Shree Haree Builders Limited v Bazara Alex Tabulo & Walter Odundo [2016] KEHC 4607 (KLR) | Arbitrator Bias | Esheria

Shree Haree Builders Limited v Bazara Alex Tabulo & Walter Odundo [2016] KEHC 4607 (KLR)

Full Case Text

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

MISCELLANEOUS APPLICATION NO.489 OF 2015

SHREE HAREE BUILDERS LIMITED....................................APPLICANT

VERSUS

BAZARA ALEX TABULO..........................................1ST RESPONDENT

WALTER ODUNDO...........................2ND RESPONDENT/ARBITRATOR

RULING

1. By a notice of motion dated 4th November 2015 and filed on the same day, the applicant SHREE HAREE BUILDERS LIMITED seeks from this court orders:

1. Spent

2. Spent

3. That pending the hearing and determination of the Originating Summons there be a stay of any further proceedings in the arbitration between the applicant herein and the 1st respondent.

2. The application is brought under the provisions of Section 15(1) (a) and (2) of the Arbitration Act, 1995, Rules 17(10) of the Arbitration Rules Articles 50(1) and 165(8) of the Constitution of Kenya and all other enabling legislation.

3. The application is predicated  on  12 grounds on the face of the application and the annexed  affidavit  sworn by Sailesh  Kerai  sworn on 4th November  2015  and  several  annextures/exhibits.

4. In Mr Kerai's supporting affidavit  which mirrors  the grounds  in support of the application, it is  deposed that the applicant herein  has sought  the  recusal of the  sole arbitrator  Mr WALTER ODUNDO  from arbitrating  over the  dispute  but that the Arbitrator  has refused  to hear  the application for recusal.  That the Arbitrator  has been very slow  in setting  down the hearing of the dispute  which  has also escalated  the costs  and that there is reasonable  apprehension  that the arbitrator  is not impartial and or independent  in view of the manner  in which  he  has conducted himself.  That instead of hearing the objection to his arbitrating over the dispute, the arbitrator directed that the objection to jurisdiction be heard and determined   first.  That  the Arbitrator  who is  the 2nd  respondent hereto has by  his conduct  descended into the  arena of the dispute  and been clouded  by the dust  therein and therefore  unable to perform his cardinal role of  an independent and impartial  arbitrator  which has  created  a stalemate due to the antagonism and therefore the applicant does not  expect  to get  any justice  from the 2nd respondent sole arbitrator. Finally, that unless the arbitral  proceedings are stayed, in view of  the applicant, it  shall be  compelled  to take part  in the proceedings  thereby  waiving  their right to challenge  the 2nd  respondent’s impartiality  with the  undesirable  result that  the applicant shall suffer substantial  injustice.

5. The application is opposed by the 1st respondent BAZARA ALEX TABULOwho filed his replying affidavit sworn on 23rd November 2015.  In the said  affidavit, the 1st  respondent  contends  that he  did vide an application dated 23rd July 2015  expressed  his intention to challenge  the jurisdiction  of the arbitral  tribunal  to hear and determine the dispute pending before it  which  application  was served  upon the applicants  herein.

6. That the Arbitrator  also did write  to the applicant’s advocates  seeking their  views on the application and the advocate  promised to respond and indeed  did  respond vide a replying affidavit  sworn  by Sailesh Kerai filed on 7th August  2015.  That on 25th August 2015 the Arbitrator asked the parties to file and exchange written submission for a ruling to be delivered   on 30th September 2015.

7. That  instead, the  applicant requested  for a mention date yet the  jurisdictional application was still pending determination and  therefore  the arbitrator  did on 4th September  2015  write  to the applicant’s advocates  seeking clarification on the  purpose of the mention proposed to enable him consider  the request  and that   is when  the applicant on 7th September 2015  expressed  their  intention  to challenge  the arbitral tribunal’s  independence.

8. That despite  the parties’  filing  their submissions on the question of jurisdiction of the tribunal, the applicant  herein  filed an application before the arbitral tribunal challenging  the independence of the Arbitrator  and demanded  that the said  application be heard first before the one  challenging  jurisdiction of the arbitral tribunal could be heard.

9. That the arbitrator  issued some  peremptory  order after the applicant  failed to file  submissions in compliance  with those  peremptory orders  and  that it instead  rushed   to the High Court  to file an  Originating Summons seeking to remove the  Arbitrator  and to stay arbitral  proceedings  which is a sign of bad faith.

10. That the alleged delay has been occasioned by the applicant to obey the orders of the arbitrator. That since the Arbitrator has the power to direct proceedings before him; this court is being asked to interfere with that power of the Arbitrator.  That since a similar application for stay of arbitral proceedings is pending before the arbitral tribunal; it is un procedural for this court to entertain this application for stay of arbitral proceedings.

11. That the application herein does not meet the conditions for this court to intervene in the arbitral tribunal proceedings and that it is an abuse of the court process.  That  the applicant is  a rebel and a forum shopper  who has refused to comply with the  directions of the arbitrator  and instead  it has been unsuccessfully seeking the audience of the  chairpersons of Architectural Association of Kenya  and  the Chartered Institute of Arbitrators hence  this court  should  not fall  prey to such forum shopping exercise by the applicant.

12. That to grant the prayers sought by the applicant would amount to amending the provisions of the Arbitration Act hence the application is incompetent, pre-emptive, mischievous, vexatious, frivolous, premature and fatally defective.

13. The parties' advocates agreed and filed written submissions. The applicant filed its submissions on 4th February  2016  whereas  the respondents  filed their  submissions on 26th February 2016 and now  this court is called  upon to consider those two rival positions and  make a  determination on the application dated  4th November  2015.

14. In their  submissions, the applicant's  counsel Mr Odera contended that   the 2nd respondent  Arbitrator  has lost  the control of the  arbitration proceedings to the detriment  of the parties and especially the  applicant; that the Arbitrator is not interested  in determining the dispute with expedition; that since  June  2013, simple  housekeeping issues  like  close of proceedings (pleadings) had  to wait until December  2014, a period  of over one  and a half years  which is  unreasonable  delay; that the applicant has complied with  Section 14(1)  of the Arbitration Act  in that   on 7th September  2015  it filed notification of its intention to file  a formal application for recusal of the 2nd respondent Arbitrator as the sole arbitrator  and the applicant also invited the 1st respondent’s advocate  to concur  on a suitable  procedure  for the challenge  and having failed to receive  the response, on 25th September  2015 it filed a formal statement of the reasons for the challenge and on 30th September 2015 it wrote to the said  Arbitrator seeking  directions on the hearing of the challenge;  that instead  of the Arbitrator dealing with the matter of the challenge on his independence and impartiality, he instead issued  directions to the effect  that  the tribunal would first  deal with the point of jurisdiction earlier  raised but the  1st respondent, before dealing with the challenge on independence or impartiality  and that   after a series of correspondence exchanged between  the Arbitrator and the applicant, the Arbitrator  failed  to address the applicant’s plea  and that is when the applicant moved to this court seeking for termination of the Arbitrator's mandate.  The applicant's counsel submitted that in view of the above position, it is clear that  the arbitrator  had failed to control  the proceedings and that he had  instead  ceded the control to the  1st respondent; that the arbitrator had become  antagonistic, biased   and cannot be  fair against  the applicant.

15. That  the insistence  of the arbitrator to hear  the issue of  jurisdiction prior to the matter of bias and or independence  raised by the applicant is a clear breach of Article 50 of the Constitution and that  even with leave of this  court, he has refused  to file any  affidavit to rebut the allegations leveled against him by the applicant.  That the impugned  acts of the arbitrator  benefit  the 1st  respondent and that is the reason why the 1st  respondent  opposes  this application despite the clear  delay and possible  escalation of costs.

16. On the alleged  dilatory conduct of the arbitrator, it is submitted by Mr Odera that an  arbitrator  can be removed for failure  to conclude  the proceedings  with reasonable dispatch  and failure  to take control of  arbitration proceedings  in that  in this case, the  Arbitrator was at  the mercy  of the 1st respondent as to  time frames  and dates. Reliance   was placed on Russel on Arbitration 23rd Edition. On the alleged risk of possibility of bias reliance  was placed on Alliance  Media (K) Ltd  Vs  Monier  2000 Limited HCC 370/2007  where Warsame J ( as he then was ) set the test applicable for  apparent  bias being  objective  and which has  to be addressed from circumstances of the case  that right minded  persons would  conclude that there  was/is a real danger of  possibility  of bias.

17. It was further submitted that in this case, the Arbitrator has not been fair to both parties.  That he has unilaterally charged the applicant with the responsibility of booking a venue for arbitration which is a biased directive which has no logic and amounts to unfair treatment. And  that for the  arbitrator  to penalize  the applicant for failure to secure  the premises for the arbitrator, the  2nd respondent is acting with naked  partiality.

18. That the 2nd respondent arbitrator had not adhered to his own time frames for the filing of various pleadings and hearing.  Reliance   was placed on excerpts from Arbitration Practice and Procedure by Professor D. Mark Cato that the arbitrator’s actions are tantamount to misconduct and bias against the applicant.

19. On antagonism of the arbitrator, it is submitted that the  arbitrator  has become unnecessarily  antagonistic  therefore the applicant is  apprehensive that no justice to the  applicant can be expected from the  2nd respondent  as shown by his  letters dated  2nd September  2015.  Reliance   was placed on Howell V Lees MclliaswhereSir Anthony Clarke MR recognized the possibility of bias where there is animosity between the judge and any member of the public involved in the case.  That in this case, the Arbitrator despite the purpose of the mention being clear, he feigned ignorance of the purpose of  the  requested mention by his letter dated  4th September  2015.

20. On independence and impartiality of the Arbitrator  versus jurisdiction, it  was submitted that  there is no  way a tribunal whose  independence  and or  impartiality has  been questioned can rule on a point,  including  a point of jurisdiction.

21. The applicant  prayed for temporary  stay of arbitral proceedings and contends  that the 1st  respondent  is party to some of  the short comings  of the 2nd  respondent  particularly as to delay  in concluding the arbitration proceedings.

22. In the opposing submission filed on  26th February  2016, the 1st respondent  submitted on three issues. The first issue is whether the   court has the jurisdiction to  entertain or interfere with matters   that are pending  before an  Arbitral Tribunal. It  was submitted that Article  159 (2) of the Constitution promotes and protects  alternative  means of  dispute  resolution.  Further, that Section 10  of the Arbitration Act,1995 expressly prohibits  the intervention  by the courts  in matters that  are subject of the arbitral process, except  as provided for under the Act.

23. In addition, it was submitted that Section 14 of the Arbitration Act,1995 provides for the procedure for challenging  the independence  of the Arbitrator- that the  first instance  forum is the tribunal  itself and that the High Court can only intervene in its appellate  jurisdiction to  entertain issues arising  from the tribunal’s decision.

24. That despite the 1st respondent   challenging  jurisdiction of  the Arbitral  Tribunal, by virtue of the purported  agreement, the  parties herein  subjected  themselves to the process of  Arbitration and must therefore  deal with the matter  in accordance  with the legal provisions of the Arbitration Act, 1995 and that until the  tribunal makes s a decision  on the applications pending before it, this court  is barred  from interfering  with  the arbitral process. It was submitted that in view of the above, it is  an abuse of court process to bring this application yet there is a similar  application pending  before the tribunal for  determination.

25. I have  carefully considered  the application  by the applicant  seeking  for stay   of proceedings  pending  before  the Arbitral Tribunal  chaired by the sole Arbitrator  Mr Walter  Odundo who is  also  the 2nd respondent  herein.  I have  also considered  the serious opposition  raised  by the  1st respondent  and the parties'  advocates' rival  respective   submissions  as supported  by  case law  and statutory law.  I note that  the application herein for stay is  interlocutory, in the main Originating Summons dated  4th November  2015  which seeks  for termination of the mandate of  Walter  Odundo as the sole  Arbitrator  and appointment  of another  Arbitrator  by the Chairman of Architectural  Association of Kenya.  That Originating Summons  is  filed pursuant  to Section 15(1) (a) and (2) and 19 of the Arbitration Act, No. 4 of 1995 and all other enabling laws.

26. I further  note that  in urging  this  court to stay proceedings  before  the Arbitral Tribunal, parties' advocates  have delved  into the merits  of the Originating Summons  and therefore  the  justifying reasons  why the sole Arbitrator  Mr Walter Odundo’s mandate should  or should not be terminated, with  the  1st  respondent  giving  a very  detailed history  of the  events  leading  to  the present  scenario.

27. The issue for determination in this application in my humble view is whether this court can intervene in arbitral proceedings particularly when a similar application for the arbitrator to cease arbitrating over the material dispute for alleged bias and on account that he has no jurisdiction to hear and determine the dispute is pending before him.

28. The background to the dispute herein is that by an agreement  between  the parties  hereto dated  20th May 2010, the applicant agreed  to build  for  the respondent  apartments  on plot No.1102/XXV1/M1-KIZINGO Mombasa. However, it is  alleged that  the respondent  breached  the terms of  the agreement  by filing to pay as  per the agreement  and payment  certificates  issued by  the contractor to the employer/respondent. The applicant therefore was aggrieved by the breach and declared a dispute leading to the appointment of the Arbitrator.

29. In  Prof Lawrence Gumbe & Another V Honourable Mwai Kibaki & Others  HC Miscellaneous  1025/2004,it was held that by dint of Section 10 of the Arbitration Act, where  a party  was not invoking  the powers donated  by Section  39 of the Act,  no court  would  intervene  in matters  governed by  the Act. In Kenya Shell Ltd  Vs Kobil Petroleum  Ltd CAPP No.  Nairobi 57/2006it was held that Section 10 is so clear as to discourage intervention of the courts even at the appellate stage/level.  Onyango Otieno JA in the Kenya Shell Ltd case stated that the court’s intervention under Section 35 could only be if conditions under Section 39(3) were satisfied that when parties agree and choose to resolve their disputes under the Act, by way of arbitral proceedings, the courts take a back seat. further, that the arbitral proceedings  bestow  the finality  on disputes  whereby  a severe  limitation is imposed on access  to the courts, thereby  as a matter  of public policy, litigation is brought to an end.

30. Whether Section 10 excludes applications for stay of awards/judgments/proceedings. In CIVIL APPEAL (APPLICATION) NO.61 OF 2012Nyutu Agrovet Ltd V AIRTEL NETWORKS LIMITED,citing the case ofChief Lesapo Vs  North  West Agricultural Bank, the Constitutional Court of South  Africa  expressed very strong  sentiments  that the right  of access to court  is fundamental and central to the  stability  of an orderly  society  to ensure that  litigants  do not resort  to self help means to resolve their  disputes  and that therefore as a result very powerful considerations would  be required to its  limitation( access) to be reasonable  and justifiable.

31. Arbitration is considered, as modeled under UNCITRAL  Model Rules, to be a useful tool as a matter of  public policy, to settle  disputes among contracting parties and hence the  arbitration Act No. 4/1995 and  Article  159(2) (c  of the Constitution.

32. Section 35(1) gives situations for recourse to the High Court. The court is  prevented by Section 10  of the  Act from intervening  or interfering  in arbitral process in any manner  except as set out in the cases  cited or circumstances cited  in Section  39 of the Act.

33. From the above exposition, this court notes that the issue of jurisdiction of the arbitrator to hear and determine the dispute as filed and his alleged bias and lack of independence are pending before the arbitrator, with the issue of jurisdiction having been raised first by the 1st respondent, with the issue of the recusal of the Arbitrator having been raised by the applicant later. Under Section 17(6) of the Arbitration Act this court has the jurisdiction to entertain an appeal. the section provides that:

“6. Where the arbitral tribunal rules as a preliminary question that it has jurisdiction, any party aggrieved by such ruling may apply to the High Court, within 30 days after having received notice of that ruling, to decide the matter.”

34. Rule 33 of the Chartered Institute of Arbitrators, CIArb Arbitration Rules 2012 enjoins the parties to ensure and do all they can to aid an expeditious and cost effective disposal of the Arbitration cause.  Expeditious determination of the disputes is an attribute that attracts the parties to arbitration in the first place. It therefore follows that the issue of jurisdiction being paramount must be determined first before any other issue is considered and any party aggrieved by the arbitrator's decision will have an opportunity to challenge it in the High Court. In Owners of Motor Vessel  Lillian ‘S' Vs Caltex Oil (K) Ltd  [1989] KLR 1it was held that:

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

35. In Re  the matter  of the IIEC [2011]  e KLR  the Supreme Court stated  that:-

“Assumption of jurisdiction by courts in Kenya is a subject regulated by the Constitution, by statute law, and by principles laid down 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 (K) Ltd [1989] KLR 1  which bears  the following  passage  (Nyarangi) JA at page  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….

The Lillian's” ease establishes  that jurisdiction flows from the  law, and the recipient court is to apply the same, with any limitation  embodied therein, such  a court may not  arrogate  to itself jurisdiction through the craft  of interpretation, or by way  of endeavors 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 HC their respective  jurisdictions are donated  by the  Constitution.”

36. In the persuasive case of Eldoret Municipal Council v Rural Housing Estate Ltd Civil Suit No. 255 of 2001 (OS) KLR (2002) 1 KLR 589 Tunya J held that:

“1. The applicant’s application is competently before the court under section 17 of Arbitration Act which is the appropriate provision.

2. Jurisdiction cannot be conferred or waived by consent or the parties.

3. The issue of jurisdiction was fundamental. Once a tribunal lacks jurisdiction, any proceedings held before it must be null and void, therefore the issue of jurisdiction must be determined first before the arbitrator may conduct any proceeding.”

37. In Anne  Mumbi Hinga Vs  Victoria Njoki  Gathara [2009] e KLR  the Court Appeal  stated  that:

“ We therefore  reiterate  that  there is  no right  for any court  to intervene  in the arbitral  process or on the award  except in the  situation 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 Arbitral Act…..

38. Section 10 of the Arbitration Act, 1995 is  clear that: “ Except  as provided  in this Act, no court shall intervene  in matters  governed by this Act.” It follows that courts  are expressly forbidden by Section 10 of the Act  from intervening  other than as provided in the Act and as stated above, where there are issues involving violation of the constitutional provisions.

39. Section  7 of the Act empowers the courts to grant interim  measures of protection pending hearing and determination of arbitral proceedings, in addition to the court's  interventions as  per Sections  35 and  39 of the Act. 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 questions of law that arises. Section 35  provides much  more  instances  that would enable  the court to intervene. It provides inter alia that recourse  to  the  High Court  against  an arbitral is award only  not against  a ruling as defined  under Section 3  as “ Arbitral award” means  any award of an arbitral  tribunal  and includes an interim  arbitral award.” Black's Law Dictionary 8th Edition  defines ‘award’as final  judgment  or decision  , especially one  by an arbitrator……” ‘Ruling'is defined  as “ the outcome  of the courts’ decision either on some point of law or on the case as a whole.”

40. In the instant case, the Arbitrator gave directions  that he  wished  to determine  the issue  of  jurisdiction before  him first  as raised by the  1st respondent before he could deal with the issue of his recusal on allegations of his perceived bias or lack of independence.  It is  those  directions  that provoked  the applicant  herein  to seek to challenge  the mandate of the  arbitrator  and an allegation that  he was being controlled  by the  1st respondent.

41. In my humble view, since  the Arbitrator  has the jurisdiction to hear  and determine issues  of his jurisdiction to hear and determine whether or not he has the jurisdiction to hear and determine the dispute as filed, and as the arbitrator has the power to hear and determine whether he should recuse himself from the proceedings, and as the fact that an application for stay of arbitral proceedings is pending before the arbitrator is not denied, this  court, in my humble view would be  usurping the tribunal’s  powers  if it  was  to order  for stay of the arbitral  proceedings  wherein the arbitrator  was poised to hear  and determine  whether or not  he had  jurisdiction  to hear  and determine the dispute  as objected  to by the  1st respondent. this, however, is not to say that the Originating Summons is wrongly before this court but that the issue of stay should have been sought and determined in the first instance before the arbitrator before coming to court. In the Court of Appeal 248/2005 EPCO Builders  Ltd  V Adam S Marjan Arbitrator  & Another, the Court of Appeal held that:

“ Such recourse  to the  court should not become common  place (practice).“ If  it  were allowed to become  common practice  for parties  dissatisfied  with 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  ADR  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.  It is to become  common, commercial parties  would be  discouraged from using ADR.”

42. From the above decision of  the Court of Appeal, whereas  a party can  raise   a constitutional  issue  arising from arbitration proceedings for consideration, the applicant, in this case, in my view  simply plucked  out a  constitutional provision of Article  50  of the Constitution but has not  applied it  to the  directions of the arbitrator that he wished to hear the  issue of  jurisdiction first.  In my view, the applicant is by these proceedings seeking to oust the power of the arbitrator to determine whether or not he has jurisdiction to hear and determine the dispute. In my view, the issue of bias or lack of independence of the Arbitrator can only be determined by the arbitrator himself and if it is found that he has no jurisdiction to hear and determine the dispute, he will no doubt have to down  his tools and say no more one thing. In that regard, the arbitrator would not decide on whether or not he should recuse himself and not otherwise. In my humble view, to  stay the arbitral proceedings  would, in the instant  case, be preemptive and tantamount to barring the  arbitrator from hearing  the preliminary objection on  his jurisdiction to hear and  determine the dispute which is unacceptable.

43. In my  humble view, the  applicant has not satisfied  this court why this court should be moved   to stay  arbitral proceedings  and therefore  intervene to supervise the arbitrator  as provided in Article  165(6) of the Constitution. It has also not been demonstrated that the arbitrator in directing that the preliminary objection on jurisdiction be heard first, acted outside the law and  the law in this case is  the Arbitration Act and the Constitution of Kenya.  I see nothing in the arbitrator’s directions that would attract supervisory powers of this court Article 16(6) and (7) of the Constitution. I am  equally not seized  of any evidence  that the  sole arbitrator in directing that he hears the Preliminary Objection first, he failed to ensure that the applicant received fair  administration of justice as stipulated  in Article  165(7) of the  Constitution. I do not  find  that the insistence  on the  part of the  Arbitrator to hear the issue of his jurisdiction first before  considering the allegation  of bias  and or independence  raised by the applicant  is a clear breach of  Article  50 of the Constitution on fair hearing since determining the issue of jurisdiction first before proceeding with any other hearing is a prerequisite or that he  had therefore  ceded the control of the proceedings  to the 2nd respondent  or that  he had become  antagonistic.

44. Furthermore, Section 20(1) of the Act empowers the Arbitrator  to determine the rules of procedure to be used by the arbitral tribunal in the conduct of proceedings. The Arbitrator has the power to determine the admissibility, relevance, materiality and weight of any evidence and to determine at what point an argument or submissions in respect of any matter   has been fairly and adequately made.

45. The Arbitration Act, 1995 too has an elaborate procedure for challenging the powers of the Arbitrator. Section 14(1) empowers parties to agree on a procedure for challenging an arbitrator. Otherwise, the procedure for challenging an arbitrator is as follows: i. Under Section 14(2) the party who intends to challenge an arbitrator sends a written statement of the reasons for the challenge to the arbitral tribunal within 15 days after becoming aware of the composition of the arbitral tribunal or after becoming aware of any circumstances referred to in section 13(3). Unless the arbitrator who is being challenged withdraws from his office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge. ii. Section 14(3) provides that  if a challenge under agreed procedure or under subsection (2) is unsuccessful, the challenging party, within 30 days after being notified of the decision to reject the challenge, applies to the High Court to determine the matter. Under Section 14(5),  the High Court may confirm the rejection of the challenge or may uphold the challenge and remove the arbitrator.

46. It  therefore follows, in my  humble  view, that the arbitrator  in the instant case had the  discretion  to determine  the relevance  and materiality  of the respondent’s  submissions  on jurisdiction of the  arbitrator  to hear and determine the dispute before hearing the challenge to his independence and in the event that the applicant was dissatisfied with the decision of the Arbitrator, it would be free to apply to the High Court to determine the matter. there is no evidence that the applicant herein has followed that procedure which is clearly set out in the Arbitration Act.

47. In my view, the Arbitrator was alive to the fact that  jurisdiction is everything  without  which a tribunal ought not to  make one  more step  and hence  this court should not  be seen to be capping that power of the arbitrator  to determine  whether  or not he  has  jurisdiction   to hear and  determine  the dispute before  him, before he can make any one more step of  considering the complaint by the applicant that he appears to be biased, partial and therefore not  independent and that  he had become  antagonistic and descended into the arena of the disputants which matters can only be determined in the first instance by the Arbitrator and subsequently by the High Court.

48. In my view, there is no discretion in  matters of jurisdiction and the matter of jurisdiction must in the first instance be considered by the court or tribunal hearing a matter before parties can approach a higher authority to intervene. This court is therefore   for the foregoing reasons  reluctant to exercise any discretion to stay arbitral proceedings  considering  the real issues that are pending before the arbitrator that is the issues  of whether or not  the arbitrator had jurisdiction to hear and determine the  dispute, before he can decide on the issue of his recusal from hearing the proceedings on account of his alleged perceived bias or lack of independence.

49. With the above in mind, the fact that the arbitrator did not file a response to this application for stay of proceedings pending before him until the Originating Summons filed herein is heard and determined will not prejudice the outcome of the application as it must be heard on merits and not on the fact of absence of a response by the arbitrator. Such applications under the Arbitration Act are never considered unopposed given the nature of arbitration as a consensual process in the resolution of disputes.

50. For the foregoing reasons, and for reasons that situations where the High court  can intervene in arbitral proceedings (see sections 14 and 39 of the Arbitration Act, 1995) are limited; and as  no consent between the parties is filed allowing this court to intervene in the pending arbitral proceedings, I decline to grant the prayers sought herein. I emphasize that I would only intervene in the pending arbitral process if there was evidence of violation of the law or the Constitution, and or where an arbitral award is issued as provided for under Section 33 of the Arbitration Act.

51. I find that there is a deliberate attempt to duplicate proceedings both in the Arbitral Tribunal and before this Court which in my humble view is an abuse of the legal process which must be frowned upon as it encourages forum shopping exercise. In my humble view, and as it is not denied that there is pending before the Arbitrator an application on whether or not he has jurisdiction to hear and determine the matter, there is absolutely no reason why the Arbitrator cannot be allowed to hear that application first before considering any other procedural issue. The law is clear that whoever is dissatisfied with the outcome, either way, can approach the High Court through the established procedure.

52. I have in this ruling endeavoured not to delve into the merits of the Originating Summons as was submitted on by both parties’ advocates as that can only be dealt with by the trial judge hearing the Originating Summons. Thus, I would not attempt to discuss the alleged conduct of the Arbitrator as that would be intervening when the substantive Originating Summons touching on his conduct is pending. I note that the authorities cited by the applicant’s counsel all relate to termination of the Arbitrator’s mandate which the Judge hearing the Originating Summons will no doubt examine.

53. In the end, I find that the intended stay will only aggravate the delay in determining the substantive pending issues in this matter. It will not serve any useful purpose in this matter and neither will a refusal of stay prejudice the applicant in any way. Accordingly, the applicant's Notice of Motion dated 4th November 2015 is hereby dismissed with costs to the 1st respondent.

Dated, signed and Delivered in open Court at NAIROBI this 17th day of May, 2016

R.E.ABURILI

JUDGE

In the presence of:

Mr Odera for the applicant

Mr Mwenesi h/b for Mr Muturi for the 1st Respondent

N/A for the 2nd Respondent

Henry: Court Assistant