Enforcement of Judgments 2019

Last Updated August 07, 2019

Kenya

Law and Practice

Authors



Mohammed Muigai LLP Founded in 1988, Mohammed Muigai LLP has grown to become a leading law firm in Kenya. Recognised for its pre-eminence in providing specialised legal advisory services, high level dispute resolution (through both litigation and alternative dispute resolution 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, as well as substantial expertise in property law and conveyancing, commercial law and litigation, public procurement, corporate and financial services, corporate restructurings, mergers and acquisitions, employment law, intellectual property, insurance and tax matters. The firm has seven partners, eight associates and a dedicated team of support staff offering expert legal advice to corporate entities, banks, insurance and financial institutions, governments and private clients. The team has varied educational and professional backgrounds, with exposure to Kenyan and other legal systems, which help the firm find innovative solutions to client challenges.

Depending on the assets sought, there are various registers which contain publicly available information. For instance, the land registry maintains a database of immovable property and the National Transport and Safety Authority maintains a database of motor vehicle ownership, all of which is publicly available.

Upon meeting certain requirements, a party is allowed to seek the court’s assistance to obtain information about the assets that the other party holds, ie through tracing, asset disclosure and freezing orders. In so doing, the courts rely on the rules of civil procedure relating to attachment of assets prior to judgment and on the jurisprudence of English courts and the opinions of English writers on the subject. Borrowing from the last-mentioned source, specifically Goode on Commercial Law, the courts have held (for instance F. Tuiyott J. in Dubai Bank Kenya Ltd (I.L) v Darasa Investments Ltd [2018] eKLR) that the claimant must demonstrate that:(i) he has a good arguable case, (ii) the claim is one over which the court has jurisdiction, (iii) the defendant appears to have assets within the jurisdiction, (iv) there is a real risk that those assets will be removed from the jurisdiction or otherwise dissipated unless the orders are granted, and (v) the balance of convenience is in favour of granting the orders. The court can also order disclosure of documents or the administration of requests for further information to assist the claimant in ascertaining the location of the defendant’s assets.

A judgment can be either interlocutory or final. An interlocutory judgment is one that is given at an intermediate stage of the proceedings and its effect is to secure a party’s rights pending the eventual outcome. On the other hand, the effect of a final judgment will be to conclusively decide the party’s rights or obligations when given.

It is not always necessary that a final judgment will be pronounced at the end of a trial. For example, a plaintiff is entitled to apply for judgment where the defendant has not entered an appearance in the case within the required period or the defendant has entered an appearance but has not filed a defence within the required period. Also, a plaintiff is entitled to apply for summary judgment where, for instance, the plaintiff has a liquidated claim and the defendant has appeared but not filed a defence. On the other hand, a defendant is allowed to apply for a case to be dismissed where the plaintiff has not taken any step towards its prosecution for a period of at least one year.   

In Kenya, the courts can issue various types of reliefs. These include prohibitory and mandatory injunctions, conservatory orders, specific performance, rectification of contracts and registers, damages and declarations.

Several options are available to a successful party enforcing a decree arising from a judgment. Where the decree is for the payment of money, the rules of civil procedure provide for the attachment sale of immovable and movable property belonging to the judgment debtor. The rules also allow for the attachment of negotiable instruments and shares in a corporation. The process will typically involve an auctioneer. The auctioneer will begin the process by preparing and filing, in a prescribed format, an application for the attachment of the property in question. Upon its endorsement by the court, the auctioneer will prepare a proclamation of the goods to be attached, which will be served upon the judgment debtor. The auctioneer will also prepare and serve a notification of sale, allowing the judgment debtor a period, depending on the goods to be sold, to pay the sums owed, failing which the goods will be moved to the auctioneer’s premises in preparation for sale. Thereafter, the auctioneer will arrange for the advertisement and subsequent sale of the property.

Apart from the above, a judgment creditor has the option of attaching debts that are owed to the judgment debtor, which include sums that are held in a bank account, through garnishee proceedings. The judgment creditor will be required to apply to the court, identifying the debt that is sought to be attached in the application, and serve the application on the person who owes the judgment debtor. Should that person confirm that he or she holds monies owed to the judgment debtor, the court will order that such sums be paid to the judgment creditor.

As a last resort, where the decree is for the payment of money but the judgment debtor is recalcitrant in settling it, the judgment creditor is allowed to apply for his committal to civil jail. However, such an application may not be allowed where the judgment debtor’s failure to pay is due to an inability to do so, for instance due to a lack of resources.

Finally, contempt of court proceedings are also available where the judgment is not for the payment of money, for instance if the relief given is injunctive in nature.

The process of enforcement of judgments is typically done through an auctioneer and will vary depending on the mode. For instance, the auctioneer will serve a proclamation of attachment/repossession/distraint of moveable property, requiring the judgment debtor to pay any sums due within seven days, failing which the goods that have been proclaimed will be moved to the auctioneers’ premises. The auctioneer will then arrange for the advertisement of the goods for sale within 7 days from their removal to his or her premises and arrange for their sale between 7-14 days after their first advertisement. The auctioneer’s costs are regulated and will depend on the value of the property attached or repossessed.

The length of time taken will also be affected if the process of enforcement is disputed, since such a dispute will have to be determined by a judicial officer, thereby lengthening the enforcement process.

Apart from an uncontested process of attachment/repossession/distraint of moveable property, which can be concluded in less than a month, enforcement through garnishee proceedings is also efficient where the garnishee confirms that he holds funds that are due to the judgment debtor. In such a case, the courts will be quick to issue the garnishee order. 

Typically, the procedures for determining a defendant’s assets are available before judgment is given. The question as to whether such procedures are still available post-judgment is open to debate. The normal practice is for the decree holder to conduct an investigation of his or her own. Many auctioneers have the necessary capability.

A defendant may challenge the enforcement of a judgment by attacking the enforcement process itself or, where he or she seeks to set it aside, seek a review or appeal the judgment from which it arises.

On the one hand, he or she could challenge the enforcement process itself due to procedural lapses, such as where an auctioneer has not followed the statutory procedure or he has attached property which is statutorily excluded from attachment. Examples of the latter are tools of the trade, books of accounts, necessary wearing apparel, cooking vessels, beds and bedding and the property of some institutions where by statute they protected from execution proceedings.

On the other hand, a defendant may challenge enforcement where he seeks to set aside the judgment from which it arises, for instance where he argues that the judgment was irregularly entered since he or she was not served with the pleadings, or where he or she seeks to review or appeal the judgment. In the latter instances, the defendant would seek to stay the enforcement process until the review or appeal is concluded.

A domestic judgment remains enforceable until it is set aside, whether by the court that issued it or on appeal.

There is no central register of all domestic judgments. However, selected judgments of the High Court, the Environment and Land Court, the Employment and Labour Relations Court, the Court of Appeal and the Supreme Court are reported online and in hard copy by the National Council on Law Reporting. Also, some tribunals, like the National Environment Tribunal, maintain a database of their decisions. This reporting is maintained regardless of whether a defendant has satisfied what he or she was ordered to do.

The enforcement of foreign judgments is governed primarily by the Foreign Judgments (Reciprocal Enforcement) Act (“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 has been incorporated into Kenyan jurisprudence, as described in 3.4 below. 

The approach to the enforcement of foreign judgments depends on whether or not the judgment originated from a designated court of a reciprocating country. In the former case, the process entails applying to the High Court for its registration without the necessity of having to go through a trial. However, in the latter case, the jurisprudence of the Kenyan Court of Appeal provides that the foreign judgment would be enforceable as a claim under the common law for enforcement of a foreign judgment. More details are available in 3.4 below.

The following categories of foreign judgments are not enforceable, namely where the judgment:

•       is for the payment of money or delivery of movable property arising from taxes or similar charges or a fine or penalty;

•       is for payment of exemplary, punitive or multiple damages;

•       is for periodical payment of money as financial provision or maintenance of a spouse, former spouse, child or dependant;

•       is in a matrimonial cause or determines proprietary rights arising out of a matrimonial relationship except whereby a sum of money is payable or movable property deliverable;

•       concerns custody or guardianship of children;

•       concerns the administration of the property or affairs of an incompetent person;

•       is in succession proceedings where money is payable or movable property is deliverable;

•       arises from matters of social security or public assistance where money is payable or movable property is deliverable;

•       arises from bankruptcy or winding up proceedings of a corporation;

•       arises from proceedings relating to damage, death or injury arising out of nuclear activities;

•       arises from proceedings which were instituted contrary to an agreement or instrument that provided for the settlement of the dispute otherwise than in the court of the reciprocating country, and the judgment debtor did not agree to those proceedings and he or she did not make a counterclaim or otherwise submit to that court’s jurisdiction; 

•       is regarded as a judgment of a designated country but was given in another country; and

•       arises from proceedings for the enforcement of a judgment of a court of another country.

If the foreign judgment originated from a designated court of a reciprocating country, the judgment creditor is required to make an application to the High Court within six years of the date of the judgment for it to be registered. The application may be made ex parte where it can be shown that the judgment creditor was personally aware of or participated in the original case and the avenue of appeal is unavailable. The court may allow the application, in which case notice of the registration of the judgment should be served on the judgment debtor. However, rather than allow the application, the court may direct that the summons be issued to the judgment debtor, in which case the judgment debtor will be allowed to participate in the hearing of that application. The application should be accompanied by several documents. These include: a certificate from the original court whose contents are legally prescribed; the judgment or a certified or duly authenticated copy of it; and an affidavit whose contents are legally prescribed; and, in the case of a judgment given by a superior court of a Commonwealth country, a certificate signed by a judge or registrar certifying that the court is a superior court.

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

The costs and time taken to enforce a foreign judgment depend on whether it originated from a designated court of a reciprocating country or not. It also depends on whether the proceedings on enforcement will be disputed, the schedule of the court which is entertaining the proceedings and the value of the judgment’s subject matter.

In comparison, it takes a shorter time and is less costly to enforce a foreign judgment which originates from a designated court of a reciprocating country since the proceedings do not involve a trial. To enforce such a judgment would take roughly the same amount of time as one would expect to take to enforce a domestic judgment.

A judgment debtor is entitled to apply to the High Court to set aside a registered judgment on several grounds. Those grounds include:

•       it is not covered by the Act;

•       it was registered in contravention of the Act;

•       the original court lacked jurisdiction;

•       the judgment debtor did not appear in the original court and its jurisdiction was based on an invalid agreement by the judgment debtor to submit to its jurisdiction in the context of the rules of private international law in Kenya;

•       the cause of action was the subject of a final and conclusive judgment of a competent court other than the originating court;

•       where the matter is the subject of a final judgment of a court in Kenya arising from proceedings which were instituted before the proceedings in the original court, but decided after the date of the foreign judgment and the two judgments are irreconcilable;

•       the judgment debtor was not served with the process in the original court or, having been served, was not notified of the proceedings in sufficient time to be able to defend him or herself and did not appear or appeared only to contest jurisdiction for instance; 

•       the judgment was obtained fraudulently and the issue could not have been raised in the original court or on appeal from it;

•       the judgment disregards provisions of law which would have been applicable in Kenya by virtue of the rules of private international law; 

•       the original court had to decide an issue touching on the matters listed in 3.3 under bullet points 3 to 11 above and the Kenyan High Court would have arrived at a different decision;

•       the judgment has been set aside on appeal in the foreign jurisdiction;

•       an appeal is pending, or the judgment debtor is entitled to and intends to appeal, or there are pending proceedings in a court in Kenya on the same matter which were instituted before the proceedings in the original court;

•       the judgment debtor is entitled to immunity from the High Court’s jurisdiction;

•       the rights in the judgment are not vested in the person who applied for its registration;

•       the enforcement would contravene Kenya’s public policy; and

•       the enforcement of the judgment would require the payment of sums in excess of a monetary limit on liability applicable in Kenya.

The High Court exercises a supervisory role over arbitration proceedings.

Under Kenyan law, the enforcement of an arbitral award, including a challenge to it, is made through the High Court by virtue of the provisions of the Arbitration Act. There is significant debate as to whether the decision of the High Court in exercising this form of jurisdiction is appealable. The Court of Appeal acknowledged – while granting leave to appeal to the Supreme Court in Nyutu Agrovet Limited v Airtel Network Kenya Limited, Civil Application Sup. 3 of 2015 [2016] eKLR – that there is uncertainty in the law on the subject since different benches of the same court have made different findings. One view is that the concept of party autonomy and decisional finality should operate to deny a right of appeal. A contrary view is that, where the right is not expressly excluded, an appeal should lie. Although a five-judge bench of the Court of Appeal in that case upheld the former view, the court went ahead and granted leave to appeal to the Supreme Court of Kenya so as to resolve the conflicting views. Presently, the case is pending in Kenya’s apex court. Ultimately, this will have repercussions on the enforcement of arbitral awards in this jurisdiction. 

The legal regime that applies to the enforcement of a domestic arbitral award is different to that which applies to an international arbitration award. In the case of a domestic award, the Arbitration Act provides that it will be recognised and enforced according to the Act’s provisions. In the case of an international award, it will be recognised and enforced according to the provisions of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which was acceded to by Kenya with a reciprocity reservation, or any other convention to which Kenya is a signatory and which relates to arbitral awards.

There are no categories of arbitral awards that will not be enforced as a matter of general principle, for instance due to the subject matter of the award. However, there are grounds to challenge the enforcement of arbitral awards based on particular circumstances, details of which are given in 4.6 below. 

The first step in enforcing an arbitral award is to file the award with the High Court. The party who seeks to enforce it must provide the original arbitral award or a certified copy of it and the original arbitration agreement or a certified copy of it. Where the award or agreement is not in English, a certified translation into the English language must be provided. Notice of the filing of the award must also be given to all parties, giving the date of filing, the cause number and the registry in which it has been filed. An affidavit of service must also be filed. Thereafter, the party seeking to enforce the award will apply to the court for leave to enforce the award as a decree.

The arbitration rules provide that if an application to set aside the award has not been made, the party filing the award may apply ex parte by summons for leave to enforce the award as a decree of the court. An application to set aside the award must be made within three months of receipt of the arbitral award by the applicant. However, it is noteworthy that the same rules also provide that all applications subsequent to the filing of an award should be served on all parties at least seven days before the hearing date. Consequently, the party against whom recognition and enforcement is sought will have an opportunity to challenge it on the grounds elaborated in 4.6 below.

If there were pre-existing proceedings before the High Court that relate to the arbitration, for instance where a party approached the court to appoint an arbitrator, the award should be filed within the same cause, otherwise it shall be given its own cause number in the register.

The court fee for filing an award is Kenya Shillings 10,000/-. However, this does not include the fees for the application for its enforcement and any further documents that may be filed in litigating challenges to enforcement. Where the parties are represented by advocates, their costs are regulated. The time it takes to enforce an arbitral award depends on whether the proceedings on enforcement are disputed and the schedule of the court that is entertaining the proceedings. 

The enforcement of an award, irrespective of the state in which it was made, may be refused on several grounds. These include:

•       a party to the arbitration agreement was under some incapacity;

•       the arbitration agreement is invalid under the law to which the parties have subjected it or under the law of the state where it was made;

•       the party against whom the award was made was not given proper notice of the arbitrator’s appointment or of the arbitral proceedings or was unable to present his or her case;

•       the award deals with a dispute not contemplated by the parties or not falling within the terms of the reference to arbitration or decided  matters beyond the scope of the reference, provided that those parts are not severable from the rest of the award;

•       the composition of the tribunal or its procedure was not as agreed by the parties or in accordance with the law of the state where the arbitration took place;

•       the award has not yet become binding or has been set aside or suspended by a court of the state in which, or under the law of which, it was made; 

•       the making of the award was induced or affected by fraud, bribery, corruption or undue influence;

•       the subject matter of the dispute is not capable of settlement by arbitration under Kenyan law;

•       the enforcement of the award would be contrary to the public policy of Kenya. Additionally, under the Limitation of Actions Act, an action to enforce an award may not be brought after six years.

Mohammed Mugai LLP

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Off Lenana Road
Kilimani
Nairobi
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+ 254 20 2397 401

info@mohammedmuigai.com www.mohammedmuigai.com
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Law and Practice

Authors



Mohammed Muigai LLP Founded in 1988, Mohammed Muigai LLP has grown to become a leading law firm in Kenya. Recognised for its pre-eminence in providing specialised legal advisory services, high level dispute resolution (through both litigation and alternative dispute resolution 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, as well as substantial expertise in property law and conveyancing, commercial law and litigation, public procurement, corporate and financial services, corporate restructurings, mergers and acquisitions, employment law, intellectual property, insurance and tax matters. The firm has seven partners, eight associates and a dedicated team of support staff offering expert legal advice to corporate entities, banks, insurance and financial institutions, governments and private clients. The team has varied educational and professional backgrounds, with exposure to Kenyan and other legal systems, which help the firm find innovative solutions to client challenges.

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