Republic v Fairplan Systems Limited; County Government of Kitui (Exparte) [2022] KEHC 14846 (KLR)

Republic v Fairplan Systems Limited; County Government of Kitui (Exparte) (Judicial Review Miscellaneous Application E062 of 2022) [2022] KEHC 14846 (KLR) (Judicial Review) (3 November 2022) (Ruling)

Neutral citation: [2022] KEHC 14846 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Judicial Review

Judicial Review Miscellaneous Application E062 of 2022

AK Ndung'u, J

November 3, 2022

Between

Republic

Applicant

and

Fairplan Systems Limited

Respondent

and

County Government of Kitui

Exparte

Ruling

1. The ex parte applicant’s application seeks the following orders;i.“That this application be certified urgent and be heard ex parte in the first instance.ii.That leave be granted to the Ex parte Applicant to apply for an Order of Certiorarito bring to Court and quash the Arbitral Award/Decision delivered by Engineer Paul Thang’a Gichuhi on March 29, 2017 together with the addendum dated May 9, 2017. iii.That leave to apply for order of certiorarido operate as a stay in both Judicial Review Miscellaneous Application No. E045 of 2021 Nairobiand Judicial Review Miscellaneous Application No.143 of 2020 pending the hearing and determination of the Substantive Notice of Motion application to be filed.iv.The Honourable Court be pleased to make further or such other Orders as it may deem fair and just.v.That the costs of this application be in the cause.

2. The application is supported by the verifying affidavit of Samson Masila sworn on April 22, 2022. The grounds upon which the application is based are that when a dispute arose between the ex parte applicant and the respondent on the amount demanded by the respondent for the consultancy services for the construction of County Headquarters Offices and Kitui Central Sub-County Offices, the parties invoked the arbitration clause in the agreement which culminated into the ex parte applicant being directed to pay to the respondent the sum of Kshs.42,816,543. 00/=.

3. The ex parte applicant contends that it was not given an ample chance to present its case before the final abrital award was made. Subsequently, that the firm of Iseme Kamau Advocates which was representing the ex parte applicant ceased from representing it and the Advocates who took conduct of the applicant’s case are accused of acting without clear and proper instructions leading to the ex parte applicant’s officials being threatened with contempt proceedings.

4. The respondent is accused of demanding an unjustified Kshs.63,301,586. 00/= which is said if paid out will render the ex parte applicant financially crippled. It is also argued that there is no budgetary allocation for the alleged amount as the budget was allocated way before the said amount was awarded.

5. The respondent in response to the application has filed a notice of preliminary objection dated May 11, 2022 and a replying affidavit sworn by Arch. Julius M.F. Mutunga on May 12, 2022.

6. The respondent raises the following grounds in its notice of preliminary objection;1. The application is bad in law having been brought outside the ambit of the Arbitration Act,1995, which governs arbitration proceedings.2. The application is statute barred.3. The purported judicial review application is fatally defective the same being improperly instituted.4. The application raises issues that are res-judicata having been heard and determined vide NBIHC.Comm Misc Civl App. No.290 of 2016 and NBI HC. Comm. Misc. App. No.289 of 2017 between the Respondent and the Applicant.5. The supporting affidavit of Samson Masila is wholly defective.6. The chamber summons was served outside the three (3) days window served by the court.7. The applicant, County Government of Kitui is in contempt of this court’s orders issued on April 21, 2022 in JR.143 OF 2020 and E045 of 2021 and lacks audience in court.8. The application is an attempt to circumvent the enforcement of orders issued by this court vide JR No.143 of 2020 and E045 of 2021 which have active warrants of arrest against the Applicant’s officer.

7. The respondent contends that pursuant to Honourable Lady Justice Olga Sewe’s ruling the Arbitral award was upheld and the respondent granted orders to enforce the same. No appeal was filed by the ex-parte applicant in regards to the same and in fact that theex parte applicant paid the sum of Kshs.15,526,462. 70/= from the interim arbitral award.

8. The ex parte applicant having failed to pay Party & Party costs to the tune of Kshs.500,584/= awarded in H.C Comm Misc. Appl. 90 of 2016 led to the respondent filing JR E045 of 2021 seeking an order of mandamus to enforce payment.

9. The respondent upon an addendum to the Final Award being issued by the Arbitrator and the ex parte applicant having failed to honour the Award filed H.C. Comm. Misc 289 of 2017 seeking recognition of the Arbitral Award filed JR 143 of 2020 seeking orders ofmandamus. It is argued that a consent had been recorded in favour of the respondent recognizing the award.

10. The application was canvassed by way of written submissions and in its submissions the ex parte applicant faults the arbitrator’s decision for being unreasonable and irrational as it is urged that a decision must be based on materials and reasoning that logically support the existence of facts consistent with the procurement in order to stand sensibly and not self-contradictory once it is revealed. It is contended that although the arbitrator noted that the respondent had breached terms of the contract he still went ahead to award the respondent the sum of kshs.42,816,543. 00/=.

11. The ex parte applicant contends that the consent alluded to by the respondent was entered into without its knowledge. Further, that Mr. Ben Katungi is not the accounting officer of the ex parte applicant and that he can only make payment of such amounts if they are budgeted for and approved.

12. The Respondent submits that the Arbitration Act, No. 4 of 1995 conclusively prescribes the manner, process and conduct of arbitral proceedings and the circumstances under which an award may be challenged. The case of Republic -vs- Director General, Kenya National Highways Authority Ex–p Talewa Road Contractors Limited [2020] eKLR is referred to further buttress this argument.

13. The respondent also challenges the instant application as it offends the provisions of Order 53 Rule 2 of the Civil Procedure Rules for being time barred as an order of certiorari can only be sought within six months after the making of the decision it seeks to quash. This according to the respondent is as was held in the case of Republic -vs- Kadhi Court at Wajir & Another Exparte Abdi Koriyoy Gabow [2019] eKLR.

14. Further that, the application offends the provisions of section 35(3) of the Arbitration Act, No. 4 of 1995 which is to the effect that an application seeking to challenge an arbitral award may only be made 90 (ninety days) after the publication of the arbitral award. The application is also faulted for being defective as the ex parte applicant has enjoined the Republic as a party yet this court has not granted leave to commence judicial review proceedings.

15. The instant application is also said to be res judicata as the grounds and issues it relies upon to overturn the Arbitrator’s decision were decided in NRB HC. Com. MISC.290 of 2016 and further by the Amended Decree dated March 3, 2022 issued in NRB HC. Comm. Misc. Civil App. No.289 of 2017.

Determination 16. The issues that crystallize for determination are whether the Preliminary Objection (PO) as raised is successful and in the alternative, if the suit survives the PO , whether the ex parte applicant is entitled to the orders sought.

17. The High Court, in the case of Republic v Permanent Secretary, Ministry of Education & 2 others Ex parte Meshack Ochieng' [2021] eKLR observed that;“The circumstances in which a preliminary objection may be raised, as explained by the Court of Appeal in the case of Mukisa Biscuit Manufacturing Co. Ltd vs West End Distributors Ltd (1969) EA 696, are as follows:“a Preliminary Objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion.”10. A preliminary objection cannot therefore be raised if any fact requires to be ascertained. In the case of Oraro vs Mbaja, (2005) 1 KLR 141, the court held that any assertion which claims to be a preliminary objection, and yet it bears factual aspects calling for proof, or seeks to adduce evidence for its authentication, is not, as a matter of legal principle, a true preliminary objection which the Court should allow to proceed. The Court of Appeal also stated in Mukisa Biscuit Company vs West End Distributors Ltd (supra) that a preliminary objection cannot be raised if what is sought is the exercise of judicial discretion. (Emphasis).

18. Further, in the case of Oraro –v- Mbaja [2007] KLR 141 where Ojwang J. (as he then was) stated as follows: -“I think the principle is abundantly clear, a “Preliminary Objection” correctly understood, is now well defined as, and declared to be, a point of law which must not be blurred with factual details liable to be contested and in any event, to be proved through the processes of evidence. Any assertion which claims to be a Preliminary Objection, yet it bears factual aspects calling for proof, or seeks to adduce evidence for its authentication, is not, as a matter of legal principles a true Preliminary Objection which the Court should allow to proceed. Where a Court needs to investigate facts, a matter cannot be raised as a preliminary point ..........Anything that purports to be a Preliminary Objection must not deal with disputed facts and must not itself derive its foundation from factual information which stands to be tested by normal rules of evidence ...........” (Emphasis Mine)

19. The applicant seeks to have leave to apply for an order of certiorari to bring to court and quash the Arbitral Award/Decision delivered by Engineer Paul Thang’a Gichuhi on March 29, 2017.

20. The said award was recognized and enforced by the High Court as evidenced by the amended decree dated March 3, 2022. This court’s jurisdiction is limited by section 10 of the Arbitration Act, No. 4 of 1995 . As held in R v. Director General, Kenya National Highways Authorityex parteTalewa Road Contractors;‘’This court as a judicial review court cannot therefore interrogate any issues raised as to the merits of the arbitral award. In addition this court has limited jurisdiction to address or redress any issues arising from the proceedings on the recognition and enforcement of the said arbitral award, which are specifically regulated by the Arbitration Act. It is notable in this respect that the Arbitration Act specifically provides in section 10 thereof that no court shall intervene in matters governed by the Act, except as provided therein…….recourse to the courts for the setting aside of arbitral awards and their recognition and enforcement is in this respect provided for in sections 35, 36 and 37 of the said Act. This court as a judicial review court, therefore has no jurisdiction to consider any issue raised or the arguments made by the parties herein as regards the challenges to the subject arbitral award and recognition thereof, save to note the existence of such challenge. Any issues and arguments must be resolved in accordance with the procedures set out in the Arbitration Act and in the forum specified by the Act, namely the appropriate trial court in the High Court, or where applicable on appeal in the court of appeal.’’This court is thus not clothed with the requisite jurisdiction to entertain the matter.

21. On another limb, I note that the ex parte applicant herein intends to apply for an Order of certiorari to quash the arbitral award delivered by Engineer Paul Thang’a Gichuhi on March 29, 2017, this is five (5) years after the said award was delivered. I also note that the ex parte applicant does not contend the allegation by the respondents that it has paid out the sum of kshs. 15,526,462. 70/= arising from the Interim Award. The Civil ProcedureRules under Order 53 rule 2 provide for time for applying for certiorari in certain cases. The rule provides thus;“Leave shall not be granted to apply for an order of certiorari to remove any judgment, order decree, conviction or other proceeding for the purpose of its being quashed, unless the application for leave is made not later than six months after the date of the proceeding or such shorter period as may be prescribed by any Act; and where the proceeding is subject to appeal and a time is limited by law for the bringing of the appeal, the judge may adjourn the application for leave until the appeal is determined of the time for appealing has expired.

22. It is clear that an application for leave to apply for an order of certiorari can only be made within six months after the date of the proceeding or such shorter period as may be prescribed by any Act. The instant application having been filed more than five (5) from the date of the arbitral award is not competently before this court.

23. With the result that the application herein fails. I dismiss the same and direct each party to bear its own costs.

DATED, SIGNED AND DELIVERED AT NAIROBI THIS 3RD}} DAY OF NOVEMBER, 2022. A. K. NDUNG'UJUDGE