In this article, the hydrodynamical instability initiation criterion in two-phase stratified flow in a horizontal duct is examined. The nonlinear two mass and two momentum conservation equations are used for numerical simulation using the two-phase two-fluid model. The model is solved using the Finite Volume and Spectral Methods, respectively. This paper is the first to utilize the Spectral Method for the simulation of two-phase flow problems. Using the Spectral Method, we show that the numerical error and CPU time decreases noticeably relative to the Finite Volume Method. The well established Kelvin-Helmholtz (K-H) instability is selected for the test case and comparison. The results taken from each set of computer codes developed in this paper are highly compatible with the theoretical and experimental results of previous researchers who used alternative numerical methods. The results obtained from the Spectral Method in comparison with the results of other well known codes exhibit greater consistency with prior analytical results, but with much smaller computer calculation time. The step taken in the present study shows a positive progress in two-phase two-fluid model numerical solution with hydrostatic assumption. It is recommended the research to be continued with two-phase twofluid model but with hydrodynamical assumption.