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Prabhaki Developers Ltd v Structural Development Ltd (Civil Application E037 of 2022) [2022] KECA 917 (KLR) (22 July 2022) (Ruling)
Neutral citation:
[2022] KECA 917 (KLR)
Republic of Kenya
Civil Application E037 of 2022
K M'Inoti, JA
July 22, 2022
Between
Prabhaki Developers Ltd
Applicant
and
Structural Development Ltd
Respondent
(Application for extension of time to appeal out of time from the ruling and order of the High Court of Kenya at Nairobi (Majanja, J.) dated 10th January 2022 in HC Misc. App. No. E331 of 2021)
Ruling
1.The applicant, Prabhaki Developers Ltd., has moved the Court vide a motion on notice dated 8th February 2022, for extension of time to lodge an appeal against the ruling of the High Court of Kenya at Nairobi (Majanja, J.) dated 10th January 2022. The applicant prays that his notice of appeal, filed on the same date as the motion, be deemed to have been filed on time. Uncharacteristically, the applicant also seeks, in the application for extension of time, an order for stay of execution of the ruling of the High Court, pending the hearing and termination of the application. It is difficult to fathom how the applicant expects an order of stay of execution, which can only be granted by the full Court, to be issued in an application for extension of time by a single Judge. As has been stated time without number, an application for extension of time and an application for stay of execution in this Court should not be made in the same application. Sequentially the application for extension of time must be heard and determined first. (See Martin Change v. Vitalis Odida, C.A. No. E571 of 2021 and Abdulrazak Rageh Haji v. Mahado Abdulrazak Adichare, C.A. No. E.030 of 2020). I shall accordingly treat the application before me as one limited to extension of time only, which in any event, is my proper bailiwick.
2.The short background to the application is that the applicant and the respondent, Structural Development Ltd, had a construction contract dispute which they referred to arbitration. The arbitral tribunal issued an award on 24th February 2021 by which it awarded the respondent Kshs 85, 560,514.02, interest at 18% until payment in full, and costs. On 5th May 2021 the applicant applied to the High Court under section 35 of the Arbitration Act to set aside the award or to remit the matter back to the Arbitral tribunal for what was called conclusive determination. The application was based on the grounds that the award was contrary to public policy and in excess of the arbitrator’s scope of reference.
3.On its part, the respondent, on 15th May 2021, applied under section 36 of the Arbitration Act for enforcement of the arbitral award as a decree of the court. Majanja J. heard the two application and by the ruling dated 10th January 2022, found no merit in the applicant’s application, which he dismissed with costs for lack of merit and as a disguised appeal against the merits of the arbitral award. As regards the respondent’s application for enforcement, he allowed the same with costs.
4.The applicant was aggrieved and lodged a notice of appeal on 8th February 2022. By dint of rule 75(2) of the Court of Appeal Rules, the delay was 15 days (not seven days as the applicant claims), which in any event I would not consider inordinate granted the explanation that the applicant’s Managing Director, Mr. Pradip Shah has proffered. The explanation set out in his supporting affidavit sworn on 8th February 2022 is that he was solely responsible for instructions on the filing of the appeal and that on 7th January 2022, a few days before the delivery of the ruling, he went down with Covid-1, which forced him to go into isolation and quarantine. He has attached the results of his covid-positive results from one of the hospitals in Nairobi, a fact which the even respondent does not dispute. Indeed, save for a notice of preliminary objection, the respondent has not filed any replying affidavit or grounds of opposition to the application. But for the notice of preliminary objection, which I shall revert to shortly, on the test for extension of time propounded in such cases as Leo Sila Mutiso v. Rose Hellen Wangari Mwangi, C.A. Nai. 251 of 1997 and Fakir Mohamed v. Joseph Mugambi & 2 Others, CA No. Nai. 332 of 2004, I would have readily granted the application for extension of time.
5.Turning to the respondent’s notice of preliminary objection, it is contended that the applicant has no automatic right of appeal to this Court from decisions of the High Court under Sections 35 and 37 of the Arbitration Act and further that the applicant has not obtained leave to appeal, either from the High Court or this Court.
6.It is trite that there is no automatic right of appeal from a determination by the High Court under section 35 of the Arbitration Act. To lodge such an appeal, an aggrieved party must obtain leave, and even then, leave will only be granted in rare and exceptional circumstances. The Supreme Court has pronounced itself on this issue as follows in Nyutu Agrovet Ltd. v. Airtel Networks Kenya Ltd & Another [2019] eKLR:-
7.The same Court took a similar view in Synergy Industrial Credit Ltd v. Cape Holdings Ltd [2019] eKLR, when it stated:
8.The above residual circumscribed and residual jurisdiction is not invoked as of right; it is invoked through an application for leave to appeal, in which the intended appellant demonstrates exceptional circumstances that would justify grant of leave to appeal. I have carefully perused the application before me. The applicant does not advert to having obtained leave to appeal the decision of the High Court which was rendered under section 35 of the Arbitration Act. There is also no evidence of such leave on record. Without obtaining leave to appeal, which leave is granted by the full Court, I cannot fathom why a single judge should extend time to appeal. It is an exercise in futility because without leave to appeal, the applicant cannot mount a competent appeal. Extension of time in such circumstance therefore serves no purpose.
8.In Nairobi City Water & Sewerage Co Ltd v Capture Solutions Ltd [2021] eKLR, Ouko, P. (As he then was), confronted a similar scenario where an applicant sought extension of time to challenge a decision of the High Court in arbitral proceedings without first obtaining leave to appeal. In evaluating one of the conditions for extension of time, namely the prospects of success of the intended appeal, the learned judge stated as follows:-
9.For the foregoing reasons, I am not persuaded of the merit of the applicant’s motion on notice dated 8th February 2022. The same is accordingly dismissed with costs to the respondent. It is so ordered.
Dated and Delivered at Nairobi this 22nd of Day July, 2022K. M’INOTI...................................JUDGE OF APPEALI certify that this is a true copy of the originalSignedDEPUTY REGISTRAR
