The arbitral process is governed by the agreement and the...

Citation
[2008] KEHC 4030 (KLR)
Parties
Plaintiff: Nectel (K) Limited; Defendant: Eastern and Southern African Trade and Development Bank
Court
High Court
Court Station
High Court at Nairobi (Milimani Commercial Courts)
Jurisdiction
Kenya
Judgment Date
23 May 2008
Case Number
Civil Suit NO. 2 of 2008
Procedural Posture
Civil Suit / Ruling on Application for Stay of Proceedings Pending Arbitration
Outcome
Application allowed. Proceedings stayed pending arbitration.
Judges
LK Kimaru
Legal Topics
Loan Agreements, Arbitration Clauses, Stay of Proceedings, Contractual Disputes
Source Language
English
Commercial and Corporate Civil Procedure Alternative Dispute Resolution Loan Agreements Arbitration Clauses Stay of Proceedings Contractual Disputes

Case Brief

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Parties

Nectel (K) Limited

Plaintiff

Eastern and Southern African Trade and Development Bank

Defendant

Procedural Posture

Civil Suit / Ruling on Application for Stay of Proceedings Pending Arbitration

Legal Issues

  1. 1 Whether the court should stay proceedings pending reference of the dispute to arbitration as per the loan agreement.
  2. 2 Whether the court has jurisdiction to give directions regarding the conduct and timelines of the arbitral process.

Ratio Decidendi

The court found that the loan agreement between the parties contained a valid arbitration clause requiring all disputes to be resolved by arbitration under the Rules of Conciliation and Arbitration of the International Chamber of Commerce. The plaintiff conceded the existence of this clause and did not oppose reference to arbitration, but sought court directions on the arbitral process. The court held that its jurisdiction under Section 6 of the Arbitration Act, 1995, is limited to staying proceedings and referring the parties to arbitration, and it cannot issue directions regarding the conduct or timelines of the arbitration. The arbitral process is governed by the agreement and the...

Court Disposition

Application allowed. Proceedings stayed pending arbitration.

Orders

  • The proceedings herein are hereby stayed pending resolution of the dispute between the plaintiff and the defendant by arbitration in accordance with the terms of the loan agreement dated 30th May, 2007.
  • The costs of this application shall be in the cause.