[2006] KEHC 1381 (KLR)
The court found that by the time the plaintiff filed the suit, her membership with the defendant had expired. As a result, the contractual relationship that would have invoked the arbitration clause in Clause 18 no longer existed. The court held that the arbitration clause could not apply to disputes arising after...
Source-derived case information.
- Citation
- [2006] KEHC 1381 (KLR)
- Parties
- Plaintiff: Virginia E. Wambui Otieno-Mbugua; Defendant: Africa Air Rescue Health Services (K) Ltd
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Law Courts)
- Jurisdiction
- Kenya
- Case Number
- Civil Case 563 of 2006
- Procedural Posture
- Civil Case / Ruling on Application for Stay and Reference to Arbitration
- Outcome
- application for stay and reference to arbitration dismissed with costs
- Judges
- JL Osiemo
- Legal Topics
- Contractual Disputes, Arbitration Clauses, Specific Performance, Membership Renewal
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Virginia E. Wambui Otieno-Mbugua
Plaintiff
Africa Air Rescue Health Services (K) Ltd
Defendant
Procedural Posture
Civil Case / Ruling on Application for Stay and Reference to Arbitration
Legal Issues
- 1 Whether the dispute between the plaintiff and defendant should be referred to arbitration under Clause 18 of the contract.
- 2 Whether Clause 18 of the contract applies to disputes arising after the plaintiff's membership had expired.
Ratio Decidendi
The court found that by the time the plaintiff filed the suit, her membership with the defendant had expired. As a result, the contractual relationship that would have invoked the arbitration clause in Clause 18 no longer existed. The court held that the arbitration clause could not apply to disputes arising after the expiration of the contractual relationship, unless expressly provided for. Therefore, the defendant's application for a stay of proceedings and reference to arbitration was dismissed, as the dispute was not subject to arbitration under the contract at the time the suit was filed.
Court Disposition
application for stay and reference to arbitration dismissed with costs
Orders
- The defendant's application for stay of proceedings and reference to arbitration is dismissed with costs.
Full Case Text
Judgment text and source record
25 paragraphs
REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI (NAIROBI LAW COURTS)
Civil Case 563 of 2006
VIRGINIA E. WAMBUI OTIENO-MBUGUA….........................................................……..………PLAINTIFF
VERSUS
AFRICA AIR RESCUE HEALTH SERVICES (K) LTD…………………...………………..DEFENDANT
RULING
The plaintiff has been a member of the Defendant Africa Air Rescue (K) Ltd since the year 1989. She has remained a diligent member all along since she joined the membership of the defendant. On 17th March 2006 the defendant wrote her alerting her of the date when her membership was due for renewal which was 28th May 2006.
It is one of the conditions that before renewal a member has to avail oneself to the defendant’s medical team for check up which she did. But to her surprise the defendant wrote her that they were not going to renew her membership citing contractual age limit. She is a Gold Card Member whose age limit is 75 years and she is 69 years and 11 months so that she is within the age bracket.
She filed this suit by way of a Plaint against the defendant seeking:
(a) An order by way of specific performance of the contract between the plaintiff and the Defendant
(b) Damages in lieu of or additional to specific performance
(c) Damages for breach of contract and
(d) Cost of the suit plus interest.
The defendant on being served with summons filed this Chamber Summons expressed to be brought under Section 6 of the Arbitration Act 1995, Rule 2 of the Arbitration Rules 1997 and the inherent jurisdiction of the court seeking orders that the proceedings herein be stayed and the dispute between the parties be referred to arbitration in accordance with the terms and conditions of the contract between them.
The applicant specifically referred to Clause 18 of the said contract between the parties which provides that disputes between the parties are to be resolved by way of arbitration. The application is opposed.
I think that once an application under Section 6(1) of the Arbitration Act, has been made it is incumbent upon the Judge seized of the matter to deal with it as a whole, to discover whether any of the legal impediments set out in the section exist as to disentitle the applicant of a stay.
In order to appreciate the issues raised in this matter it is necessary I would like to reproduce Clause 18 of the Contract upon which the applicant is relying in this application.
It provides:
Clause “18” These terms and conditions shall be governed by the Law of Kenya. The Courts of Kenya shall have exclusive jurisdiction in any dispute arising between AAR and a member, touching on the construction or effect of these terms and conditions or on the rights or liabilities of the parties hereunder or any matter arising out fo the same or connected therewith shall be referred to a single arbitrator to be agreed between the parties or in default of agreement to be nominated by the Chairman of the Law Society of Kenya upon the application of either party. Such arbitration shall be conducted in Kenya under the Arbitration Act (Cap 49) Laws of Kenya, or any amendment or replacement thereof. The making of an arbitration award shall be a condition precedent to any right of action against or liability of AAR.”
The clause makes reference to a dispute between AAR and a member. The plaintiff’s membership was due for renewal on 28th May 2006. She received a letter alerting her of the renewal date on 17th March 2006 and she initiated the process for renewal by filling the renewal forms and availing herself to the defendant’s doctors for a check up which was done. But on 25th May 2006 she received a letter informing her that her membership was not going to be renewed citing contractual age limit which going by the defendant’s own documents was not correct, the plaintiff being 69 years and 11 months and being a Gold Card Holder the age limit being 75 years.
This suit was filed on 29th May 2006.
By the time the plaintiff filed this suit she had ceased to be a member of the defendant, her membership having expired on 28th May 2006 and for that reason the provisions of Clause 18 cited above cannot apply and for that reason the defendant’s application is dismissed with costs.
Dated and delivered at Nairobi this 12th day of September 2006.
J.L.A. OSIEMO
JUDGE