National Agricultural Export Development Board v Cargill Kenya Limited [2014] KEHC 5294 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT MOMBASA

MISC. CIVIL APPLICATION NO. 390 OF 2012

NATIONAL AGRICULTURAL EXPORT DEVELOPMENT BOARD ... APPLICANT

V E R S U S

CARGILL KENYA LIMITED ………….....……..……………RESPONDENT

IN THE MATTER OF THE ARBITRATION ACT 1995 (AS AMENDED BY THE ARBITRATION (AMENDMENT) ACT NO. 11 OF 2009

AND IN THE MATTER OF AN ARBITATION

BETWEEN

NATIONAL AGRICULTURAL EXPORT DEVELOPMENT BOARD… CLAIMANT

AND

CARGILL KENYA LIMITED ……………………………… RESPONDENT

JUDGMENT

1. What is for consideration in this judgment is the Claimants Notice of Motion dated 20^th November 2012.  The Claimant seeks the following prayers-

• That this Honourable Court be pleased to set aside the Arbitral Award made by Mr. Steven Gatembu Kairu, sole Arbitrator dated 25^th September 2012 and allow the Claimant’s application for security for costs and security for the claim dated 12^th July 2012.

• That the costs herein and before the Arbitrator regarding the applications dated 8^th June 2012 and 12^th July 2012 be paid by the Respondent.

Background

2. The parties referred their dispute over their Bailment Agreement to the sole Arbitrator as stated above.

3. By Notice of Motion dated 8^th June, 2012 (hereinafter called Respondent’s application) the Respondent applied before the Arbitrator for security of costs for the Arbitration.

4. The Claimant also filed a Notice of Motion dated 12^th July 2012 (hereinafter called the Claimant’s application) seeking to secure its claim in the sum of US$ 1,175,383.84 and also to secure its costs estimated at Kshs. 4 million.

5. The Arbitrator after hearing both the applications delivered his Ruling dated 25^th September 2012.  By that Ruling the Arbitrator dismissed the Claimant’s application and allowed the Respondent’s application by ordering the Claimant to deposit Kshs. 2.5 million within fifteen (15) days from the date of the Ruling in interest earning account of the joint names of the parties in a bank account agreed by the parties.  It is that decision that the Claimant by Notice of Motion dated 20^th November 2012 seeks to set aside.

6. The Respondent filed a Notice of Preliminary Objection dated 13^th December 2012 against the Notice of Motion dated 20^th November 2012.  That Preliminary Objection was in the following terms-

“1.  The Application amounts to an Appeal against the Ruling given by the

Arbitrator, Mr. Steven Gatembu Kairu (as he then was) on 25^th September, 2012.

2. This Honourable Court does not have jurisdiction to entertain an Appeal or

any challenge to the said Ruling.

3. The Application offends, inter alia, the strict provisions of Section 10 of the Arbitration Act Number 4 of 1995 (as amended by Arbitration (Amendment) Act Number 11 of 2009)”

7. The Preliminary Objection was dismissed with costs on 4^th November 2013 by Justice Muya.  On dismissing the Objection the learned Judge stated in his said Ruling-

“I do find that it will be upon the Judge hearing the main application to determine whether there was an award in the first place and secondly whether the award is in conflict with the public policy of Kenya.  It would be unjudicious to shut the Applicant from arguing its application when it has brought it within the confines of Section 35 of the Arbitration Act.  The Preliminary Objection has no merit and its dismissed with costs.”

Claimants grounds in support of Notice Of Motion dated 20^th November 2012

8. The Notice of Motion was supported by the affidavit of ALEX KANYANKOLE who is the Director General of the Claimant.  Claimant is a statutory body created pursuant to Law No. 39 of 210 of the Laws of Rwanda operating in the Republic of Rwanda.  The deponent stated that the Claimant was dissatisfied with the Ruling delivered by the Arbitrator on the following grounds-

• THAT the Arbitral Award made by the Learned Arbitrator is contrary to Public Policy of Kenya in that it is inconsistent with Article 47 of the Constitution which provides that there should be fair administrative action and Article 159 of the Constitution of Kenya, 2010 which provides that in exercising judicial authority, courts and tribunals shall not use dispute resolution mechanisms in a way that is repugnant to justice or morality or inconsistent with the Constitution or any written law.

• THAT the Learned Arbitrator erred in failing to address the issue of reciprocation in enforcement of judgments enjoyed between the Republic of Kenya and the Republic of Rwanda in terms of the Foreign Judgments (Reciprocal Enforcement) Act, Cap 43 Laws of Kenya, while the said issue was a core issue.

• THAT the Learned Arbitrator failed to appreciate the fact that the Claimant’s/Applicant’s claim against the Respondent is quite substantial being USD 1,175,383.84 and given that the Respondent is a private company, it is susceptible to being wound up thus might not have the financial capacity to satisfy an Award for that amount.

• THAT the Learned Arbitrator erred in failing to appreciate the fact that the Claimant/Applicant is an agency of the Government of Rwanda and it exists in perpetuity unlike the Respondent which is a limited liability Company that could be wound up at any time.

• THAT the Learned Arbitrator erred in failing to consider evidence tendered by the Claimant showing that Respondent’s shareholders are domiciled in the United States of America which country is not among those enjoying reciprocal status with Kenya and as such there is a flight risk in the event of an Award made in favour of the Claimant/Applicant.

• THAT in all the circumstances of the case, the Learned Arbitrator arrived at a most unjust decision in condemning the Claimant to provide security for the costs of the Respondent yet the Claimant has already suffered massive losses due to the loss of its teas in the custody of the Respondent.  The Claimant’s application for security for the claim as well as security for costs was dismissed and with utmost respect to the Learned Arbitrator, the said decision was repugnant to justice and morality; contravenes Articles 47 and 159 of the Constitution of Kenya, 2010.

9. It is on the above grounds that the Claimant seeks the setting aside of the Ruling of the Arbitrator and prays that this Court do order the Respondent to provide security of the claim and costs as sought in the Claimant’s application.

CLAIMANT’S SUBMISSIONS

10. That the Court by the Ruling delivered by Justice Muya on 4^th

November 2013 having dismissed the Respondents Preliminary Objection dated 13^th December 2012 the issue on whether this Court had jurisdiction to entertain this matter was not before the Court.  That further since the Respondent had not filed a replying affidavit, the Notice of Motion dated 20^th November 2012 had no factual opposition.

11. On Article 159(3) of the Constitution Claimant submitted that

traditional dispute resolutions mechanism should not be repugnant to justice.

12. That the Learned Arbitrator failed to consider in his Ruling the

Claimant’s submission to the effect that the Respondent would be able to recover its costs from the Claimant by using the provisions of the Foreign Judgment (Reciprocal Enforcement) Act Cap 43, since Rwanda was one of the countries set out in Section 13 as one of the reciprocating country with Kenya.  That in failing to consider Claimant’s submission on Cap 43 without giving reason gives this Court basis to set aside the Arbitrator’s Ruling.  Claimant relied on the case from UNITED KINGDOM ENGLISH –Vs- EMERY REIMBOLD & STRICK LTD [2002] EWCA CIV. 605 wherein the Judges referred to the case FLANNERY V HALIFAX ESTATE AGENCIES LTD [2000]1 WLR 377 and stated that the Courts have a general duty to give reasons in their judgments.  The Court further stated-

“(1)  The duty is a function of due process, and therefore of justice.  Its

rationale has two principal aspects.  The first is that fairness surely requires that the parties especially the losing party should be left in no doubt why they have won or lost.  This is especially so since without reasons the losing party will not know (as was said in Ex parte Dave) whether the court has misdirected itself, and thus whether he may have an available appeal on the substance of the case.  The second is that a requirement to give reasons concentrates the mind, if it is fulfilled, the resulting decision is much more likely to be soundly based on the evidence than if it is not. 

(2)   The first of these aspects implies that want of reasons may be a good

self-standing ground of appeal.  Where because no reasons are given it is impossible to tell whether the judge has gone wrong on the law or the facts, the losing party would be altogether deprived of his chance of an appeal unless the court entertains an appeal based on the lack of reasons itself.”

13. Claimant submitted that it was wrong for the Arbitrator to find that it

could not pay its costs firstly because the Claimant is a Statutory Corporation in Rwanda and would therefore exist in perpetuity; secondly because the Claimant’s tea belonging to Claimant that had been warehoused by Respondent was highly valuable; thirdly because the Arbitrator should have taken judicial notice that the Rwanda’s economy was agro based and its produce of tea and coffee passed through Kenya and such produce could be attached in satisfaction of any costs if need be; and fourthly that Respondent being a Limited Liability Company could be wound up any time.

14. It is on the basis of the above submission that the Claimant sought the

Court’s finding that the Arbitrator had not accorded it a fair administrative action as per Article 47 and a fair hearing as per Article 50 of the Constitution.  Claimant therefore invited this Court to re-evaluate the evidence submitted before the Arbitrator and find that the Arbitrator’s Ruling was not based on facts and the law. 

RESPONDENT’S SUBMISSIONS

15. Respondent submitted that this Courts lacks jurisdiction to entertain

the Claimant’s Notice of Motion dated 20^th November 2012.  In this regard Respondent submitted that it is crucial for the Court to determine whether it has jurisdiction in view of the decision of OWNERS OF THE MOTOR VESSEL “LILIANS” –Vs- CALTEX OIL (KENYA) LTD where it was held-

“Jurisdiction is everything.  Without it, a Court has no power to make one more step.  Where a Court has no jurisdiction, there would be no basis for a continuation of proceedings pending other evidence.  A Court of law downs tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction …”

Respondent also relied on the case  Re THE MATTER OF THE INTERIM INDEPENDENT ELECTORAL COMMISSION (2011)eKLR where the Supreme Court rendered itself as follows-

“Assumption of jurisdiction by Courts in Kenya is a subject regulated by the Constitution, by statute law, and by principles laid out in judicial precedent.  The classic decision in this regard is the Court of Appeal decision in Owners of Motor Vessel ‘Lillian S’ v. Caltex Oil (Kenya) Limited [1989]KLR 1, which bears the following passage (Nyarangi, JA at p.14):

‘I think that it is reasonably plain that a question of jurisdiction ought to be raised at the earliest opportunity and the Court seized of the matter is then obliged to decide the issue right away on the material before it.  Jurisdiction is everything.  Without it, a Court has no power to make one more step.’

The Lillian ‘S’ case establishes that jurisdiction flows from the law, and the recipient-Court is to apply the same, with any limitations embodied therein.  Such a Court may not arrogate to itself jurisdiction through the craft of interpretation, or by way of endeavours to discern or interpret the intentions of Parliament, where the wording of legislation is clear and there is no ambiguity.  In the case of the Supreme Court, Court of Appeal and High Court, their respective jurisdictions are donated by the Constitution.”

16. Respondent submitted that this Court lacked jurisdiction to entertain

the matter before it because Claimant had failed to bring itself within the provisions of the Arbitration Act Cap 49 (the Act) particularly Section 35.  That Section 35 limits the High Court’s intervention in respect of Arbitral awards.  That in any case Claimant had failed to bring this action within the provisions of that Section, and further what the Claimant was challenging was not an award but rather a Ruling to an interlocutory matter.  In this regard Respondent relied on an Article by Dr. Kariuki Muigua which considered Section 18 of the Act as follows-

“The interim powers of the Arbitrators and, by extension, the High Court, during Arbitration have been expanded in the Amending Act to include orders for party to provide security for costs.  This is in recognition of the fact that arbitration tribunals have to meet commercial requirements of expediency of decisions and to avoid frivolous claims and defence.  But interim orders have been relegated in that they are not to be construed as awards and therefore the principles of recognition and enforcement of awards are not to apply to them.  This helps to save time as the parties will be limited in their ability to clog arbitration with unnecessary and indirect challenges to interim orders through the channels provided for challenging arbitral awards.”  (emphasis supplied)

Further Respondent referred to the case ANNE MUMBI HINGA –Vs- VICTORIA NJOKI GATHAARA [2009]eKLR where Court of Appeal stated-

“We therefore reiterate that there is no right for any Court to intervene in the arbitral process or in the award except in the situations specifically set out in the Arbitration Act or as previously agreed in advance by the parties and similarly there is no right of Appeal to the High Court or the Court of Appeal against an award except in the circumstances set out in Section 39 of the Arbitration Act … We are concerned that contrary to the broad principles of finality of arbitral awards as set out in the Arbitration Act the Superior Court all the same entertained incompetent Applications which have in turn resulted in the 10 years delay in the enforcement of the award.”

17. Respondent further submitted that this Court cannot substitute the

Arbitrator’s discretion with its own on the parties applications for deposit of security for costs and relied on the case Nairobi Misc. Application No. 297 of 2008 KENYA OIL COMPANY LIMITED & ANOTHER –Vs- KENYA PIPELINE COMPANY LTD (2008)eKLR as follows-

“Having considered the application and the rival submissions of the advocates for the parties, I make a finding that this application is an attempt on the part of the applicants to seek this court to substitute its discretion for the discretion already exercised by the learned Arbitrator who heard full arguments of the matter.  In his wisdom and having considered the totality of the dispute before him, the learned arbitrator decided on the form of security that should be furnished in this case.  I do not think, it is within the powers of this Honourable Court to question the form and nature of security as ordered by the learned arbitrator.”

18. Having considered those submissions I shall now consider various

issues raised by the parties.

Is the issue of jurisdiction available for consideration?

19. The argument of the Claimant is that the Ruling by Justice Muya of 4^th

October 2013, having dealt with the Respondent’s Preliminary Objection dated 13^th December 2012, finally dealt with the issue of jurisdiction and it is therefore not before me.  That Ruling of Justice Muya as correctly stated by learned Counsel for the Claimant dismissed Respondent’s Preliminary Objection.  In dismissing the Objection the learned Judge left the two critical issues for later determination.  The learned Judge left for determination whether the Ruling of the Arbitrator was an award and if so whether it was in conflict with public policy as per Section 35(2)(b)(ii) of the Act.

20. As correctly submitted by Respondent the difference between a Ruling

and an award goes to the jurisdiction in as far as the Act is concerned.  In this regard Section 10 of the Act provides a good starting point.  That Section is the following terms-

“Except as provided in this Act, no Court shall intervene in matters governed by this Act.”  (underlining mine)

It follows that Courts are forbidden by that Section from intervening other than as provided in the Act. 

21. Other than the power given by Section 7 of the Act for the Courts to

grant interim measures of protection, the Courts interventions can only be as per Sections 35 and 39.  Section 39 provides that parties to the Arbitration can agree that the Court can determine any question of law arising in the course of Arbitration or that the Court may entertain an appeal on question of law that arises. 

22.   Section 35 provides much more instances that would enable the Court

to intervene and for that reason I will reproduce it for clarity.  That Section provides-

“35.(1)  Recourse to the High Court against an arbitral award may be made only by an application for setting aside the award under subsections (2) and (3).

(2)  An arbitral award may be set aside by the High Court only if-

                              (a)  the party making the application furnishes proof-

         (i)  that a party to the arbitration agreement was under some

                                         incapacity; or

         (ii)  the arbitration agreement is not valid under the law to which

    the parties have subjected it or, failing any indication of that    

    law, the laws of Kenya; or

(iii)   the party making the application was not given proper notice

   of the appointment of an arbitrator or of the arbitral

   proceedings or was otherwise unable to present his case; or

     (iv)   the arbitral award deals with a dispute not contemplated by or

  not falling within the terms of the reference to arbitration or     

  contains decisions on matters beyond the scope of the reference  

  to arbitration, provided that if the decisions on matters referred  

  to arbitration can be separated from those not so referred, only

  that part of the arbitral award which contains decisions on   

  matters not referred to arbitration may be set aside; or

     (v)  the composition of the arbitral tribunal or the arbitral

procedure was not in accordance with the agreement of the parties, unless that agreement was in conflict with a provision of this Act from which the parties cannot derogate; or failing such agreement, was not in accordance with this Act; or

2. the High Court finds that-

1. the subject-matter of the dispute is not capable of settlement by arbitration under the law of Kenya; or
2. the award is conflict with the public policy of Kenya:

3.       An application for setting aside the arbitral award may not be made after 3 months have elapsed from the date on which the party making that application had received the arbitral award, or if a request had been made under Section 34 from the date on which that request had been disposed of by the arbitral award.

    (4)     The High Court, when required to set aside an arbitral award, may,

where appropriate and so requested by a party suspend the proceedings to set aside the arbitral award for such period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of the arbitral tribunal will eliminate the grounds for setting aside the arbitral award.”

22. Having seen the Sections that enable the Court to intervene in arbitral

process does the ruling of the Arbitrator, which is the subject of this judgment, fall within those Sections?  Section 35(1) and (2) which allows recourse to the High Court only allows such recourse in respect of an award not a Ruling.  The definition Section of the Act, that is Section 3 defines an award as-

“‘Arbitral award’ means any award of an arbitral tribunal and includes an interim arbitral award.”

Further Section 32A of the Act sets out the effect of an award by providing:

“Except as otherwise agreed by the parties, an arbitral award is final and binding upon the parties …”  (underlining mine)

That Section gives a clear impression that an award is final.  In other words it finally determines the issues before the Tribunal.  That definition is in keeping with the definition of ‘Award’ in the Black’s Law Dictionary, 8^th Edition.  It defines it as-

“award, final judgment or decision, esp. one by an arbitrator …”

Ruling in that dictionary is defined as-

“The outcome of a Court’s decision either on some point of law or on the case as a whole.”

It follows from the above definition that an award finally determines the issues before the Arbitrator whereas a Ruling determines on some issues whose effect may or may not terminate the case.  Bearing the above there is no doubt that the Ruling of the Arbitrator was not an award.  It follows that that Ruling cannot be challenged under the Sections in the Act.  To respond to the issue raised by Justice Muya in his Ruling of 4^th October 2013, I would say that the Arbitrators Ruling therefore cannot be tested whether it passes the public policy test in Section 35 of the Act because it was not an award.

23. The Arbitrator’s Ruling for provision of security for costs by the

Claimant was based on Section 18 of the Act.  In my view there is no provision in the Act for challenging before Court a Ruling under that Section.

24. That having been said however, such a Ruling would be subject to the

Constitution of Kenya.  The Ruling would have to measure up to the Constitutional standards.  This indeed was stated by the Court of Appeal in the case Civil Appeal No. 248 of 2005 EPCO BUILDERS LIMITED –Vs- ADAM S. MARJAN ARBITRATOR & ANO.  In that case the Court of Appeal held the view however, that such recourse to the Court should not become common practice.  The Court in that case stated-

“If it were allowed to become common practice for parties dissatisfied with the procedure adopted by the Arbitrator(s) to make constitutional applications during the currency of the arbitration hearing, resulting in lengthy delays in the arbitration process, the use of alternative dispute resolution, whether arbitration or mediation would dwindle with adverse effects on the pressure of the Courts.  This does not mean that recourse to a constitutional Court during Arbitration will never be appropriate.  Equally, it does not mean that a party wishing to delay an Arbitration (and there is usually one side that is not in a hurry) should be able to achieve this too easily by raising a constitutional issue as to fairness of the trial when the Arbitration Act 1995 itself has a specific provision in Section 19 stipulating that ‘the parties shall be treated with equality and each party shall be given full opportunity of presenting his case,’ in order to secure substantial delay.  If it were to become common, commercial parties would be discouraged from using ADR.”

25. Having therefore stated that a party can raise constitutional issue

during arbitration does the Claimant raise valid constitutional issues for consideration.  The Claimant in my view plucked out constitutional provision from the Constitution but did not apply them to the Ruling it seeks to challenge.  It is not enough to repeat that under Article 159(3) of the Constitution traditional dispute resolution mechanism should not be repugnant to justice without saying how the Arbitrator’s Ruling was firstly a traditional dispute resolution or secondly how it was repugnant to justice.  Claimant simply made that bare claim without drawing out from the Ruling the aspect of which it was repugnant to justice.

26. Claimant further in its written submission relied on Articles 165 (6)

and (7) of the Constitution, yet again did not state how these Articles should apply to the Ruling at hand.  Claimant failed to state why this Court should be moved to supervise the Arbitrator as provided in Article 165 (6).  There is no basis in my view presented by the Applicant why this Court should be moved to exercise its supervisory jurisdiction over the Arbitrator.  The Court, in my view, can only be moved to invoke its supervisory power if the Arbitrator was shown to have acted outside the Law.  The Law in this case is the Arbitration Act.  The Arbitrator applied Section 18 in granting order for security to be provided.  There is nothing in his Ruling that would attract supervision of this.  Claimant indeed did not raise any issue that would lead to this Court exercising that power.

27. Similarly Claimant did not draw out any part of the Arbitrator’s

Ruling or proceedings before him to show that he failed to ensure that the Claimant received “fair administration of justice” as set out in Article 165 (7) of the Constitution.  Claimant did not show what aspect of the Arbitrators Ruling was unjust or biased against the Claimant.  The Claimant only made a bare submission in regard to that Sub Article.

28. Claimant submitted that it did not receive fair administrative action as

required under Article 47(1) and did not receive a fair hearing as provided under Article 50.  To support that submission Claimant argued that the Arbitrator failed to give reasons why he did not consider Claimant’s submissions on the Foreign Judgment (Reciprocal Enforcement) Act Cap 43.  Claimant submitted before the Arbitrator that Respondent would have no difficulty recovering its costs, if the claim was dismissed, since Rwanda, where Claimant is based, is a reciprocal country with Kenya.

29. My first response to that submission is that the Arbitrator is given

wide discretion under Section 20(3) of the Act.  That Section provides-

“The power of the arbitral tribunal under Subsection (2) includes power to determine the admissibility, relevance, materiality and weight of any evidence and to determine at what point an argument or submission in respect of any matter has been fairly and adequately put or made.”

Arbitrator therefore had the discretion to determine the relevance and materiality of the Claimant’s submission on Cap 43.  The Arbitrator in his Ruling referred to the Claimants submission on the provisions of Cap 43.  The Arbitrator however was of the view that Claimant was obligated, in response to the Respondent’s application for security of costs, to show that it had means or assets to meet Respondent’s costs.  The Arbitrator in his Ruling was very alive to the fact that Claimant was a foreign entity but he clarified that that fact was not the basis of his decision.  But rather the Arbitrator gave reasons for ordering Claimant to provide security for Respondent’s costs as follows-

“I do not consider that an order for security for costs should be made based solely or primarily on the ground that a party is based outside the Republic of Kenya …  It was incumbent in my view upon the Claimant to show that it has the means to meet an award of costs …  The Claimant did not disclose what assets, if any, it has either in Kenya or in Rwanda.  I am therefore not satisfied that the Claimant has demonstrated to the Tribunal on a balance of probabilities that it has the means to meet an award for costs in the event that such an award is ultimately made.”

It is clear that the Arbitrator was more swayed by the Claimant’s failure to show its assets, than the fact it was based in a reciprocal country under Cap 43, in reaching his decision.  I therefore reject Claimant’s submissions that the Arbitrator failed to consider Cap 43.   My finding is supported by an authority relied upon by the Claimant, namely ENGLISH –VS- EMERY REIMBOLD & STRICK LTD (supra) where it was stated-

“While it is perfectly acceptable for reasons to be set out briefly in a judgment, it is the duty of the Judge to produce a judgment that gives a clear explanation for his or her order.  The second is that an unsuccessful party should not seek to upset a judgment on the ground of inadequacy of reasons unless, despite the advantage of considering the judgment with knowledge of the evidence given and submissions made at the trial, that party is unable to understand why it is that the Judge has reached an adverse decision.”

The Learned Arbitrator exercised his discretion in reaching his decision and this Court declines to substitute that discretion.

Is there a legal basis for re-considering the evidence submitted before the Arbitrator?

30. Claimant submitted this Court should follow the findings of the case

ONYANGO & ANOTHER –Vs- LUWAYI [1986]KLR 513 where the Court of Appeal held-

“The Court of Appeal would not interfere with the findings of the fact of the two lower Courts unless it was clear that the Magistrate and the Judge had so misapprehended the evidence that their conclusions were based on incorrect bases.  The Magistrate and Judge were right in their findings.”

31.  My first response is that this Court, as stated before, can only

intervene in arbitral process as provided under the Act.  Under Section 39 of the Act issues on matters of Law can be referred to the High Court and can be the subject of an appeal where parties have so consent.  That is not the case here.  There is no consent to refer this matter to this Court.  There is therefore no room for this Court to reconsider evidence submitted before the Arbitrator nor can this Court re-evaluate such evidence.  That being so this Court cannot grant prayers sought in the Claimant’s application nor disallow prayers of the Respondent.

32. Since this Court as stated has no appellant jurisdiction over the Ruling

of the Arbitrator it also cannot set aside Arbitrator’s decision in disallowing Claimant’s application for Respondent to provide security costs.  The Learned Arbitrator made a finding of Law in respect of that application as follows-

“The specific provision empowering the Tribunal to order provision for security for costs is Section 18(c).  That provision is specific that the Tribunal may ‘order a Claimant to provide security for costs.’  On the face of that provision, there is no power to order a Respondent to provide security for costs.”  (underlining mine)

That finding of the Law, unless parties consent as provided under Section 39, cannot be referred to the High Court nor can it be the subject of an appeal before the Court of Appeal.

Conclusion

33. The Courts therefore are restricted in their intervention of arbitral

process but that does not mean that a party cannot approach the Constitutional Court alleging violation of the Constitution.  The High Court can only intervene after an arbitral award is issued as provided under Section 35 of the Act and can only entertain an issue on point of Law if parties consent as provided under Section 39 of the Act.

34. It therefore follows that the Claimant’s Notice of Motion dated 20^th

November 2012 is dismissed with costs to the Respondent.

DATED  and  DELIVERED  at  MOMBASA  this  15^TH   day   of  MAY,  2014.

MARY KASANGO

JUDGE