[2015] KEHC 6407 (KLR)

[2015] KEHC 6407 (KLR)

The court found that although the contract contained an arbitration clause, the Defendant did not deny the existence of the contract, the completion of the works by the Plaintiff, or the issuance of invoices for payment. The Defendant's only ground for seeking a stay was the arbitration clause, but there was no actual dispute between the parties regarding the performance of the contract or the debt owed. Under Section 6(1)(b) of the Arbitration Act, a stay of proceedings and reference to arbitration is only warranted where there is a genuine dispute. Since the Defendant admitted the essential facts and did not contest the debt, there was no dispute to refer to arbitration. The court,...

Citation
[2015] KEHC 6407 (KLR)
Parties
Plaintiff: Reliable Electrical Engineers Ltd; Defendant: Kenya Petroleum Refinery Ltd; Plaintiff: Nircon Construction Ltd
Court
High Court
Court Station
High Court at Mombasa
Jurisdiction
Kenya
Judgment Date
5 March 2015
Case Number
Civil Suit 24 & 29 of 2014
Procedural Posture
Notice of Motion / Ruling on Application for Stay of Proceedings and Reference to Arbitration
Outcome
Defendant's applications for stay of proceedings and reference to arbitration dismissed with costs to the Plaintiffs.
Judges
MM Kasango
Legal Topics
Arbitration Clauses, Stay of Proceedings, Contractual Disputes, Jurisdiction of Court
Source Language
English
Commercial and Corporate Civil Procedure Arbitration Clauses Stay of Proceedings Contractual Disputes Jurisdiction of Court

Case Brief

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Parties

Reliable Electrical Engineers Ltd

Plaintiff

Kenya Petroleum Refinery Ltd

Defendant

Nircon Construction Ltd

Plaintiff

Procedural Posture

Notice of Motion / Ruling on Application for Stay of Proceedings and Reference to Arbitration

Legal Issues

  1. 1 Whether the existence of an arbitration clause in the contract requires the dispute to be referred to arbitration.
  2. 2 Whether there is a dispute between the parties capable of being referred to arbitration under Section 6(1) of the Arbitration Act.
  3. 3 Whether the court has jurisdiction to hear the suit in light of the arbitration agreement.

Ratio Decidendi

The court found that although the contract contained an arbitration clause, the Defendant did not deny the existence of the contract, the completion of the works by the Plaintiff, or the issuance of invoices for payment. The Defendant's only ground for seeking a stay was the arbitration clause, but there was no actual dispute between the parties regarding the performance of the contract or the debt owed. Under Section 6(1)(b) of the Arbitration Act, a stay of proceedings and reference to arbitration is only warranted where there is a genuine dispute. Since the Defendant admitted the essential facts and did not contest the debt, there was no dispute to refer to arbitration. The court,...

Court Disposition

Defendant's applications for stay of proceedings and reference to arbitration dismissed with costs to the Plaintiffs.

Orders

  • The Notice of Motion dated 5th March 2014 in Mombasa Civil Commercial Case No. 24 of 2014 is dismissed with costs to the Plaintiff.
  • The Notice of Motion dated 7th March 2014 in Mombasa Civil Commercial Case No. 29 of 2014 is dismissed with costs to the Plaintiff.