Euro Water Services v Peter Gatune [2018] KEHC 10099 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL AND ADMIRALTY DIVISION

CIVIL SUIT NO. 208 OF 2015

EURO WATER SERVICES.........PLAINTIFF/APPLICANT

-VERSUS -

PETER GATUNE..................DEFENDANT/RESPONDENT

R U L I N G

1. The application before me was brought pursuant to the Contempt of Court Act No. 46 of 2016.

2. In the first instance, the application asks the court to summon DEEPAK PANDIT, the Managing Director of the plaintiff company, to court, where he would then be required to show cause why he should not be cited for contempt of court.

3. The applicant intends to persuade the court that the alleged contemnor should be committed to prison for such period of time as the court may deem appropriate.

4. The applicant also asked the court to impose a fine on the alleged contemnor.  If the fine was not paid, the applicant asked the court to order that all the movable and immovable assets of DEEPAK PANDIT be attached and sold in execution of the judgment and also to satisfy the penalty for contempt.

5. The application is based upon the Arbitral Award dated 25th January 2017, which was later adopted as an Order of the Court.  The decision to adopt the award as an Order of the Court was arrived at with the consent of the two parties.

6. Notwithstanding the said consent order, the respondent, EURO WATER SERVICES LIMITED, are said to have made no efforts to comply with the order.

7. The applicant, PETER GATUNE, stated that the respondent’s refusal to comply with the Court Order had denied him the use of the borehole which the respondent was supposed to dig.

8. The applicant also submitted that the conduct of the respondent undermines the authority and dignity of the court.  Therefore, he urged the court to deal firmly with the respondent, so that the court’s authority was not brought into disrepute.

9. In answer to the application the respondent conceded that the arbitral award was adopted as an Order of the Court on 30th May 2017.

10. However, the respondent faulted the applicant for having extracted the Formal Order without any reference to the respondent.  As a consequence, the respondent expressed the view that the Formal Order which was extracted, did not capture the arbitral award.

11. In particular, the Formal Order is said to have excluded the part of the award which had stated that the applicant was to pay all the costs incidental from the borehole being idle.

12. Meanwhile, the respondent had, in their considered opinion, taken steps to comply with the court order.

They explained that they had taken steps by asking the applicant’s advocates what was required of them, in order that the order would be deemed to have been complied with.

13. At that stage during the hearing of the application, the court asked the respondent if it had been required to comply with the orders within 60 days from the date when the order was made.

14. The respondent confirmed that it was supposed to comply with the order within 60 days from the date when the award was received.

15. As a period of over 180 days had lapsed from the date when the consent order was adopted as an order of the court, the court wanted the respondent to explain why it had not yet complied with the order.

16. Mr. Kiragu, the learned advocate for the respondent said that his client’s understanding was that the applicant would first pay the costs before his client could deliver the borehole.

17. Mr. Kiragu also said that his client did not have access to the borehole.

18. When the court reminded Mr. Kiragu advocate that more than 6 months had lapsed since the order was made, he stated that the respondent had been mis-advised.

19. The learned advocate then told the court that the respondent was now ready to deliver the borehole, by 28th January 2018.  That assurance was given by the respondent’s advocate on 6th December 2017.

20. It is worthy of note that the respondent made it clear that if it did not deliver the borehole by 28th January 2018, it would be in contempt.

21. At that stage of the proceedings the court made it clear that the plaintiff was, prima facie, in contempt of court when it failed to deliver the borehole within six months.

22. Nonetheless, as the Plaintiff/Respondent had now promised to deliver the borehole by 28th of January 2018, the court ordered it to honour that promise.

23. I also directed the defendant/applicant to facilitate compliance with the order, by granting to the plaintiff, access to the site.

24. On 8th March 2018, the defendant informed the court that the plaintiff had not yet delivered the borehole.

25. The defendant also said that the plaintiff had served him with an invoice for flushing the borehole.

26. Finally, the defendant told the court that there was no water in the borehole.

27. In answer, the plaintiff confirmed that the borehole was dry.  It also confirmed having sent an invoice for the drilling and the flushing of the borehole.

28. Although the borehole was dry, the plaintiff insisted that it had complied with the arbitral award, as it had dug the hole to the depths ordered.

29. A reading from the Arbitral Award reveals that;

“It is common ground that sounding was not carried out, which then means that the Respondent may not have been fully aware of what lay underground.”

30. The arbitrator noted that Clause 6(a) read as follows, in an apparent attempt by the parties to address the gap in knowledge of what was beneath the surface;

“That neither can tell exactly what will be found underneath the surface of the earth and that the work of the Contractor hereunder is subject to those conditions which he may find underneath the surface, therefore-:

The Contractor shall drill the borehole with the diameter and casing sizes as specified previously as long as such a programme remains practicable considering the nature of the material being drilled….”

31. In the circumstances, when the defendant submitted before the arbitrator, that the plaintiff had no option but to complete the works to the contract depth for which he had been fully paid, or drill a replacement borehole, the arbitrator held that that conclusion was not borne out by the report of the defendant’s expert witness, Evanson Nyaramba.

32. Later, at page 39 of his Award, the arbitrator stated as follows:

“It goes without saying that by agreeing to casing, the Claimant was equally consenting to stoppage of further attempts to drill by the Respondent to reach the proposed depth of 260 metres.”

33. Therefore, the arbitrator made it clear that whilst the original intention was to reach the depth of 260 metres, the parties later agreed that there was no longer a need to reach that depth.

34. On the other hand, the arbitrator granted an order for;

“(a)……specific performance compelling the Respondent to perform the Agreement dated 19th September 2012 and to deliver a complete borehole to the Claimant.”

35. He made it clear that the Respondent was to ensure that a functional borehole was completed.

36. The Respondent was directed to specifically perform the Agreement within such period as would be mutually agreed upon by the parties, but in any event in a period not exceeding sixty (60) days from the date the Award was taken up by either party.

37. In the circumstances, I reiterate that the respondent failed to specifically perform the contract within 60 days.

38. However, the applicant has not demonstrated to the court that the said failure by the respondent constituted a willful disobedience of a court order, as envisaged by the provisions of Section 4 (1) (a) of the Contempt of Court Act.

39. The borehole has been handed over to the defendant.  However, the said borehole is dry.

40. In my understanding, that is the real complaint against the plaintiff.

41. The defendant cannot use the dry borehole, and therefore it is arguable that the borehole was not functional.

42. But I also note that, from the outset, the parties appreciated the fact that neither of them knew what was to be found beneath the surface.  There was always a probability that water may or may not be found in the borehole.

43. I find that the plaintiff did not promise to provide a borehole with water.  Of course, a functional borehole should have water.  But when a borehole was found to be dry that cannot be said to be attributable to the plaintiff’s willful disobedience of a court order.

44. Accordingly, I find no merit in the defendant’s application dated 23rd November 2017.  It is dismissed, with costs to the respondent.

DATED, SIGNEDandDELIVERED at NAIROBI,this4th day ofJune 2018.

FRED A. OCHIENG’

J U D G E