JUANCO TRADING COMPANY LTD v SGS KENYA LIMITED & KENYA SHELL LIMITED [2011] KEHC 874 (KLR)

REPUBLICOF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL & TAX DIVISION

CIVIL SUIT MISC. NO. 1053 OF 2010

JUANCO TRADING COMPANY LTD……………….……PLAINTIFF

VERSUS

SGS KENYA LIMITED.………………………………1ST DEFENDANT

KENYA SHELL LIMITED ……………………….….2ND DEFENDANT

RULING

The Applicant in the Notice of Motion dated 22nd November 2010, prays that Milimani Chief Magistrate’s Suit No EJ 2356 of 2003 be transferred to the High Court (Milimani Commercial Court) for hearing and determination on the ground that the value of the subject matter, being KShs. 6,541,944/- surpasses the pecuniary jurisdiction of the subordinate court. The figure was arrived at following an audit conducted by an audit firm, M/S King’ang’i & Company, a report of which is annexed as an exhibit in the Applicant’s Further Affidavit filed on 28th January 2011. The report is dated 7th February 2003.

The application is opposed on the strength of the 2nd Defendant’s Grounds of Opposition filed on 21st January 2011, and the Replying Affidavit sworn by its Legal Officer, Alison Kariuki who depones, inter alia, that the 2nd Defendant would be greatly prejudiced if the orders sought herein were allowed, owing to the fact that the suit was filed way back in 2003. The Respondent contends that since the enhancement of the claim before the Resident Magistrate’s Court would necessitate the amendment of the Plaint, protracted delay would ensue. The 2nd Defendant contends that it would be more difficult now to secure witnesses with astitute memories to testify on the additional maters than it would have been had the Applicant amended the Plaint when the consent order leading to the enhanced claim, was recorded on 29th February 2008 as per annexture “JW1” of the Supporting Affidavit.

The 2nd Defendant/Respondent contends further that, according to the consent order, the issue of excess of jurisdiction was to be taken care of by the filing of a fresh suit if the Plaintiff’s claim exceeded the pecuniary jurisdiction of the subordinate court. The 2nd Defendant/Respondent prays therefore that the application be dismissed with costs.

In the Grounds of Opposition filed, the 2nd Defendant/Respondent states that the application is frivolous and an abuse of the process of the court since the consent filed in H.C.C.C. NO. 288 of 2008 (O.S)(annexture “JW1” of the Supporting Affidavit) provided that the Plaintiff/Applicant files a fresh suit if jurisdiction was in issue. I have perused the consent recorded on 29th February 2008, in H.C.C.C. No. 288 of 2005 (O. S.) and have noted that the relevant order was recorded inter alia as follows:-

“4. The following outstanding issues be included in the Chief Magistrate’s Civil Case No. EJ 2356 of 2003 filed by the Plaintiff against the         Defendant if within the Magistrates power by    way of appropriate amendments to the pleadings or in the alternative the said claims be the subject matter of a fresh suit (hereinafter) “the proposed suit”)

5. ------

6. Liberty to apply.(Underlining by the court)

It has been deponed by the Respondent that the Applicant did not apply to amend the Plaint in the suit sought to be transferred andthat the perceived enhanced claim is merely a figure quoted without any justification. As earlier noted in this ruling, the Applicant has annexed to its Further Affidavit of 27th January 2011 an auditor’s report dated 7th January 2003. The same must have been within the Applicant’s possession and knowledge when the consent order was recorded on 29th February 2008. There is nothing to show that it was not. Clearly therefore, the Applicant knew or ought to have known that the claim, if based on the said audit report was bound to exceed the pecuniary jurisdiction of the lower court.

Going by the wording of the consent, particularly Order 4 thereof, an inclusion in the claim in EJ 2356 of 2003, of the amount stated in the audit report was, not envisaged. Provision was made giving the Applicant leeway to file a fresh suit in respect of any claim in excess of the Chief Magistrate’s jurisdiction. That being the case, I agree with the position taken by the 2nd Defendant that the application herein is without merit. The same is hereby dismissed with costs to the 2nd defendant/Respondent.

DATED, SIGNEDand DELIVERED at NAIROBIthis 11THday of NOVEMBER, 2011

M. G. MUGO

JUDGE

In the presence of:

Ms. Mburu holding brief for Mr. MulekyoFor the Applicant

Mr. MogereFor the 2nd Respondent