Patel v Biopharma Limited [2022] KEHC 69 (KLR)

Patel v Biopharma Limited (Civil Case E191 of 2019) [2022] KEHC 69 (KLR) (Commercial and Tax) (2 February 2022) (Judgment)

Neutral citation number: [2022] KEHC 69 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Civil Case E191 of 2019

DAS Majanja, J

February 2, 2022

Between

Narendra Kumar Patel

Plaintiff

and

Biopharma Limited

Defendant

Judgment

1. The Plaintiff’s claim against the Defendant is set out in the Plaint dated 14th June 2019. According to the Plaint, the Plaintiff, who works and resides in the United States of America, lent the Defendant, a company incorporated in Kenya, USD 386,605. 12 under an agreement dated 9th March 2010 (“the Loan Agreement’’). The salient terms of the Loan Agreement were that the amount would attract interest at a rate of 12% per annum (compounded) on payment on the due date, an initial 6-month moratorium period for repayment and thereafter repayment on every 4th day of each calendar month starting from September 2010 over a period of 2 years.

2. The Plaintiff forwarded the loan proceeds to the Defendant on 5th March 2010 but in due course, the Defendant failed to make payment causing the Plaintiff to terminate the loan agreement on 14th April 2012. On making several demands, the Defendant issued several cheques to the Plaintiff but these were dishonored. The Plaintiff avers that the Defendant only paid USD 84,000. 00.

3. Despite notice of intention to sue, the Defendant failed to pay the balance due under the Loan Agreement thus causing the Plaintiff to file suit and seek judgment for payment of the principal sum due and default interest at 14% p.a, general and exemplary damages, interest thereon and costs.

4. The Defendant denied the claim by filing the Statement of Defence dated 2nd August 2019 in which it denied all the allegations in the Plaint. However, it admitted receipt of USD 308,605. 12 and stated that the loan has been paid and that the Defendant is not entitled to any money. It also states that the claim is time barred under the Limitation of Actions Act (Chapter 22 of the Laws of Kenya).

5. This matter was fixed for pre-trial directions several time and when it became apparent that the Defendant was not actively participating in pre-trial processes, the court issued a Notice to Show Cause why the Defence should not be struck out. On 17th November 2021, counsel for the Defendant did not attend court to show cause or file any affidavit in that regard despite being serviced. Consequently, the court struck out the Defence and fixed the suit for formal proof.

6. At the hearing, the Plaintiff testified along the lines set out in the Plaint and which I have summarized above. He produced documents to support his case including the Loan Agreement signed by both parties, a remittance receipt for the money dated 21st June 2012, email correspondence between the parties confirming receipt of the loan sum and demand for repayment.

7. Counsel for the Defendant also attended court and was allowed to cross-examine the Plaintiff notwithstanding the Defendant’s Defence had been struck out.

8. I have considered all the evidence and I find and hold that the Plaintiff has proved its case on a balance of probabilities. The Loan Agreement confirms the relationship between the parties, the loan sum was duly acknowledged and received. Save for the USD 84,000. 00 which was repaid, the balance was never repaid and it is still outstanding. Since the Defence was struck out, all this evidence is uncontested. There is also no evidence that the balance was repaid.

9. I have noted that the Plaintiff sought general relief in the Plaint including the Principal sum due. The principal sum is the loan sum of USD 386,605. 12 less the amount of the USD 84,000. 00 which the Plaintiff acknowledges was repaid amounting to USD 302,605. 12. I do not find that failure to plead the specific amount in the prayers is not fatal as the claim is clear in the body of the Plaint and the Defendant had notice of it. Further, the Plaintiff paid court fees for claiming the said amount.

10. I note that the Plaintiff has not prayed for compounded interest but seeks interest at 14% p.a. This is a claim for money lent under a contract hence the court cannot award general and exemplary damages.

11. Consequently, I enter judgment for the Plaintiff against the Defendant for the following:a)USD 302,605. 12;b)Interest on (a) at court rates from the date of filing suit until payment in full;c)Costs of the suit.

DATED AND DELIVERED AT NAIROBI THIS 2ND DAY OF FEBRUARY 2022. D. S. MAJANJAJUDGECourt Assistant: Mr. M. Onyango.Ms Kihara instructed by Chege Kariuki and Associates Advocates for the Plaintiff.Mr Okao instructed by Okao and Company Advocates for the Defendant.