Legal Opinion on Enforcement of Arbitral Awards and Payment by Installments – Analysis of Masongo & Another v Riruta Gardens [2025] KEHC 10371 (KLR)

1. INTRODUCTION

This analysis is purposed to review and advise on the High Court ruling in Masongo & Another v Riruta Gardens [2025] KEHC 10371 (KLR), with particular reference to:

• The enforceability of arbitral awards within the 90-day window provided for setting aside; and
• The threshold for obtaining leave to satisfy arbitral awards through installment payments.

2. BACKGROUND

The applicants, Mr. and Mrs. Masongo, sought enforcement of an arbitral award delivered in their favor on 11 September 2024. The award arose from a sale agreement dispute between the applicants and Riruta Gardens.

Upon filing an application for enforcement under Section 36 of the Arbitration Act, the respondent (Riruta Gardens) raised a preliminary objection, asserting that enforcement was premature, as the 90-day window to apply for setting aside the award under Section 35(3) had not expired.

In the alternative, the respondent sought leave to settle the award (Kshs. 7,677,260) in 24 monthly installments, citing cash flow constraints and proposing an interest freeze from 11 October 2024.

The court issued its ruling on 17 July 2025.

3. ISSUES CONSIDERED

1. Whether an arbitral award can be enforced before the expiry of the 90-day window for setting aside under Section 35(3) of the Arbitration Act.
2. Whether a judgment-debtor can be granted leave to pay the arbitral award in installments, and what evidentiary standard must be met.

4. LEGAL FRAMEWORK

• Arbitration Act, 1995 (Revised 2010):
• Section 35(3) – 90-day window to apply for setting aside arbitral awards.
• Section 36 – Recognition and enforcement of domestic arbitral awards.
• Civil Procedure Rules, 2010:
• Order 21 Rule 12(1) – Court discretion to permit payment of judgment debts in installments.
• Case Law:
• Freight Forwarders Kenya Ltd v Elsek & Elsek (2012) – Criteria for installment payments.
• Keshavji Jethabhai & Bros Ltd v Saleh Abdulla (1959) – Good faith and financial disclosure are essential.

5. COURT’S FINDINGS AND ANALYSIS

a. Enforcement Before Expiry of Section 35(3) Window

The court rejected the respondent’s objection, holding that:

• Mere lapse of time under Section 35(3) does not bar enforcement unless an actual application to set aside is filed and pending.
• Since no such application had been made by Riruta Gardens, there was no legal impediment to the applicants’ enforcement application.

b. Request for Installment Payments

The court analyzed the respondent’s application under Order 21 Rule 12, and held:

• Discretion to allow installment payments must be exercised judicially and only upon sufficient cause being shown.
• The respondent did not provide financial records, audited accounts, or any documentation evidencing cash flow constraints.
• The court further noted that the respondent had not made any part payment of the award, undermining claims of good faith.
• As such, the court found no sufficient basis to grant the installment payment request.

6. CONCLUSION

The court:

• Recognized and adopted the arbitral award dated 11 September 2024 as a judgment of the court;
• Declined the respondent’s application to settle the amount in installments;
• Awarded costs of the application to the applicants.

7. LEGAL IMPLICATIONS FOR A  POTENTIAL CLIENT

a. Enforceability of Awards Within 90 Days

Your organization can proceed to enforce a domestic arbitral award immediately upon issuance, unless:

• The judgment debtor has filed a formal application to set aside the award under Section 35; or
• A court has issued a stay of enforcement.

There is no need to wait for the 90-day window to lapse, contrary to common misconception.

b. Installment Payment Proposals

If your organization is a judgment debtor and wishes to pay in installments, the court will only consider such requests if:

• There is full disclosure of financial incapacity (e.g., audited financial statements, bank statements);
• There is a demonstrated good faith effort (e.g., partial payment);
• The request is made promptly and transparently.

Absent these, such applications are unlikely to succeed.

c. For Future Arbitrations

Where XYZ Corporate Client is an award creditor, we recommend:

• Promptly applying to enforce the award without waiting for 90 days;
• Opposing installment payment proposals unless backed by credible documentation;
• Ensuring arbitration clauses remain enforceable and binding under Kenyan law.

8. RECOMMENDATION

Based on the court’s position in Masongo v Riruta Gardens, we advise the following:

1. Where your company is a beneficiary of a domestic arbitral award, proceed with enforcement immediately unless there is a stay or pending setting-aside application.
2. If facing enforcement, and desiring time to pay, ensure your installment proposal is:
• Supported by verifiable financial evidence;
• Presented in good faith with part payment;
• Reasonably structured and time-bound.
3. Strengthen your contracts to include enforceable arbitration clauses, and train relevant departments on the finality of arbitration outcomes under Kenyan law.

Yours sincerely,
Admin.