Christopher Thiongo Waweru & James Mwangi Kabugi v Waiyaki Way Developers Limited, Virji Meghji Patel, Muigai Phares Thumbi, Waiyaki Ridge Gardens Limited & N K Mugo & Company Advocates [2021] KEHC 13270 (KLR)

IN THE HIGH COURT OF KENYA AT NAIROBI

MILIMANI LAW COURTS

COMMERCIAL AND TAX DIVISION

CORAM: D. S. MAJANJA J.

CIVIL SUIT. NO. E806 OF 2020

IN THE MATTER OF THE ARBITRATION ACT NO. 4 OF 1995

BETWEEN

CHRISTOPHER THIONGO WAWERU......................................................................1ST APPLICANT

JAMES MWANGI KABUGI....................................................................................... 2ND APPLICANT

AND

WAIYAKI WAY DEVELOPERS LIMITED.............................................................1ST RESPONDENT

VIRJI MEGHJI PATEL.............................................................................................. 2ND RESPONDENT

MUIGAI PHARES THUMBI.....................................................................................3RD RESPONDENT

WAIYAKI RIDGE GARDENS LIMITED................................................................4TH RESPONDENT

N. K. MUGO & COMPANY ADVOCATES............................................................5TH RESPONDENT

RULING NO. 2

1.  This court issued an injunction in favour of the Applicants on 8th July 2020 restraining the Respondents from transferring any interest in Waiyaki Way Developers Limited and Waiyaki Way Ridge Gardens Limited pending determination of the application brought under section 7of the Arbitration Actseeking to refer the dispute between the parties to arbitration on condition that the Applicants execute an undertaking as to damages.

2.  The Applicants duly executed the undertaking as to damages on 26th August 2020. The court dismissed the application for injunction on 26th November 2021 and discharged the injunction. The Respondent now seeks to enforce the undertaking as to damages by way of the Chamber Summons dated 28th April 2021 as amended on 2nd June 2021.

3.   The Applicants oppose the application on the ground that the arbitrator should conduct the inquiry as to damages. I disagree. In the case of Nguruman Limited v Jan Bonde Nielsen [2020] eKLR,the court cited with approval Cheltenham and Gloucester BS v Ricketts and Others [1993] 4 All ER 276where the court held that, “'The undertaking is not given to the party enjoined but to the court." In this case the court ordered the undertaking as a condition for the grant of the injunction. The inquiry as damages must therefore proceed before this court.

4.  An arbitrator does not have jurisdiction to determine any matters apart from those within the purview of the arbitration agreement. An undertaking given to the court in proceedings before it is not a matter contemplated within the arbitration agreement and is outside the jurisdiction of the arbitrator.

5.  Whether the Respondent suffered any damages as a result of the injunction is a matter of evidence. The matter shall therefore be set down for hearing in due course hence I direct as follows:

(a) The Respondent file and serve an affidavit annexing all the documents of proof within 14 days

(b) The Applicant shall file a Replying Affidavit in response thereto within 14 days of service.

(c) Mention on 22. 09. 2021 for directions and further orders.

(d) Costs in the cause.

DATEDandDELIVEREDatNAIROBIthis29th day of JULY 2021

D. S. MAJANJA

JUDGE