Stanley Suguvi Kegode t/a Kirinda Distributors v Equator Bottlers Limited [2020] eKLR Case Summary

Court
High Court of Kenya at Kakamega
Category
Civil
Judge(s)
W Musyoka
Judgment Date
October 16, 2020
Country
Kenya
Document Type
PDF
Number of Pages
2
Get a comprehensive summary of the Stanley Suguvi Kegode t/a Kirinda Distributors v Equator Bottlers Limited [2020] eKLR case. Explore key legal insights and implications from this judgment.


Case Brief: Stanley Suguvi Kegode t/a Kirinda Distributors v Equator Bottlers Limited [2020] eKLR

1. Case Information:
- Name of the Case: Stanley Suguvi Kegode t/a Kirinda Distributors v. Equator Bottlers Limited
- Case Number: Civil Case No. 4 of 2020
- Court: High Court of Kenya at Kakamega
- Date Delivered: 16th October 2020
- Category of Law: Civil
- Judge(s): W Musyoka
- Country: Kenya

2. Questions Presented:
The court must resolve whether it has jurisdiction to hear the case given the existence of an arbitration clause in the distributorship agreement between the parties and whether the suit is sub judice due to pending arbitration proceedings.

3. Facts of the Case:
The plaintiff, Stanley Suguvi Kegode, operated a business as a distributor for Equator Bottlers Limited under a distributorship contract dated 1st January 2015. A dispute arose regarding payments, leading the defendant to cease product supply and remove products from the plaintiff's custody, effectively taking over the plaintiff's business. The plaintiff sought both general and special damages, along with injunctive relief and a recognition letter to secure credit for his business.

4. Procedural History:
The plaintiff initiated the case by filing a plaint on 15th May 2020 and subsequently filed a Motion on 15th June 2020 seeking injunctive relief. The defendant responded with a Notice of Preliminary Objection, claiming the suit violated the Arbitration Act and was an abuse of the court process. The court noted the absence of the distributorship agreement in the record, which was crucial for determining the case.

5. Analysis:
- Rules: The court considered several provisions of the Arbitration Act, including sections 6, 12(3)(4), and 42(3), which outline the court's duty to stay proceedings when arbitration is invoked. Section 6 mandates that the court must refer the matter to arbitration if a party requests it before entering appearance.
- Case Law: The court referenced several cases, including *Monique Oraro vs. AAR Insurance Co. Ltd* and *David Mututo Mumo vs. South Eastern Kenya University*, which established that parties must adhere to arbitration agreements and that courts cannot intervene in matters already subject to arbitration. The case *Niazsons (K) Ltd vs. China Road & Bridge Corporation Kenya* reinforced the principle against concurrent proceedings in court and arbitration.
- Application: The court found that the plaintiff had invoked the arbitration clause by sending a notice on 10th March 2020, which the defendant acknowledged. Thus, arbitration proceedings were deemed to have commenced. Given that the plaintiff did not appoint an arbitrator following the defendant's non-response, the court determined that it should stay the proceedings and refer the matter to arbitration, as allowing both court and arbitration proceedings would be prejudicial.

6. Conclusion:
The court upheld the defendant's preliminary objection, ruling that the suit should be stayed pending arbitration proceedings. The court emphasized the importance of adhering to the arbitration agreement and the need to avoid parallel proceedings.

7. Dissent:
There were no dissenting opinions noted in this ruling.

8. Summary:
The High Court of Kenya ruled in favor of Equator Bottlers Limited, staying the proceedings in the case of Stanley Suguvi Kegode t/a Kirinda Distributors due to the existence of pending arbitration proceedings. This case underscores the enforceability of arbitration agreements and the court's limited role in disputes already subject to arbitration, highlighting the legal principle that parties must follow their agreed dispute resolution mechanisms.

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