The time crunch in challenging an arbitrator’s jurisdiction

The High Court has often indulged litigants who failed to comply with the time limits for challenging the jurisdiction of an arbitrator. This has been on the mistaken belief that such indulgence satisfied the ends of justice for a litigant that was not necessarily indolent, but simply late. However, in the recent case of University of Nairobi v Nyoro Construction Company Ltd and Another [2021] KEHC 380 (KLR), Hon Justice Majanja held that the Arbitration Act deliberately limited the timeframe in which a litigant could challenge the jurisdiction of an arbitrator to reduce the interference by courts in arbitral proceedings.    

8 Mar 2022 3 min read Dispute Resolution Alert Article

At a glance

  • The High Court has often allowed late challenges to the jurisdiction of arbitrators, but a recent case emphasized that the Arbitration Act limits the timeframe for such challenges to reduce court interference in arbitral proceedings.
  • In the case of University of Nairobi v Nyoro Construction Company Ltd, the university challenged the jurisdiction of an arbitrator after a significant delay. The court upheld the provision in the Arbitration Act that requires such challenges to be made within 30 days of the arbitrator's ruling.
  • The court's decision emphasized that the Arbitration Act is a complete code that aims to promote the efficiency and finality of arbitral awards, limiting court involvement in arbitration proceedings. Late applications to set aside an arbitrator's jurisdiction ruling are not allowed under the law.

In this case, Nyoro Construction Company Ltd entered into a contract with the University of Nairobi for the construction of proposed extensions to the university’s Lower Kabete Campus. A dispute arose between the contracting parties and Nyoro Construction requested that the president of the Architectural Association of Kenya appoint an arbitrator. An arbitrator was duly appointed, and the parties held preliminary meetings and exchanged pleadings, but for unstated reasons the proceedings did not take off for close to four years. The university consequently challenged the arbitrator’s jurisdiction on the grounds that the claim was time barred.

The arbitrator considered the parties’ submissions and dismissed the objection. Aggrieved, the university filed an application to set aside the arbitral tribunal’s decision. The application was filed three months after the arbitrator delivered the ruling. One of the issues that came up for consideration was the timeframe within which an applicant could approach the court to set aside a determination by an arbitrator on their jurisdiction. The court upheld the provision in section 17(6) of the Arbitration Act, which states that such an application challenging a ruling by an arbitrator on their jurisdiction must be made within 30 days of the ruling. In upholding the provisions of the act, the court held that it did not have jurisdiction to entertain a late application or extend the time for filing an application for the following reasons:

  • section 10 of the Arbitration Act limits what a court can do in arbitration proceedings and an extension of time for filing such an application is not provided for;
  • the Arbitration Act is a complete code and therefore the provisions of the Civil Procedure Act on time extensions cannot be relied upon unless expressly imported by the Arbitration Act;
  • the intention of the time limit is to ensure that neither party frustrates the arbitration process; and
  • parties to arbitration agreements make a conscious decision to exclude court jurisdiction and prefer the finality and expediency of the arbitral process.

Court involvement in arbitration proceedings

In Nyutu Agrovet Limited v Airtel Networks Kenya Limited; Chartered Institute of Arbitrators-Kenya Branch (Interested Party) [2019] eKLR, the Supreme Court stressed the importance of limiting the involvement by courts in arbitration proceedings. As such, parties to commercial agreements must abide by the rules set out in the Arbitration Act.

Earlier decisions of the High Court had provided that the time limit imposed by section 17(6) of the Arbitration Act could be cured by seeking leave from the court to make the application out of time. For instance, in Kenya Ports Authority v Baseline Architects and Three Others [2014] eKLR, the court was of the view that there was no provision in the Arbitration Act barring an aggrieved party from making an application for leave to file the appeal out of time. The court was also enjoined to do substantial justice under section 3A of the Civil Procedure Act. Similarly, in Royal Ngao Holdings Limited v N.K. Brothers Limited [2020] eKLR, the court held that where an aggrieved party provided a reasonable explanation for failing to file an application within the 30-day limit the same could be allowed.

However, Justice Majanja’s decision in this case is consistent with the Supreme Court’s finding that the Arbitration Act is a complete code that deliberately limits instances of interference with the arbitral process to promote expediency and finality of arbitral awards. Therefore, any party to an arbitration dispute that desires to apply to the High Court to set aside a ruling by an arbitrator on their jurisdiction must file the application within 30 days of the arbitrator’s decision, failing which they would have no recourse under the law.

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