Mifra Construction Company Ltd v Eldoret
High Court, at Eldoret September 20, 2000
Visram, Commissioner of Assize
Miscellaneous Civil Application No 193 of 1998
Contract – illegal contract – such contract void ab-initio.
Local Government – contracts by Local Government – where people with vested interests participate in proceedings – such contracts illegal and void ab-initio.
Arbitration – arbitration award - arbitrator applying wrong principles or failing to take into account correct principles – Court to upset such award.
The applicant, by way of Notice of Motion brought under sections 3A and 89 of the Civil Procedure Act and 35(1) (a) (ii) and (b) of the Arbitration Act, 1995 and order L rule 1 of the Civil Procedure Rules, sought to set aside an interim arbitral award. The main ground of the application was that the arbitrator erred in principle in failing to appreciate that the contract was in dispute, hence void ab initio. The reason for the illegality was stated to be that it was entered into in contravention of the express provisions of the Local Government Act.
1. No application is to be defeated by use of a wrong procedural mode and the judge has the discretion to hear it either in Court or in chambers.
2. If a contract is tainted by illegality, it has no benefit to the parties.
3. Section 89(1) of the Local Government Act talks of any pecuniary interest, direct or indirect, that requires disclosure, and withdrawal from participation in the proceedings.
4. An artibrator’s finding will not invite quick interference of the High Court. However, an arbitrator must always make his determination guided by proper principles. If he fails, the Court will not hesitate to overturn his finding.
1. David Taylor and Son, Ltd v Barnett  1 All ER 843
2. R v Hendon Rural District Council ex parte Chorley  2 KB 696;  All ER Rep 20
3. Boyes v Gathure  EA 385
4. Kinyanjui, Johnson Joshua v Rachel Wahito Thande Civil Appeal No 284 of 1997
Furmston, M P et al (Eds) (1986) Cheshire, Fifoot & Furmston’s Law of Contract London: Butterworths 11th Edn pp 334, 337, 341 - 345, 359 - 361
1. Civil Procedure Act (cap 21) sections 3A; 89
2. Civil Procedure Rules (cap 21 Sub Leg) order L rule 1
3. Arbitration Act 1995 (Act No 4 of 1995) sections 3, 7(2); 17; 32; 35(2) (a) (ii) (b)
4. Local Government Act (cap 265) section 89(1) (2) (5)
Mr Gicheru for the Applicant
Mrs Odede for the Respondent