https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11042

Omonge & another v Royal Gates Estate Ltd (Commercial Arbitration Cause E029 of 2025) [2026] KEHC 11042 (KLR) (Commercial and Tax) (21 July 2026) (Ruling) Neutral citation: [2026] KEHC 11042 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Commercial Arbitration Cause E029 of 2025 BK Njoroge, J July 21, 2026 Between Pinto Kidie Omonge 1st Applicant Sylvia Matankole Okode 2nd Applicant and Royal Gates Estate Limited Respondent Ruling 1.Before this Court are two diametrically opposed applications that test the sacred boundaries of arbitral finality against the statutory safeguards of the Arbitration Act. On the one hand, the Applicants seek to dismantle a Final Arbitral Award dated 14th March, 2025. They allege that the Sole Arbitrator wandered impermissibly beyond the contractual terms of reference by ordering their eviction and the forfeiture of their deposit. On the other hand, the Respondent petitions this Court to lay its judicial imprimatur upon that very same award, seeking its immediate recognition and enforcement as a decree of the Court. The central controversy rests on a singular jurisprudential pivot: Did the Arbitrator usurp jurisdiction not conferred by the parties, or are the Applicants attempting to prosecute a disguised appeal on the merits under the cloak of a jurisdictional challenge? As the outcome of one application inherently dictates the fate of the other, they have been consolidated for a singular, definitive determination. Background Facts 2.The first application is a Chamber Summons dated 27th March 2025, brought under Section 35(2)(a)(iv) of the Arbitration Act. It seeks the following orders;a.The court to set aside the Arbitral Award published on 14th March, 2025 by the Sole Arbitrator Hon. Ngeresa A. Lilly, MCIArb in the matter of the arbitration between Pinto Kidie Omonge & Sylvia Matankole Okode (as "Claimants") and Royal Gates Estates Limited (as "Respondent.")b.The costs of this application be borne by the Respondents. 3.The Application is supported by the Affidavit of Pinto Kidie Omonge. He deponed that the Applicants entered into a Sale Agreement with the Respondent in November 2021 for Town House No. 01 on Title No. Kajiado/Kaputiei North 113994 at a purchase price of KES 15,500,000.00. It was the Applicants' case that the Arbitral Award directed that they vacate the premises within thirty days from the date of the award and that the purchase price be refunded less 10% after resale. They contend this determination fell entirely outside the scope of the reference to arbitration. 4.The second application is a Chamber Summons dated 30th June, 2025, brought under Sections 36 and 37 of the Arbitration Act. It seeks the following orders;a.The Arbitration award dated 14/03/2025 be recognized and adopted as a judgment of the court.b.The costs of this application be provided for. 5.By furnishing the Court with the original Arbitral Award dated 14th March, 2025 and the Sale Agreement dated 16th May 2022 the Respondent met the statutory prerequisites. The application is supported by the Affidavit of Leah Wambui Njoroge. She deponed that the arbitral proceedings were determined on the merits and that the order for the Applicants to vacate the premises was sound in law. That there was no contractual relationship to legitimize their continued stay following the lawful rescission of the contract. Issues for determination 6.After carefully considering the Applications and the Response thereto as well as the written submissions, the issues for determination in the consolidated applications are as follows;a.Whether the Arbitral Award dated 6/11/2024 should be set aside, or;b.Whether it should be adopted as the order of this court. 7.A considered review of the evidentiary record reveals a duality in the contractual relationship between the parties. The dispute is governed not by a single, monolithic agreement, but by two distinct legal instruments operating in sequence. A Tenancy Agreement was executed on 12th November 2021, granting the Applicants a five-month fixed-term occupation. Following the expiration of this tenancy by the effluxion of time, the parties formalized the Sale Agreement on 16th May 2022. The Applicants breached this Sale Agreement by failing to clear the outstanding balance of KES 2,400,000.00. a) Whether the Arbitral Award dated 6/11/2024 should be set aside. 8.The statutory parameters circumscribing this Court’s supervisory jurisdiction over arbitral awards are notoriously narrow, fiercely guarded, and strictly construed. Section 35 of the Arbitration Act is not an appellate gateway; it is a limited statutory remedy designed to cure grave procedural aberrations and jurisdictional excesses. The Applicants herein invoke Section 35(2)(a)(iv), advancing the proposition that the Sole Arbitrator wandered beyond the contractual terms of reference by ordering their eviction and the forfeiture of 10% of the purchase price. They contend that their reference to arbitration was strictly confined to the issue of property defects and the costs of repair. 9.This argument is fundamentally flawed and represents a profound misapprehension of arbitral jurisdiction under Kenyan law. The terms of reference in an arbitral proceeding are not unilaterally dictated by the claimant’s initial grievance. They are crystallized by the totality of the pleadings, which inextricably includes the Respondent's Counterclaim. The arbitral record speaks for itself: the Respondent did not merely defend the claim for repairs; it actively lodged a Counterclaim seeking a declaration that the Sale Agreement was lawfully rescinded due to the Applicants admitted financial default, alongside prayers for vacant possession and liquidated damages. 10.The fountainhead of the Arbitrator’s jurisdiction is Clause 16.1 of the Sale Agreement dated 16th May 2022, which unambiguously subjects any dispute "including any question as to its existence, interpretation, validity or termination" to arbitration. The Respondent’s Counterclaim for eviction and forfeiture was a direct invocation of the termination provisions under Clause 12.1.1(b) and 12.2.3 of the Agreement. Consequently, the Arbitrator did not embark on a frolic of her own; she adjudicated the precise contractual consequences of termination squarely placed before her by the Counterclaim. The Applicants’ attempt to sever their financial default from the lawful termination of the contract is an exercise in legal futility. 11.As the Supreme Court of Kenya definitively articulated in Synergy Industrial Credit Ltd v Cape Holdings Ltd [2019] KESC 12 (KLR), a Court of law must not succumb to the temptation of treating a Section 35 application as an appeal on the merits, regardless of the ingenuity of counsel in disguising it as a jurisdictional challenge. The policy of the law, as enshrined in Section 10 of the Arbitration Act, is that of minimal court intervention. The Applicants are evidently aggrieved by the Arbitrator's factual and legal conclusions regarding their breach of contract. However, dissatisfaction with an arbitral outcome—or a belief that the Arbitrator erred in fact or law by not excusing their default based on alleged housing defects—does not mutate into a jurisdictional excess. This Court refuses to be converted into an appellate tribunal over the Arbitrator's findings of fact. Common practice by disgruntled litigants seeking to re-litigate their commercial failures does not equate to sound legal practice. 12.Premised on the foregoing, the Applicants' contention—that the Arbitral Award exceeded the scope of the reference by directing their eviction and the forfeiture of a 10% deposit—is fundamentally misguided. Having failed to discharge the heavy burden of proving that the Arbitral Award offends Section 35(2)(a)(iv) or contravenes the public policy of Kenya, the Applicants' Chamber Summons dated 27th March 2025 collapses in its entirety. b) Whether it should be adopted as the order of this Court. 13.Consequently, the statutory sequence under Section 36 of the Arbitration Act is immediately triggered. Absent any valid, proven grounds for setting aside the Award under Section 35, or any evidence of the vitiating factors listed in Section 37, the recognition and enforcement of the Award as a decree of this Court is an inexorable, mandatory operation of the law. The Court possesses no residual equitable discretion to deny a successful party the fruits of a valid arbitral process. 14.As to cost the same lie at the discretion of this Court and ordinarily follow the event. The successful Respondent is entitled to costs. Determination 15.The Court therefore make the following final orders as to the two applications dated 27th March, 2025 and 30th June, 2025.1.The Applicants' application by way of a Chamber Summons dated 27th March, 2025 is hereby dismissed with costs to the Respondent.2.The Respondent's application by way of a Chamber Summons dated 30th June, 2025 is HEREBY allowed in the following terms:a.The Arbitration award dated 14/03/2025 be and is HEREBY recognized and adopted as a judgment of the Court.b.The costs of the Application are awarded to the successful Respondent. 16.Orders accordingly. DATED, SIGNED AND DELIVERED AT MILIMANI THIS 21ST DAY OF JULY, 2026NJOROGE BENJAMIN K.JUDGEIn the presence of:Mr. Ochuka for the Applicants.Mr. Kariuki holding brief for Mr. Odhiambo for the Respondent.Mr. John Paul - Court Assistant.