Chemelil Sugar Football Club & another v Nick Mwendwa & 2 others; Tusker FC & 22 others [2020] eKLR

Key Facts

Transaction Type

Issues

• Whether the FKF-KPL Agreement terminated due to the COVID-19 pandemic as a force majeure event. The Tribunal rejected this plea, emphasizing the Agreement governed the relationship and the pandemic did not absolve the 3rd Respondent of obligations.
• Whether the Petitioners exhausted internal dispute resolution processes. The Tribunal found the joint executive committee mechanism inoperative due to expired terms, blocking meaningful resolution and justifying direct legal action.
• Whether the 3rd Respondent breached the 2015 Agreement by unilaterally declaring a league winner. The Tribunal declined to rule on this due to the petition's invalidity but noted the Agreement's clauses (2.1a, d, g) were allegedly violated.
• Whether the Sports Disputes Tribunal has jurisdiction to determine the petition and whether it qualifies as an arbitral tribunal under arbitration law. The Tribunal concluded it has jurisdiction based on the Agreement and its statutory role, rejecting arguments that it lacks parity or impartiality.
• Whether the 2nd Petitioner had proper authority to institute the petition. The Tribunal dismissed the petition due to lack of valid company resolution, though it noted the issue was moot after the 1st Petitioner's withdrawal.
• Whether the current petition is barred by previous rulings in SDT Petition No. 41 of 2016. The Tribunal found parts of the petition res judicata (specific prayers) but allowed other novel issues not previously addressed.

Holdings

• The Tribunal held that it has jurisdiction to determine the petition as the Agreement explicitly refers disputes to the Sports Disputes Tribunal. It is a statutory tribunal, not an arbitral one, and its structure aligns with public law requirements.
• The plea of force majeure was rejected as a red herring. The Tribunal acknowledged the pandemic's impact but found the Respondents' actions breached the Agreement by usurping the Petitioner's authority.
• The petition was dismissed for want of authority. The 2nd Petitioner failed to demonstrate valid resolution sanctioning the CEO to institute proceedings, and the institution was not ratified.
• The Tribunal found that internal dispute resolution mechanisms were infeasible due to the expired Joint Executive Committee and the Respondents' refusal to engage, excusing the Petitioners from prior exhaustion.
• The matter was partially res judicata. While prayers 5, 6, and 7 were barred by prior rulings, other issues in the petition remained undetermined and admissible.
• The petition was ultimately dismissed for lack of authority, though the Tribunal noted its other findings. Each party was directed to bear its own costs.
• Breach of contract claims were dismissed as the 1st Respondent's actions were not authorized by the 3rd Respondent, and the Petitioner failed to establish a valid contractual breach.

Remedies

• The Tribunal ordered that each party involved in the proceedings shall bear its own costs. This decision was made in light of the conclusion that the Petition was invalid due to lack of proper authority, and thus no party was to be held liable for the costs of the other.
• The Tribunal dismissed the Petition filed by the 2nd Petitioner, Kenya Premier League Limited, due to lack of proper authority and resolution. The Petition was initiated without the necessary corporate approvals, rendering it invalid. Additionally, the Tribunal ruled that each party shall bear its own costs in relation to the proceedings.

Legal Principles

• The tribunal considered the argument that the FKF-KPL Agreement was terminated due to force majeure (frustration) caused by the COVID-19 pandemic. It rejected this plea, emphasizing the Petitioner had already suspended the league due to the pandemic but the core issue was the Respondents' unauthorized cancellation of the season.
• The court applied the doctrine of res judicata to determine whether certain issues in the current petition had already been finally decided in SDT Petition No. 41 of 2016. It concluded that prayers 5, 6, and 7 of the petition were res judicata because the Tribunal had previously issued a permanent injunction restraining interference with the Petitioner's rights. However, the court found the petition not entirely res judicata as other novel issues remained.

Precedent Name

• Samuel Njau Wainaina v Commissioner of Lands and Others
• CASE 2018/A/5779, Zamalek Sporting Club -VS- FIFA
• East Africa Safari Air Ltd -vs- Antony Ambaka Kegode & Another
• Bugerere Coffee Growers Ltd vs Sebaduka & Another
• Omondi v National Bank of Kenya Limited and Others
• Haither Haji Abdi and another -vs.- Southdowns Developers and others
• Nathaniel Ngure Kihiu -vs.- Housing Finance
• East African Portland Cement Ltd v Capital Markets Authority & 4 others
• Republic vs Registrar General and 13 Others
• Edwin Thuo v Attorney General & Another
• England and Wales Cricket Board vs. Kaneria
• Mavuno Industries Limited & 2 Others vs Keroche Industries Limited
• Walkinshaw vs. Diniz
• Peter Omwando -vs- Nick Mwendwa & Others
• Leo Investments Ltd vs Trident Insurance Co. Ltd

Key Disputed Contract Clauses

• Clause 2(a) and (d) of the FKF-KPL Agreement explicitly required FKF to ensure KPL had the exclusive, full, and unhindered right to manage the Kenyan Premier League, including branding and commercial rights. The Petitioners alleged that FKF's unilateral cancellation of the 2019/2020 season and public announcements (e.g., declaring a champion) violated these clauses by interfering with KPL's management authority.
• Article 10.2 of the Agreement stipulated that any unresolved disputes must be referred to the Sports Disputes Tribunal under the Sports Act, 2013. The Petitioners argued this clause established the Tribunal's jurisdiction, while the Respondents contested whether the Tribunal qualified as an arbitral body under FIFA statutes, asserting it lacked impartiality and procedural fairness.
• Clause 12.1 stated the 2015 Agreement constituted the entire understanding between the parties, superseding prior negotiations. The Petitioners relied on this to argue that internal dispute resolution mechanisms (e.g., the Joint Executive Committee) were the sole pathway for resolving conflicts, which the Respondents failed to activate due to expired governance terms.
• Article 19(c) of the KPL Constitution required the CEO to act under the Governing Council's direction. The Respondents argued the CEO lacked authority to institute the petition without a council resolution. The Tribunal found the petition invalid due to this lack of corporate authorization, though it acknowledged the resolution could have been filed later under the Companies Act.
• Rule 2.6 of the FKF Rules and Regulations Governing Kenya Football (2019) defined force majeure as events beyond reasonable control, including pandemics. The Respondents claimed the COVID-19 pandemic triggered force majeure, allowing them to cancel the season. The Tribunal rejected this, noting the Agreement governed the relationship and the pandemic did not absolve FKF of contractual obligations.

Cited Statute

• FKF-KPL Agreement
• Sports Act, 2013
• FKF Rules and Regulations Governing Kenya Football (2019)
• Companies Act, No. 17 of 2015
• Constitution of Kenya, 2010
• Civil Procedure Act, Chapter 21

Judge Name

• John M. Ohaga
• Gabriel Ouko
• E. Gichuru Kiplagat

Passage Text

• 15. I find and hold that all matters concerning the parties in respect of the suit property are now res judicata. The substance of the case as between the petitioner and Southdown is whether the sale by the Kenyac was valid or not. The Court has already made determination as to propriety of the sale. The petitioners had a full opportunity to make all allegations regarding that sale including allegations regarding the position of one of the directors of Southdown and it would be improper to re-open a matter that has been determined by a Court of competent jurisdiction.
• 80. However, the Tribunal notes that it did not directly speak upon the matter in issue in the present Petition.
• 128. To summarize therefore, the Panel has come to the conclusion that the action was commenced without the authority or sanction of the 2nd Petitioner and neither Jack Oguda nor the firm of CMO & Company Advocates had the requisite authority and competence to commence and sustain this action. The Petition is accordingly dismissed.

Damages / Relief Type

• Prohibition orders to stop respondents from interfering with KPL's exclusive rights to manage the league
• Stay orders against respondents for making the unlawful decision to cancel the KPL season 2019/2020 pending inter partes hearing
• Mandamus to compel respondents to allow KPL to manage the league without interference as per the 2015 Agreement
• Certiorari to quash the unlawful decision to cancel the KPL season 2019/2020
• General and punitive damages for intentional breach of the 2015 FKF-KPL Agreement