Litigation 2019 Second Edition Comparisons

Last Updated December 05, 2019

Contributed By Mohammed Muigai LLP

Law and Practice

Authors



Mohammed Muigai LLP was founded in 1988 and has grown to become a leading law firm in Kenya. Recognised for its pre-eminence in the provision of specialised legal advisory services, high level dispute resolution (through both litigation and ADR mechanisms) and handling complex and high-value conveyancing and commercial transactions. The firm has a keen understanding of the legal, commercial and regulatory environment in Kenya. Among other areas, the firm has substantial expertise in property law and conveyancing, commercial law and litigation, public procurement, corporate and financial services, corporate restructurings, M&A, employment law, intellectual property, insurance and tax matters. Today we have seven partners, eleven associates and a dedicated team of support staff offering expert legal advice to corporate entities, banks, insurance and financial institutions, governments and private clients. Our members have varied educational and professional backgrounds with exposure to Kenyan and other legal systems helping the firm to find innovative solutions to client challenges.

The legal system in Kenya is based on the common law. This is expressly acknowledged in the Country’s Judicature Act which makes provisions on the court’s jurisdiction. It provides that, in addition to the Constitution and all written law, the substance of the common law is to apply in Kenya. The legal system adopts an adversarial model with the court being an impartial arbiter of the disputes before it. The impartiality of the court is a crucial element of this legal system. Litigants have a constitutional right to have their disputes determined before an independent and impartial arbiter.

The manner in which parties present their case varies with the type of case. Most cases will involve the parties giving their testimonial and documentary evidence and, thereafter, submitting their arguments in the form of written submissions made to the court. However, in cases such as constitutional petitions and applications for judicial review of administrative decisions, parties may file written submissions and, thereafter, make oral arguments highlighting those written submissions.

The Constitution of Kenya sets out the structure of the court system. The courts have two tiers – subordinate courts and superior courts. Subordinate courts are comprised of the Magistrates' Courts, Kadhis’ Courts and the Court Martial. But this list is not conclusive. Parliament has the power to set up additional subordinate courts and it recently exercised this power to set up the Small Claims Court. The main subordinate court is the Magistrate's Court and its jurisdiction is fairly wide. This includes most civil disputes, criminal matters and matrimonial causes. This means that most suits are instituted in the Magistrate's Court.

The superior courts, in order of ascendancy, are the High Court, the Court of Appeal and the Supreme Court. Like the other superior courts, the High Court can hear appeals from courts which are subordinate to it. But unlike the other superior courts, the High Court has unlimited original jurisdiction. Due to the wide scope of matters which can be heard by the High Court, the Chief Justice has been given the power to divide the Court into divisions. He has exercised this power and divided the High Court into the following divisions: the Family and Children Division, the Commercial and Admiralty Division, the Civil Division, the Criminal Division, the Constitutional and Human Rights Division and the Judicial Review Division. In addition to these divisions, the Constitution has established two courts of the same rank as the High Court to deal with specialised causes of action – the Employment and Labour Relations Court and the Environment and Land Court. The judges in these two courts are selected from among legal practitioners or academics who have expertise in the causes of actions the courts are specialised in.

The Court of Appeal hears appeals from the High Court, the Employment and Labour Relations Court and the Environment and Land Court. If the matter was instituted in the High Court, a party can challenge both the factual and legal aspects of a decision. If the matter originated from a subordinate court and the appeal is a second appeal, a party is restricted to challenging the legal aspects of a decision.

The Supreme Court is the final superior court. But its jurisdiction is limited. It can hear and decided a limited range of matters. It is the only court which can hear and determine election petitions on the country’s presidential election. For an appeal to be made from the Court of Appeal to the Supreme Court, it must involve the interpretation of the Constitution of Kenya or raise an issue of general public importance, it is the Court of Appeal which certifies this. But if certification is denied, a party can apply to the Supreme Court to review it. In Hermanus Phillipus Steyn v Giovanni Gnecchi-Ruscone [2013] eKLR, the Supreme Court explained that a matter of general public importance was one which was one of law, which demonstrated that a substantial portion of the law was involved and whose determination had a bearing on public interest.

In most cases, court filings and proceedings are available to the public. The Constitution provides that disputes in court should be resolved in a fair and public hearing. The effect of this is that members of the public may freely attend court proceedings or may peruse filings at the court registry. But this is not always the case. The Constitution provides that the press and members of the public may be excluded from proceedings in order to protect the identity of witnesses, and vulnerable people or to preserve morality, public order or national security. This should cover cases involving children or where the safety of witnesses may be comprised if their identity is revealed as well as matrimonial proceedings. If a party believes that the details of their case, their identity or that of their witness should be confidential, they can apply to the court and invoke its inherent power to make such orders as may be necessary for the ends of justice to be met.

Legal representation in Kenya is restricted to people admitted as advocates of the High Court of Kenya. Their name must also appear in the roll of advocates and they must have a current practising certificate. These legal representatives can address a court on behalf of a litigant or an interested party, can file documents on their behalf and may bind them to consents or settlement agreements made with other parties in the court.

A foreign lawyer may represent a client in a Kenyan court, but the avenues are limited. They may be admitted by the Attorney General to practise as an advocate in a specific suit. But this is very rare and mostly involves matters the Attorney General has an interest in.

Parliament is yet to enact a statute or authorise regulations which prevent third parties from funding the litigation costs of a party in court matter. There are also no restrictions in Kenyan law on the funding arrangements such a party may have with third parties.

Please refer to 2.1 Third-Party Litigation Funding.

Please refer to 2.1 Third-Party Litigation Funding.

Please refer to 2.1 Third-Party Litigation Funding.

Please refer to 2.1 Third-Party Litigation Funding.

The Advocates Act provides that an agreement which provides for contingency fees shall be an invalid agreement. Contingency fees are also expressly forbidden under the Fatal Accidents Act (Chapter 32, Laws of Kenya) which states that where an award is made under the act, the total amount must be paid to the dependants and as such no creditors are permitted to be paid any part of this sum.

Please refer to 2.1 Third-Party Litigation Funding.

Parties are usually advised to issue a pre-action demand letter informing the other party of their grievances, how they propose to address them and the period within which they should hear from the other party. There are no statutory rules or authorities which provide that such a letter must be issued. In fact, Mr. Justice Gikonyo, in Stanley Kaunga Nkarichia v Meru Teachers College & another [2016] eKLR, held that failure to issue a pre-action demand letter does not affect the decision or the costs awarded by the court.

There is also no legal obligation on a defendant to respond to a pre-action letter. But there are certain causes of action, such as defamation, where it would be beneficial for a defendant to respond to such a letter in order to demonstrate that there was no malice in making an alleged defamatory statement.

Each cause of action has a period within which it should be taken to court. These periods are primarily provided for in the Limitation of Actions Act. For example, the Act provides for a limitation period of three years in tort, six years for a breach of contract and 12 years for actions to recover land. There are other statutes such as the Employment Act which provide that parties to an employment contract have three years to institute legal proceedings for breach of the contract.

The limitation period primarily commences when the cause of action arises. But the period may commence at a later date, for example when, by reason or fraud of mistake by a defendant, a party discovers at a later date that they have been wronged.

The party instituting the suit has the choice of filing a suit either where the cause of action arose or where the defendant resides. The location where the cause of action arose has a wide meaning and may include where a contract was made or performed by the parties. If a defendant resides in another Country, the Civil Procedure Rules provide for a process through which the court filings may be transmitted to the country where the defendant resides and served upon them.

Diplomats and other persons who have diplomatic immunity – by virtue of the Vienna Convention on Diplomatic Immunity, the Privileges and Immunity Act and other statutes which confer diplomatic immunity on entities in the country – may not, in certain situations, be subjected to the jurisdiction of the Kenyan courts

In most situations, the initial complaint is set out in a document known as a plaint. This will be the case except where the Civil Procedure Rules provide otherwise. For example, application for judicial review would be made through a notice of motion once leave is granted, divorce proceedings and disputes on the application or interpretation of the Constitution are instituted by petition.

A party is permitted to amend its pleadings, but how they may amend will depend on the stage that the matter has reached. If parties are still exchanging their primary pleadings, then the party will not need the leave of the court to amend. If pleadings have closed and parties have exchanged their primary pleadings, the party must seek leave of the court before amending their pleadings.

A party should, where practical, be served personally with pleadings filed in court. Service is the responsibility of the party who wishes to serve the pleading. If the other party is a company or a corporation, the pleadings should be served upon its principal officer, secretary or director. If it is not practical to serve the pleadings personally, the serving party should seek leave of the Court to effect substituted service. This substituted service may include serving a party through their registered post or through a newspaper of wide circulation. It is however critical in the leave application to demonstrate that it is not practical to serve the other party with the pleadings personally.

A party can be sued outside the jurisdiction, but the court’s leave is needed for this. Once they have such leave, they can liaise with the Kenyan Ministry of Foreign Affairs which would then transmit their pleadings to the court in the other country which is nearest to the physical location of the defendant for service.

There are situations where, upon being served with summons to enter an appearance, a party either fails to enter an appearance or enters an appearance but fails to respond to the plaint. In such a case, the party instituting the suit may apply for either a judgment in default of appearance or for an interlocutory judgment.

Judgment in default of appearance will be entered where the claim is for a liquidated amount. The party who instituted the suit may then move on to executing the judgment. However, if the claim is for an unliquidated amount, interlocutory judgment will be entered, and the plaintiff will be required to prove the quantum of their damages at a formal proof hearing.

The Civil Procedure Rules envision representative actions such as class action suits or derivative suits. In such cases, the party instituting the suit is required to give notice to the other parties personally, or where that is not practical, to inform them through public advertisement that they are instituting a suit which concerns an issue which affects them. In Rose Florence Wanjiru v Standard Chartered Bank Kenya Limited & another [2015] eKLR, the court held that it is for the parties who have been notified to apply to join the suit. This is an opt–in process.

There is no positive obligation on advocates to give a client an estimate of the costs that they will incur in court proceedings. However, the client may, at the beginning of or during a matter, request that their advocate advise them on the costs which they are likely to incur.

The Civil Procedure Rules allow a party to file an interim motion before the substantive hearing of a claim. Such motions are not limited to case management issues, parties may also apply for interim relief. If the claim is for an interim injunction, a party must demonstrate that they have a prima facie case with high chances of success; that they stand to suffer irreparable harm; or, if the court is in doubt, that the balance of convenience rests with the court granting the order (see Giella v Cassman Brown & Company Ltd [1973] EA 358).

There are several ways in which early judgment may be sought by a party. Interlocutory judgment and the judgment in default of appearance have already been discussed in 3.6 Failure to Respond.

If a party makes an admission of facts, either in pleadings or during the matter, the other party may apply to the court for judgment on the admissions made. Alternatively, if the pleadings disclose no reasonable cause of action or defence in law, are scandalous, frivolous or an abuse of the court process, the court may order that they are struck out and the suit may be dismissed, or judgment entered, whichever the case may be.

In civil proceedings, there are instances where a matter may be disposed of without going to trial. These include: preliminary objections raised on points of law, applications to strike out the suit for either offending mandatory provisions of law or interlocutory judgments where the defendant has not set out a defence raising triable issues.

Interested parties, who have not already been joined as plaintiffs or defendants, may join suits. They or the other parties must apply to have them joined in the suit. The court will join them in the suit if they either have an identifiable interest in the subject matter of the lawsuit or if they are a necessary party to enable the court to effectively settle all the issues raised in the suit.

A defendant has the option of applying to have the plaintiff provide security for costs in a matter. The court has the discretion to make this order where it thinks it is reasonable to do so, but this order is predominantly made when the plaintiff resides in a foreign country and has no known assets in Kenya.

The general rule is that the costs of the motion will follow the event unless the court, for good reason, orders otherwise. Ordinarily the party who has been awarded the costs will wait until the end of the suit and have their costs assessed by the taxing master (a costs judge) who will determine the quantum of the costs they are entitled to. However, in special circumstances the court may order for the costs to be paid immediately or may direct that the costs of a particular application be dependent on the outcome of the suit.

It is difficult to estimate the timeframe a court will take to determine a motion. This will depend on the nature of the motion, the state of the court diary, the availability of a hearing date and the compliance by the parties with the timelines given by the court. However, motions can be dealt with on an urgent basis.

A party will have to pray, in the motion, that the matter be certified as urgent and be heard on a priority basis. The motion will be accompanied by a certificate of urgency prepared by an advocate of the High Court of Kenya who states the reasons why the motion should be heard urgently and certifies this. The motion will be presented to the court, ordinarily in chambers, for the court to consider whether the motion is urgent and give any ex-parte interim orders or directions on how the motion shall be dispensed with.

There is a mechanism for discovery which is available to parties to a civil case in Kenya. How this mechanism is exercised depends on the kind of evidence a party is seeking from the other side. If the evidence is testimonial, a party may file in court – and serve on the party – interrogatories which the other party will be required to answer. The discovery process is not limited to testimonial evidence. The court has the power to order the discovery of documentary evidence, but the court does not exercise this power of its own volition. One of the parties must apply to the court to exercise this power. The party may apply: to inspect documents held by the other party, for documents to be produced or for documents which they had given to the other party to be returned.

The Civil Procedure Rules do not specifically provide for the scope of the discovery which the court may order. They provide that the orders made on discovery should be necessary or reasonable. If the scope of the discovery sought by an applicant is unnecessarily wide or may cause the party to whom the discovery is directed to incur unreasonable costs, the court may place restrictions or conditions on the type of discovery it orders. For example, the court may limit the documents or material which are to be produced or may order the party who applied for discovery to cover the costs of production or inspection.

The mechanism of discovery is not limited to parties to the suit. It extends to third parties. A party can apply to summon people to give evidence or produce documents that will assist the court in determining a suit. If a third party, despite being summoned, fails to appear before the court or to produce documents, the court has the power to issue warrants for their arrest, order the attachment or sale of their property or fine them. These are powers the court may use to ensure compliance with a summons.

Most litigation is conducted and concluded without a formal application for interrogatories. There may be an application for discovery in some cases, but this is not typical. Most cases will proceed on the basis of the witness statements and documents which the parties have filed in court. There is nothing to prevent a party who is dissatisfied with the evidence tendered by the other party from exercising the option of filing interrogatories or applying for the production, inspection or return of documents or similar material.

The rules of discovery detail how testimonial or documentary evidence may be sought from the other party. They do not specify the kind of documents or materials which may be sought from the other party.

As there is a discovery mechanism in civil cases in Kenya, no alternative methods for developing and admitting evidence have been established.

Legal advice is privileged in Kenya. An advocate instructed by a client may not disclose the communications they have had with a client during the course of their employment as an advocate. They are also not permitted to state the contents or conditions of any documents they came across in the course of their employment as a client’s advocate. This privilege persists even after the end of the advocate-client relationship.

The client may however waive the legal advice privilege. There are exceptions to the legal advice privilege. It does not apply where the communication is to further a breach of the law or if an advocate observes that a crime is being perpetrated by the client.

There is a distinction made between external and in-house counsel. In United Airlines Limited v Kenya Commercial Bank Limited [2017] eKLR the Court of Appeal held that an internal memo from a bank to its legal department was not covered by legal advice privilege as the relationship was not an advocate and client relationship.

The rules on compellability and privilege of witnesses provide for a list of documents and types of testimony which a person may not be compelled to disclose. This privilege covers judicial officers on their conduct in court proceedings, communication made between spouses in a marriage, documents or communications by public officers which will harm public interest if disclosed, and production by banks of banker’s books where the bank is not a party to the proceedings. The Constitution of Kenya adds that an accused person has the additional right not to be compelled to make any confession or admission which may be used in evidence against them.

The Courts have the power to grant a temporary injunction, or any other interlocutory order which is needed to prevent the ends of justice from being defeated in a suit. The Court of Appeal, in New Ocean Transport Limited & Another v Anwar Mohamed Bayusuf Limited [2014] eKLR, held that there are basically two types of injunction; positive and negative. A positive injunction directs a party to do something and a negative one restrains a party from doing something.

Mandatory injunctions are a good example of positive injunctions. In Kenya Breweries Limited v Washington Okeyo [2002] EA 109, the court held that an interlocutory mandatory injunction is only to be given in special circumstances. Special circumstances, the court explained, arise where the case is both clear and one which ought to be decided at once, or if the defendant is attempting to steal a march on the plaintiff.

There are several types of negative injunction and these include interlocutory and quia timet (restraint for wrongful acts which are imminent) injunctions as well as applications for Anton Piller orders (to search another party’s premises and seize evidence). If the interlocutory application is for a negative injunction, a party must demonstrate that they have a prima facie case with high chances of success; that they stand to suffer irreparable harm; or, if the court is in doubt, that the balance of convenience rests with the Court granting the order (see Giella v Cassman Brown & Company Ltd [1973] EA 358).

If circumstances are urgent, an application can be filed together with a certificate of urgency. The certificate is prepared by an advocate of the High Court of Kenya who should explain, in the certificate, why the application should be heard urgently. In addition to this, the application for injunctive relief will seek that the application be heard on a priority basis and will make a request for interim relief pending the hearing and determination of the application. Once these pleadings are filed, it will be for the court to certify the matter as urgent and issue interim relief if it believes it is necessary.

The application will be heard during work hours and the rules governing civil procedure do not provide for arrangements to be made for judges to hear applications out of hours.

The Court, if satisfied that the object of the application will be defeated by delay, may hear the application ex parte and give an interim injunction. The rules provide that this interim injunction may only be granted once and should not be for a period of more than 14 days. Any subsequent extension should have the consent of the parties or be by order of the court and should not be for a period of more than 14 days.

A party who has suffered damages because of an injunction against him or her, and which has subsequently been determined to have been granted on insufficient grounds, may apply to the court for an award of damages. The problem with this application is that the applicable rules cap the maximum damages at KES2000 (approximately USD20). However, two of the three Court of Appeal Judges, in Chatur Radio Service v Pronogram Limited [1994] eKLR, held that in such cases an advocate can make an undertaking to the court to pay for damages in case the injunction is discharged later on. They held that this undertaking is different from the damages contemplated in the Civil Procedure Act and may exceed the KES2000.

The jurisdiction of the court is limited to Kenya. It can only make orders against assets which are within this jurisdiction.

Parties have a constitutional right to a fair hearing. This means that in order for injunctive relief to be sought against third parties, they must first be joined in the proceedings. This will enable them to respond to the application for an injunction. The court has the power to join, either on its own motion or on application by one of the parties, a person who the court believes is necessary to determine the issues in a dispute.

If a respondent does not comply with the terms of an injunction, the court may, on application, find the respondent to be in contempt of the court and commit them to jail or fine them. Previously, the respondent had to be served personally with the order before contempt proceedings could be instituted against them. However, in Basil Criticos v Attorney General and 8 Other [2012] eKLR, it was held that personal service was no longer necessary. It is sufficient to demonstrate that the contemnor’s actions demonstrate that they had knowledge of the court order.

Trials in Kenya are primarily conducted through oral hearings. This involves witnesses testifying and being cross-examined by the other party or their legal representatives. However, some divisions of the High Court, such as the Civil and Commercial divisions, have dispensed with the need for examination in chief. Witnesses can file their statement and merely adopt them in court. They can then proceed to cross-examination. This has reduced the amount of time taken by trials.

Proceedings which mainly turn on issues of law or on the interpretation of the Constitution, such as applications for the judicial review of administrative decisions or constitutional petitions rarely have oral hearings. Parties file affidavits containing their evidence and then file written submissions containing their arguments.

Hearings of applications or interim motions are rarely conducted orally. Parties present their evidence through sworn statements (affidavits) and thereafter file their written submissions. Oral hearings in applications will be done where a party wishes to cross examine a party on an averment they made in their affidavit.

A case management conference has to take place before the hearing of a civil case. At this conference, parties will inform the court if they have complied with all pre-trial requirements and of the number of witness they intend to call, as well as confirming that they are not opposed to the production of the documents by the other side. Once this conference is concluded, the matter is certified as ready for hearing.

There are no jury trials in Kenya.

The detailed rules on the admission of evidence are contained primarily in the Evidence Act. It excludes evidence which is irrelevant or inadmissible. For purposes of this chapter, only a general overview is possible. Oral evidence must be direct evidence and not hearsay evidence. The contents of documents can be proved through primary evidence (the document itself) or secondary evidence (for example certified copies of the original documents). Documents should be produced by their maker, or together with a certificate by the maker. Similarly, for electronic evidence to be deemed admissible it must be accompanied by a certificate of authenticity. That certificate must be signed by a person holding a responsible position with respect to the management of the device from which the electronic evidence had been generated. There are witnesses who may not be compelled to give evidence; and the court may take judicial notice of facts such as written laws, proceedings of parliament, territorial boundaries and all matters of general and local notoriety.

The court can rely on the evidence of an expert to form an opinion on foreign law; science or art; or on handwriting, finger or other impressions or customs. Parties can introduce expert evidence, but the expert has to be available for cross-examination by the other party. The court’s role is to be impartial in the proceedings before it. It would not seek its own expert testimony or guidance without giving the parties an opportunity to participate. If neutral advice is needed, what is more likely is that the court would direct the experts called by the parties before it to prepare a joint expert report and present it to the court.

In most cases, court filings and proceedings are available to the public. The constitution demands that they are. It provides that disputes in court should be resolved in a fair and public hearing. This means that members of the public may attend court proceedings or may go to the court registry and request to peruse filings in a case, subject to the payment of the requisite fee. But this is not always the case. The Constitution provides that the press and members of the public may be excluded from proceedings in order to protect the identity of witnesses or vulnerable persons, or to preserve morality, public order or national security. This provision will cover cases such as those of children, witnesses whose safety will be jeopardised if their identity is known or matrimonial proceedings. If a party believes that the details of their case or their witnesses should be kept confidential, they have the option of invoking the court’s inherent jurisdiction to make such orders as may be necessary for the ends of justice to be met.

Judges are required to remain impartial during a hearing or trial. However, parties may object to how evidence is being led by the other party and the court will be required to make a determination on this. The court may also question the relevance of the evidence which is being presented and give directions on the time which should be taken at a hearing or trial.

The rules governing court procedure allow the court to pronounce judgment at once in court, or within 60 days from the conclusion of the trial. It is, however, very rare for the court to give its decision at the hearing. In the few instances where this has been done, it was a decision on an interlocutory application. However, for substantive hearings, the court will usually give the parties time to file written submissions containing their arguments and it will thereafter deliver its judgment within 60 days.

It is difficult to give an accurate time frame within which a commercial dispute will be determined. However, if this must be done, the determination of a commercial dispute can range anywhere from one year to six years depending on the nature of the matter, the available dates in the court diary and the compliance by the parties with the directions given by the court. Interlocutory applications in the matter may also delay the determination of the substantive dispute.

There are several routes parties may take to settle a suit. The court’s approval will be needed if they agree to record a consent before the court and have that consent recorded as an order of the court. This option is advisable if a party wishes to expeditiously enforce the terms of the consent in case the other party breaches them. The issue is that the terms of the consent will not be confidential as the consent order will be public. The other option is for the parties to privately enter into a deed of settlement where one of the clauses of the deed could be for the plaintiff to withdraw the suit.

The procedure is more express in criminal proceedings. The court has to be convinced that there are sufficient reasons before it can permit a complainant to withdraw their complaint.

The settlements of suit can be confidential if the parties enter into the deed of settlement described in 8.1 Court Approval, include a clause on confidentiality in the agreement and have the plaintiff withdraw the suit.

A settlement agreement which was subsequently recorded as an order of the court can be enforced as such. If it is for a liquidated sum, the parties may extract a decree and attach the other party’s properties. If it is for an injunctive order, the party may institute contempt proceedings.

A deed of settlement which has not been recorded as an order of the court will have to be enforced as any ordinary contract. This will mean the parties instituting a fresh suit claiming breach of the terms of the deed of settlement.

A settlement agreement can be set aside, but it is quite difficult to do so. In Board of Trustees National Social Security Fund v Micheal Mwao [2015] eKLR, the Court of Appeal held that a consent will be set aside in circumstances that are good grounds for varying or rescinding a contract. It must be shown that the settlement agreement was obtained by fraud, collusion or by an agreement contrary to the policy of the court.

There are several awards which are available to a successful litigant. But litigants must set out the award they seek in their initial complaint, usually the plaint. These kinds of awards vary with each case. In claims for breach of contract, a party will ordinarily seek special damages together with interest on those damages from the date of the breach, institution of the suit or date of the delivery of the judgment. Cases for negligence or concerning tort may have both general and special damages as well as prayers for injunctive relief. Constitutional petitions and applications for the judicial review of administrative decisions by the government may have declarations as well as forms of administrative relief, such as certiorari, mandamus and prohibition.

Damages may take various forms: general, special, exemplary or aggravated. General damages are usually for harm which cannot be quantified and are common in cases of tort. Special damages are for harm which can be quantified; for example, a contractual amount, repair or hospital bills. This form of damages is common in cases of breach of contract. Exemplary damages are awarded in rare circumstances. In Civil Appeal No 88 of 2016 (Nation Media Group vs Gideon Mose Onchwati & Anor), the Court of Appeal held that exemplary damages are awarded where the conduct of a defendant is deserving of punishment. Aggravated damages, in the same case, were held to arise where a defendant acts out of improper malice.

The normal rule is that general damages are discretionary, which discretion is to be exercised judiciously, without any formal upper limit. However, there are certain claims which have a cap on damages. For example, in claims for unfair termination of employment, the maximum amount one can claim against one's employer is the equivalent of 12 months’ salary.

Some contracts have clauses which provide for interest to accrue from the date of breach. In such cases, a party may pray for interest to accrue from the date when the contract was breached. In most cases interest will either be awarded from the date when the suit was filed or when the judgment was delivered. The Court may either order the post-judgment interest to accrue at the court rate (12% per annum) or at a rate which the court deems reasonable; or it may be silent on the interest rate. In Nicholas Sumba v Radio Africa Ltd, Jimmy Gathu & another [2017] eKLR, the court held that where the court is silent on the rate of the interest, it shall be 6%.

Once a party has obtained a judgment and their costs have been assessed by the court, they may extract a decree which sets out the amounts to which they are entitled; including the principal sum awarded, their costs and their interest at the date of the decree. Once a decree is extracted, a plaintiff has several options for enforcement. They may attach the movable property of the defendant, their bank accounts or even apply to the court to have them committed to civil jail.

The enforcement of foreign judgments is governed primarily by the Foreign Judgments (Reciprocal Enforcement) Act (hereinafter the Act). It provides for the enforcement of foreign judgments of superior or subordinate courts of particular countries which have reciprocal provisions in their laws relating to the enforcement of the judgments of Kenya’s superior courts. The assessment on whether a country qualifies as a reciprocating country, and its designation under the Act as such, is done by executive order. Presently, there are eight reciprocating countries, namely: Australia, Malawi, the Seychelles, Tanzania, Uganda, Zambia, the United Kingdom and the Republic of Rwanda.

However, if the foreign judgment is not covered under the Act, the common law principles on the enforcement of foreign judgments have been incorporated into Kenyan jurisprudence. Not all judgments are enforceable, for instance judgments on succession of the estate of deceased persons, on social security and bankruptcy proceedings. The judgment should originate either from a Commonwealth country or a country which the Minister for Foreign Affairs has declared to be a country with reciprocal provisions on the enforcement of judgments from Kenya.

In order to enforce a judgment which satisfies the above conditions, a party has to file an application before the High Court seeking to have the judgment registered in Kenya. The application will be accompanied by an affidavit by the applicant and should annex a certified copy of the judgment and any other evidence prescribed by law. Once the judgment is registered, it can be enforced as a judgment which originated from a court in Kenya.

If the foreign judgment does not originate from a designated country of a reciprocating country, the binding jurisprudence of the Kenyan Court of Appeal, for instance in Jayesh Hasmukh Shah v Navin Haria & Another [2016] eKLR, provides that the foreign judgment will be enforceable as a claim in common law for enforcement of a foreign judgment. The judgment creditor is required to file a plaint at the High Court setting out the nature of the claim accompanied by a verifying affidavit, a list of witnesses, witness statements and a bundle of documents which should include a certified copy of the foreign judgment. It is then open to the judgment debtor to challenge the validity of the foreign judgment in the context of a trial on the basis that it was not conclusive within the meaning of the Civil Procedure Act. In the context of the Civil Procedure Act, a foreign judgment is not conclusive where:

  • it has not been pronounced by a court of competent jurisdiction;
  • it has not been given on the merits of the case;
  • it is founded on an incorrect view of international law or a refusal to recognise Kenyan law if applicable;
  • it was obtained in breach of natural justice;
  • it has been obtained by fraud; and
  • it sustains a claim founded on a breach of a law that is in force in Kenya.

Civil or criminal matters may either be commenced in the Magistrate's Court or at the High Court. If a matter is commenced in the Magistrate's Court, a party can appeal on issues of fact, law or both to the High Court. Any subsequent appeal will be limited to issues of law. If a matter is commenced in the High Court, a party can appeal to the Court of Appeal on issues of law, fact or both to the Court of Appeal.

There is a Supreme Court but appeals to it are different. Appeals from the Court of Appeal to the Supreme Court must raise matters of general public importance. It is for the Court of Appeal to certify that an intended appeal raises a matter of general public importance. If certification is denied, a party can challenge the denial of the certification at the Supreme Court. A party however can skip this certification phase if the case involves the interpretation or application of the Constitution.

The review process is different to that of an appeal. A party may apply to review a judgment or a ruling where there is discovery of new evidence which was not within the party’s knowledge, an error apparent on the face of the record or any other sufficient reason. A party must, however, choose between a review of the decision or an appeal against it.

The right of appeal must be granted by law and cannot be implied or inferred. There must be a provision of law that allows a party to appeal either as of right or with the leave of the court. The rules concerning appeals to the High Court are set out in Order 42 of the Civil Procedure Rules, 2010. The Court of Appeal is guided by the Court of Appeal Rules, 2010 and the Supreme Court applies the Supreme Court Rules.

In civil matters, a party has 14 days from the date of the decision to file a notice of appeal. In criminal matters, a party has 30 days to file a notice of appeal. This document notifies the other party that a party is appealing. The party shall simultaneously apply for a certified copy of the court proceedings and the decision appealed from. Once the proceedings and decisions are ready, a party has 60 days to prepare a record of all documents filed in the lower court and thereafter file it in the appellate court.

In a first appeal, a party may challenge the findings of fact made by the court or the holdings in law. In Kenya Power & Lighting Compant Ltd v E K O & another [2018] eKLR, the court held that on first appeal, the court is under a duty to reconsider and re-evaluate the evidence on record and draw its own conclusions. In Securicor (Kenya) Ltd v. EA Drappers Ltd and Anor. (1987) KLR 338, the Court of Appeal held that it has the discretion to allow a party to introduce a new point which was not explored in the subordinate court, but this discretion will be exercised sparingly.

The court does not impose conditions on the granting of an appeal.

The appellate court can set aside, uphold or vary an impugned decision.

The court has the discretion to award costs but in most cases it will be the losing party who will be responsible for them. The party who has been awarded costs will need to file a party-and-party bill of costs detailing the instruction fees, filing fees and other expenses they have incurred in a matter. The advocate remuneration order, made under the Advocates Act, provide a scale of fees which are payable. The Deputy Registrar is responsible for taxing the bill of costs. The losing party can challenge the bill of costs before the Deputy Registrar and if they are dissatisfied with how the costs have been assessed, they may file a reference in the High Court.

The Civil Procedure Act gives the court deciding the matter discretion when it comes to costs. The rules provide that costs in a matter follow the event unless the court shall, for good reason, order otherwise. There is no clear definition in judicial decisions on the meaning of "good reason". Costs are usually not awarded in cases of public interest litigation such as constitutional petitions and some applications for judicial review. In Cecilia Karuru Ngayu v Barclays Bank of Kenya & another [2016] eKLR, the court held that the good reasons may arise from: the conduct of the parties, the subject of litigation, the circumstances leading to the proceedings, the events leading to the termination of the proceedings, the stage at which the proceedings were terminated, the manner in which they were terminated and the relationship between the parties.

The Civil Procedure Act allows the court to award interest on costs at any rate, provided it does not exceed 14% per annum, and this interest is added to the costs. The court may either order interest at the court rate or be silent on the matter. In Nicholas Sumba v Radio Africa Ltd, Jimmy Gathu & another [2017] eKLR, the court held that where the court is silent on the rate of the interest, it shall be 6%.

The Constitution has placed a special responsibility on the courts and tribunals to promote alternative forms of dispute resolution such as reconciliation, mediation, arbitration and traditional dispute resolution mechanisms. Arbitration is popular in commercial disputes, though there are some agreements which provide for compulsory mediation before the parties in the contract can proceed to arbitration. Other types of disputes usually involve the parties trying to negotiate directly with each other before an aggrieved party decides to institute a court case.

There has been a recent effort to promote alternative dispute resolution (ADR) in the court. At the case management stage, the court is usually prepared to give the parties a chance to negotiate the dispute out of court. The High Court, especially its Commercial Division, now screens cases filed before it to assess if parties may mediate it. There are rules on mediation, which provide that parties can appear before a court-appointed mediator and explore the possibility of settling their dispute. The mediation process is usually mandatory, but parties are not compelled to enter into an agreement. The process is driven by the parties and they may return to the court should they be unable to enter into an agreement. There are no sanctions for unreasonably refusing ADR, but the mediator is allowed to make a report to the court on the mediation. Parties are not bound by the offers they made during mediation and the communications exchanged are confidential.

The court-mandated mediation programme is developing. For example, more divisions of the High Court are incorporating ADR as part of their case management procedures. The programme has rules on when parties should file their case summary and the timelines within which mediation should be concluded. The programme is funded by the court and parties do not incur additional costs if their matter is referred to mediation.

Kenya has an Arbitration Act which sets out the arbitration procedure that needs to be taken where a contract has an arbitration clause. The Arbitration Act provides for the form of the arbitration agreement, a stay of legal proceedings which concern the underlying agreement, the composition of the arbitral tribunal and the conduct of arbitral proceedings, and the recognition of the award in the courts and its subsequent enforcement.

The Arbitration Act provides that the High Court may refuse to recognise or enforce an arbitral award if the subject matter is not capable of settlement by arbitration under Kenyan law. Examples of such subject matter include disputes which concern criminal conduct or the infringement of constitutional rights which occurred as a result of the relationship created by the underlying contract.

There are limited circumstances through which a party may challenge an arbitral award. None of the grounds of the challenge go to the merits of the award. They concern the capacity of the parties; the legality of the arbitration agreement; whether the award has gone beyond the reference; and whether the composition of the parties or the award has been influenced by corruption, bribery or fraud. Save for these factors, an arbitral award is final and binding upon the parties. Courts are precluded from intervening in matters governed by the Arbitration Act. The Court of Appeal, in Nyutu Agrovet Limited v Airtel Networks Limited [2015] eKLR, held that challenges to an arbitral award are strictly limited to those set out in the Arbitration Act.

In order to be able to enforce a domestic arbitral award, a party must first apply to the High Court for it to order that the award be recognised as binding and be adopted as a judgment of the court.

An international arbitral award which was the result of foreign arbitration can be recognised as binding and can be enforced in accordance with the provisions of the New York Convention or any other convention relating to arbitral awards to which Kenya is a signatory.

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Law and Practice in Kenya

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Mohammed Muigai LLP was founded in 1988 and has grown to become a leading law firm in Kenya. Recognised for its pre-eminence in the provision of specialised legal advisory services, high level dispute resolution (through both litigation and ADR mechanisms) and handling complex and high-value conveyancing and commercial transactions. The firm has a keen understanding of the legal, commercial and regulatory environment in Kenya. Among other areas, the firm has substantial expertise in property law and conveyancing, commercial law and litigation, public procurement, corporate and financial services, corporate restructurings, M&A, employment law, intellectual property, insurance and tax matters. Today we have seven partners, eleven associates and a dedicated team of support staff offering expert legal advice to corporate entities, banks, insurance and financial institutions, governments and private clients. Our members have varied educational and professional backgrounds with exposure to Kenyan and other legal systems helping the firm to find innovative solutions to client challenges.