Whether the arbitral award dated 11 September 2024 should be recognized and enforced by the court under Section 36 of the Arbitration Act - The Case of Peter Nyaboga Masongo & Juliet Nyante Masongo v Riruta Gardens (Arbitration Cause No. E065 of 2024 [2025] KEHC 10371 (KLR)

Procedural History / Background

• The applicants filed a Chamber Summons dated 26 September 2024 seeking enforcement of an Arbitral Award dated 11 September 2024, which arose from a dispute related to a sale agreement dated 12 November 2018.
• The dispute had been referred to arbitration per Clause 12 of the sale agreement, and Mr. Dominic N. Mbigi, FCIArb, was appointed arbitrator by the Chartered Institute of Arbitrators (Kenya Branch).
• The arbitration was conducted under the Arbitration Act, 1995.
• The applicants sought:
1. Recognition and enforcement of the arbitral award;
2. Judgment in terms of the award; and
3. Costs of the application.

Facts of the Case

• The arbitral award was issued on 11 September 2024 in favor of the applicants.
• The respondent did not file an application to set aside the award under Section 35 of the Arbitration Act.
• The respondent objected to enforcement on the grounds that the statutory 90-day period to set aside the award had not yet lapsed (i.e., premature enforcement).
• Additionally, the respondent proposed to settle the award sum of Kshs. 7,677,260 in 24 equal monthly installments, requesting that interest be frozen from 11 October 2024.
• The applicants opposed the proposal, asserting that the respondent had not made any payment since the award and had not demonstrated willingness or capacity to pay.

Legal Issues for determination

1. Whether the arbitral award dated 11 September 2024 should be recognized and enforced by the court under Section 36 of the Arbitration Act.
2. Whether the court should allow the respondent to settle the award in installments as per their proposal.

Legal Principles / Statutory Provisions Applied

• Section 36(1) of the Arbitration Act: An arbitral award shall be recognized as binding and enforced by the court upon application.
• Section 36(3): Requires the applicant to produce the original or certified copy of the arbitral award and arbitration agreement.
• Section 35(3): A party may apply to set aside an award within 3 months (90 days) of receiving it.
• Order 21 Rule 12(1) of the Civil Procedure Rules: The court has discretion to allow judgment debts to be paid in installments for sufficient cause.

Court's Analysis

Issue 1: Enforceability of the Arbitral Award

• The court noted that although Section 35(3) provides a 90-day window to challenge an award, this does not create a moratorium or stay against enforcement under Section 36 unless a setting-aside application is actually filed.
• The court emphasized that the respondent had not filed any application to set aside the award or obtained any stay of enforcement.
• The court found that the applicants had fulfilled all requirements under Section 36, including attaching the arbitral award and the arbitration agreement.
• Therefore, there was no legal bar to enforcing the award.

Issue 2: Payment by Installments

• The court acknowledged its discretion under Order 21 Rule 12 to grant payment in installments but stressed that such discretion must be exercised judicially and not merely for convenience.
• The court referred to past precedents:
• Freight Forwarders Kenya Limited v Elsek & Elsek [2012] eKLR
• Keshavji Jethabhai & Bros Limited v Saleh Abdulla [1959] EA 260
• The key principle is that a party seeking installment payments must:
• Show good faith;
• Disclose full financial position;
• Show reasonable prospects of meeting the installment plan;
• Have partially paid or made efforts to pay.
• In this case, the respondent had not demonstrated any payment, nor did they produce financial statements or documents to support the installment request.
• The court therefore found no sufficient cause to justify the respondent’s request.

Court's Holding:

• The arbitral award dated 11 September 2024 is recognized and adopted as a judgment of the court under Section 36 of the Arbitration Act.
• The respondent’s request to pay in 24 monthly installments with frozen interest was denied.
• Costs of the application awarded to the applicants.

Significance of the Case

• Clarifies that enforcement of arbitral awards is not delayed merely because the 90-day setting aside period has not lapsed—unless an application to set aside is filed.
• Reinforces that courts will not permit installment payments without sufficient cause—mere proposals or assertions without supporting evidence are inadequate.
• Upholds the finality and enforceability of arbitral awards under Kenya’s Arbitration Act.
• Encourages good faith and compliance post-award rather than tactical delay by judgment debtors.