Coram
Case No: [2006] HCCC (Nairobi) No. 1295 of 2005 (Unreported)
Forum: High Court of Kenya (Nairobi Law Courts)
Judge: P. K. Kariuki
Date: 24th February, 2006
Counsels for the Parties
Miss Muchiri for the Plaintiff
Mr. Mwangi Kariuki for the Defendant
Authorities Cited in the Ruling
Rawal-v-The Mombassa Hardware Ltd [1968] E.A. 398
Section 6 of the Arbitration Act, 1995
CASE NOTES
An arbitration clause or arbitration agreement in a contract is not an impediment to resolving disputes in court until a party to the agreement objects by seeking stay of the proceedings within the appropriate time. The court in Rawal-v-The Mombassa Hardware Ltd [1968] E.A. 398 said as much when it held that an arbitration agreement does not limit or oust the jurisdiction of the court to grant reliefs sought by way of a Plaint.
In the instant case, the Plaintiff had filed a suit seeking to enforce an agreement for sale of land by way of permanent injunction and in addition applied and was granted ex-parte temporary injunction pending inter-partes hearing of the application. The said agreement had arbitration clause under which the parties had undertaken to refer any dispute arising to a single arbitrator appointed by the Law Society of Kenya. The Defendant entered appearance and, in addition, filed grounds of opposition to the application for injunction.
The Defendant then brought an application seeking to strike out the Plaintiff's suit and the application thereof on the ground that the court was not seized of jurisdiction to try the matter. The learned counsel for the Defendant argued in support of the aforesaid ground that the Plaintiff having failed to invoke fully the arbitration agreement clause, the court had no jurisdiction to entertain the suit and/or the application as the reliefs sought by the Plaintiff were best sought under inter section 7 of the Arbitration Act. The Plaintiff in response cited the Rawal case (supra) arguing that an arbitration clause does not limit or oust the jurisdiction of the court and that the Defendant had taken steps in the suit.
The court found for the Plaintiff holding that striking out the suit was beyond the ambit of section 6 of the Arbitration Act. The court further held that the Defendant having failed to move the court in appropriate time under section 6 to refer the matter to arbitration and instead taking steps in the proceedings, had waived his right to rely on and invoke the arbitration agreement. Thus, the Defendant's application to strike out the suit and/or stay the proceedings was dismissed with costs.
In a word, the parties can choose to ignore the arbitration agreement and file the proceedings in a court. However, if one of the parties is desirous of relying on the arbitration agreement when the other has gone to court, then the former party may seek an order of the court under section 6 of the Arbitration Act staying the court proceedings. The grant of the order of stay of legal proceedings under section 6 leaves the initiator of the court proceedings with no option but to follow the provisions of the arbitration agreement if he wishes to have the dispute resolved.
