KENYA’S LESSON FROM SINGAPORE: A PLEA OF TIME LIMITATION UPON PARTIAL OF FULL SETTING ASIDE OF AN ARBITRAL AWARD.

While enacting their domestic legislations, countries tend to borrow from the Model Law on International Commercial Arbitration. However, based on unique experiences, countries have made improvements to the Model Law proposals. Singapore’s Section 8A(2) of the International Arbitration Act (IAA) is such an improvement when compared to Kenya’s Arbitration Act, 1995. Section 8A(2) of the IAA provides;

The General Division of the High Court may order that in computing the time prescribed by the Limitation Act 1959 or the Foreign Limitation Periods Act 2012 for the commencement of proceedings (including arbitral proceedings) in respect of a dispute which was the subject matter of;

• An award which the General Division of the High Court orders to be set aside or declares to be of no effect; or
• The affected part of an award which the General Division of the High Court orders to be set aside in part or declares to be in part of no effect, the period between the commencement of the arbitration and the date of the order referred to in paragraph (a) or (b) is to be excluded.

The import of this provision is to ensure that a party which has successfully obtained an award in the arbitration and then seen it set aside by the court is not barred by statute of limitation from initiating fresh arbitration or court proceedings.

In Kenya, there is no equivalent enactment. This means that a plea of limitation of action may be raised where a arbitration party which successfully obtained an award in the arbitration but saw it set aside attempts to initiate new proceedings. In absence of a provision in Arbitration Act allowing the court setting aside to exclude the period between the commencement of the arbitration and the date for partial or full setting aside in computing the time for purposes of Limitation of Actions Act contractual limitation of time agreed upon by the parties, the court may not order such exclusion.

Curial intervention in Arbitration matters is highly circumscribed under section 10 of the Arbitration Act. The section pithily provides that a court shall only intervene in matters governed by Act only where the Act allow intervention. The limitation under this section to means that a court in Kenya cannot derive any power from the Act allowing the exclusion of time between the commencement of the arbitration and the date for partial or full setting aside in computing the time for purposes of Limitation of Actions Act as a court in Singapore.

Where a court in Kenya allows an application for setting aside an arbitral award, it may be an irresistible and convincing argument that it possesses no powers to remit an award it has set aside for determination by the either fresh of a new Arbitrator. The effects of setting aside of the award is that the award ceases to exist and the dispute remains unresolved. This position was affirmed in the Singapore’s AKN and Another v ALC and Others and Other Appeals [2015] SGCA 63

Unlike court process in Kenya where a court to which an appeal lies may remit a case for rehearing to the court from which the appeal was preferred, a remittal seems unavailable in arbitral proceeding where an award is set aside. A remittal is however expressly available before setting aside order pursuant to provisions of sections 35(4) of the Arbitration Act.

A party which successfully obtained an award in the arbitration but saw it set aside and later faced with an objection on time limitation on the cause of action upon its attempts to initiate new proceedings, may seem without a remedy. However, such a party may file an application relying on provisions of the Constitution of Kenya and creatively seek to persuade court to allow exclusion of time between the commencement of the arbitration and the date for partial or full setting aside in computing the time for purposes of Limitation of Actions Act.

An amendment to have an equivalent of section 8A(2) of the Singapore’s IAA may cure the lack of clarity and the injustice that may flow.