MOHAMMED BARISA DHIDA, WILBERFORCE BONANZA, ATHMAN BAHOLA BUYA, AMON BUYA HIRBAE, BWANAISAH BARISA BUYA, JOSEPH MOROWA, ABDALLAH KOMORA OKEI, JANE MKALA & BAKARI BAHOLA BAJILA v ATTORNEY-GENERAL, DIRECTOR OF KENYA WILDLIFE SERVICES, WORLD BANK [2010] KEHC 1705 (KLR)

REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT MOMBASA

Civil Suit 23 of 2010

MOHAMMED BARISA DHIDA

WILBERFORCE BONANZA

ATHMAN BAHOLA BUYA

AMON BUYA HIRBAE

BWANAISAH BARISA BUYA……..PLAINTIFFS

JOSEPH MOROWA

ABDALLAH KOMORA OKEI

JANE MKALA

BAKARI BAHOLA BAJILA

[suing for and on behalf of

248 affected members of the

Ndera & Ngwano communities of

Tana River Delta District]

-VERSUS-

THE ATTORNEY-GENERAL [on behalf of]

(a)THE MINISTRY OF LANDS AND SETTLEMENT

(b)THE MINISTRY OF ENVIRONMENT .…1ST DEFENDANT

(c)OFFICE OF THE PRESIDENT

(d)THE MINISTRY OF WILDLIFE & TOURISM

THE DIRECTOR OF KENYA WILDLIFE SERVICES………….2ND DEFENDANT

THE WORLD BANK COUNTRY DIRECTOR……………….….3RD DEFENDANT

THE GLOBAL ENVIRONMENTAL FACILITY…………………..4TH DEFENDANT

RULING

The 3rd and 4th defendants moved the Court by Chamber Summons dated 12th April, 2010 and brought under Order IXA, rules 10 and 11 of the Civil Procedure Rules, and ss. 3A and 63(e) of the Civil Procedure Act (Cap. 21, Laws of Kenya). The application carries two substantive prayers:

(i)that the Court do set aside or vary the interlocutoryex partejudgment entered against 3rd and 4th defendants on 4th March, 2010;

(ii)that the Court do order that 3rd and 4th defendants file a defence to the claim.

The said interlocutory judgment was entered as a routine procedure by the Deputy Registrar, and reads as follows:

“The 3rd and 4th defendants having been served and having failed to file defence within the prescribed time and upon receiving a request for judgment dated 4th March, 2010 filed by the advocate for the plaintiff,

IT IS HEREBY ORDERED:- That Judgment be and is hereby entered against the 3rd and 4th defendants, the World Bank Country Director and the Global Environment Facility respectively for Kshs. 634,000,000 only.”

The general grounds forming the basis of the application have been set out as follows:

(a)the plaintiffs who filed suit against 3rd and 4th defendants, failed to indicate that these two defendants were subject to absolute immunity;

(b) by virtue of the Bretton Woods Agreements Act (Cap. 464, Laws of Kenya), and in the circumstances of this case, the World Bank is immune from action or legal process, and its property and assets are immune from all forms of seizure, attachment or execution, and the Executive Director thereof is immune from legal process with respect to acts performed by him/her in his/her official capacity;

(c)the 3rd defendant has not been served with summons to enter appearance;

(d)service of summons upon 4th defendant was irregular, as the World Bank had no authority to receive summons on behalf of 4th defendant;

(e) entry of the interlocutory judgment was inadvertent and in error, in the light of the provisions of the law, and so should be set asideex debito justitiae;

(f)there had been no delay in filing the application.

Johannes Zutt, the 3rd defendant, swore a supporting affidavit on 9th April, 2010 deponing that the World Bank is an international organization established and operating in Kenya by virtue of the provisions of the Bretton Woods Agreements Act (Cap. 464, Laws of Kenya). Of 4th defendant, the deponent avers that it is a sui generiS financial mechanism without a separate legal existence, and serves the purpose of providing funds for grants to developing countries, as well as countries with economies in transition for projects related to biodiversity, climate change, international waters, land degradation, the ozone layer, and persistent organic pollutants – for the benefit of the global environment and in a nexus with local, national and global environmental challenges and the promotion of livelihoods. The deponent states that at all material times, the World Bank was the Trustee and implementing agency of 4th defendant, as well as 4th defendant’s implementing agency with respect to projects.

The deponent deposes that he has never at any time, in his personal capacity, or as World Bank Country Director for Kenya, entered into any agreements with the plaintiffs or any other person on their behalf.

The deponent avers that 4th defendant could not have entered into any agreement the effect of which is compel inhabitants of the Tana Delta to vacate their homes and be translocated without sufficient compensation.

The deponent deposed that there were only two agreements relevant to the instant matter, both entered into on 25th February, 1997: (i) the Global Facility Trust Fund Grant Agreement (Tana River Primate National Reserve Conservation Project) – concluded between the Republic of Kenya and the World Bank; and (ii) the Global Facility Trust Fund Project Agreement (Tana River Primate National Reserve Conservation Project) – made between the World Bank and the Kenya Wildlife Service.

Under the two agreements, the World Bank, acting as implementing agency for 4th defendant, availed to the Republic of Kenya grant funds from 4th defendant, for use by Kenya Wildlife Service in implementing the project described in the two agreements.

The deponent depones that the plaintiffs have sued him personally as the World Bank Country Director for Kenya, but the World Bank itself has not been sued. The 3rd defendant depones that he has not been served personally or through his duly authorized agent; nor has he been served as the duly authorized and recognized agent of 4th defendant. The deponent believes to be true the advice of his advocate, that such service was improper and insufficient for the purposes of effluxion of time for entry of appearance and filing of defence.

The deponent believes to be true the advice from his advocate: that the World Bank, by virtue of the Bretton Woods Agreements Act (Cap. 464), is immune from such a suit, and its property and assets are held inviolable and immune to all forms of seizure, attachment and/or execution; and that under the same provision, the World Bank’s Governors, Executive Directors, Officers and employees are immune from legal process with respect to acts performed by them in their official capacity, except where the World Bank waives this immunity; and there has been no such waiver.

The deponent expresses his belief and understanding, that since the World Bank was implementing the two agreements for and on behalf of 4th defendants, the immunities applicable to the World Bank were imputed to and covered 4th defendant entirely.

The plaintiffs responded by filing grounds of opposition, which grounds are as follows:

(i)the application is misconceived, frivolous, vexatious and otherwise an abuse of Court process;

(ii)3rd and 4th defendants were as a fact served with summons to enter appearance, plaint, and copy of verifying affidavit;

(iii)3rd and 4th defendants have no good reasons for not entering appearance or filing a defence;

(iv)the interlocutory judgment entered is a proper judgment which should not be set aside;

(v)3rd and 4th defendants have no good defence to the claim: they enjoy no immunity from being sued; their property has no immunity against attachment; the suit is not against an individual or individuals but against 3rd and 4th defendants as bodies corporate;

(vi)the claim is not time-barred.

The 9th plaintiff also swore a replying affidavit (dated 20th April, 2010) which he claims to be swearing also on behalf of other plaintiffs.

The deponent avers that the suit is against (i) World Bank as a body corporate, and (ii) Country Director, as the office that is the source of authority for officers serving the World Bank.

The deponent believes to be true his advocate’s advice: that summons to enter appearance, copy of plaint, and verifying affidavit were properly served upon 3rd and 4th defendants on 15th February, 2010 and duly received by Nightingale Rukuba-Ngaiza who presented herself as Senior Counsel for both 3rd and 4th defendants. It is deponed that the said Nightingale Rukuba-Ngaiza also received notice of entrance of judgment on behalf of 3rd and 4th defendants.

Although both sides in the suit have devoted themselves to the question whether or not service of the suit documents was properly effected, a much more important question, which lies at the core of this application and which is linked to the destiny of the suit itself, is the relevance of immunity against civil proceedings.

For if it is held that 3rd and 4th defendants are covered by such immunity, then the fact of service of summons becomes relegated to mere gratuitous engagement.

The basis for determining the question of immunity, learned counsel Mr. Ojiambo urged, is the Bretton Woods Agreements Act (Cap. 464, Laws of Kenya), which bears the preamble:

“An Act of Parliament to provide for acceptance by Kenya of the Agreements for the International Monetary Fund and the International Bank for Reconstruction and Development and to provide for matters related thereto.”

The Bretton Woods Agreements Act carries a schedule devoted to “Status, Immunities and Privileges”, and this schedule thus provides:

“The Fund shall possess full juridical personality, and, in particular, the capacity –

(i)to contract;

(ii)to acquire and dispose of immovable and movable property;

(iii)to institute legal proceedings.

“Section 3. Immunity from Judicial Process –

“The fund, its property and its assets, wherever located and by whomsoever held, shall enjoy immunity from every form of judicial process except to the extent that it expressly waives its immunity for the purpose of any proceedings or by the terms of any contract.

“Section 4. Immunity from Other Action –

“Property and assets of the Fund, wherever located and by whomsoever held, shall be immune from search, requisition, confiscation, expropriation or any other form of seizure by executive or legislative action.

………………..

“Section 8. Immunities and Privileges of Officers and Employees –

“All Governors, Executive Directors, Alternates, Officers and employees of the Fund –

(i)shall be immune from legal process with respect to acts performed by them in their official capacity except when the Fund waives this immunity;

(ii)not being local nationals, shall be granted the same immunities from immigration restrictions, alien registration requirements and national service obligations and the same facilities as regards exchange restrictions as are accorded by members to the representatives, officials, and employees of comparable rank of other members……….”

Learned counsel submitted that the Bank itself is immune from any legal action, except in respect of its lending or commercial transactions; and that all its executive directors and other officers and employees are immune from legal process in respect of official action, unless there is a specific waiver of immunity.

Counsel urged that there was no evidence of any kind of waiver of immunity by 3rd and 4th defendants: that they do not appear in the plaintiffs’ documents which are said to have been signed by parties; that the annexes to the said agreements have nothing to do with the World Bank, nor with 3rd or 4th defendant; that the plaintiffs’ attachments bearing architectural drawings have nothing to do with 3rd or 4th defendant; and so, it was submitted, the plaintiffs had failed to show any kind of connection with 3rd or 4th defendant.

Such elements show, Mr. Ojiambo urged, that real arguable and triable issues exist, which ought to be canvassed before judgment can be entered in favour of the plaintiffs; and in this regard, it was urged, the fact that large sums of money were involved, restated the appropriateness of a hearing on the merits. Mr. Ojiambo submitted that the Deputy Registrar’s order was unlawful, because he failed to inquire into things apparent on the face of the documents of suit themselves.

Learned counsel submitted that, even assuming the plaintiffs could properly lodge a suit against the World Bank, they had an obligation to show that the personification of the World Bank for the purpose of being sued, was the Country Director; and that the plaintiffs ought to show that the right person to receive service of the suit papers was the legal officer of the World Bank. Such a suit, it was urged, ought to be directed at the corporate persona of the World Bank, but not at a director; and the corporate persona was that of an international body constituting a separate legal entity; the ordinary law of corporations, in this regard, was inapplicable.

Mr. Ojiambocontested the plaintiffs’ position, that the World Bank lacked immunity against suit; by law the World Bank enjoyed immunity, except in respect of guarantees of loan.

Mr. Ojiambodevoted much attention to the issue of service of the suit documents, and contended that the service as effected, was invalid. In the plaint it is stated that the 3rd defendant is the World Bank Country Director; but 3rd defendant really stood as an individual, and did not embody the corporate persona of the World Bank; the description in the plaint had not indicated which Country Director of the World Bank was being sued; so the service upon 3rd defendant was merely embarrassing, and this defendant did not know who to respond to; if the proper target of the suit was 3rd defendant, then service must be effected upon him individually, or upon his recognized agent; and this same argument applied to 4th defendant, a facility which is run by the World Bank. The effect, counsel urged, was that the suit papers had not been served upon 3rd or 4th defendant; only a legal officer of the World Bank had been served, but she was not the agent of the World Bank for the purpose of service. By law, counsel urged, service of the suit papers had to be personal service, or service upon somebody with direct authority or a power of attorney (Order III, rule 1 of the Civil Procedure Rules); so if service of the papers indeed took place, then such service was insufficient.

Counsel relied on the Court of Appeal decision, Kanji Naran v. Velji Ramji (1954) EACA 10 for the proposition that an interlocutory judgment, where there was insufficient service, amounts to an unlawful finding; the Court thus stated (P.21):

“….the learned trial Judge appears to have thought that he had a discretion in refusing the motion, whereas, in fact, he had none, because in the absence of proper service the order of the Registrar was unlawful.”

In the same category is the High Court (Harris, J.) decision in Jesse Kimani v. McConnell & Another [1966] E.A. 547, in which the following passage (at p.555) appears:

“Looking at O.IXas a whole, and attempting to comprehend the purpose of rr.10 and 24, it seems to me that a reasonable approach to the application of these rules to any particular case would be for the Court, first, to ask itself whether any material factor appears to have entered into the passing of theex partejudgment which would or might not have been present had the judgment not beenex parte, and then, if satisfied that such was or may have been the case, to determine whether, in the light of all the facts and circumstances both prior and subsequent and of the respective merits of the parties, it would be just and reasonable to set aside or vary the judgment, if necessary, upon terms to be imposed”.

Learned counsel relied on still other cases, dealing with the same point: Patel v. E.A. Cargo Handling Services Ltd. [1974] E.A. 75 (Ct of Appeal); Remco Ltd. v. Mistry Jadva Parbat & Co. Ltd and others [2002] 1 E.A. 223 (Ringera, J).

On the question of proper service of suit papers, in the context of the instant case, counsel relied on Mulla: The Code of Civil Procedure, 16th ed (Solil Paul & Anupam Srivastava), where the following passages appear:

(i)[p. 1709] –

“It is only an agent who is empowered, as provided in O.3, r6, that can accept service under this rule. Mere oral authorization is not sufficient. Thus service of the summons on a clerk of a party is not sufficient unless such a clerk is duly authorized to accept service”.

(ii)[p. 1711] –

“The object of the service of a summons, in whatever way [it] may be effected (other than substituted service to which other considerations apply), is that the defendant may be informed of the institution of the suit in due time before the date fixed for hearing. Where the defendant is not served with summons, the mere fact that he had knowledge of the suit is immaterial”.

Learned counsel urged that the plaintiffs had misapprehended the nature of legal personality in international law, and that this led them to fail the test, in effecting service upon the defendants; and that the World Bank and the Global Environmental Facility did not typify the ordinary kind of corporate personality known in Municipal law and which is thus defined (Halsbury’s Laws of England, 4th ed. Reissue, Vol 9(2) (London, 1998)) (para. 1001, p. 570):

“A corporation may be defined as a body of persons (in the case of a corporation aggregate) or an office (in the case of a corporation sole) which is recognized by the law as having a personality which is distinct from the separate personalities of the members of the body or the personality of the individual holder for the time being of the office in question.”

Legal personality in international law is considered by Professor D. W. Bowett in his work, The law of International Institutions, 2nd ed. (London: Stevens & Sons, 1970), at p. 327:

“The attribution to an international organization of legal personality, both under international and municipal law, should not be allowed to obscure the fact thatthere is no single,comprehensive body of law to govern its transactions and activities;unlike the corporation in private law which has a personal law (whether based on the test of place of incorporation, place of control orsiège social), the international corporation has in general no personal law or ‘law of incorporation’.”

Learned counsel, Mr. Kenzi, did not endeavour to address the foregoing points on their technical and substantive merits; he took only the broad sweep, in these words:

“On behalf of the plaintiffs, we oppose. The application is misconceived. In an application of this nature, a Court has to be satisfied there was service of Summons: Summons to enter appearance; copy of the plaint; affidavits. On 15th February, 2010 service was effected upon 3rd defendant, and was received by a lady, a Senior Counsel for 3rd and 4th defendants,Nightingale Rukuba-Ngaiza, who duly signed and stamped [the documents]. OneMusau, a process-server, duly signed……The defendants in their application, did not deny the existence of this Senior Counsel…..They have refused to mention that name. Therefore, service was properly effected.”

Learned counsel did not address the question whether the recipient of the plaintiff’s service of suit papers was a designated person for that purpose, on behalf of 3rd and 4th defendants; counsel’s position was thus stated: “Someone describing herself as Senior Counsel cannot be said to be a mere clerk; if she was a lawyer, she was the most suitable person to receive service; and therefore, 3rd and 4th defendants were properly served”.

On the basis that 3rd and 4th defendants were properly served, counsel urged, “there is no basis for a discretion” [on the part of the Court]. For, it was urged, “there is no reason why the defendants did not enter appearance or file a defence”. The plaintiff’s case was all the stronger, Mr. Kenzi submitted, because “Nightingale Rukuba-Ngaiza also received notice of entrance of judgment, and she duly signed”. Counsel urged that the Deputy Registrar was right to enter judgment, for “the defendants have no good defence to the claim”.

Mr. Kenzisubmitted that, contrary to 3rd and 4th defendants’ contention, the plaintiff’s claim is not against an individual, but is “against the World Bank as a body corporate”. Counsel urged: “We sued the office of Country Director as an office. The World Bank is not synonymous with a particular Country Director”. And learned counsel submitted that “the Bank does not enjoy immunity as alleged”. Counsel submitted that 3rd and 4th defendants “cannot claim they were not a party to the agreement between the plaintiffs and 1st and 2nd defendants and the present applicants”.

The applicants have asked that the interlocutory judgment recorded by the Deputy Registrar on 4th March, 2010 be set aside or varied. The guiding principles for such an issue are clear from the case law already considered above; and this Court, indeed, has recently considered those principles, in Joseph Kimatu and others v. Rukiya Soud Ali Bashir and Others, Mombasa HCCC No. 284 of 2003; the following is the pertinent passage:

“It is to be regarded as meritorious judicial practice, moreover, that a belated defence which enables the Court to take thecorrect decision in law, and in the absence of which opportunity the judgment-creditor is likely to win outside the framework of the law, is forallowing. In such a situation, the late-comer defendant walks a meritorious path, and his or her defence cannot be peremptorily excluded, even when laches, or lack of diligent prosecution of defence, is apparent”.

Is the instant matter one in which the Court would be under such a well-defined obligation to set aside an interlocutory judgment?

In this matter there are questions of law which did not form part of the background to the interlocutory judgment of 4th March 2010: does immunity from legal process apply to the World Bank, on the facts of this case? What is the legal standing of 3rd defendant, in relation to the corporate persona of the World Bank? What is the nature of the legal personality of 4th defendant, in relation to the suit herein? How is summons to be effected upon the World Bank? What is the effect of the Bretton Woods Agreements Act (Cap. 464, Laws of Kenya) in relation to the suit as filed? Was there any waiver of immunity from legal process, on the part of 3rd and 4th defendants?

In so far as there was no opportunity to consider the foregoing questions, the legal framework does not, in my opinion, exist for entry of an interlocutory judgment, and, in particular, for execution of any decree based on such judgment.

It follows that all the relevant questions must be the subject of inter partes hearing, before a proper judicial decision is arrived at.

Consequently, I hereby set aside the interlocutory ex parte judgment entered against 3rd and 4th defendants on 4th March, 2010. The 3rd and 4th defendants shall file and serve their defences within 21 days of the date hereof. The costs of this application shall be in the cause.

DATED and DELIVERED at MOMBASA this 25th day of June, 2010.

J. B. OJWANG

JUDGE

Coram: Ojwang, J.

Court Clerk: Ibrahim

For the Plaintiffs/Respondents: Mr.kenzi

For 3rd & 4th Defendants/Applicants: Mr. Ojiambo