https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/8135

North China Power Engineering Company Ltd v Kenya Electricity Transmissions Company Ltd (Commercial Case E303 of 2025) [2026] KEHC 8135 (KLR) (Commercial and Tax) (9 June 2026) (Ruling) Neutral citation: [2026] KEHC 8135 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Commercial Case E303 of 2025 PM Mulwa, J June 9, 2026 Between North China Power Engineering Company Limited Applicant and Kenya Electricity Transmissions Company Limited Respondent Ruling 1.This ruling is in respect of the chamber summons application dated 23rd April 2026, brought under Section 7(1) and 12(4) of the Arbitration Act, 1995, Rule 2 of the Arbitration Rules, 1997 and all enabling provisions of the law. 2.The applicant seeks the following:i.An order compelling the Respondent to select one arbitrator from the names submitted by the company through the letter dated 22nd July 2026, within 7 days, failure to which the company shall appoint the arbitrator, and the appointment will be valid for legal purposes.ii.An interim measure ordering the Respondent to deposit USD 4,415,000.00 into an interest‑earning account maintained jointly by the advocates of the parties pending the completion of arbitral proceedingsiii.costs Background and pleadings 3.The facts as set out in the applicant’s affidavit of Guo Feng dated 23rd April 2026 show that the applicant commenced proceedings against the Respondent for sums arising from the Kenya–Tanzania Power Interconnection Project. By a ruling delivered on 16th July 2025, this Court referred the dispute to arbitration and directed the parties to appoint an arbitrator for the formal commencement of arbitral proceedings. 4.The applicant deposes that the Respondent has, despite repeated requests (letters dated 22nd July 2025, 12th August 2025, 22nd September 2025 and 3rd March 2026), failed and/or refused to participate in the appointment process, thereby frustrating the commencement of arbitration. The applicant further avers that KETRACO has acknowledged an undisputed portion of the claim amounting to USD 4.415 million. 5.The Respondent, through the replying affidavit of Florence Mitey (Company Secretary & GM Legal Services), opposes the application. The Respondent contends that the earlier application for interim measures had been determined by the Court when interim relief was declined on 16th July 2025, that the Respondent is engaged in a verification exercise under the parties’ agreed verification protocol intended to narrow the issues for arbitration; and that the present application is premature, seeks to re-litigate matters already decided and would prejudice the verification process. 6.I have considered the application, the affidavits on record, and the submissions of counsel. In my view, two issues arise for determination:i.whether the Court should intervene in the appointment of an arbitrator andii.whether the Applicant has established a basis for the grant of an interim measure of protection under Section 7 of the Arbitration Act. 7.The material before the Court shows that following the ruling of 16th July 2025 referring the dispute to arbitration, the Applicant repeatedly invited the Respondent to participate in the appointment process through letters dated 22nd July 2025, 12th August 2025, 22nd September 2025, and 3rd March 2026. The Respondent does not deny receipt of those communications. Its explanation is that it has been engaged in a claim verification exercise and requires additional time before the arbitration can commence. 8.Arbitration is founded upon party autonomy and the obligation of parties to give effect to their contractual bargain. Once a court refers parties to arbitration, it is incumbent upon them to take all reasonable steps to commence the arbitral process. In Nyutu Agrovet Limited v Airtel Networks Kenya Limited & Another [2019] eKLR, the Supreme Court emphasized that courts ought to support, rather than hinder, the arbitral process and should intervene only to facilitate the objectives of the Arbitration Act. 9.Where one party unreasonably declines or fails to co‑operate in the appointment process, the object and purpose of the referral is defeated. Section 12(4) Of the Arbitration Act provides thatIf the party in default does not, within fourteen days after notice under subsection (3) has been given —a.make the required appointment; andb.notify the other party that he has done so, the other party may appoint his arbitrator as sole arbitrator, and the award of that arbitrator shall be binding on both parties as if he had been so appointed by agreement. 7.The record shows that nearly nine months have elapsed since this Court directed the parties to appoint an arbitrator. In the circumstances, I am satisfied that the Respondent has failed to cooperate in the appointment process within a reasonable time. The Court is therefore entitled under Section 12(4) to intervene so as to give effect to the order of 16th July 2025 and to prevent further frustration of the arbitral process. 8.The second issue concerns the prayer that the Respondent be compelled to deposit USD 4.415 million in a joint interest-earning account pending arbitration. 9.The jurisdiction of this Court to grant interim measures of protection is conferred by Section 7 of the Arbitration Act. 10.And the principles of granting interim measure of protection are laid down in Safaricom Limited v Ocean View Beach Hotel Limited & 2 Others [2010] eKLR, where the Court of Appeal held that the Court must consider whether there exists an arbitration agreement, whether the subject matter of arbitration is under threat, the appropriate measure of protection in the circumstances, and the duration of such protection. 11.However, this Court cannot ignore the fact that the very relief now sought was expressly sought and determined in the ruling of 16th July 2025. In that ruling, the Court declined the Applicant's request that the disputed sums be deposited in a joint account, holding that the circumstances did not warrant the grant of an interim measure of protection. That determination has neither been reviewed nor set aside. 12.The Applicant has not demonstrated any material change of circumstances since that ruling. The assertion that the Respondent acknowledged an amount of USD 4.415 million does not, without more, establish a basis for requiring the Respondent to deposit that sum into a joint account. Such an order would, in substance, amount to securing the Applicant's monetary claim before liability has been determined by the arbitral tribunal. 13.Moreover, the Respondent has explained that the claim is undergoing verification and remains disputed. The Court must be careful not to make orders that effectively determine contested issues reserved for arbitration. 14.In the circumstances, I find that the prayer for the deposit of USD 4.415 million in a joint interest-earning account is not merited. 7.Accordingly, I make the following orders:i.The Respondent shall, within Seven (7) days from the date hereof, select and appoint an arbitrator from the names submitted by the Applicant through its letter dated 22nd July 2025..ii.In default of compliance with Order (1), the Applicant shall be at liberty to appoint an arbitrator, and such appointment shall be deemed valid and binding for purposes of commencing the arbitral proceedings.iii.The prayer seeking an order directing the Respondent to deposit USD 4.415 million into a joint interest-earning account is declined.iv.Each party shall bear its own costs.It is so ordered. RULING DELIVERED VIRTUALLY, DATED AND SIGNED AT NAIROBI THIS 9TH DAY OF JUNE 2026.P.M. MULWAJUDGEIn the presence of:Mr. Peter Wanyama for ApplicantMr. Kisigwa for RespondentCourt Assistant: Lispa