Automated Summary
Key Facts
This case involves a dispute over jurisdiction in an employment contract between Arthur Kawino (Claimant) and Population Services International (PSI) (Respondent). The Respondent argued that the Kenyan court lacks jurisdiction because the contract explicitly states it is governed by the laws of the District of Columbia, and the contract was primarily performed in the Republic of South Sudan. The Claimant, hired as a Business Operations Technical Advisor, initially worked in South Sudan but was later relocated to Nairobi due to security concerns. The court referenced precedents such as United India Insurance Co Ltd v East African Underwriters (1985) and Universal Pharmacy (K) Ltd v Pacific International Lines (2015), which uphold parties' freedom to contract under foreign jurisdictions unless there is manifest fraud or coercion. The court concluded that the governing law clause in the contract effectively ousts Kenyan jurisdiction, resulting in the Claimant's case being struck out. Both parties agreed to bear their own costs.
Transaction Type
Employment Contract
Issues
- The court evaluated whether the parties' agreement to be bound by applicable US laws, through their contract's governing law clause, precludes the Kenyan court from handling the dispute.
- The court considered whether it had jurisdiction to hear the case given the employment contract's clause 13(c) which states that the agreement is governed by the laws of the District of Columbia, thereby ousting Kenyan court jurisdiction.
- The court examined if the contract was wholly performed in the Republic of South Sudan, which is outside the jurisdiction of the Kenyan court, as a basis for the preliminary objection.
Holdings
- The Claimant's claim was struck out as the court concluded it had no jurisdiction to entertain the matter based on the contract's governing law provision.
- The court held that the express term in the employment contract governing the laws of the District of Columbia effectively ousts the jurisdiction of the Employment and Labour Relations Court in Kenya, leading to the dismissal of the claim.
- Parties are bound by the terms of their employment contract, including the governing law clause, unless there is manifest fraud, coercion, or undue influence, which the court found absent in this case.
Remedies
- The Court ruled that it lacks jurisdiction to entertain the Claimant's claim, which is consequently struck out. The Court found no reason to interfere with the express term on governing law in the employment contract.
- The Court ordered that each party will bear their own costs.
Legal Principles
The court applied the principle that parties are bound by their contractual agreements on governing law and jurisdiction, as per the doctrine of Pacta Sunt Servanda, unless there is manifest fraud, coercion, or undue influence. The Claimant's contract specified that it would be governed by the laws of the District of Columbia, and the Court found no reason to interfere with this agreement, leading to the conclusion that Kenyan courts lack jurisdiction.
Precedent Name
- United India Insurance Co Ltd & 2 others v East African Underwriters (Kenya) Ltd
- Universal Pharmacy (K) Limited v Pacific International Lines (PTE) Limited & another
Key Disputed Contract Clauses
Clause 13(c) of the employment contract, which explicitly states that the agreement will be governed by the laws of the District of Columbia without regard to its choice of law principles, formed the central contractual provision disputed in this case. The Respondent relied on this clause to assert foreign jurisdiction, while the Claimant argued for Kenyan court jurisdiction despite the contractual provision.
Judge Name
Linnet Nduo
Passage Text
- 8. In the instant case, the Court found no reason to interfere with the express term on governing law as contained in the Claimant's employment contract, which effectively ousts the jurisdiction of this Court. The result is that this Court lacks jurisdiction to entertain the Claimant's claim which is consequently struck out.
- 4. The subject matter of the preliminary objection raised by the Respondent is clause 13 (C) of the Claimant's contract of employment which states the following: "This agreement will be governed by the laws of the District of Columbia, without regard to its choice of laws principles."
- 6. The Court was referred to the decision in United India Insurance Co Ltd & 2 others v East African Underwriters (Kenya) Ltd [1985] KLR where it was held that parties who have agreed to the exclusive jurisdiction of a foreign court should be held to their bargain, except in exceptional circumstances.
Damages / Relief Type
Each party to bear their own costs