MB Limited v Kenya Ports Authority [2005] KEHC 1851 (KLR)

M.B. LIMITED................................PLAINTIFF

VERSUS

KENYA PORTS AUTHORITY.......DEFENDANT

Coram: Before Hon. Justice Mwera

Gor for Plaintiff

K. Shah for Defendant

Court clerk – Kazungu

J U D G E M E N T

This judgment follows a trial that was concluded before Tutui, Commissioner of Assize, as she was then on 24-10-02. The parties then submitted on it.

By the plaint filed on 12-1-93 the plaintiff pleaded that at all material times it was the holder of a bill of lading No. UN/179 dated 27/8/92. Also it was the owner of one contained holding 919 cartons of general merchandise which had been shipped on “M.V. ELIZA” – all in good order and condition.

That the vessel docked at Kilindini on 16-9-92 and the container with its contents was discharged and delivered into the custody and possession of the defendant which was expected to release it to the plaintiff after completing the relevant formalities. That it was the duty of the defendant to take proper care of the said container until it delivered it to the plaintiff or its agents upon production of compliance with the said formalities and presentation of the bill of lading. That when the plaintiff presented the certificates and the bill, the defendant failed to deliver the container with its contents to it. That at a result the plaintiff suffered loss of US$ 337216 or its equivalent in Kenya currency which it sought this court to grant to it.

A defence filed on 22-2-93 admitted matters including the fact that the plaintiff held the said bill of lading in respect of the said container that was shipped on “m.v. ELIZA”. But it described itself as a stranger to the pleadings that the said ship docked at Kilindini Harbour, the container was offloaded and entrusted to the care of the defendant until the plaintiff came to claim it after going through the due formalities and presenting the bill of lading. The defendant further denied having been negligent whereupon the container was lost or not delivered up at all. That no container with 919 cartons was delivered to it or that it lost it. The claimed loss was also denied.

Four (4) agreed issues were filed on 14-5-93. Before the trial commenced on 13- 10-99 the court noted that on 20-6-96 liability had been admitted by the defendant in full and so what followed was to prove the quantum of damages.

Kahumuza Hannington (PW.1), the plaintiff’s manager at Kampala, Uganda, told the court that his company imported merchandize from United Arab Emirates in two containers destined for sale to/by Kampala Supermarket. That one container was delivered to them but not the one subject of this case. The witness produced the bill of lading (Exh. 2) to the effect that they imported two containers but only one was received on their behalf by M/s Askar Forwarders Ltd. He also exhibited the list of goods from the source in Dubai in the missing container (Exh.4). PW.1 added that the Super market paid for the goods in the received container but withheld payment for the goods that were not delivered to it – valued at US$30628. 92. That was the value that the plaintiff was pursuing.

This witness was firm that even if the plaintiff had not been at the port where the goods were loaded, their shipping agent was and he did not inform them of any shortage in the number of cartons - the contents of the lost/missing container. That the goods were ordered in “dhirams” – local currency in the country of shipping. But that the rate of 3. 64 he gave to convert into dollars was one he knew although he had no official conversion rates schedule. That the documents he referred to and were marked for identification, bore the true and full value of the goods. That the plaintiff paid the suppliers, whom it had been dealing with for long without reports of short-landed goods.

Mugisha Patrick (PW.2) was a director at Kampala Supermarket Ltd. He knew the plaintiff – supplier of goods to the supermarket. They struck a deal to buy goods from the plaintiff in 1992 (Exh.1) to be paid in US dollars, 58752. 70. The supermarket got only one container of the goods as opposed to the two that it expected. Being informed of this PW.2’s company ticked off Exh. 1 the goods they had received valued at US$.28096. 78. This sum was paid but not the balance of US$.30628. 90 representing the goods that were not delivered. That the contract to buy all the goods that the plaintiff was to import included their worth and all other charges. PW.2 did not know about the bill of lading or how the goods were packed.

Mohamed Dawood (PW.3), the managing director of Askar Forwarders Ltd. said that his firm did clearing and forwarding work for the plaintiff company. He produced the forms that were filled in such exercises (Exh.5) in that the entries showed in Kenya shillings value of goods in 2 containers. That the missing container had 991 (error?) cartons. And that the value of the container was US$. 33,722.

Silas Nkubitu (DW.1) a senior Commercial officer testified on behalf of the defendant. That he had the file concerning the matter in court and he knew the facts thereto. He produced (Exh. D1) the Mombasa Port Release Order relating to the subject container. That M/s Askar Forwarders Ltd. completed all the columns and details therein required. That in what he called Box 19, the value of the containers was put at KSh.333,172/- in case of loss. That in this dispute one container only was released to the plaintiff or his agent but the other could not be traced. That the consignee was the plaintiff and that the value declared was the importers value and not the sale value. In submissions, the plaintiff’s side went over the pleadings, the evidence and the exhibits. That the agreed price for the goods was US$.58,752. 70. That because goods worth $28,096. 78 were received, the plaintiff is entitled to the balance representing the goods in the lost container. That the value declared in Kenya shillings at the time of arrival should be disregarded.

The defence in its part focused on the value to be assessed on the 919 cartons that were not traced at the time of delivery, and thus considered lost. That although there had been reference to the Uganda shilling, the American dollar and even the Dubai dirham, no documentary evidence was tendered to show the prevailing conversion rates among these currencies. That the plaintiff should thus not be allowed to impose a currency it chooses for the basis of assessing its loss. That instead the Exh. P5 and Exh.D1 be used here. They indicate the loss of goods in Kenya shillings. That in both forms the plaintiff declared to the defendant and the defendant accepted that the value of the goods in the 2 containers was KSh.333,172/-. And that because only one container was lost with its contents, the value must be a portion of what was declared to the defendant. That also there is an unexplained variation in the value of goods, said to be US.$ 33,122. 16 in the plaint while PW.1’s evidence claims only 30,628. 92. That with all this the plaintiff should only get the value of the goods lost according to proof laid but not all projected sale (with profit) value. And that in any case the plaintiff had not proved on evidence here, what its loss is or as it should be assessed.

It is not in doubt that the plaintiff imported goods in 2 containers from Dubai destined for Kampala through the Port of Mombasa. It is also not in dispute that these containers were to pass through the hands of the defendant and they would only be released for the onward trip after due formalities of completing relevant forms and paying requisite costs, charges, levies etc. had been done. From the evidence, after all was done, only one container was delivered to the plaintiff’s agents but the other was never traced and so considered lost with all its contents. Consequently the plaintiff is entitled to the value of the goods the defendant did not deliver to it. So the question is: What is the value of the 919 cartons said to have been lost?

In this court’s considered opinion the value will not be based on the purchase price or anticipated sale price in whatever currencies. There was no evidence either of these values or a credible rate of conversion. But assuming that indeed the values claimed by the plaintiff are true, then itself or its clearing agent did not so state in the various forms that the defendant handled in the transaction, to warn it at every stage that the goods were truly worth a total of US$58,725. 70 in 2 containers. If the plaintiff did not do so but declared that the goods were worth KSh.333,172 which the defendant accepted and worked on, this court will not accept another and an unproven figure. Why did the plaintiff decide to declare this figure while it knew that the goods were worth a lot more? Looking at the plaintiff’s own (Exh. P5) the Transit Entry Onward (Form C.34 – quadruplet) Column 37 TOTAL VALUE SH.333,172/- goods in the 2 containers on “M.V. ELIZA”. The defendant’s (Exh. D1) Mombasa Port Release Order again shows these two containers on “M.V. ELIZA, Column 19: “Value (Port only) Sh.331,172/-“

In the circumstances this court which could also give relief in other currencies if proved, accepts that the plaintiff entrusted into the custody and care of the defendant its goods in the 2 containers with a total value of Sh.333,172/-. That being clearly typed in the forms stated above formed the basis on which the defendant handled the property of the plaintiff. But that only one container was delivered, the value of the goods in the lost one will be a proportion of the total value declared here KSh.166,586/-.

Accordingly judgment is entered in favour of the plaintiff as against the defendant in the sum of Sh.166,586/- plus costs and interest on the lower court scales. By the way does the defendant (KPA) or KRA (Customs Department) require to have a glance at e.g. the bills of lading before accepting what importers declare on the various forms at least to ensure that the dues, charges, levies, duties collected are based on near correct figures? Probably that is not necessary but look at what we have here! Be that as it may.

Delivered on 17th June 2005.

J.W. MWERA

JUDGE