BGP Kenya Limited v East African Exploration (K) Limited [2017] KEHC 2510 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL & ADMIRALTY DIVISION

HCC.  NO. 115 OF 2016

BGP KENYA LIMITED............................................................................PLAINTIFF

VERSUS

EAST AFRICAN EXPLORATION (K) LIMITED.....DEFENDANT/RESPONDENT

RULING

1. The Plaintiff’s application of 24th January 2017 faces an immediate difficulty. In that Motion the Plaintiff seeks the following substantive prayers:-

b) Pending the hearing and determination of this Application, the Court be pleased to order that the USD 2,059,026. 50 scheduled to be deposited in Court pursuant to the Court’s Ruling of 29th June 2016 and the Order of 24th November 2016 is only available to the Plaintiff for settlement of the decree herein.

c) The USD 2,059,026. 50 scheduled to be deposited in Court pursuant to the Court’s ruling of 29th June 2016 and the Order of 24th November 2016 be released to the Plaintiff, immediately upon deposit, to answer/settle the judgment and the decree herein.

d)  In the alternative and without prejudice to the above, the sum of U|SD 85,000/= being the accrued interest and costs of the suit herein be remitted to the Plaintiff Decree Holder by Octant Energy Corp(the Garnishee) to answer the Judgement and the decree herein.

e) The costs of this application be provided for.

2. It is common ground that pursuant to the Order of this Court made on 29th June, 2016, an amount of US$ 2,059,0126. 50 has been deposited into Court pending the hearing and determination of this suit.

3. It is not in dispute that on 18th July 2016 the Plaintiff obtained Judgement against the Defendant for USD. 2,059,026. 50 together with Interest and Costs.

4. It is the Plaintiff’s case that the said Judgment has given rise to a Preliminary Decree which has been drawn as follows:-

CLAIM FOR:

a) A permanent injunction be issued restraining the Defendant by itself, agents, servants, employees or otherwise howsoever form selling, disposing, alienating and/or in any manner whatsoever transferring its Oil Exploration Block in Kenya, known as Block No. L17, L18 and BLOCK 1 pending the payment of the Plaintiff’s USD 2,059,016. 50.

b) Payment of USD 2,059,026. 50.

c) Interests of (b) at commercial rates from the date of this suit until settlement in full.

d) Costs.

e) Any other orders the court may deem just and appropriated.

The Defendant having been duly served and having failed to enter appearance and/or file Defence within the stipulated time and upon the application of the Advocate for request for Judgement dated 10th June, 2016:

IT IS HEREBY ORDERED:

1. THAT Judgement be and is hereby entered for the Plaintiff against the Defendant in the sum of USD 2,059,016. 50.

2. THAT interest of (1) at commercial rates from the date of this suit until settlement in full.

3. THAT costs of the suit.

5. The Motion by the Plaintiff is predicated on the Provisions of Order 22 Rules 1 and 2 of The Civil Procedure Rules and sections 3A and 63 of The Civil Procedure Act. Execution of a Decree is the act of carrying out or putting into effect the Decree (See Black’s Law Dictionary 9th Edition). What the Plaintiff seeks, in essence, is the execution of the Decree through release of the funds deposited in Court. And if there is doubt as to whether there are Execution proceedings then one needs to look at the alternative prayer which seeks to compel the Garnishee herein to answer to the Decree.  Garnishee proceedings are proceedings in execution of a Decree.

6. What the Plaintiff has overlooked is that costs is part of the Preliminary Decree and execution cannot proceed before costs are ascertained or ascertainment exempted by the Court.  The provisions of Section 94 of The Civil Procedure Act are explicit on this and provides:-

“Where the Court considers it necessary that a decree passed in the exercise of its original civil jurisdiction should be executed before the amount of the costs incurred in the suit can be ascertained by taxation, the court may order that the decree shall be executed forthwith, except as to so much thereof as relates to the costs; and as to so much thereof as relates to cost costs that the decree may be executed as soon as the amount of the costs shall be ascertained by taxation”.

The Defendant’s Counsel is right that the Motion is caught up by those provisions.

7. The rationale for the provisions of Section 94 is that a Judgement Debtor should not be vexed or burdened by multiple executions.  The requirement nevertheless recognises that there would instances where it is necessary for a Decree Holder to proceed with the execution immediately without the delays that may be caused by awaiting ascertainment of costs by taxation. An example is where the Judgment Debtor intends to leave the jurisdiction of the Court or is attempting to put its Assets beyond the reach of the Court so as to evade or avoid execution. The Plaintiff may have good reason to seek the immediate settlement of its Decree but it cannot overlook the clear and mandatory provisions of Section 94. If there was urgency as argued by the Plaintiff, then it should have moved Court in a composite application with the prayer for permission under Section 94 being the first prayer.

8. The Decree as it stands is not executable and the Motion of 24th January 2017 is premature and is hereby struck out with costs.

Dated, Signed and Delivered in Court at Nairobi this 5th Day of October, 2017.

F. TUIYOTT

JUDGE

PRESENT;

Obonyo for Defendant

Agwara for Plaintiff

Alex -  Court Clerk