Kenya

Part I: what can be enforced?

1. What counts as an arbitral “award” that can be enforced?

Any award issued by an arbitral tribunal, including an interim, partial, and final arbitral award, can be enforced by the High Court of Kenya, the court with inherent jurisdiction over arbitration-related matters. The Arbitration Act (CAP 49, Laws of Kenya) provides that courts shall recognise and enforce an arbitral award unless a party demonstrates that the award is affected by one or more of the prescribed grounds under Arbitration Act s37 or Article V of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (New York Convention).

2. Formal requirements that an award needs to conform with to be enforceable?

In accordance with Arbitration Act s32, an award shall be in writing, signed by the arbitrators, dated, state the juridical seat of arbitration, and provide the reasons upon which it is based.

3. Orders on interim measures: enforceability

a. Domestic arbitration

Arbitration Act s7 provides that a party may request interim measures from the High Court before or during arbitral proceedings.

The Court of Appeal in Safaricom Limited v Ocean View Beach Hotel Limited and two others held that interim measures of protection in arbitration take different forms, and it would be unwise to regard the categories of interim measures as being in any sense closed (restricted to injunctions, for example) and what is suitable must turn or depend on the facts of each case before the High Court or the tribunal. Such interim measures include measures relating to preservation of evidence, measures aimed at preserving the status quo, measures intended to provide security for costs, and injunctions. In Kenya, the essentials which the court must consider before issuing interim measures of protection are:

The existence of an arbitration agreement.

Whether the subject matter of arbitration is under threat.

In the special circumstances, which is the appropriate measure of protection after an assessment of the merits of the application?

For what period must the measure be given?

Arbitration Act s18 provides that the arbitral tribunal may, on the application of a party, order any party to take such interim measures of protection as the arbitral tribunal considers necessary in respect of the subject matter of the dispute.

b. International arbitration

The Arbitration Act applies to both domestic and international arbitrations. Pursuant to s18(2), the High Court will enforce an interim order issued by an arbitral tribunal in an international arbitration.

On the question of whether the High Court can determine and grant interim measures of protection in an international arbitration, in SGS Societies Generale De Surveillance SA Kenya Ltd and another v Tracer Ltd and others, the Court of Appeal held that s7 does not limit or exclude the High Court issuing interim measures in international arbitrations. This would however be subject to the High Court’s consideration of issues such as: jurisdiction; the urgency of the matter; and any exclusions in the arbitration agreement.

4. Emergency awards: enforceability

a. Domestic awards

b. International awards

The Arbitration Act is silent on the question of emergency arbitration and emergency awards. However, pursuant to s18(2), the High Court would enforce a domestic and international emergency order as an interim order.

It is noteworthy that two of the main domestic arbitral institutions in Kenya, the Nairobi Centre for International Arbitration and the Chartered Institute of Arbitrators, both have provisions dealing with emergency arbitration and emergency awards.

Part II: resisting enforcement

Pursuant to the Arbitration Act, the following are considered an award for purposes of enforcement: a “final award” dealing with all issues in the arbitration; a “partial award(s)” dealing with some issues in an arbitration; and an award on agreed terms between the parties.

5 a. How are awards set aside?

If a party is aggrieved by an arbitral award, their only recourse is filing an application to the High Court under Arbitration Act s35 seeking to have the award set aside.

After the High Court makes its decision, the party who seeks to challenge that decision will need leave from the Court of Appeal to file an appeal. Leave to appeal will only be granted where the appellant is able to show that the High Court stepped outside the grounds set out in Arbitration Act s35 and thereby made a mistake “so grave, so manifestly wrong and which has completely closed the door of justice to either of the parties” (Nyutu Agrovet v Airtel Networks; Chartered Institute of Arbitrators-Kenya Branch-Interested Party)

b. Can enforcement be resisted if the respondent has not formally applied to set aside the award?

A formal application must be filed to set aside an arbitral award under Arbitration Act s35. The High Court held in Jambo Biscuits(K) Limited and three others v Jambo East Africa Limited and three others that the rationale for this is that parties willingly subject themselves to arbitration and it is expected that they shall abide by the outcome. Notwithstanding the above, enforcement of an arbitral award may be resisted on technical grounds such as inter alia: (i) not furnishing originals or certified copies of the arbitration agreement and arbitration award(s); (ii) computation corrections to the award (must be within 30 days of the award); (iii) procedural issues on how the enforcement application was filed.

c. Can non-parties seek annulment?

The arbitration proceedings under the Arbitration Act are based on the agreement by the parties to submit to arbitration. Under the doctrine of privity of contract, a contract cannot confer rights or impose obligations on any person other than the parties to the contract. Accordingly, a non-party cannot resist the enforcement of an award, unless an award has been made against the non-party (which would be outside the scope of the arbitral tribunal’s jurisdiction).

d. Grounds to seek setting aside?

An arbitral award may be set aside by the High Court under Arbitration Act s35 if the party making the application furnishes proof that:

A party to the arbitration agreement was under some incapacity.

The arbitration agreement is not valid under the law to which the parties have subjected it or under the law of Kenya.

The party making the application was not given proper notice of the appointment of an arbitrator, the arbitral proceedings or was otherwise unable to present their case.

The arbitral award deals with a dispute not contemplated by or not falling within the terms of the reference to arbitration or contains decisions on matters beyond the scope of the reference to arbitration.

The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties.

The making of the award was influenced by fraud, bribery, undue influence, or corruption.

The subject matter of the dispute is not capable of settlement by arbitration under the law of Kenya.

The award conflicts with the public policy of Kenya.

e. Timelines to seek setting aside?

An application to set aside an arbitral award under Arbitration Act s35 may be made within three months from the date of receiving the award.

f. Grounds to resist enforcement?

Under Arbitration Act s37, the enforcement of an arbitral award may be refused only at the request of the party against whom it is invoked, if that party furnishes the High Court with proof that:

A party to an arbitration agreement was under some incapacity.

The arbitration agreement is not valid under the law to which the parties have subjected it or failing any indication of that law under the law of the state where the arbitral award was made.

The party against whom the award is invoked was not given proper notice of the appointment of an arbitrator, the arbitral proceedings, or was otherwise unable to present their case.

The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or was not in accordance with the law of the state where the arbitration took place.

The arbitral award has not yet become binding on the parties or has been set aside or suspended by a court of the state in which or under the law of which that arbitral award was made.

The making of the arbitral award was induced or affected by fraud, bribery, corruption, or undue influence.

The subject matter of the dispute is not capable of settlement by arbitration under the law of Kenya.

The award is against the public policy of Kenya.

g. Which court to go to for setting aside?

Applications for setting aside awards are filed in the High Court.

h. Formal requirements before court can grant setting aside?

Once an arbitral award is issued, a party can only approach the High Court on the specified grounds in Arbitration Act s35. Rule 7 of the Arbitration Rules requires that the application shall be supported by an affidavit specifying the grounds for setting aside the award and both the application and the affidavit shall be served on the other party and the arbitrator. The parties will be given an opportunity to present their case at a hearing before the High Court makes a decision.

i. Do courts grant stay on enforcement as an interim measure?

Yes. The High Court can stay enforcement of the arbitral award pending the determination of an application to set aside the award.

j. What is the appellate mechanism against the decision of the court of first instance?

Arbitration Act s35 does not expressly bar an appeal to the Court of Appeal. The Supreme Court in Nyutu Agrovet v Airtel Networks; Chartered Institute of Arbitrators-Kenya Branch-Interested Party held that an appeal may lie where the High Court has stepped outside the grounds set out in Arbitration Act s35 and thereby made a “mistake so grave, so manifestly wrong and which has completely closed the door of justice to either of the parties”.

Part III: enforcing foreign awards

6. New York Convention applicability?

Kenya acceded to the New York Convention on 10 February 1989 with a reciprocity reservation. Arbitration Act s36(2) provides that an international arbitration award shall be recognised as binding and enforced in accordance with the provisions of the New York Convention or any other convention to which Kenya is signatory and relating to arbitral awards.

7. Timelines for enforcement?

Arbitration Act s37 does not provide a timeline for filing an application for recognition and enforcement of an award. However, Limitations of Actions Act s4 provides that an action for the enforcement and recognition of awards cannot be brought after six years have elapsed from the date the cause of action accrued. An uncontested enforcement application can be determined within 8–12 months.

8. Which court to go to? Relation with location of assets?

An application for enforcement is filed in the High Court in Kenya.

9. Can non-parties resist enforcement?

Under the doctrine of privity of contract, a contract cannot confer rights or impose obligations on any person other than the parties to the contract. Accordingly, a non-party cannot resist the enforcement of an award, unless an award has been made against the non-party (which would be outside the scope of the arbitral tribunal’s jurisdiction).

10. Compelling disclosure of local assets? How to identify assets available for enforcement?

Following receipt of an order recognising the award as a judgment of the High Court, the judgment creditor must obtain a decree for purposes of enforcement. Thereafter, the decree-holder may, pursuant to Civil Procedure Rules Order 22 r35, apply to the High Court for an order that: (a) the judgment debtor; (b) in the case of a corporation, any officer thereof; or (c) any other person, be orally examined as to whether any or what debts are owing to the judgment debtor, and whether the judgment debtor has any and what property or means of satisfying the decree, and the court may make an order for the attendance and examination of such judgment debtor.

In addition to the above, a decree-holder may hire an asset-tracing firm to assist with location of assets.

11. Are third-party funded awards enforceable?

The Arbitration Act is silent on third-party funding in Kenya. There are also no express rules or restrictions on third-party funders. However, advocates of the High Court of Kenya are expressly forbidden from entering into champertous agreements. Advocates Act s46 prohibits retention agreements whose payment is contingent on the success of the suit. Advocates are further prohibited from purchasing interests or part of the interest in a client’s suit (Advocates Act s45). In a situation whereby an advocate of the High Court was involved in arbitration proceedings and benefitted from a champertous agreement, there may be a public policy challenge raised on the enforceability of the award. However, given that champerty in Kenya is a common law concept which has since evolved, in the authors’ opinion, any such challenge on enforceability can be defended unless there is proof of impropriety linked to the substance of the award.

International arbitrations which are funded by third parties and do not have the involvement of Kenyan lawyers would, in the authors’ opinion, be readily enforceable in Kenya.

Notwithstanding the above, it should be noted that at the time of writing there has been no publicly available judicial pronouncement on the enforceability of third-party funded awards in Kenya.

12. What interim reliefs are available pending enforcement of awards?

The types of relief that can be granted are: injunctions; preservation or detention of property; and active interim measures (such as “status quo” orders).

13. Which of those reliefs are granted ex parte?

Injunctions may, in the first instance, be granted ex parte if the applicant can demonstrate: the urgency of the matter; the serious risk of dissipation of assets; and that any losses to the respondent can be adequately compensated. The High Court may grant an ex parte injunction, pending an inter partes hearing whereby the judge may either vacate or extend the injunction.

14. Formal requirements for enforcement application: what documents need to be filed in court?

Article IV of the New York Convention requires that a party must provide:

the original arbitral award or a duly certified copy of it

the original arbitration agreement or a duly certified copy of it

if the arbitral award or arbitration agreement is not made in the English language, a duly certified translation of it into the English language

15. Enforcing awards that have been annulled/set aside at other courts. Enforcing when an annulment application is pending at a foreign court?

Pursuant to Arbitration Act s37(1)(a)(vi), awards that have been set aside or annulled at the “seat” of the arbitration will not be enforced in Kenya. However, there is no express provision for the High Court to refuse enforcement of an award set aside in a jurisdiction other than the “seat” of the arbitration. There are no publicly available cases dealing with enforcement of such awards, but the law allows the High Court to make its own determination of enforcement.

When an application to set aside or annul an award is pending at the “seat” of the arbitration, pursuant to Arbitration Act s37(1)(a)(vi), the High Court will not consider the enforcement application pending the determination of the set-aside/annulment application at the “seat” of the arbitration.

If a set-aside/annulment application is pending in any jurisdiction other than the “seat” of the arbitration, the High Court can decide on the enforcement of the award.

16. Once an application for enforcement is allowed, how does the actual enforcement against assets work? What are the available remedies available for tracing assets during enforcement proceedings including assets disposed of by fraud?

After the High Court allows an application to recognise and enforce an arbitral award, the award shall be enforced as a decree of the court. Under Civil Procedure Act s38, execution of the decree may occur in the following ways:

by delivery of any property specifically decreed

by attachment and sale or by sale without attachment of any property

by attachment of debts

by arrest and detention in prison of any person

by appointing a receiver

in any such manner as the nature of relief granted may require

As stated above, pursuant to Civil Procedure Rules Order 22 r35, the decree-holder may apply to the High Court for an order that: (a) the judgment debtor; (b) in the case of a corporation, any officer thereof; or (c) any other person, be orally examined as to whether any or what debts are owing to the judgment debtor, and whether the judgment debtor has any and what property or means of satisfying the decree, and the court may make an order for the attendance and examination of such judgment debtor.

In addition to the above, a decree-holder may hire an asset-tracing firm to assist with enforcement of the decree.

17. What is the procedure for repatriation of sums awarded after obtaining an order for enforcement?

If a judgment creditor is based outside Kenya, the funds can be repatriated subject to anti-money laundering and banking regulations. There are no foreign exchange restrictions in Kenya. There is no express legal provision on repatriation of sums awarded outside Kenya.

18. Do courts grant orders for security for costs?

An order for security for costs is a discretionary one as per Civil Procedure Rules Order 26 r1. However, this discretion is to be exercised judicially by taking account of the circumstances of each case. The High Court in Raw Bank PLC v Yusuf Shaa Mohamed Omar and another held that matters to be considered include:

absence of known assets or office within the jurisdiction of the court, insolvency, or inability to pay costs

the general financial standing or wellness of the plaintiff

the bona fides of the plaintiff’s claim

any other relevant circumstance or conduct of the plaintiff or the defendant

19. Exchange control regulations: do they affect payments to foreign award holders?

20. Enforcing awards from non-New York Convention places

Non-New York Convention enforcement may take place through the Foreign Judgments (Reciprocal Enforcement) Act (CAP 43, Laws of Kenya) (Foreign Judgments Act). It only applies to enforcement of arbitral awards and judgments originating from countries which accord reciprocal treatment to judgments/arbitral awards made in Kenya: Australia; Malawi; Seychelles; Tanzania; Uganda; Zambia; United Kingdom; and Rwanda (designated countries). Enforcement of a foreign arbitral award from the designated countries is by filing a formal application in the High Court in a prescribed form in the Foreign Judgments Act.

For non-designated countries, the Court of Appeal in Jayesh Hasmukh Shah v Navin Haria and another established that in the absence of a reciprocal enforcement arrangement, a foreign arbitral award/judgment is enforceable in Kenya as a claim in common law and with the application of common law principles on enforcement of foreign judgments, as elaborated in the case of Adams and others v Cape Industrials PLC. A party must file a plaint at the High Court providing a concise statement of the nature of the claim, claiming the amount of the judgment debt, supported by a verifying affidavit, list of witnesses, and bundle of documents intended to be relied on. A certified copy of the foreign judgment should be exhibited with the plaint. It is open to a party to challenge the validity of the foreign judgment under the grounds set out in Civil Procedure Act s9.

21. Enforcing against sovereigns

The Government of Kenya (GoK) is bound by the Arbitration Act by dint of s41 of the Act. A party can therefore enforce an arbitral award against the GoK. Execution against the GoK is carried out in accordance with Government Proceedings Act s21, which provides that:

Where an order is made against the GoK in favour of a party, the proper officer of the court shall on the application made by that party after 21 days from the date of the order issue to that person a certificate in the prescribed form containing particulars of the order.

A copy of the certificate issued is then served on the attorney general.

If the order provides for the payment of money by way of damages or of any costs, the certificate shall state the amount so payable and the accounting officer for the GoK department concerned shall pay to the person entitled or their advocate the amount appearing on the certificate, to be due together with interest if any.

Government Proceedings Act s21(4) prohibits execution against the GoK’s assets in Kenya. Since decrees will be issued from time to time against the GoK, the only remedy available for a person holding a decree against GoK is to institute judicial review proceedings and seek an order of mandamus to compel the GoK to settle the decree in question. This is the position taken by the Court of Appeal in Five Star Agencies Limited v National Land Commission and National Bank of Kenya.

For enforcement against other sovereign assets in Kenya, pursuant to the Privileges and Immunities Act (CAP 179, Laws of Kenya), execution cannot lie against assets of a foreign state in Kenya that include the “premises of the mission, their furnishings and other property thereon and the means of transport of the mission”. A judgment debtor can enforce against commercial assets of a foreign state in Kenya.

22. Appellate mechanism available?

A party against whom an international arbitral award is invoked can ask the High Court to refuse to recognise and enforce an arbitral award if it offends Arbitration Act s37. However, there is no right of appeal where the High Court refuses to recognise and enforce an award. Kenya’s Court of Appeal in Tanzania National Roads Agency v Kundan Singh Construction Limited held that the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration (1985), as with the Arbitration Act, has provided a one-step intervention in a competent court, the High Court. No further right of appeal has been provided and therefore the Court of Appeal does not have jurisdiction to entertain an appeal.

Part IV: enforcing domestic awards

23. Timelines for enforcement?

Arbitration Act s36 does not provide timelines for enforcement. However, Limitation of Actions Act s4 places the limitation period at six years from the date on which the cause of action arose. For an uncontested enforcement, timelines for court proceedings could be 6–8 months. For a contested enforcement, timelines for court proceedings could be 10–18 months.

24. Which court to go to? Relation with location of assets?

An application to enforce a domestic award is filed in the High Court with geographical jurisdiction over the assets.

25. Compelling disclosure of local assets? How to identify assets available for enforcement?

Following receipt of an order recognising the award as a judgment of the High Court, the judgment creditor must obtain a decree for the purposes of enforcement. Thereafter, the decree-holder may, pursuant to Civil Procedure Rules Order 22 r35, apply to the High Court for an order that: (a) the judgment debtor; (b) in the case of a corporation, any officer thereof; or (c) any other person, be orally examined as to whether any or what debts are owing to the judgment debtor, and whether the judgment debtor has any and what property or means of satisfying the decree, and the court may make an order for the attendance and examination of such judgment debtor.

In addition to the above, a decree-holder may hire an asset-tracing firm to assist with location of assets for the purposes of enforcement.

26. Are third-party funded awards enforceable?

Notwithstanding the above, it should be noted that at the time of writing there has been no publicly available judicial pronouncement on the enforceability of third-party funded awards in Kenya.

27. What interim reliefs are available pending enforcement of awards? Which of those reliefs are granted ex parte?

The types of relief that can be granted are: injunctions; preservation or detention of property; and active interim measures (such as “status quo” orders).

28. Formal requirements for enforcement application: what documents need to be filed in court?

Arbitration Act s36(3) provides that a party relying on an arbitral award must furnish the High Court with:

the original arbitral award or a duly certified copy of it

the original arbitration agreement or a duly certified copy of it

if the arbitral award or arbitration agreement is not made in the English language, a duly certified translation of it into the English language

29. Filing for enforcement when an annulment application is pending?

When an application to annul/set aside an award is pending, the High Court will not consider the enforcement application pending the determination of the annulment/set-aside application at the “seat” of the arbitration.

30. Once application for enforcement is allowed, how does the actual enforcement against assets work? What are the available remedies for tracing assets during enforcement proceedings including for assets disposed of by fraud?

by delivery of any property specifically decreed

by attachment and sale or by sale without attachment of any property

by attachment of debts

by arrest and detention in prison of any person

by appointing a receiver

in any such manner as the nature of relief granted may require

In addition to the above, a decree-holder may hire an asset-tracing firm to assist with enforcement of the decree.

31. Do courts grant orders for security for costs?

absence of known assets or office within the jurisdiction of the court, insolvency, or inability to pay costs

the general financial standing or wellness of the plaintiff

the bona fides of the plaintiff’s claim

any other relevant circumstance or conduct of the plaintiff or the defendant

32. Appellate mechanism available?

A party against whom an arbitral award is invoked can make an application to the High Court requesting the court to refuse to recognise and enforce an arbitral award that offends Arbitration Act s37. However, after the High Court makes its pronouncement, there is no right of appeal to the Court of Appeal.

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Nikhil Desai

Director | JMiles & Co. | Kenya

ngd@jmilesarbitration.com

+254 (0) 700 000 106 Nikhil is a director at JMiles & Co., specialising in domestic and international arbitration, fraud investigations, and litigation. He has represented state and private entities in arbitrations before international tribunals under the auspices of the International Centre for Settlement of Investment Disputes, the International Chamber of Commerce, the London Court of International Arbitration and the Federation of Oils, Seeds and Fats Associations and is also often called on to sit as an arbitrator in disputes. He has recently led a team in training the Kenya Ethics and Anti-corruption Commission, the Attorney General’s Office in Ethiopia, and the Government of Somalia on the use of alternative dispute resolution (ADR). He has represented regulatory authorities in fraud and asset recovery investigations which have resulted in successful recovery actions in multiple jurisdictions. Nikhil is also managing partner at the Kenyan law firm Desai & Co. Advocates, which is a sister company of JMiles & Co., and which provides a wide range of Kenyan law advice and representation to clients. Nikhil is a Fellow of the Chartered Institute of Arbitrators and is chair of the ADR Commission of ICC – Kenya.

Maurice Masiga

Associate | JMiles & Co. | Kenya

mmo@jmilesarbitration.com

+254 (0) 700 000 106 Maurice Masiga is an associate at JMiles & Co. He advises clients on matters in a wide range of sectors including insurance, employment, succession, tax, constitutional, contract, land, defamation, and commercial matters. He specifically assists in litigation and ADR processes and advises clients on the legal options available for the resolution of their disputes. He has gained exposure and experience in various aspects of practice, including but not limited to provision of legal opinions, drafting pleadings, and attendance before courts, tribunals, and arbitrators.