COURT INTERVENTION IN ARBITRATION PROCEEDINGS
COURT INTERVENTION IN THE ARBITRATION PROCESS:
The court plays a vital role before, during and after arbitration hearing. It is important to point out from the onset that as a matter of fact, there is consensus among the scholars and practitioners that the court plays a key role in the arbitration process. It therefore follows that arbitral proceedings may be ineffective or even falter without the support of our courts. As the learned judge correctly pointed out in Rawal v The Mombasa Hardware Ltd; an arbitration agreement does not limit or oust the jurisdiction of the court to grant relief sought by way of a plaint.
My argument in this article is therefore founded on the firm belief that the court has a key role to play in arbitral proceedings. Consequently, we look at the extent to which the court may be allowed to take part in the arbitration process.
To begin with, Article 5 of the UNICITRAL Model Law on International Commercial Arbitration provides that: in matters governed by this law, no court shall intervene except where so provided in this law. This is to say that the model law effectively limits the role of the court in the arbitration only to the circumstances that are expressly stated under the model law. Apparently, the model law’s limitation under Article 5 is only related to “matters governed by” the model law. On the other hand, Section 4 of the Arbitration Act of England limits the involvement of the court to the extent that the court’s objective in arbitral proceedings is to ensure fair and impartial settlement of disputes. Effectively, the court is prohibited from taking steps that may end up limiting the party’s autonomy except in cases where there is public interest.
The House of Lords in COPPEE - LAVALIN SA/NV V KEN-REN CHEMICALS AND FERTILIZERS LTD came up with three instances where the involvement of the court is inevitable in the arbitration process. These include:
Measures involving pure procedural steps and which the arbitral tribunal cannot give orders or enforce.
Measures aimed at maintaining status quo like issuing of interim orders.
Measures giving the award the intended effect through providing the enforcement mechanisms.
In Lord Mustill’s words, “Whatever view is taken regarding the correct balance of the relationship between international arbitration and national courts, it is impossible to doubt that at least in some instances the intervention of the court may not only be permissible but highly beneficial.”
From the foregoing, it is evident that the law of arbitration all over the world appreciates the vital role played by the court in arbitral proceedings. Equally, the law of arbitration also appreciates the need to limit court intervention in arbitral proceedings to some extent for purposes of safeguarding party autonomy. As a result, the provisions on court intervention are usually worded in the negative such that except where the law expressly provides for court intervention, the court cannot be said to have a recognized basis for such interventions in the arbitration process.
The principle of finality of arbitration aimed at enhancing expeditious settlement of disputes is the basis of limitation of judicial intervention. It has thus been argued that court intervention in arbitration proceedings will defeat the primary purpose of the arbitration act. As Dr. Kariuki Muigua pointed out; the role of the court should be merely facilitative otherwise the excessive judicial interference with awards will not only be a paralyzing blow to the healthy functioning of arbitration but will also be a clear negation of the legislative intent of the Arbitration Act.
In Kenya, the role of the court in arbitral proceedings is provided for under Section 10 of the Arbitration Act. It states that except as provided in this act, no court shall intervene in matters governed by this act. This is to say that the Arbitration Act effectively restricts court intervention only to the situations contemplated under the act. At the face of it, Section 10 only allows two circumstances for court intervention in the arbitration process. Firstly, where the act expressly provides for court intervention. For example, during the appointment of the arbitral tribunal in accordance with Section 12 of the act. Secondly, the high court has inherent jurisdiction to act in public interest.
It is thus arguable that court intervention and particularly the High Court of Kenya, is therefore justified in intervention in arbitral proceedings provided that it is acting on public interest even where it is not expressly stated under the act. It has been correctly observed that the Kenyan courts entertain judicial review and constitutional applications against both the arbitrators and arbitral tribunals in public interest.
The biggest challenge the Kenyan courts have faced is the inconsistency with respect to the full implication of Section 10 regarding their role in arbitration. This is due to the lack of clarity of “public policy” concept. For instance, the court of appeal in ANNE MUMBI HINGA V VICTORIA NJOKI GATHARA held that public policy can never be defined exhaustively and should be approached with extreme caution, failure of recognition on the ground of public policy would involve some element of illegality or that it would be injurious to the public good or would be wholly offensive to the ordinary reasonable and fully informed member of the public on whose behalf the state’s powers are exercised. This in my view, seems to suggest that courts may intervene in arbitration since public policy is a concept that does not render itself to a clear definition and as a consequent not exhaustible. It is thus my view that Section 10 must be construed as allowing the court to intervene in the arbitral proceedings in public interest even where it is not expressly stated in the act.
As Sutton, D.J correctly pointed out, the act cannot reasonably be interpreted as ousting the inherent jurisdiction of the high court to do justice especially through constitutional and judicial review remedies. If anything, parliament would have made a clear provision under our constitution that limits the role of the court in arbitral proceedings even in instances where public interest is in question if that was what it intended. This is a position that can be backed by the jurisprudence emanating from our courts. For instance, in EPCO BUILDERS LIMITED V ADAM S. MARJAN- ARBITRATOR & ANOTHER the appellant’s constitutional application was entertained on the grounds that his constitutional right to fair arbitration had been violated by a preliminary ruling of the arbitrator. This is a clear indication that courts are reluctant in dismissing the need for constitutional applications in arbitration.
The supreme court of Kenya while commenting on the same issue in the case of NYUTU AGGROVET LIMITED V AIRTEL NETWORKS KENYA LIMITED; CHARTERED INSTITUTE OF ARBITRATORS (2019) held that indeed our Constitution in article 159(2) (c ) acknowledges the place of arbitration in dispute settlement and urges all courts to promote it. However, the arbitration process is not absolutely immune from the court process, hence the present conundrum.”
In conclusion, arbitration must be conducted in a manner that is consistent with constitutional principles and values and any derogation thereof must be seen as unconstitutional and challenged in court. As was succinctly held by the supreme court of Kenya in Synergy Industrial Credit Ltd v Cape Holdings Ltd (2019); the courts of law remain the ultimate guardians and protectors of justice. As such, they cannot be completely shut off from any process of seeking justice. It suffices to say that courts have jurisdiction in matters which are subject to valid arbitration agreement until either party alerts the court of the arbitration agreement within reasonable time and seeks to enforce the same.
This article has been written and compiled by Wilson Ngao, a Legal Researcher at Kazi Advocates LLP.