Krystalline Salt Limited & 3 others v Cabinet Secretary, Ministry of Mining and Petroleum & another; Kenya Revenue Authority (Interested Party) [2023] KECA 1488 (KLR)

Krystalline Salt Limited & 3 others v Cabinet Secretary, Ministry of Mining and Petroleum & another; Kenya Revenue Authority (Interested Party) (Civil Application E002 of 2023) [2023] KECA 1488 (KLR) (8 December 2023) (Ruling)

Neutral citation: [2023] KECA 1488 (KLR)

Republic of Kenya

In the Court of Appeal at Malindi

Civil Application E002 of 2023

AK Murgor, KI Laibuta & GV Odunga, JJA

December 8, 2023

Between

Krystalline Salt Limited

1st Applicant

Kurawa Industries Limited

2nd Applicant

and

Malindi Salt Works Limited

Garnishee

and

Kensalt Salt Limited

Applicant

and

Cabinet Secretary, Ministry of Mining and Petroleum

1st Respondent

Attorney General

2nd Respondent

and

The Kenya Revenue Authority

Interested Party

(Being an application to cite the respondents and the interested party for contempt of court orders issued on 12th May, 2023 Environment & Land Petition 14 of 2021 )

Ruling

1. Upon hearing the notice of motion dated February 6, 2023 brought by the applicants against the respondents, this Court issued an order on May 12, 2023 to the effect that:“pending the hearing and determination of the intended appeal, the prevailing status quo be maintained.”

2. That order arose from an application made by the applicants in which they sought stay of the decision of the Malindi Environment and Land Court (ELC) Petition No. 14 of 2021 delivered by the ELC (M. A. Odeny, J.) on January 12, 2023, pending hearing and determination of the intended appeal.

3. The applicants are back with an undated application filed on August 7, 2023 praying that this Court issues a notice to the 1st respondent and the Commissioner General of the interested party to personally attend court and show cause why they should not be cited for contempt of the said orders of May 12, 2023; that the court cites the 1st respondent and the Commissioner General of the interested party for contempt for unreasonably and maliciously refusing to comply with the said order suspending the directions by Justice M.A. Odeny to have the applicants brought within the purview of the Mining Act; that the court commits the 1st respondent and the Commissioner General of the interested party to civil jail for six (6) months, or for such other period that the court deems just in the circumstances, or until the contempt of court is purged in full; that the interested party be directed to henceforth cease imposing any other conditions regarding the export business of the applicants that has the effect of effecting any provision in the Mining Act, 2016; that the court directs that no such demands for royalties and/or attempt to act on the judgement of the Hon. Justice M. A. Odeny shall be made by the respondents and the interested party; that the court issues such further orders as befit the circumstances of this case; and that the costs of this application be provided for.

4. The said application was supported by an affidavit sworn by Hamita Patel, the 1st applicant’s Managing Director, on August 7, 2023. The gist of the said affidavit was that this Court issued a stay order stopping the execution of Malindi Environment and Land Court (ELC) Petition No. 14 of 2021 pending the hearing of the intended appeal; that the import of the said decision was brought to the attention of the respondents and the interested party; that the respondents defiantly continue to harass, intimidate and subject the applicants to acts of economic sabotage in a bid to force them to comply with the decision; that the interested party has severally impounded the applicants’ trucks on transit to various areas in a bid to force them to pay what they termed as outstanding royalties and levies under the Mining Act, 2016; that the interested party has disallowed the applicants from exporting salt unless they pay the fees otherwise payable under the Mining Act, 2016; that the applicants are faced with the options of either complying with the order or shut down their businesses since exports form a substantial part of their business; that the interested party has changed the payment terms so that, while the applicants would previously pay any monies required per consignment, they are currently required to pay such monies per truck; and that the contemptuous acts of the respondents are detrimental to the applicants’ business.

5. It was further averred that any attempt to demand for royalties and levies which are premised on the Mining Act, 2016 is out rightly contemptuous of the orders issued on May 12, 2023 since there are active proceedings challenging the attempt by the respondents to bring the applicants within the purview of the Mining Act, 2016; and that continuing to demand for royalties is malicious and a show of utter disregard for judicial authority. There were other averments in the said affidavit, which are adumbration of legal principles rather than factual averments. In support of their application, the applicants exhibited copies of the ruling alleged to have been disregarded, letters from the applicants’ advocates to the respondents, and Mineral export Permits issued by the Director of Mines and Customer Notice in respect of clearance of export cargo at the port of Mombasa by the Kenya Ports Authority.

6. In a further affidavit sworn by the same deponent on September 12, 2023, it was disclosed that, subsequent to the filing of this application, the Ministry of Mining put up a public notice inviting stakeholder engagement on the proposed regulations under the Mining Act; that some of the regulations affect the applicants as they seek to define new rates payable by the applicants and impose new conditions for obtaining licences and permits for mining including edible sea salt mined by the applicants; that, despite a request by the applicants’ advocates to stay the intended stakeholder engagement, the respondents failed to respond to the concerns raised and, instead, proceeded with the said engagement; and that the said action is in contempt of the orders of this Court.

7. In response to the application, the 1st respondent, through its Senior Principal Superintending Inspector of Mines, Abel Chumba, swore an affidavit on 30th August 2023. Material to the instant application, it was averred that it has not demanded the payment of royalties from the applicants since service upon it of the stay orders issued on 12th May 2023; that it was the applicants who were harassing the 1st respondent to release the trucks which the 1st respondent had not even impounded; that, upon being contacted, the applicants’ advocates clarified that the letter was erroneously brought to the attention of the Director of Mines, as it was meant for the Commissioner, Kenya Revenue Authority; that the State Department of Mining received and processed export permits, which were approved in the spirit of maintaining status quo as per the ruling of this court; that the said permits point to a provisional payment of royalty which is subject to the court process; that no demand for the same has been made as evidenced by the approvals; and that the allegations made against the 1st respondent are unfounded.

8. The interested party did not file any response to the Motion.

9. When the application came up for hearing on this Court’s GoTo Meeting platform on 19th September 2013 on which day learned counsel, Mr. Ometo Bryson held brief for Dr Arwa for the applicant while learned counsel Ms. Lutta appeared for the respondent.

10. By way of submissions filed on behalf of the applicants by the firm of Rachier & Amollo Advocates, LLP, and which were briefly highlighted by Mr. Ometo, the averments set out in the affidavit in support of the application which we have set out above were reiterated. Apart from that, it was contended that, by its ruling dated May 12, 2023, this court stayed the operations of the Mining Act, 2016, under which the royalties in question were demanded; that, by developing regulations under the Mining Act, 2016 whose effect is to give effect to various aspects of the Mining Act, including the obtaining of permits and prescribing threshold and payment of royalties, the 1st Respondent was acting in contempt of the orders of the Court which expressly directed that status quo be maintained; that by developing the said regulations, the 1st Respondent has pre-empted this court’s final determination; and that by exposing the applicants to conditions which find root in the Mining Act, 2016 the interested party has defied the court orders.

11. In support of their submissions, the applicants cited Econet Wireless Kenya Ltd v Minister for Information & Communication of Kenya &another [2005] 1 KLR 828; and Trusted Society of Human Rights Alliance v Cabinet Secretary for Devolution and Planning & 3 others [2017] eKLR, highlighting the importance of obeying court orders, since disobedience of court orders lowers the dignity, and demeans the authority, of the court. According to the applicants, the parties had absolute knowledge and notice of the court’s ruling, and the applicants have severally reminded the 1st espondent and the interested party about the existence of the same; that the applicants have met the standard of proof required to have the respondent and the interested party cited for contempt of the court orders of May 12, 2013; that the respondents and the interested parties ought to be committed to civil jail for 6 months, or until they purge the said contempt.

12. The Attorney General filed submissions on behalf of the respondents. They were highlighted by Ms. Lutta. According to them, the interested party is a separate legal entity from the respondents, and is not under direct authorization and/or mandate as that of the respondents; that it is injudicious for the applicants to prefer such an application against the respondents as well as the interested party, who was not a party in the initial proceedings in which the orders of stay were issued; that, based on Alfred Mutua v Boniface Mwangi [2022] eKLR in which the High Court cited this Court’s decision in Christine Wangari Gachege v Elizabeth Wanjiru Evans & 11others [2014] eKLR, as read with section 5 of the Judicature Act, the statutory basis for contempt of court is rule 81. 4 of the English Civil Procedure Rules (Amendment No. 3) Rules; that the power to punish for contempt is discretionary and should be issued sparingly, and that the order alleged to have been breached must state clearly and unequivocally what should and should not be done; that the standard of proof in contempt of court applications is higher than that of balance of probabilities, but lower than that of beyond reasonable doubt as held in Mutitika v Baharini Farm [1985] eKLR; and that the only claims made by the applicants are against the interested party which claims are not supported by any compelling evidence.

13. We have considered the issue raised by the parties to this appeal. It is clear from the ruling which gave rise to the present proceedings that the entity described in the instant application as the interested party, Kenya Revenue Authority, was not party to the earlier proceedings. No application has been made and no order has been obtained joining it to these proceedings. Consequently, no order was issued against it which either compelled it to act or restrained him from acting in any particular manner. Accordingly, we agree with the respondents that an order citing the interested party for contempt cannot be issued since in personam orders, as was held in Ernest Orwa Mwai v Abdul S Hashid &another Civil Appeal No. 39 of 1995 (UR), (decision of Gicheru, Tunoi & Shah, JJA on 24th March 1995) and Kihoto Housing Co-Operative Society Limited v Gachika Farmers Trading Company LimitedCivil Appeal No. 308 of 1997 (UR), (a decision of Gicheru, Omolo & Shah, JJA on 4th June 1999), cannot bind those who were not parties to the proceedings in which those orders were made.

14. We associate ourselves with the decision of the Supreme Court of Canada in Carey v Laiken 2015 SCC 17, [2015] 2 S.C.R. 79 that:“The contempt power is discretionary and courts have consistently discouraged its routine use to obtain compliance with court orders: see, e.g., Hefkey v Hefkey, 2013 ONCA 44, 30 R.F.L. (7th) 65, at para. 3. If contempt is found too easily, ‘a court’s outrage might be treated as just so much bluster that might ultimately cheapen the role and authority of the very judicial power it seeks to protect’: Centre commercial Les Rivières ltée v Jean Bleu inc., 2012 QCCA 1663, at para. 7. As this Court has affirmed, ‘contempt of court cannot be reduced to a mere means of enforcing judgments’: Vidéotron Ltée v. Industries Microlec Produits Électroniques Inc, [1992] 2 SCR. 1065, at p 1078, citing Daigle v St- Gabriel-de-Brandon (Paroisse), [1991] RDJ 249 (Que. C.A.). Rather, it should be used ‘cautiously and with great restraint’: TG Industries, at para 32. It is an enforcement power of last rather than first resort: Hefkey, at para 3; St Elizabeth Home Society v Hamilton (City), 2008 ONCA 182, 89 OR (3d) 81, at paras 41- 43; Centre commercial Les Rivières ltée, at para. 64. ”

15. Although the applicants complain that the order of this Court issued on May 12, 2023 was disobeyed, the applicants have not clearly explained the manner in which the said order was disobeyed. The applicants in their application giving rise to the order of 12th May 2023 sought to have the decision of the learned judge of the ELC stayed. However, this Court, in its wisdom, issued an order maintaining the “prevailing status quo”. In this application, the applicants have not explained to us what the status quo existing at the time the order was made. Instead, the applicants have concentrated their submissions on the order that was made by the learned judge of the High Court, which they sought to have stayed, a stay which was not granted in the exact words sought in the application. In applications of this nature, we agree with this Court’s decision in Jacob Zedekiah Ochino &another v George Aura Okombo & 4others [1989] KLR 165 that :“The Court will only punish for contempt of injunction if satisfied that the terms of the injunction are clear and unambiguous and that the defendant has a proper notice of the terms and the breach of the injunction has been proved beyond reasonable doubt.”

16. In a sworn affidavit, the respondents have denied that they have disobeyed the orders of this court and asserted that, since the issuance of the orders in question, they have not demanded any further payments from the applicants. However, the applicants have exhibited documents which, in their view, amount to demand of royalties which, they contend, they ought not to pay since such payment was stayed by this Court. We have stated that there was express order staying the said payments. We are unable, based on the record put to us, to find what exactly the prevailing status was at the time of the grant of the said orders. Apart from that, the respondents have explained that what the said documents contain is a provisional payment of royalty which is subject to the court process, but whose payment has not been demanded.

17. It is our view that the fact that the applicants obtained orders maintaining status quo which did not expressly bar the respondents from developing regulations since those regulations were not only meant for the applicants, but also other actors in the mining sector. Therefore, we do not find any contempt in the actions of the applicants in developing regulations and proceeding with stakeholder engagements.

18. In Carey v Laiken (supra), it was held that:“The first element is that the order alleged to have been breached “must state clearly and unequivocally what should and should not be done”: Prescott-Russell, at para. 27; Bell ExpressVu, at para. 28, citing with approval Jaskhs Enterprises Inc. v. Indus Corp., 2004 CanLII 32262 (Ont. S.C.J.), at para. 40. This requirement of clarity ensures that a party will not be found in contempt where an order is unclear: Pro Swing, at para. 24; Bell ExpressVu, at para. 22. An order may be found to be unclear if, for example, it is missing an essential detail about where, when or to whom it applies; if it incorporates overly broad language; or if external circumstances have obscured its meaning: Culligan Canada Ltd. v. Fettes, 2010 SKCA 151, 326 D.L.R. (4th) 463, at para. 21. ”

19. In this case, the applicants have failed to prove that the order alleged to have been disobeyed was issued against the interested party; that the said order was unequivocal as to what the respondents were directed to do or not to do; and that the said order was actually disobeyed by the respondents.

20. In Re Bramblevale (1970) 1 Ch. 128, it was appreciated that:“Contempt of court is an offence of a criminal character. A man may be sent to prison for it. It must be satisfactorily proved.”

21. In the premises, this application fails to meet the threshold for finding a party to be in contempt of a court order. It is hereby dismissed with costs to the respondents. It is so ordered.

DATED AND DELIVERED AT MALINDI THIS 8TH DAY OF DECEMBER, 2023A. K. MURGOR...............................JUDGE OF APPEALDr. K. I. LAIBUTA...............................JUDGE OF APPEALG. V. ODUNGA...............................JUDGE OF APPEALI certify this to be a true copy of the originalSingedDEPUTY REGISTRAR