https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/10836

# **REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA** **AT NAIROBI** **COMMERCIAL & TAX DIVISION** # **HCOMM MISC NO. E197 OF 2018** PESA PRINT LIMITED...................................................................... APPLICANT -VERSUS- ## ATTICON LIMITED ……………………………….……........1ST RESPONDENT USHINDI CREDIT LTD CREDIT LIMITED………………...2ND RESPONDENT **RULING** 1. Before this Court for determination are two Notice of Motion applications. The first one is dated 11th December 2018 *“hereinafter the first application”*. It was filed by the applicant pursuant to Section 35 of the Arbitration Act, Rule 7 of the Arbitration Rules (1997), Section 3A of the Civil Procedure Act and Order 51 of the Civil Procedure Rules, 2010. The applicant seeks stay of execution of the Arbitral Award dated 24th August 2018 and published on 13th September 2018, and for the setting aside of the said Award. 2. The 2nd application is a Notice of Motion application dated 21st August 2020 *“hereinafter the second application”,* filed by the respondents pursuant to Section 36 of the Arbitration Act and Rules 4, 6 and 9 of the Arbitration Rules. The respondents seek recognition and enforcement of the Arbitral Award dated 24th August 2018 and the Award of costs dated 29th April 2020, by the sole Arbitrator. The applicants also pray for costs and expenses incidental to the enforcement and the execution of the said Awards, as well as costs of the application. 3. This Court adopted the Consent Order dated 20th March 2025, signed by the parties herein, and directed that the two applications would be heard and determined afresh. This meant that the two Rulings delivered by Hon. Lady Justice M. Muigai, on 20th December 2019 and 28th June 2021, respectively, were set aside by adoption of the Consent. 4. The first application by the applicant, *“hereinafter referred to as Pesa Print”,* is premised on the grounds on the face of the Motion, and it is supported by the affidavit sworn on 11th December 2018 by Mr. David Njane, the Managing Director of **Pesa Print.** He averred that the Arbitral Award ordered **Pesa Print** to pay the 1st respondent, *“hereinafter referred to as Attico*n*”*, Kshs.50,000,000/= and the 2nd respondent *“hereinafter referred to as Ushindi Credit Ltd”,* Kshs.30,000,000/=. He stated that **Pesa Print** was also condemned to pay costs of the Reference and the Award. 5. Mr. Njane averred that the dispute was in respect to a Loan Agreement dated 9th June 2016, wherein **Atticon** granted **Pesa Print** a loan of Kshs.50,000,000/= and the dispute followed the arbitration process. He stated that the Arbitral Award found that **Pesa Print** was in breach of the said Loan Agreement. He stated that the dispute also concerned a Further Agreement entered into by **Pesa Print**, **Ushindi Credit Ltd** and Symphony Technologies, and that the Arbitral Award held that **Pesa Print** should pay **Ushindi Credit Ltd** Kshs.30,000,000/=. Mr. Njane faulted the Arbitral Award and urged this Court to set it aside. 6. In opposition to the application, **Atticon** filed a replying affidavit sworn on 26th February 2019 by Ms Emily Nkirote Buantai, on behalf of **Atticon** and **Ushindi** **Credit Ltd**. She stated that the application does not disclose any *bona fide* grounds to challenge the Arbitral Award. She termed the said challenge as an appeal disguised as an application to set aside the said Award, and that the said application improperly introduces new evidence. She stated that the application does not set out any reasonable basis to show conspiracy or fraud or that the Arbitral Award is contrary to public policy meant to cause prejudice upon them. She urged this Court to dismiss the application with costs. 1. The second application filed by **Atticon** and **Ushindi Credit Ltd** is premised on the grounds set out on the face of the Motion and it is supported by an affidavit sworn on 21st August 2020 by Ms Emily Nkirote Buantai. She averred that they entered into a Loan Agreement with the **Pesa Print** dated 9th June 2016 and 25th July 2016, and that it was an express term that if any disputes arose, they would be referred to arbitration. She deposed that **Pesa Print** breached the said Agreement and the Arbitral Tribunal published the Final Award in favour of **Atticon** and **Ushindi Credit Ltd**. She urged this Court to recognize and enforce the entire Award to avoid it being rendered nugatory. 2. In opposition to the second application, **Pesa Print** filed a replying affidavit sworn on 28th March 2025 by Mr. David Njane, its Managing Director. He averred that the Award was induced by fraud and its recognition and enforcement would be against public policy. He further stated that the Arbitral Tribunal lacked jurisdiction to consider part of the dispute which makes the Award invalid as the Agreement dated 25th July 2016, did not have an arbitration clause. 3. He deposed that the Agreement dated 25th July 2016 was a tripartite one and the Arbitral Tribunal failed to involve all parties under the contract. He also stated that the Award directed **Ushindi Credit Ltd** to collect its debt with Symphony from **Pesa Print**, which was not the principal debtor. He argued that the impugned Award amounts to unjust enrichment and fraud which is against public policy. He deposed that **Pesa Print** has sufficient reasons to show why the Award should be set aside. He prayed for the application to be dismissed with costs. 4. This Court directed that the two applications would be canvassed by way of written submissions. **Pesa Print** filed its submissions dated 23rd June 2025 by the law firm of Mutua Nyongesa Muthoka Advocates. **Atticon** and **Ushindi Credit Ltd** filed their submissions dated 10th July 2025 by the law firm of Muthomi & Karanja Advocates. 5. Mr Makokha, learned Counsel for **Pesa Print** submitted that the grounds for setting aside an Arbitral Award are established under Section 35(2) of the Arbitration Act. He relied on the case of **Kenya Shell Limited v Kobil Petroleum Limited [2006] KECA 389** (KLR. He argued that the Arbitral Award herein, should be set aside because it was induced and/or affected by fraud and it is in conflict with the public policy of Kenya, in terms of Section 35(2)(a)(vi) & (b) (ii) of the Arbitration Act. He relied on the case of **National Cereals & Produce Board v Erad Suppliers & General Contracts Limited** [2014] KECA 473 (KLR), to support his submissions. 6. He stated that the Loan Agreement dated 9th June 2016 between **Pesa Print** and **Atticon** was for the sum of Kshs.50,000,000/=, which was for the purposes of paying off a claim or guaranteeing payment of the same to Symphony Technologies, to settle a Consent Order in **Nairobi HC MISC Appl No. 507 of 2015**. Counsel also stated that it was a salient feature that in the event **Atticon’s** guarantee to Symphony was utilized to meet **Pesa Print’s** obligations under the Consent, then **Pesa Print** was to pay the entire sum to **Atticon**. He indicated that **Atticon** did not pay off the claim but guaranteed it through a bank guarantee dated 30th June 2016 which was to expire on 30th September 2016. 1. Mr. Makokha submitted that **Pesa Print** met all the payment obligations it had with Symphony in terms of the Consent Order between it and Symphony on 10th June 2016, and there was no need to utilize **Atticon’s** guarantee issued by Family Bank Limited. He stated that **Atticon** instructed Family Bank on 26th June 2016 to transfer the entire guarantee amount held in lien, back to its account. In addition, he submitted that **Atticon** despite being aware of the same, fraudulently told the Arbitrator that the guarantee was not called in by Symphony since there was no evidence that the respondent made its financial obligations with Symphony in terms of the Consent Agreement dated 10th June 2016. He stated that the Arbitrator rightfully noted that the guarantee was neither addressed to, nor given by **Atticon**, and **Pesa Print** was therefore not in a position to assert that the guarantee was not called in. 2. Mr. Makokha blamed the Arbitral Tribunal for issuing an Award that was factually incorrect as it was based on **Atticon’s** misrepresentation of facts. He stated that after the Award was issued, a former Shareholder and Director of **Atticon**, Mr. Collins Kipchumber Ng’etich, swore an affidavit dated 20th May 2019 stating that the sum of Kshs.50,000,000/= had been paid to **Atticon’s** account prior to the appointment of the sole Arbitrator on 22nd August 2017. He stated that the said Mr. Ngetich deposed that **Atticon** through its Director, Ms Emily Nkirote, wrote a letter dated 26th September 2016 to Family Bank Limited indicating the expiry of the irrevocable letter of guarantee issued in favour of Ms Miller & Company Advocates of behalf of Symphony and Family Bank Limited upon receipt of the said letter, proceeded to pay the sum into **Atticon’s** account. 3. Counsel submitted that the deponent confirmed that the said sums were a direct payment of the Loan Agreement dated 9th June 2016 between **Atticon** and **Pesa Print** being the full and final payment, and that the demand and Award of the said sum was fraudulent, which shows that the Award ought to be set aside as it deals with a dispute not contemplated by or not falling within the terms of the reference to arbitration. Counsel contended that the making of the Award was induced and/or affected by fraud, and is in conflict with the public policy of Kenya. 4. Counsel submitted that the Second Agreement dated 25th July 2016, did not contain an arbitration clause or reference to arbitration, yet the Arbitral Tribunal assumed jurisdiction. He stated that the two Agreements were separate and not an extension of each other. He submitted that the Arbitral Award with respect **Ushindi Credit Ltd** dealt with a dispute not contemplated by, or not falling within the terms of the reference to arbitration under the Loan Agreement. He cited the case of **Rural Housing Estates Limited V Eldoret Municipal Council** [2009] KEHC 2054 (KLR), to support his position. 5. He also submitted that the Second Agreement was a tripartite contract, yet Symphony was not a party to the arbitration proceedings and its exclusion was against the public policy of Kenya. He claimed that **Pesa Print’s** debt was only Kshs.5,000,000/= as the amount of Kshs. 25,000,000/= was a debt owed to **Ushindi Credit Ltd** by Symphony, which created a garnishee relationship not debtor, which again showed fraud. He stated that the Arbitral Tribunal ignored the fact that the entire contractual sum of Kshs. 30,000,000/= had been remitted by **Pesa Print** to **Ushindi Credit Ltd**, but instead ordered it to pay the sum again. He submitted that the Award in favour of **Ushindi Credit Ltd** was both fraudulent and against the public policy of Kenya for being inconsistent with the Laws of Kenya, national interest of Kenya and for being contrary to justice and morality. He urged this Court to allow the application to set aside the Award and dismiss the second application seeking enforcement of the Award. 6. In the submissions on behalf of **Atticon** and **Ushindi Credit Ltd**, Mr Karanja, learned Counsel for the respondents, submitted that a challenge as to an Arbitral Award being erroneous in law and fact, is not a ground contemplated under Section 35 of the Arbitration Act for setting aside an Arbitral Award. He cited the case of **Synergy Industrial Credit Limited v Cape Holdings Ltd** [2020] KECA 208 (KLR), to buttress his assertion. He argued that the claim that the arbitral proceedings were biased, was not specifically alleged and established as required in the case of **Kenya Pipeline Company Limited v Kenya Oil Company Limited & another** [2015] KEHC 4470 (KLR). 7. Mr. Karanja disputed the claim that the Arbitral Tribunal failed to join other relevant third-parties to the proceedings *suo moto,* and stated that is not a sufficient ground for setting aside an Arbitral Award per Section 35 of the Arbitration Act, since it creates the principle of party autonomy in arbitration, meaning that the parties have the freedom to determine the procedure and the scope of arbitration under Sections 19 and 20 of the said Act. He stated that in the Arbitral proceedings, **Pesa Print** ought to have filed an application for joinder of the third party, which shows that the claim is an afterthought and a way to reopen the arbitral proceedings to determine new issues. He cited the case of **CMC Aviation Limited & another v Anastassios D. Thomos** [2017] KEHC 9925 (KLR) and **Anne Mumbi Hinga v Victoria Njoki Gathara** [2009] KECA 466 (KLR), to buttress his submissions. 8. Mr. Karanja submitted that **Pesa Print** has introduced new evidence in its supporting affidavit and replying affidavit, through ***Exhibits ‘DN5 DN6, DN7, DN9, DN10, DN11 and DN12’***,which were not part of the arbitral proceedings, as some of the said documents were acquired after delivery of the Award and some were obtained during the proceedings but were never provided. He stated that allowing the additional evidence will cause great prejudice to the respondents. He relied on the Court of Appeal case in **National Cereals & Produce Board v Erad Suppliers & General Contracts Limited** [2014] KECA 473 (KLR) and **Mahamud v Mohamad & 3 others** [2018] KESC 62 (KLR). 9. He submitted that issues of fraud are serious and they must be specifically pleaded and proved, which **Pesa Print** has not done. He relied on the case of **Elizabeth Kamene Ndolo v George Matata Ndolo** [1996] eKLR and **Mamta Peeush Mahajan [Suing on behalf of the estate of the late Peeush Premlal Mahajan] v Yashwant Kumari Mahajan [Sued personally and as Executrix of the estate and beneficiary of the estate of the late Krishan Lal Mahajan]** [2017] KEHC 2062 (KLR). 10. Counsel argued that allowing introduction of new evidence will be contrary to public policy and cited the case of **Nyutu Agrovet Limited v. Airtel Networks Kenya Limited; Chartered Institute of Arbitrators-Kenya Branch** [2019] KESC 11 (KLR), **Mall Developers Limited v Postal Corporation of Kenya** [2014] KEHC 1464 (KLR) and the explanatory notes to Article 35 of **The UNCITRAL Model Law on International Commercial Arbitration refer us to The UNCITRAL Secretariat Guide on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958)** for a comprehensive discussion on Article V (2) (b) of the New York Convention, to support his submissions. 11. Mr. Karanja asserted that **Pesa Print** had not proved fraud, collusion, or wilful deception between the respondents, the Arbitrator, and/or other third parties, and introduction of new evidence after the Award, shows intent by **Pesa Print** to patch up its case. 12. As to whether the Award should be recognized and enforced, Counsel cited the case of **Cytonn Investment Management PLC v Njuguna** [2024] KEHC 7242 (KLR), and urged this Court to enforce it. He stated that the Arbitral Award conforms with Section 36 of the Arbitration Act since the respondents have adduced certified copies of the Arbitral Award. He contended that **Pesa Print** does not have a valid application under Sections 35, 37 or 39 of the Arbitration Act as it had not revealed *bona fide* grounds to challenge to the Final Award. He posited that its application is disguised as an appeal and it improperly introduces additional evidence, and there is no proof of the allegation of fraud and conspiracy. 13. Mr. Karanja urged this Court to recognize the Final Award dated 24th August 2018 and the Award on costs dated 29th April 2020, and enforce them as a Judgment and decree of the Court. **ANALYSIS AND DETERMINATION.** 1. I have considered the applications and the affidavits filed in support. I have also considered the replying affidavits, as well as the written submissions filed by Counsel for the parties. The issues for determination are- 2. **Whether the Arbitral Award and Award on costs should be set aside.** 3. **Whether the Arbitral Award and Award on costs should be recognized and enforced.** **Whether the Arbitral Award and Award on costs should be set aside.** 1. Section 32A of the Arbitration Act provides that Arbitral Awards are final and binding. The said Section states that- ***“except as otherwise agreed by the parties, an Arbitral Award is final*** ***and binding upon the parties to it, and no recourse is available against the Award otherwise than in the manner provided by this Act.”*** 1. The legal position **under** Section 10 of the Arbitration Act, is that Courts should not intervene in matters governed by the said Act, except where it is provided to the contrary by the Act. Parties have only two available recourses when it comes to Arbitral Awards, either to have the Awards set aside or to have them recognized and enforced. 2. **Pesa Print** has moved this Court under Section 35 of the Arbitration Act, which provides for the setting aside of Arbitral Awards. The said Section states that- **“35(1) Recourse to the High Court against an arbitral Award may be made only by an application for setting aside the Award under subsections (2) and (3).** **(2) An arbitral Award may be set aside by the High Court only if-** **(a) the party making the application furnishes proof-** **(i) that a party to the arbitration agreement was under some incapacity; or** **(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication of that law, the laws of Kenya; or** **(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or** **(iv) *the arbitral Award deals with a dispute not contemplated by or not falling within the terms of the reference to arbitration or contains decisions on matters beyond the scope of the reference to arbitration, provided that if the decisions on matters referred to arbitration can be separated from those*** ***not so referred, only that part of the arbitral Award which contains decisions on matters not referred to arbitration may be set aside; or*** ***(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless that agreement was in conflict with a provision of this Act from which the parties cannot derogate; or failing such agreement, was not in accordance with this Act; or*** ***(vi) the making of the Award was induced or affected by fraud, bribery, undue influence or corruption;*** ***(b) the High Court finds that—*** ***(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law of Kenya; or*** ***(ii) the Award is in conflict with the public policy of Kenya*.”** 1. **Pesa Print** challenges the Arbitral Award on the grounds that the said Award deals with a dispute not contemplated by, or not falling within the terms of the reference to arbitration; the making of the Award was induced or affected by fraud and the Award is in conflict with the public policy of Kenya. 2. Under the first ground, that the Arbitral Award deals with a dispute not contemplated by or not falling within the terms of the reference, **Pesa Print** faults the Arbitrator for relying on the Second Agreement which did not have an arbitration clause. **Pesa Print** contended that the said Agreement was a tripartite contract, but Symphony was not part of the arbitral proceedings. In this regard, the Court agrees with **Atticon** and **Ushindi Credit Ltd** that **Pesa Print** ought to have raised these issues in the arbitral proceedings to be determined by the Arbitrator, which it failed to do. It cannot now raise the said issues at this juncture because this Court is not required to go into the details of the correctness of the decision. Doing so would render the Court to sit on appeal from the decision of the Arbitrator. 1. The foregoing position was held by the Court in the case of [**Geo Chem Middle East v. Kenya Bureau of Standards**](http://resolver.caselaw.kenyalaw.org/resolver/akn/ke/judgment/kesc/2020/12)[2020] eKLR, where the Supreme Court of Kenya quoted with approval the late Judge Ochieng’s holding in the High Court that*-* *“****It is not the function nor mandate of the High Court to re-evaluate such decisions of an arbitral tribunal, when the Court was called upon to determine whether or not to set aside and Award … if the Court were to delve into the task of ascertaining the correctness of the decision of an arbitrator, the Court would be sitting on an appeal over the decision in issue. In light of the public policy of Kenya, which loudly pronounces the intention of giving finality to arbitral Awards, it would actually be against the said public policy to have the Court sit on appeal over the decision of the arbitral tribunal”.*** 1. The second ground upon which **Pesa Print** challenges the Arbitral Award is on the claim that the Arbitrator relied on fraudulent evidence from **Atticon** and **Ushindi Credit Ltd**, which led to issuance of a fraudulent Arbitral Award. It is clear from the wording of the Section 35(2)(a) of the Arbitration Act that “*a*n arbitral Award may be set aside by the High Court only if- (a) the party making the application furnishes proof…” 2. The standard of proof in cases where fraud is alleged is higher than on a balance of probabilities in civil cases. In the case of **Kinyanjui Kamau -vs- George Kamau** [2015] eKLR, it was stated thus: ***“… It is trite law that any allegations of fraud must be pleaded*** ***and strictly proved. See Ndolo -vs- Ndolo (2008) 1 KLR (G&F) 742 wherein the Court stated that: -*** ***“… we start by saying that it was the Respondent who*** ***was alleging that the will was a forgery and the burden to prove that allegation lay squarely on him. Since the Respondent was making a serious charge of forgery or fraud, the standard of proof required of him was obviously higher than that required in ordinary civil cases, namely proof upon a balance of probabilities; but the burden of proof on the Respondent was certainly not one beyond a reasonable doubt as in Criminal Cases…”*** 1. This Court notes that **Pesa Print** has relied on the affidavit of one Collins Kipchumber Ngetich, a former Director and Shareholder of **Atticon**, who deposed that the contractual payment had already been made before the appointment of the Arbitrator. **Atticon** disputed the affidavit on the basis that it was not part of the arbitral proceedings. This Court has gone through the Final Award and has not found evidence that the documents were provided in the arbitral proceedings in support of the averment made by Mr. Ngetich. This Court notes that **Pesa Print** ought to have relied on the alleged documents in the arbitral proceedings, by either calling the deponent of the said affidavit in issue, Mr. Collins Kipchumber Ngetich, as a witness or by simply relying on them therein, to make its case. This Court finds that **Pesa Print** has not sufficiently proved its allegation of fraud, therefore the claim fails. 2. Lastly, **Pesa Print** argued that the Arbitral Award is against public policy. The Court in the case of **Mall Developers Limited v Postal Corporation of Kenya ML** Misc. No. 26 of 2013 [2014] eKLR, held as follows on the issue of public policy- ***“Public policy must have a connotation of national interest. It*** ***cannot mean fairness and justice as was submitted by the parties herein as it was only the Claimant and the Respondent who were individuals entitled to be affected by the decision of the Arbitrator. They did not both demonstrate to this Court how the decision by the Arbitrator would negatively affect, impact or infringe the rights of third parties thus offend public policy.*** 1. This Court notes that the Arbitral Award in issue, is in respect to the parties herein which are companies affected by the said Award. There is no proof or correlation as to how the said Award will negatively affect the rights of third parties so as to prove that it offends public policy. The challenge of the Arbitral Award on public policy also fails. **Whether the Arbitral Award and Award on costs should be recognized and** **enforced.** 1. Section 36 of the Arbitration Actprovides as follows- ***“Recognition and enforcement of Awards*** 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. ***An international arbitration Award shall be recognised as binding and enforced in accordance to the provisions of the New York Convention or any other convention to which Kenya is signatory and relating to arbitral Awards.*** 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.*** 1. ***If the arbitral Award or arbitration agreement is not made in the English language, the party shall furnish a duly certified translation of it into the English language.*** 2. **Pesa Print** raised the issue as to whether compliance with Section 36(3) of the Arbitration Act is mandatory. This Court notes the second application contains a certified copies of the Awards dated 24th August 2018 and 29th April 2020. The original and/or a certified copy of the Arbitration Agreement was however not availed. Section 36(3) reads that- “…***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.* (**Emphasis added). 41. My interpretation of the above provisions is that they are couched in permissive terms and if one of the documents specified in paragraphs (a) and (b) thereof has been inadvertently omitted at the time of filing of an application for setting aside or recognition and enforcement of an Arbitral Award, the Court can order for the same to be furnished for completeness of the record. 1. In the end, this Court issues the following orders: 2. **The Notice of Motion application dated 11th December 2018 is hereby dismissed with costs to the respondents.** 3. **The Notice of Motion dated 21st August 2020 is hereby allowed subject to compliance and filing of the original and/or certified copy of the Arbitration Agreement within 21 days from today;** 4. **Upon compliance with (ii) above the Court shall recognize and enforce the Final Arbitral Award dated 24th August 2018 and the Award on costs dated 29th April 2020.** 5. **The respondents are hereby granted costs of the Motions dated 11th** **December 2018 and 21st August 2020*.*** **DATED, SIGNED and DELIVERED IN KIAMBU on 26TH day of JUNE 2026.** **Ruling delivered through Microsoft Teams Online platform.** **NJOKI MWANGI** **JUDGE** **In the presence of:-** No appearance for the applicant Mr. Mwangi Lucas with Mr. Karanja for the respondents Ms Julia – Court Assistant.