DONHOLM RAHISI STORES(suing as a firm) v EAST AFRICAN PORTLAND CEMENT LTD [2004] KEHC 33 (KLR)

REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA

AT NAIROBI (MILIMANI COMMERCIAL COURTS)

Civil Case 18 of 2004

DONHOLM RAHISI STORES(suing as a firm)........PLAINTIFF

-VERSUS-

EAST AFRICAN PORTLAND CEMENT LTD     DEFENDANT

FIVE STAR AGENCIES LTD............................. 1stAPPLICANT

KENJORO ENTERPRISES LTD..................... 2nd APPLICANT

RIFLO TIMBER AND GENERAL LTD............. 3rd APPLICANT

POP METAL FABRICATORS &

HARDWARE HARDWARE.................................. 4th APPLICANT

RULING

This is an application by way of chamber summons dated andfiled in court on 24th February, 2004. It is brought under 0. 1 Rule 10(2) and O.XXXIX Rule 4 of the Civil procedure Rules, the inherentjurisdiction of the court and all other enabling provisions of the law.

The application seeks orders that the applicants, FIVE STARAGENCIES LIMITED, KENJORO ENTERPRISES LIMITED, RIFLOTIMBER AND GENERAL LIMITED AND POP METAL FABRICATIONS

AND HARDWARE LIMITED, be added as defendants in the suit hereinas second, third, fourth and fifth defendants, respectively; that theorder of injunction granted to the plaintiff and issued on 14th January,2004 and any other or further or consequential order or orders bedischarged or set aside, and that the costs of the application beprovided for.

The application is based on the annexed affidavits ofMOHAMMED SHARIF, GEORGE KIARIE NJORO, RICHARD MUCHAIKIBATHI and PAUL NJOGU NJUGUNA and on the grounds that

(a)            the appearance of the applicants before the court is necessaryin order to enable the court effectually and completely toadjudicate upon and settle all questions involved in the suit;

(b)            that the applicants have sufficient interests in the suit;

(c)             that the suit raises issues and concerns which are of publicinterest and touch on public policy;

(d)            that the contract between the plaintiff and the first defendant isin breach of the Exchequer and Audit Act, Chapter 412 of theLaws of Kenya and the Exchequer and Audit (PublicProcurement) Regulations;

(e)            that the contract between the plaintiff and the first defendantcontravenes the Restrictive Trade Practices, Monopolies andPrice Control Act, Chapter 504 of the Laws of Kenya; and

(f)       that the contract is null and void abinitio.

Appearing for the four applicants, Mr. Orengo said that as theapplication is under 0. 1 Rule 10, he did not even need to come byway of chamber summons as the application could be made orally incourt. The applicants are appointed distributors who have beenbuying and distributing throughout the country, some from as earlyas 1984. Their position is that the agreement between the plaintiffand the defendant herein is in breach of the Exchequer and Audit(public Procurement) Regulations, and contravenes the RestrictiveTrade Practices, Monopolies and Price Control Act. By execution ofthat agreement, the applicants have been shut out and driven out ofbusiness which they have been carrying out over the years. Whereasthe plaintiff is making colossal profits, the defendant, which is astatutory public body, continues sustaining heavy losses and yet, theother distributors are not getting to that level playing ground offeredto the plaintiff, and all this is due to the fact that the defendant is in breach of the, Restrictive Trade Practices, monopolies and PriceControl Act.

Mr. Orengo further submitted that in a report on themanagement practices at East African Portland Cement by an AuditInspectorate Team, there was a specific observation against theplaintiff herein. Counsel urged the court to join the applicants asdefendants so that all these matters can be brought out to the open,and in order that all issues can be effectively adjudicated.

Responding for the plaintiff, Mr. Oraro, appearing with Mr.Ahmed nasir, argued that whether there was a breach of theExchequer and Audit Act, and Restrictions Trade Practices,Monopolies and Price Control Act are matters between the plaintiffand the defendant in this suit, and the issues therein cannot bedetermined in a suit concerning the plaintiff and other defendants.In the event, the applicants have already filed suit No. 154 of 2004. There are now two suits, and this court is being asked to exerciseconcurrent jurisdiction over the same matter. By seeking to bejoined in this suit, the applicants merely wish to gang up to fight theplaintiff, and the issue of a conspiracy with the defendant can't be ruled out, Mr. Oraro submitted. He then posed the question as towhether the applicants, having filed suit challenging the contract, cannow join in another suit filed and involving alleged breach of contractbetween the plaintiff and the defendant. Whether the contract wasvalid and whether the defendant is incurring losses are issues fordetermination between the plaintiff and the defendant. He concludedby submitting that since the applicants have filed their own suit, theyshould proceed with it.

On his part, Mr. Oyatsi for the defendant explained his clientsposition in both suits. He argued that in the present suit, thedefendant has been sued for alleged breach of contract, and thedefendant has filed a counterclaim. The defendant itself alleges thecontract is invalid. Both issues of validity and breach have beenraised, and it is clear that the central issue in both suits is the validityof that contract. He therefore submitted that the applicants have achoice - if they want a pronouncement in case No. 154 of 2004 aswell as in this one, they can consolidate, otherwise the courts mightmake conflicting decisions on both matters. The defendant, he said,is already in a difficult position because of the injunction. There are two conflicting ex parte orders, and to avoid conflict the decent thingto do is to join the two suits. However, Mr. Oyatsi concluded, theconspiracy theory advanced by Mr. Oraro has no basis as thedefendants' interests and those of the applicants are not the same.Should the applicants succeed, the defendant might be called upon topay heavy damages and, therefore, for the defendant to conspirewith them is akin to the defendant conspiring against itself. Such ascenario would not arise as it can't help the defendant.

In reply, Mr. Orengo concurred with Mr. Oyatsi that what is inissue is a contract out of which the plaintiff is making claims, and ifthey succeed, the applicants will be adversely affected. The issues inthe case in the Central Registry and those in this case are likely to beaddressed by two courts of concurrent jurisdiction and arrive atdifferent conclusions. This is a danger to be circumvented. Onesolution lies in consolidation. But under Order 1 Rule 10, allapplicants have to show is that they have sufficient interest in thematter in order to be joined as parties. Counsel then pleaded for theapplicants to be joined as defendants.

I have listened to the rival submissions of counsel for therespective parties. The gap between them is not very wide. It canbe bridged. The choice lies between joining the applicants as co-defendants in this case, or consolidating this case with High CourtCivil Suit No. 154 of 2004. Counsel are agreed that if these two suitswere to be determined, each independently of the other, there isevery danger that two courts of co-ordinate jurisdiction might cometo two different and conflicting decisions. That is an eventualitywhich should be avoided.

If the defendants are joined as co-defendants in this case, andas long as the other case is also proceeding independently andconcurrently with this one, I don't think that it will help matters. Therisk of the two courts exercising concurrent jurisdiction over a matterraising similar issues will persist. The most logical and decent wayout, I think, would be to consolidate the two suits so that all theissues therein can be effectively and completely adjudicated upon,and all the questions involved in both suits would be answered in onejudgment. That procedure will save the court's time too.

O.X1 Rule 1 of the Civil Procedure Rules states-

"Where two or more suits are pending in thesame court in which the same or similarquestions of law or fact are involved, thecourt may either, upon application of one ofthe parties, or of its own motion, at itsdiscretion, and upon such terms as may seemflt-

(a)           order a consolidation of such suits, and

(b)          direct that further proceedings in any of suchsuits be stayed until further order."

This court has not been availed the pleadings in High Court CivilSuit No. 154 of 2004, and is not, therefore, in a position to confirmthat the same or similar questions of law or fact are involved in bothsuits. The court is consequently of the view that the best wayforward is for the applicants to file a formal application for theconsolidation of the two suits. It is so ordered. Costs will be in thecause.

Dated and delivered at Nairobi this 1st day of March 2004

L. NJAGI

JUDGE