Digital Divide Data Kenya Ltd v. Coretec Systems and Solutions Ltd [2020] eKLR

Digital Divide Data Kenya Ltd v. Coretec Systems and Solutions Ltd [2020] eKLR
April 23, 2020
Commercial and Tax Law

• Court: High Court of Kenya at Nairobi

• Judge: Hon. Justice W.A. Okwany

• Date: 23 April 2020

• Case No.: Misc. Civil Application No. E052 of 2018 (consolidated)

• Outcome: Application to set aside arbitral award dismissed; enforcement upheld.

Background

Digital Divide Data Kenya Ltd was subcontracted by Coretec Systems to provide digitization services. A dispute arose over non-payment, leading to arbitration as provided in their contract. Digital Divide initiated the arbitral process after Coretec failed to engage.

Arbitral Proceedings

Coretec ignored multiple invitations to participate in the arbitral process, despite being served. The arbitrator proceeded, and on 4 May 2018, awarded Digital Divide the disputed amount. The award was adopted and enforced by the court on 27 September 2018.

Court Applications

Coretec sought to:

• Set aside the award (claiming no notice or participation),

• Stay execution, and

• Challenge service of the enforcement application.

However, evidence—including stamped letters and ignored invitations—proved Coretec was properly served and failed to act. The court emphasized that their silence amounted to a waiver of rights under Section 5 of the Arbitration Act.

Court’s Decision

1. Service Was Valid:
   Court upheld that service of documents and arbitral notices was duly effected.

2. No Grounds to Set Aside:
   The claim of being unaware of proceedings was dismissed due to overwhelming contrary evidence.

3. Competence of Tribunal Affirmed:
   The tribunal had proper jurisdiction and Coretec’s objections were time-barred.

4. Award Already Enforced:
   The award had already been recognized, making the setting-aside application moot.

Ruling

• Coretec’s application dated 1 August 2018 dismissed with costs.

• No stay of execution or security deposit required.

• Enforcement of the arbitral award upheld.

Significance

This case underscores:

• The binding nature of arbitration and the importance of participation.

• Courts’ reluctance to overturn arbitral awards once enforcement is underway.

• Silence or inaction during arbitration can waive the right to object later.