Vaghjiyani Enterprises Limited v Prilscot Company Limited [2020] KEHC 395 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL & TAX DIVISION

CIVIL CASE NO. E462 OF 2019

VAGHJIYANI ENTERPRISES LIMITED.... PLAINTIFF/RESPONDENT

V E R S U S

PRILSCOT COMPANY LIMITED.................DEFENDANT/APPLICANT

RULING

(1) Before this Court is the Notice of Motion dated 15th February 2020 by which PRILSCOT COMPANY LIMITED (the Defendant/Applicant) seeks the following orders:-

“(1) THAT all further proceedings herein be stayedand the matter be referred to Arbitration.

(2) THAT the costs of and occasioned by theApplication be provided for.”

(2) The Application which was premised upon Section 6 of The Arbitration Act 1995 and all other enabling provisions of the law was supported by the affidavit of even date sworn by LUKA KIGEN a Director of the Defendant Company.

(3) VAGHJIYANI ENTERPRISES LIMITED, the Plaintiff/Respondent, despite having been duly served with the application did not file any response thereto.  As such the application remained unopposed.

BACKGROUND

(4) The Plaintiff and the Defendant entered into an Agreement and Conditions of Contract for Building Works dated 12th January 2015 (hereinafter “the Agreement”) by which the Plaintiff agreed to partner with the Defendant to construct residential houses.  Clause 45 of the said Agreement provided that disputes arising between the parties to the Agreement would be resolved through Arbitration.

(5) On 19th December 2019 the Plaintiff filed suit against the Defendants alleging Breach of the Agreement and by the Plaint dated 18th December 2019 the Plaintiffs sought for Judgment against the Defendant for:-

“(a) Settlement/full payment of the total amount due for thevalue of work done, advance payment made by the Plaintiff for approvals, accrued interest on advanced payments being the undisputed sum of Kshs. 53,325,153. 95/-.

(b)  Interest on prayer (b) above at court rates from the datethe amount fell due upto payment in full.

(c) A permanent injunction restraining the defendantsherein from continued interference of the site until the amount due and owing is fully settled to the Plaintiff and thereafter the possession of the site will be handed back to the Defendants.

(d)  Costs of this suit and interests thereon.

(e)   Any other relief as the court may deem fit to grant.”

(6) The Defendant challenges the jurisdiction of this Court to hear and determine the dispute between the parties in light of the Arbitration clause contained in the Agreement and prays that said dispute be referred to Arbitration.  As stated earlier the present application was not opposed by the Plaintiff/Respondent.

(7)  The application was disposed by way of written submissions.  The Defendant/Applicant filed its written submissions dated 29th May 2020 whilst the Plaintiff/Respondent did not file any submissions in the matter.

ANALYSIS AND DETERMINATION

(8) The fact that a valid and enforceable Agreement exists between the parties to this suit is not in any doubt.  Annexed to the Supporting Affidavit dated 13th February 2020 is a copy of the Agreement and Conditions of Contract for Building Works (Annexture ‘LK-1’).  The said Agreement which is dated 12th January 2015 was duly executed by both the Plaintiff and the Defendant.

(9) There is also no contest that the dispute between the parties which occasioned the filing of this suit arises from the agreement of 12th January 2015.  Indeed it is clear from paragraph 15 of the Plaint dated 18th December 2019 that the Plaintiffs suit is premised upon an alleged breach by the Defendants of the Agreement of 12th January 2015.

(10) Clause 45. 1 of the Agreement under the hearing SETTLEMENT OF DISPUTES provides as follows:-

“45. 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 party to the other with a request to submit it to arbitration and to concur in the appointment of an Arbitrator within thirty days of the 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 Association of Kenya on the request of the applying party.”

(11) Having executed the Agreement in question this Arbitration bound the Plaintiffs.  Section 6(1) and (2) of the Arbitration Act provides that:-

“A Court before which proceedings are brought is a matter which is the subject of an arbitration agreement shall if a party so applies not later than the time when that party enters appearance or otherwise acknowledges the claim against which the stay of proceedings is sought, stay the proceedings and refer the parties to arbitration unless it finds-

(a) That the arbitration agreement is null and void, inoperative or incapable of being performed; or

(b) That there is not in fact any dispute between the parties with regard to the matters agreed to be referred to arbitration.

(c) Proceedings before the Court shall not be continued after an application under Sub-Section (1) has been made and the matter remains undetermined.

(12) It is trite law that the Court will not re-write contracts entered into voluntarily by parties.  The Plaintiffs having voluntarily entered into the Agreement with the Defendants are bound by all the terms of said Agreement and more particularly the Plaintiffs are bound by the Arbitration Clause in that Agreement.  I have no doubt that this realisation is what has informed the failure of the Plaintiff/Respondents to oppose this present application.

(13) Finally I am satisfied that this application is merited.  I allow the Notice of Motion dated 13th February 2020in terms of prayer (1).  Given that the present application was necessitated by the Plaintiffs failure to adhere to the terms of the Agreement between the parties.  I condemn the Plaintiff/Respondent to pay the costs for this application.

It is so ordered.

Dated in Nairobi this 11th day of December, 2020.

…………………………………..

MAUREEN A. ODERO

JUDGE