https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/9376
The dispute concerned performance of the contract, and the arbitration clause was clear, mandatory, and broad enough to cover even a claim for the unpaid balance. No exceptional circumstances were shown to justify departing from the parties' agreed dispute resolution mechanism, so the lower court correctly referred...
Source-derived case information.
- Citation
- [2026] KEHC 9376 (KLR)
- Parties
- Appellant: Vanesh Investment Company Limited; Respondent: China Railways No. 10 Engineer Group Company Limited
- Court
- High Court
- Jurisdiction
- Kenya
- Case Number
- Civil Appeal E1261 of 2025
- Procedural Posture
- Civil Appeal / Ruling on Appeal
- Outcome
- Appeal dismissed with costs.
- Judges
- ["LP Kassan"]
- Legal Topics
- Arbitration Clause Interpretation, Referral of Dispute to Arbitration, Jurisdiction, Performance of Contract, Costs on Appeal
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Vanesh Investment Company Limited
Appellant
China Railways No. 10 Engineer Group Company Limited
Respondent
Procedural Posture
Civil Appeal / Ruling on Appeal
Legal Issues
- 1 Whether the dispute was properly referred to arbitration under the contract
- 2 Whether the lower court erred in striking out the claim for lack of monetary jurisdiction and existence of an arbitration clause
- 3 Whether partial performance and a claim for the balance removed the dispute from the arbitration clause
Ratio Decidendi
The dispute concerned performance of the contract, and the arbitration clause was clear, mandatory, and broad enough to cover even a claim for the unpaid balance. No exceptional circumstances were shown to justify departing from the parties' agreed dispute resolution mechanism, so the lower court correctly referred the matter to arbitration and the appeal failed.
Court Disposition
Appeal dismissed with costs.
Orders
- The appeal is dismissed.
- Costs awarded to the respondent.
Full Case Text
Judgment text and source record
1 paragraphs
Vanesh Investment Company Ltd v China Railways No. 10 Engineer Group Company Ltd (Civil Appeal E1261 of 2025) [2026] KEHC 9376 (KLR) (Civ) (1 July 2026) (Ruling) Neutral citation: [2026] KEHC 9376 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Law Courts) Civil Civil Appeal E1261 of 2025 LP Kassan, J July 1, 2026 Between Vanesh Investment Company Limited Appellant and China Railways No. 10 Engineer Group Company Limited Respondent Ruling 1.This appeal emanates from the lower Court’s decision of striking out a claim for two key reasons: - first is because the Court had no monetary jurisdiction and secondly because there was an arbitration clause. The lower Court referred the matter to arbitration. The Appellant was aggrieved by this reference for the main basis that the contract had partly been performed and that its claim was merely for the balance. 2.At this juncture, this Court is called upon to determine if the matter was rightly referred to arbitration by simply interpreting the clause in the agreement. 3.Sub clause 2 on termination of a contract states“Any dispute arising from performance of this contract shall be first solved by negotiation, if negotiation fails then such dispute shall be referred to an arbitrator of Kenya tribunal.” 4.The above provision uses the mandatory word of “shall” and gives no room for any alternative. The word “any dispute” has been used to mean all disputes. The Appellant has no room to choose the dispute for reference to an arbitrator or to Court. The issue at hand is performance of the contract which is well captured by the clause above. 5.The Courts have always respected the parties’ choice for an arbitrator because it is enshrined in the constitution. The explanation by the appellant that the contract was performed in full and so he was right to seek redress in Court fails. Payment of any balance is part of “performance “because the act of payment is actually a performance envisaged by the arbitration clause and cannot be dismembered as it is the last obligation of the parties. 6.There are no exceptional circumstances for me to reverse the lower Court’s decision finding as the arbitral clause is not ambiguous and the dispute is well within the clause. There is no prove of fraud or prove that the arbitrator is likely to fail to implement it. 7.The onset of the above is that the appeal is dismissed with costs DATED, DELIVERED VIRTUALLY AND SIGNED ON THIS 1ST DAY OF JULY 2026.HON L P KASSANJUDGEIn the presence of;No appearance for AppellantMafumbo for the RespondentLeonard – Court Assistant