Sisters of Notre Dame De Namur Registered Trustees v Envirocheck Kenya Limited [2022] KEHC 607 (KLR)

Sisters of Notre Dame De Namur Registered Trustees v Envirocheck Kenya Limited (Civil Suit 2 of 2022) [2022] KEHC 607 (KLR) (14 June 2022) (Ruling)

Neutral citation: [2022] KEHC 607 (KLR)

Republic of Kenya

In the High Court at Kakamega

Civil Suit 2 of 2022

PJO Otieno, J

June 14, 2022

Between

Sisters of Notre Dame De Namur Registered Trustees

Plaintiff

and

Envirocheck Kenya Limited

Defendant

Ruling

1. When served with the pleadings in the matter, the defendant simultaneously with its entry of appearance and filing of a statement of defence and a Replying Affidavit, filed a Notice of Preliminary Objection couched thus:-(a)That this Court lacks jurisdiction to hear and determine the Plaintiff’s Notice of Motion dated 26th April 2022 and the entire suit by dint of Section 6 of the Arbitration Act, 1995 which empowers a Court before which proceedings are brought in a matter which is subject to an Arbitration Agreement Clause, to strike out and refer parties to Arbitration.(b)That the Plaintiff’s Notice of Motion and Plaint as filed are improper, premature, incompetent, misconceived, vexatious and an abuse of the Court process as they have been instituted in flagrant breach of Section 7 of the Arbitration Act which requires a party bound by an Arbitration clause to firstly, refer a Dispute to Arbitration as stipulated under Clause 43 of the Agreement between the parties herein.(c)That in view of Paragraphs 1 and 2 hereinabove, the Plaintiff’s suit as laid is a legal nullity, a non starter in law, incompetent, improper and an abuse of the Court process and hopelessly defective craving to be dismissed ex-debito justitiae.

2. When parties attended before Court to argue the application by the Plaintiff seeking temporary orders of injunction and the Court’s attention having been drawn to the preliminary point that went to jurisdiction, it was directed that parties file and exchange written submissions in that regard. The Defendant’s submissions are dated 16th May 2022 filed the next day while those by the Plaintiff are dated and filed on 3rd June 2022. As expected the defendant contends that the Cause does not lie on the basis of an Arbitration Clause between the parties by which they voluntarily chose the forum for dispute resolution while the Plaintiff contends without denying the existence of the Arbitration Clause, that the issue ought to have been raised by an application for stay and referred to arbitration rather than by a Preliminary Objection.

The Objection 3. The dispute between the parties arises out of a contract for construction works and coded in a document titled “Agreement and schedule of conditions of contract for building works” between the two parties. That agreement is common place because both sides have sought reliance upon it.

4. In it, at pages 44 is Clause 43 (42. 1 – 42. 9 Sic) which stipulates:-42. 1 “In case any dispute or difference shall arise between the Employer or the Architect on his behalf and the Contractor, either during the progress or after the completion or abandonment of the Works, such dispute shall be notified in writing by either part to the other with a request to submit it to arbitration and to concur in the appointment of the Arbitrator within thirty days of notice. The dispute shall be referred to the arbitration and final decision of a person to be agreed between the parties. Failing agreement to concur in the appointment of an Arbitrator, the Arbitrator shall be appointed by the Chairman or Vice Chairman of The Architectural of Kenya or by the Chairman or Vice Chairman of the Chartered Association of Arbitrators, Kenya Branch, on the request of the applying party.” (emphasis added)

5. I have looked at the copies of the Agreement availed to Court by both sides and it is clear that while the document exhibited by the Plaintiff is not complete it is duly executed while that by the Defendant is indeed complete but unexecuted.

6. The fact that the two parties have exhibited documents each with its own shortcomings doesn’t negate the fact that both agree to having signed an agreement pursuant to which some work was done and part payment made.

7. Looking at the documents filed by the Plaintiff, and I must say that more could have been done to make the bundle of documents easier and friendlier to read and comprehend, say by having it bound, reveals a table of contents which sits and stands on all fours with the document exhibited by the Defendant. That fact when taken together with the fact that Defendant admits at paragraph five (5) of statement of defence the pleading by the Plaintiff at paragraph 4 of the Plaint, of an agreement dated 27th August 2020, I find that there was indeed an agreement signed between the parties by which both in exercise of their party autonomy chose that all disputes, of whatever nature regarding the contract would be resolved by arbitration and not the Court. There being an agreement by the parties that their disputes be referred to arbitration merely means that parties wishes that the Court abstains and refrains from seeking to entertain the matter. It is said in law that parties have ousted the jurisdiction of the Court.

8. Even though there is no application before the Court pursuant to Section 7 of the Act, I consider it contractual between the parties that all their disputes be referred to arbitration. That contract and its obligations must be enforced because the Court has no right to negate or rewrite the contract for the parties1. The only just thing to do on the facts of the case is to help parties achieve the purpose of their covenant.1National Bank of Kenya Limited v Pipeplastics Samkolit (K) Ltd[2001] eKLR

9. I also consider that to struck out the suit, as sought by the defendant, will not resolve the dispute between the parties. On that basis and for the sake of proportionate and substantive justice, I do direct that the dispute, as pleaded, be referred to arbitration in terms of Clause 43 of the Contract. Let the arbitrator be appointed within sixty (60) days from today and parties to attend Court on 5th October 2022 to report on the progress made.

10. I order that the costs of the Preliminary Objection be in the cause.

DATED, SIGNED AND DELIVERED IN OPEN COURT, THIS 14TH DAY OF JUNE 2022. PATRICK J. O. OTIENOJUDGEIn the presence of:Mr. Wabuko for the PlaintiffMr. Atulo for the DefendantCourt Assistant: Kulubi