[2009] KEHC 3614 (KLR)
The court found that the dispute between the parties is a business dispute concerning the company's assets and not a dispute regarding the interpretation, construction, or consequences of the Articles of Association. Therefore, the dispute does not fall within the scope of the arbitration clause in Article 33. As a...
Source-derived case information.
- Citation
- [2009] KEHC 3614 (KLR)
- Parties
- Plaintiff: Thomas V. Abey; Defendant: Aisha Mohamed Rahmathullah; Defendant: Mumtahina Ahmed Mahfudh Jeizan; Defendant: Shaik Mohamed Rahmathullah; Defendant: Satyam Industries Kenya Limited
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Civil Case 311 of 2009
- Procedural Posture
- Civil Case / Ruling on Application for Stay of Proceedings and Reference to Arbitration
- Outcome
- application dismissed with costs to respondents
- Legal Topics
- Arbitration Agreements, Company Articles of Association, Stay of Proceedings
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
More case intelligence is available
Unlock the full research layer for this judgment.
Parties
Thomas V. Abey
Plaintiff
Aisha Mohamed Rahmathullah
Defendant
Mumtahina Ahmed Mahfudh Jeizan
Defendant
Shaik Mohamed Rahmathullah
Defendant
Satyam Industries Kenya Limited
Defendant
Procedural Posture
Civil Case / Ruling on Application for Stay of Proceedings and Reference to Arbitration
Legal Issues
- 1 Whether the dispute falls within the scope of the arbitration clause in Article 33 of the company's Articles of Association.
- 2 Whether the proceedings should be stayed and the matter referred to arbitration under Section 6(1) of the Arbitration Act.
Ratio Decidendi
The court found that the dispute between the parties is a business dispute concerning the company's assets and not a dispute regarding the interpretation, construction, or consequences of the Articles of Association. Therefore, the dispute does not fall within the scope of the arbitration clause in Article 33. As a result, the application for stay of proceedings and referral to arbitration was dismissed, as there was no obligation to refer such a dispute to arbitration under the company's Articles or the Arbitration Act.
Court Disposition
application dismissed with costs to respondents
Orders
- The application for stay of proceedings and referral to arbitration is dismissed.
- Costs awarded to the respondents.
Full Case Text
Judgment text and source record
18 paragraphs
REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI (MILIMANI COMMERCIAL COURTS)
Civil Case 311 of 2009
THOMAS V. ABEY …………………….……………………PLAINTIFF
VERSUS
AISHA MOHAMED RAHMATHULLAH ………… 1ST DEFENDANT
MUMTAHINA AHMED MAHFUDH JEIZAN …… 2ND DEFENDANT
SHAIK MOHAMED RAHMATHULLAH ………… 3RD DEFENDANT
SATYAM INDUSTRIES KENYA LIMITED ……… 4TH DEFENDANT
R U L I N G
Application dated 8/5/09 filed on 11/5/09 seeking stay of proceedings and that this suit be referred to arbitration under Arbitration Act No.4 of 1995, Section 6 (1) which empowers the court to stay proceedings and refer the same to arbitration where parties are bound to arbitration agreement provided the arbitration agreement is null and void, inoperative or incapable of being performed or that there is not in fact any dispute between the parties with regard to the matters agreed to be referred to arbitration. If an application is made not later than the time when that party enters appearance or files any pleadings or takes any other steps in the proceedings.
It is submitted that the parties being members of a limited liability company, they are bound by Article 33 of Articles of Association of the company which provides:
“Whenever any difference arises between the company on one hand and any the members, their executors, administrators or assigns on the other hand, touching the true intent or construction or the incidents or consequences of these articles or statutes or touching anything then or thereafter done, omitted, executed or suffered in pursuance of these Articles … or of the statutes or touching any breach or alleged breach of these Articles or any claim on account of such breach or alleged breach or otherwise relating to the premises or to the company, every such difference shall be referred to the decision of arbitration.”
It is quite clear that the disputes arising in this suit are not such as ARE envisaged in that ArticleS of Association. Here we have a business dispute not one touching true intent or construction… or consequences of these Articles. The parties are fighting over business of the company and its assets. It is my finding therefore, that there is not in fact any dispute between the parties with regard to the matters agreed to be referred to arbitration under Article 33 thereof.
I therefore dismiss this application with costs to respondents.
Orders accordingly.
DATED and DELIVERED this 12th day of May 2009.
JOYCE N. KHAMINWA
JUDGE