Stay Rule 5 CAR1

REPUBLIC OF KENYA
IN THE COURT OF APPEAL AT NAIROBI

CIVIL APPLICATION NO. NAI OF 2001
ccccccccccccccccccc ...................... APPLICANT
VERSUS
cccccccccccccccccccccc...................1 st RESPONDENT
ccccccccc LIMITED...2nd RESPONDENT
Being an application for a stay of the orders of the High Court pending
the lodging, hearing and determination of an intended Appeal from
the Ruling and Order of the High Court of Kenya at Nairobi (Mr. Justice
Tom Mbaluto) given on 30th November 2001 in Milimani High Court
Civil Case No. ,,,,,,, of 2001
BETWEEN
mmmmmmmmm LIMITED.............................................PLAINTIFF
mmmmmmmmmmmmm LIMITED..........................................DEFENDANT
mmmmmmmmmmmm LIMITED.......................THIRD PARTY
NOTICE OF MOTION
(Under Rule 5 (2)(b) of the Court of Appeal Rules)
DRAWN & FILED BY
mmmmmmm
NAIROBI.
ADVOCATES FOR THE APPLICANT
TO BE SERVED UPON:
mmmmmmmm
1
Loita Street,
NAIROBI.
2
REPUBLIC OF KENYA
XXX LIMITED ...................... APPLICANT
VERSUS
XXX LIMITED...................1 st RESPONDENT
XXX LIMITED...2nd RESPONDENT
BETWEEN
XXX LIMITED.............................................PLAINTIFF
XXX LIMITED..........................................DEFENDANT
XXX LIMITED.......................THIRD PARTY
INDEX
ITEM DOCUMENT PAGE(S)
1. Plaint 1-4
2. Verifying Affidavit 5
3. Defence 6-12
4. Third Party Notice 13-18
5. Memorandum of Appearance 19-20
6. Certificate of Urgency 21-22
3
ITEM DOCUMENT PAGE(S)
7. Chamber Summons dated 10th September, 2001 23-26
8. Affidavit of Xxx 27-30
9. Chamber Summons dated 10th September, 2001 31-34
10. Affidavit of R.V. Narasimhan 35-39
11. Annextures 40-49
12. Third Partys List of Authorities 50-51
13. Affidavit of Service 52-54
14. Grounds of Objection 55-56
15. Certificate of Urgency & Chamber Summons dated

12th September, 2001 57-59
16. Affidavit of Jayant Rach 60-61
17. Grounds of Objection 62-63
18. Replying Affidavit of Osman Maalim 64-66
19. Annextures thereto 67-94
20. Ruling of 30th November, 2001 95-101
21. Order 102-104
22. Notice of Appeal 105-106
23. Letter requesting for proceedings 107
4
REPUBLIC OF KENYA
VERSUS
BETWEEN
CERTIFICATE OF URGENCY
We, XXX & COMPANY, Advocates for the Applicant herein, do certify that the
application filed herein under Rule 5 (2)(b) of the Court of Appeal Rules is urgent on
the ground that the Applicant is seeking a stay of proceedings in Milimani HCCC ,,,,,,,
of 2001 and unless the Respondents are restrained as prayed in the application,
judgement in default will be entered against the Applicant and the whole substratum
of the Appeal will be destroyed thereby rendering the intended appeal nugatory.
5
WHICH CERTIFICATE is further supported by the annexed Affidavit sworn by XXX,
Advocate, and on such further or other grounds as may be adduced at the hearing
hereof.
DATED at Nairobi this day of 2001.
XXX & COMPANY

DRAWN & FILED BY:
Xxx & company,

Advocates,
Xxx,
,,,,,,,,
P. O. Box xxx, 00100,
NAIROBI.
TO BE SERVED UPON:
NAIROBI.
6
REPUBLIC OF KENYA
VERSUS
BETWEEN
AFFIDAVIT IN SUPPORT OF URGENCY
I, XXX, residing along Isaac Gathanju Road and of Post Office Box Number xxx, 00100
Nairobi in the Republic of Kenya hereby make oath and state as follows:-
1. THAT I am an Advocate of the High Court of Kenya practising as a Partner in

the firm of Xxx & Company who have the conduct of this matter on behalf of
Xxx Limited, the Applicant herein.
7
2. THAT in my capacity aforesaid, I have full knowledge and information
concerning this suit and I have the Applicants authority to swear this Affidavit
on the Applicants behalf.
3. THAT this suit was instituted by the 1 st Respondent against the 2nd Respondent
in June 2001.
4. THAT the 2nd Respondent filed a Defence on 6th July, 2001 and on 20th July,
2001, pursuant to leave obtained from Court, filed a Third Party Notice against
the Applicant.
5. THAT on 10th August, 2001, the Applicant through our firm, entered
appearance to the Third Partys Notice.
6. THAT subsequently, I wrote to the Defendants Advocates seeking an extension

of time within which to file a Defence due to the fact that the Applicant s
Officers who are conversant with this matter were out of the country.
Messrs. ,,,,,,,, the Advocates on record for the 2 nd Respondent agreed to an
extension of time until 7th September, 2001. The period was later extended to
10th September, 2001.
7. THAT when the Applicants Officers tendered all the documents in respect of
this claim, I noticed that the Agreement between the Applicant and the 2 nd
Respondent contained an Arbitration Clause and it was therefore not possible
under the Rules to file a Defence.
8. THAT I then formed the opinion that an Application under Section 6 of the
Arbitration Act needed to be filed as soon as possible in the High Court. The
8
said Application was filed on 10th September, 2001 under Certificate of
Urgency.
9. THAT my assistant, one Edith Muriu, attended Court on 28 th September, 2001

and argued the Application for Stay of Proceedings before Justice Mbaluto.
The same was opposed and a Ruling was reserved for 12th October, 2001.
10. THAT the said Learned Judge eventually delivered his Ruling on 30 th November,
2001, dismissing the Applicants application with costs. The Applicants have
filed a Notice of Appeal against the said Ruling and I verily believe that the
Appeal, which raises a substantial issue of Law, has overwhelming chances of
success.
11. THAT according to the said Ruling, the Applicant is now required to file a
Defence by 14th December, 2001. The Applicant is unwilling to do so as the act
of filing a Defence will mean a waiver of its right to proceed to Arbitration.
12. THAT it is only fair and just that all the proceedings in Milimani HCCC No. ,,,,,,,
of 2001 be stayed pending the hearing and determination of the intended
Appeal.
13. THAT at any time after 14th December, 2001, the 2nd Respondent may apply for
Judgment in Default of Defence to the utter detriment of the Applicant. If the
default judgment is entered, the whole substratum of the Appeal will be
destroyed and the appeal rendered nugatory.
14. THAT I swear this Affidavit in support of the Applicants prayer that this
application be heard as soon as it is convenient for this Honourable Court to
do so, taking into account the urgency of the matter.
9
15. THAT what is deponed to hereinabove is true to the best of my knowledge
save as to matters deponed to on belief, grounds whereupon have been given
and matters deponed to on information, the sources whereof have been
disclosed.
SWORN by the said XXX )

)
At NAIROBI this day of 2001 )
)
)
)
)
BEFORE ME )
)
)
)
COMMISSIONER FOR OATHS )
DRAWN & FILED BY:
Xxx & Company,

Advocates,
Xxx,
,,,,,,,
P. O. Box xxx, 00100,
10
REPUBLIC OF KENYA
VERSUS
BETWEEN
NOTICE OF MOTION
(Under Rule 5 (2)(b) of the Court of Appeal Rules)
TAKE NOTICE that on the day of 2001 at 9.00 oclock in the forenoon
or as soon thereafter as they can be heard, Messrs. Xxx & Company, Advocates for
the above named Applicant will move this Honourable Court FOR ORDERS:
1. THAT pending the lodging, hearing and determination of the Applicants

intended Appeal, there be a stay of all further proceedings in Milimani High
Court Civil Case Number ,,,,,,, of 2001.
11
2. THAT the costs of this application be provided for.
ON THE GROUNDS THAT:
1. Unless the application, which seeks a stay of further proceedings in Milimani

HCCC No. ,,,,,,, of 2001, is heard as a matter of urgency, the Defendant is likely
to obtain default Judgment against the Third Party before the substantive
Appeal is heard thereby rendering the Appeal nugatory and occasioning loss
and prejudice to the Applicant.
2. The Applicant has an arguable Appeal with good prospects of success for the
reasons inter alia:-
(a) The Learned Judge erred in law by failing to allow the Applicants
Application dated 10th September, 2001 which sought to refer this
matter to Arbitration as per the Agreement between the Applicant and
the 2nd Respondent.
(b) The Learned Judge erred in failing to consider and appreciate the
uncontroverted evidence contained in the Affidavit of ,,,,,,, sworn on
10th September, 2001.
(c) The Learned Judge failed to consider any of the Authorities cited in
support of the Application.
(d) The Learned Judge misdirected himself when he found contrary to Law
that in order for the Applicant to invoke the provisions of Section 6 of
12
the Arbitration Act, it ought to have filed its Application at the time
Defence was due.
(e) The Learned Judge misdirected himself by finding the Applicant guilty
of delay when the period between filing appearance and filing the
application had been fully explained.
(f) The Learned Judge erred by finding that the Applicants case was
unmeritorius and proceeding to dismiss the same.
3. This Appeal will be rendered nugatory if the stay is not granted as prayed for
the reasons inter alia that:-
(a) The sum at stake, standing at Kshs.32,940,408.00 as at 20 th July, 2001,

is of such magnitude that if paid over to the 2 nd Respondent, it would
adversely and severely affect the Applicants operations and prejudice
the Applicant.
(b) The Applicant is apprehensive that the 2nd Respondent would not be in
a position to refund the monies if the intended Appeal is successful.
4. The balance of convenience clearly weighs in favour of the Applicant in this

matter owing to the substantial amount of money involved.
This application is supported by the affidavit of RAMALINGAM VENKITACHALAM

NARASIMHAN sworn on the day of 2001 and annexed hereto.
The address for service of the Applicant is care of Xxx & Company Advocates,
Xxx, ,,,,,,,, P O Box xxx, 00100 Nairobi.
13
XXX & COMPANY
Lodged at the Nairobi Registry on the day of 2001.
DEPUTY REGISTRAR
DRAWN & FILED BY:
Xxx & company,

Advocates,
Xxx,
,,,,,,,,
P. O. Box xxx, 00100,
NAIROBI.
TO BE SERVED UPON:
NAIROBI.
14
REPUBLIC OF KENYA
XXX LIMITED........................... APPLICANT
VERSUS
XXX LIMITED........................1st RESPONDENT
XXX LIMITED.......................2nd RESPONDENT
Tom Mbaluto) given on 30th November, 2001 in Milimani High Court
BETWEEN
XXX LIMITED.........................PLAINTIFF
XXX LIMITED.....................................DEFENDANT
AFFIDAVIT
I, ,,,,,,, residing at Brookside Gardens and of Post Office Box Number 30238 Nairobi, in
the Republic of Kenya do hereby make oath and state as follows:
1. THAT I am the Deputy General Manager of the Applicant. I have full knowledge
and information concerning this suit and as such I am duly authorised by the
Applicant to make this Affidavit on its behalf.
15
2. THAT under and by virtue of a written Agreement dated 24 th June, 1997
(hereinafter referred to as "the said Agreement"), made between the 2 nd
Respondent on the one part and the Applicant on the other part, the 2 nd
Respondent agreed to surrender yield up and release to the Applicant as Landlord
of the building known as Investment House erected upon Land Reference Number
209/,,,,,,, (hereinafter referred to as the Building), all portions of the Building
that had been leased to the Defendant.
3. THAT following were the, inter alia, conditions of the said Agreement:
(a) The Applicant would upon execution of the Agreement pay to the 2 nd
Respondent the sum of Kshs.1,000,000.00;
(b) Pay to the 1st Respondent who by a Lease bearing even date with the
Agreement, had agreed to lease to the 2 nd Respondent premises the sum of
Kshs.3,300,000.00 being the goodwill payable for the granting of the
Interim Lease and indemnify and keep indemnified the 2 nd Respondent
against any and all tax liabilities that may arise in respect of the said
payment;
(c) Upon completion of the substantial reconstruction improvements and

repairs to the Building the Applicant would grant to the 2 nd Respondent a
Lease of a portion of the ground floor of the New Building;
(d) Only in the event that the Applicant was not able or not willing to deliver
possession of the New Building by the Commencement Date being the 31 st
day of May 2000 (hereinafter referred to as the Commencement Date)
pay on behalf of the 2nd Respondent to the 1st Respondent any rent and
16
other payments due and arising to the 1 st Respondent under the Interim
Lease after the Commencement Date;
4. THAT subsequent thereto:-
(a) The 2nd Respondent entered into an Interim Lease with the 1 st Respondent.
It was an understanding between the 2nd Respondent and the Applicant
that the 2nd Respondent would vacate the premises leased by the 1 st
Respondent on or before the Commencement Date. Further it was agreed
between the 1st Respondent and the Applicant that the Interim Lease
period would in any event only be for three (3) years.
(b) The 2nd Respondent failed, neglected and/or otherwise refused to deliver
vacant possession of the Building as had been agreed upon thereby
delaying the commencement of the Works on the Building.
5. THAT notwithstanding the 2nd Respondents failure to deliver vacant possession of

the premises on time as had been agreed, the Applicant, in fulfilment of its
obligations under the Agreement, paid to the 2 nd Respondent and the 1st
Respondent respectively, the said sums of Kshs.1,000,000.00 and
Kshs.3,300,000.00 aforestated.
6. THAT as at 1st March, 2001, the Works on the Applicants Building being complete,
the Applicant was ready, able and willing to and duly offered to give the 2 nd
Respondent possession of the premises in the New Building pursuant to the terms
of the Agreement.
17
7. THAT despite the Applicants offer to the 2 nd Respondent to take up possession of
the premises at the Applicants New Building, the 2 nd Respondent has failed,
neglected and/or otherwise refused so to do.
8. THAT further, since 1st March 2001:-
(a) The 2nd Respondent has failed refused and/or otherwise neglected to
vacate the 1st Respondents premises
(b) The Applicant paid to the 1st Respondent a further sum of

Kshs.2,736,000.00 on the 1st of March 2001 being contribution of rent
payable to the 1st Respondent by the 2nd Respondent after the
Commencement Date, the Works on the Building not having been
completed by the said Commencement Date for reasons inter alia that the
Defendant did not vacate the Building on the agreed date as aforesaid, and
other factors beyond the Applicants control.
9. THAT contrary to the provisions of the Agreement, the 2 nd Respondent seeks in

this suit, to make the Applicant liable for the rent and other payments now
purportedly due and owing by the 2 nd Respondent to the 1st Respondent from the
said period of 1st March, 2001 and which continue to accrue by virtue of the 2 nd
Respondent still being in possession of the 1st Respondents premises aforesaid.
10. THAT it was an express term of the Agreement by virtue of Clause 5 that all
questions in dispute between the parties thereto and all claims for compensation
or otherwise not mutually settled and agreed between the parties would be
referred to Arbitration.
18
11. THAT accordingly, in view of Clause 5 of the Agreement above stated, the parties
having entered into and signed the said Agreement by consent, are bound to refer
any and/or all such matters in dispute touching on the said Agreement to
Arbitration.
12. THAT the Applicant is ready, able and willing to proceed to Arbitration on any dispute
arising between the parties as stipulated in the Agreement.
13. THAT I am advised by the Applicants Advocates on record Messrs. Xxx and
Company, which advice I verily believe to be true, that the Third Party
proceedings instituted against the Applicant in the Superior Court are an abuse of
the process of Court in light of the provisions of the Agreement and of the
Arbitration Act, 1995.
14. THAT having been enjoined in the suit as Third Party, the Applicant instructed its
Advocates to apply for a Stay of Proceedings which application was filed on 11 th
September, 2001.
Annexed hereto at pages 1 to 107 of the exhibit marked RVN 1 are true copies
of the Pleadings and applications filed in the Superior Court, the Order, the Notice
of Appeal and letter requesting for proceedings together with a Draft
Memorandum of Appeal.
15. THAT I am informed by our Advocates on record that the application was argued
before the Hon. Justice Mbaluto on 28 th September, 2001 but the same was
dismissed by a Ruling dated and delivered on 30th November, 2001.
16. THAT I am also informed by the said advocates, which information I verily believe to be
true that, as soon as the Ruling was delivered, they sought leave to appeal which leave
was granted.
19
17. THAT unless this Court orders a Stay of Proceedings in HCCC No. ,,,,,,, of 2001, I
am apprehensive that the Advocates for the 2 nd Respondent will apply for
Judgement in default of Defence. If this should happen and the Judgement is
entered, the Applicant will suffer loss and prejudice as the amount at stake is
huge. The amount claimed by the 2 nd Respondent is Kshs.32,940,408 as at 20 th
July, 2001 plus costs and interest.
18. THAT I am also apprehensive that in the event that the sum is paid over to the 2 nd
Respondent, it would not be in a position to refund the money if the intended
appeal is successful.
19. THAT in the circumstances, I verily believe that it is in the interest of justice that
Stay of all further proceedings in Milimani HCCC No. ,,,,,,, of 2001 be granted as
prayed herein.
20. THAT what is deponed to hereinabove is true to the best of my knowledge save as
to matters deponed to on information sources whereof have been disclosed and
matters deponed to on belief the grounds whereupon have been given.
SWORN BY the said ggggggggg )

ggggggggggggggg )
at Nairobi this day of 2001 )
)
)
BEFORE ME )
)
COMMISSIONER FOR OATHS )
20
DRAWN AND FILED BY:-
Xxx & Company

Advocates,
Xxx,
,,,,,,,
P. O. Box xxx
21
REPUBLIC OF KENYA
VERSUS
BETWEEN
DRAFT MEMORANDUM OF APPEAL
The Appellant, being dissatisfied with the Ruling delivered by the Honourable Mr.
Justice Tom Mbaluto on the 30th day of November, 2001 hereby appeals to the Court
of Appeal against the whole of the said Ruling on the following grounds:
1. THAT the Learned Judge erred in law by failing to allow the Applicants
application dated 10th September, 2001 which sought to refer this matter to
Arbitration as per the Agreement between the Applicant and the 2 nd
Respondent.
22
2. THAT the Learned Judge erred in law by failing to have due regard and to take
into account the various issues raised in the Affidavits of Xxx and ,,,,,,, sworn
on 10th September, 2001.
3. THAT the Learned Judge misdirected himself by finding that the Applicant had
disentitled itself of its right to invoke the provisions of Section 6 of the
Arbitration Act by reason of delay.
4. THAT the Learned Judge misdirected himself by finding the Applicant guilty of
delay when the period between filing appearance and filing the Application
had been fully explained.
5. THAT The Learned Judge erred by failing to consider any of the Authorities
cited in support of the Application.
6. THAT the Learned Judge misdirected himself when he found contrary to Law
that in order for the Applicant to invoke the provisions of Section 6 of the
Arbitration Act, it ought to have filed its Application at the time Defence was
due.
7. THAT the Learned Judge erred in Law and in fact by finding the Applicants
case unmeritorious and dismissing the same with costs.
8. THAT in all the circumstances of the case, the Learned Judge failed to do
justice before him.
It is proposed to ask this Honourable Court for Orders that :-
23
(a) The Appeal be allowed.
(b) The dispute between the Appellant and the 2 nd Respondent be referred to
Arbitration.
(c) That pending the Award of the Arbitrator, all proceedings in Milimani HCCC
No. ,,,,,,, of 2001 be stayed.
(d) The Order made by the Learned Judge in the Superior Court as regards costs
be set aside.
(e) The Appellant be awarded the costs of this Appeal and in the Superior Court.
DATED at Nairobi this day of 2001.
XXX & COMPANY

ADVOCATES FOR THE APPELLANT
To:
The Honourable Judges

of the Court of Appeal of Kenya at Nairobi.
DRAWN & FILED BY:
Xxx & company,

Advocates,
Xxx,
,,,,,,,,
P. O. Box xxx, 00100,
NAIROBI.
24
TO BE SERVED UPON:
cccccccc
Loita Street,
NAIROBI.
LODGED in the registry at Nairobi this day of 2001.
DEPUTY REGISTRAR
COURT OF APPEAL
25

Stay Rule 5 CAR1

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REPUBLIC OF KENYA

IN THE COURT OF APPEAL AT NAIROBI

ccccccccccccccccccc ...................... APPLICANT

ccccccccc LIMITED...2nd RESPONDENT

mmmmmmmmmmmm LIMITED.......................THIRD PARTY

DRAWN & FILED BY

ADVOCATES FOR THE APPLICANT

XXX LIMITED ...................... APPLICANT

XXX LIMITED...................1 st RESPONDENT

XXX LIMITED...2nd RESPONDENT

XXX LIMITED.......................THIRD PARTY

ITEM DOCUMENT PAGE(S)

4. Third Party Notice 13-18

5. Memorandum of Appearance 19-20

6. Certificate of Urgency 21-22

7. Chamber Summons dated 10th September, 2001 23-26

8. Affidavit of Xxx 27-30

9. Chamber Summons dated 10th September, 2001 31-34

10. Affidavit of R.V. Narasimhan 35-39

11. Annextures 40-49

12. Third Partys List of Authorities 50-51

13. Affidavit of Service 52-54

14. Grounds of Objection 55-56

15. Certificate of Urgency & Chamber Summons dated

17. Grounds of Objection 62-63

18. Replying Affidavit of Osman Maalim 64-66

19. Annextures thereto 67-94

20. Ruling of 30th November, 2001 95-101

21. Order 102-104

22. Notice of Appeal 105-106

23. Letter requesting for proceedings 107

XXX LIMITED ...................... APPLICANT

XXX LIMITED...................1 st RESPONDENT

XXX LIMITED...2nd RESPONDENT

XXX LIMITED.......................THIRD PARTY

DATED at Nairobi this day of 2001.

XXX & COMPANY

DRAWN & FILED BY:

Xxx & company,

XXX LIMITED ...................... APPLICANT

XXX LIMITED...................1 st RESPONDENT

XXX LIMITED...2nd RESPONDENT

XXX LIMITED.......................THIRD PARTY

AFFIDAVIT IN SUPPORT OF URGENCY

1. THAT I am an Advocate of the High Court of Kenya practising as a Partner in

6. THAT subsequently, I wrote to the Defendants Advocates seeking an extension

9. THAT my assistant, one Edith Muriu, attended Court on 28 th September, 2001

SWORN by the said XXX )

DRAWN & FILED BY:

Xxx & Company,

XXX LIMITED ...................... APPLICANT

XXX LIMITED...................1 st RESPONDENT

XXX LIMITED...2nd RESPONDENT

XXX LIMITED.......................THIRD PARTY

1. THAT pending the lodging, hearing and determination of the Applicants

ON THE GROUNDS THAT:

1. Unless the application, which seeks a stay of further proceedings in Milimani

(a) The sum at stake, standing at Kshs.32,940,408.00 as at 20 th July, 2001,

4. The balance of convenience clearly weighs in favour of the Applicant in this

This application is supported by the affidavit of RAMALINGAM VENKITACHALAM

Lodged at the Nairobi Registry on the day of 2001.

DRAWN & FILED BY:

Xxx & company,

XXX LIMITED........................... APPLICANT