[2009] KEHC 3964 (KLR)

[2009] KEHC 3964 (KLR)

The court found that the letter dated 23rd February 2007 did not constitute a valid modification of the agreement dated 10th June 2005, as it did not specifically refer to the original agreement nor state in what respects it was being modified, amended, altered, or waived. The required deeds of variation and standard agreements were never executed. Therefore, the arbitrator exceeded the scope of the reference by treating the letter as a binding variation. The arbitral award was set aside to the extent that it awarded the respondent Kshs. 4,851,097.35, together with interest and costs, as this portion was based on an invalid modification. In all other respects, the award was confirmed.

Citation
[2009] KEHC 3964 (KLR)
Parties
Respondent: Pinnacle Projects Ltd; Applicant: Dickson Matu
Court
High Court
Court Station
High Court at Nairobi (Milimani Commercial Courts)
Jurisdiction
Kenya
Judgment Date
30 January 2009
Case Number
? 742 of 2008
Procedural Posture
Miscellaneous Application / Ruling on Application to Set Aside Arbitral Award
Outcome
application allowed in part
Judges
CM Kariuki
Legal Topics
Arbitration Awards, Contract Variation, Public Policy, Enforcement of Awards
Source Language
English
Commercial and Corporate Alternative Dispute Resolution Arbitration Awards Contract Variation Public Policy Enforcement of Awards

Case Brief

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Parties

Pinnacle Projects Ltd

Respondent

Dickson Matu

Applicant

Procedural Posture

Miscellaneous Application / Ruling on Application to Set Aside Arbitral Award

Legal Issues

  1. 1 Whether the arbitral award should be set aside on grounds of conflict with public policy.
  2. 2 Whether the arbitrator exceeded the scope of the reference by relying on a letter dated 23rd February 2007 as a variation of the original agreement.
  3. 3 Whether the letter dated 23rd February 2007 constituted a valid modification of the agreement dated 10th June 2005.

Ratio Decidendi

The court found that the letter dated 23rd February 2007 did not constitute a valid modification of the agreement dated 10th June 2005, as it did not specifically refer to the original agreement nor state in what respects it was being modified, amended, altered, or waived. The required deeds of variation and standard agreements were never executed. Therefore, the arbitrator exceeded the scope of the reference by treating the letter as a binding variation. The arbitral award was set aside to the extent that it awarded the respondent Kshs. 4,851,097.35, together with interest and costs, as this portion was based on an invalid modification. In all other respects, the award was confirmed.

Court Disposition

application allowed in part

Orders

  • The arbitral award dated 5th September 2008 and filed on 7th October 2008 is set aside to the extent of the award in favour of the respondent amounting to Kshs. 4,851,097.35 together with interest and costs.
  • In all other respects, the arbitral award is confirmed.