COK FAST COMPANY LTD v JIANG NAN XIANG [2013] KEHC 2743 (KLR)

REPUBLIC OF KENYA

High Court at Nairobi (Milimani Law Courts)

Civil Suit 431 of 2012 [if gte mso 9]><![endif]

COK FAST COMPANY LTD. ………………………..……… PLAINTIFF

VERSUS

JIANG NAN XIANG …………………………………..…….. DEFENDANT

RULING

1. Before the Court are two applications for determination. The first application is dated 7th September, 2012 filed by the Plaintiff. The application is brought under the aegis of Order 45 Rule 1(1)3, Order 51 Rule 1 of the Civil Procedure Rules, Sections 1A, 1B and 3A of the Civil Procedure Act and Articles 47 and 159 of the Constitution. The applicant seeks orders of this Court inter alia to have the Orders issued in the Ruling of Mutava, J delivered on 10th August, 2012 reviewed and/or set aside.

2. The grounds upon which the Plaintiff relies, as set out on the face of the face of the application, are that the Orders issued in the Ruling dated 10th August, 2012 were not prayed for and further that the Orders as issued were in flagrant breach of its Constitutional Rights and that the Ruling purported to overturn the Orders issued on 31st July, 2012 for the matter to be determined by Arbitration.

3. The application is supported by the Affidavit of Lucy Wambui Githinji sworn on 7th September, 2012. In reiterating the grounds adduced, the deponent averred that the Court exceeded its mandate by issuing Orders that were not prayed for and that it determined issues and facts on matters that were to be determined by arbitration. Further, the said Ruling created fresh areas of conflict as between the parties, instead of resolving the dispute. It was the deponent’s contention that the Court should review and set aside the said Ruling, which prejudices the scope of the arbitrator. The Plaintiff relied on the authorities of the Official Receiver and Liquidator and Freight Forwarders (K) Ltd Civil Appeal No. 235 of 1997, Mbogoh v Muthoni & Another (2006) 1 KLR 199, Said Hemed Said v Emmanuel Karisa Maitha Civil Appeal No. 237 of 1999, Vaday Establishment v Shretta (2001) 2 E.A 587 and Touring Cars (K) Ltd v Mankanji (2000) 1 E.A 261 in support of its application.

4. The application is opposed. In the Grounds of Opposition filed by the Defendant dated 17th September, 2012 it is contended that the application is bad in law, misconceived, fatally defective, incompetent and prejudicial. Further, the Defendant avers that the application indirectly seeks an appeal disguised as a review. It maintained that the application is res judicata and that the grounds as set out in the Affidavit in support of the application are points of law merely indicating disagreement with the findings of the ruling of the Court.

5. The Plaintiff’s case is that the Honourable Court made a determination on 10th August, 2012 in which the Orders issued had not been prayed for in its application dated 1st August, 2012. It is the Plaintiff’s contention that the Ruling essentially usurped the role of the Arbitrator and the Court took upon itself to resolve the dispute between the parties. In other words, what the Plaintiff is saying is that the Court acted outside its mandate and therefore the Ruling was erroneous and bereft of merit. On the other hand, the Defendant detailed that such falls within the purview of an appeal, and not for review or setting aside of the Orders made. The provisions of the law under which the Plaintiff purports to bring its application employ being Order 45 for Review, sets out the grounds upon which such an application should be predicated. Rule 1(1) of the said Order reads:

“(1) Any person considering himself aggrieved—

(a)by a decree or order from which an appeal is allowed, but from which no appeal has been preferred; or

(b)by a decree or order from which no appeal is hereby allowed,

and who from the discovery of new and important matter or evidence which, after the exercise of due diligence, was not within his knowledge or could not be produced by him at the time when the decree was passed or the order made, or on account of some mistake or error apparent on the face of the record, or for any other sufficient reason, desires to obtain a review of the decree or order, may apply for a review of judgment to the court which passed the decree or made the order without unreasonable delay”. (Underlining mine).

For an application for review, as set out above, the Applicant who seeks for an Order or Decree to be reviewed has to establish firstly that there was discovery of new and important matter not before court at the time its Ruling under review was delivered. Secondly, that there was some mistake or error apparent on the face of the record and thirdly, for any other sufficient reason. Of these three principles set out in the said Order, the Plaintiff relies on the third head of Rule 1, which allows for an application for “any other sufficient reason”.

6. In the Affidavit of Lucy Wambui Githinji, at paragraph 7, it was deponed that the matter was heard and determined in the presence of both parties. The paragraph reads:

“1. THATafter hearing both parties the Court made its ruling on 10th August 2012. Annexed hereto and marked as Exhibit “LW1” is a copy of the ruling and order.” (Underlining mine)

It therefore follows that no new material or evidence important to the matter could have been overlooked before the court made its determination. By all due diligence and inference, both parties were heard and the application determined on its merits. The first ground as set out by Order 45 (1) has therefore, not been established. In all the subsequent paragraphs of the Supporting Affidavit dated 7 September 2012 that follow, the Plaintiff has laid out grounds that attempt to establish that the learned judge may have erred in his Ruling. At paragraphs 8, 9, 10, 16 and 17 thereof, the Plaintiff lays emphasis on why the Ruling was unsatisfactory to it. In my view, this does not create a basis from which an application for review may emanate. It sets grounds for appeal, as the issues raised in the Supporting Affidavit cannot be determined by review and set aside. The Plaintiff avers that the learned judge overstepped his mandate in determining the facts and issues in the matter, in disregard to the merits of the application itself.

7. In the case of Francis Origo & Another v Jacob Kumali Munagala[2005] eKLR, the Court of Appeal held;

“From the foregoing, it is clear that an applicant has to show that there has been discovery of new and important matter or evidence which after due diligence, was not within his knowledge or could not be produced at that time or he must show that there is some mistake or error apparent on the face of the record or that there was any other sufficient reason…Our parting shot is that an erroneous conclusion of law or evidence is not a ground for review but may be a good ground for appeal.(emphasis added).Once the appellants took the option of review rather than appeal they were proceeding in the wrong direction.”

This Court cannot sit on appeal of its own Ruling. The application, as put by the Defendant in its skeletal submissions, seeks for this Court to sit on appeal, a mandate that it clearly has no jurisdiction so to do. The applicant has failed to establish any of the three heads under which the application for review is predicated. No evidence has been produced or shown before Court that there are any other “sufficient reasons” from which the Orders may be reviewed. The application is therefore dismissed with costs as it does not fall within the purview of Order 45 Rule 1 (1) (b) of the Civil Procedure Act.

8. The second application dated 17th September, 2012 filed by the Defendant is brought under Order 46 Rules 3, 5(a) and 20, Order 51 Rule 1 of the Civil Procedure Rules, Sections 1A, 1B and 3A of the Civil Procedure Act and all other enabling provisions of the law. The applicant seeks the following prayers;

2)THATthe Honourable Court be pleased to appoint an arbitrator pursuant to the Honourable Court’s order of 31st July, 2012 and ruling of 10th August, 2012.

3)THATthe Honourable Court be pleased to fix the time for making an award in the intended arbitration.

4)THATthe Honourable Court be pleased to order the Plaintiff to deposit Kshs. 40,000,000/- (Forty Million) in a joint account in the name of the Advocates for the Plaintiff and the firm of Ochieng’, Onyango, Kibet & Ohaga Advocates as security for the amount claimed and/or outcome of the intended arbitration.

5)THATthe Defendant/Applicant be at liberty to apply to the Honourable Court for such further directions and orders for purpose of meeting the ends of justice.

9. The application is predicated upon the grounds that the Honourable Court on 31st July, 2012 directed the parties to proceed to arbitration. Further, this court’s said Ruling of 10th August, 2012 sanctioned the arbitration and clarified the dispute to be referred to arbitration. The application was also based on the ground that the Plaintiff has refused, ignored and/or neglected requests and reminders to appoint an arbitrator. It was further averred that it would be in the interest of justice for the Orders to be granted so as to ensure that the intended arbitration would not be rendered nugatory.

10. The application is supported by the Affidavit of Jiang Nan Xiang sworn on 17th September, 2012. The deponent, in reiterating the grounds of the application, further deponed that the Plaintiff has delayed in appointing and/or selecting an arbitrator to have the disputes referred to arbitration determined and it was time wasting, as well as disposing of and/or transferring the assets in the Plaintiff in an effort to defeat the possible outcome of arbitration.

11. The Plaintiff opposed the application by filing its Affidavit in Reply sworn on 4th October, 2012. The deponent, Lucy Wambui Githinji, contended that this Court does not have the jurisdiction to entertain or grant any of the orders sought by the Defendant. She further contends that the Plaintiff is ready to submit to an arbitration process but that the Defendant has inadvertently misinterpreted the Court’s Ruling of 31st July, 2012 thus delaying the appointment of an arbitrator.

12. This Court on 31st July, 2012 issued its Ruling and ordered that all matters be referred to arbitration. The learned judge directed that the parties should address their issues through alternative modes of dispute pursuant to Article 159 (2) of the Constitution. Those Orders were granted vide Order 46 Rule 20 of the Civil Procedure Rules, 2010 which empowers a judge to order that disputes between parties be referred to arbitration. The said Ruling of Mutava, J on 10th August 2012 was delivered on the Application by the Plaintiff seeking interim measures of protection, pending the hearing and determination of the arbitration. The learned judge was guided by Section 7 of the Arbitration Act and ordered an injunction against the Plaintiff, pending the hearing and determination of the Court sanctioned arbitration. The Court also made Orders limiting the issues to be resolved by arbitration. At page 13 of the said Ruling, Justice Mutava determined inter alia:

“In my considered view, the dispute that should be subjected to arbitration should not be about ownership of the factory but should be directed at addressing the issue of which party owes the other what obligations or sums of money within the manufacturer-seller agreement between them.”

It should therefore be noted that the Orders of the Court made on 10 August 2012 followed upon and confirmed the Orders of Ogola J. detailed on 31 July 2012 and were still, that the dispute was to be referred to arbitration.

13. As a result, the applicant seeks for the Court to appoint an arbitrator in accordance with the orders of both Mutava and Ogolla, JJ issued on 10th August, 2012 and 31st July, 2012 respectively. The orders of Ogola, J were that:

“In the exercise of my discretion under Order 46 Rule 20 of the Civil Procedure Rules and under Article 159(2) of the Constitution, I order and direct the parties to resolve this matter by way of arbitration in accordance with the Memorandum and Articles of Association of the Plaintiff Company.” (Emphasis mine).

The resolution of the matter in accordance with the Memorandum and Articles of Association, as per the agreement, required the appointment of an arbitrator by the Chartered Institute of Arbitrators (Kenya Branch). In his Ruling dated 11th October, 2012 (in which the application by the Defendant dated 17 September 2012 was compromised), Mutava J. had directed that the Chairman of the Chartered Institute of Arbitrators (Kenya Branch) do appoint a sole arbitrator to arbitrate the dispute.

14. Consequently and with regard to the prayers sought in the Defendant’s Notice of Motion dated 17 September 2012, as well as in exercising its supervisory role in arbitration (as under Article 159(2) of the Constitution and Order 46 rule 20, Civil Procedure Rules, 2010), this Court determines and would now make Orders as follows:

(a)As both the parties herein have agreed to refer the dispute between them to arbitration as per the Articles of Association, the Chairman of the Chartered Institute of Arbitrators (Kenya Branch) shall appoint an arbitrator to arbitrate on the issues as per the Ruling of Mutava, J dated 10th August, 2012 within the 30 days from the date hereof.

(b)The injunctive orders issued by the Court on 10 August 2012 are hereby extended pending the hearing and determination of the arbitration.

(c)As regards prayer No. 4 of the 17 September application, the Court declines to make any order for the deposit of Kshs. 40,000,000/- as prayed for by the Defendant, at this stage. A decision as to whether any security needs be put up by either party hereto will rest with the arbitrator to be appointed.

(d)The costs thereof shall be the costs in the arbitration.

DATED and delivered at Nairobi this 4th day of June, 2013.

J. B. HAVELOCK

JUDGE

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