Surestep Systems & Solutions Limited v KAG Sacco Limited [2022] KEHC 16032 (KLR)

Surestep Systems & Solutions Limited v KAG Sacco Limited (Miscellaneous Application E756 of 2021) [2022] KEHC 16032 (KLR) (Commercial and Tax) (2 December 2022) (Ruling)

Neutral citation: [2022] KEHC 16032 (KLR)

Republic of Kenya

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

Commercial and Tax

Miscellaneous Application E756 of 2021

A Mabeya, J

December 2, 2022

Between

Surestep Systems & Solutions Limited

Applicant

and

KAG Sacco Limited

Respondent

Ruling

1. This is a ruling on the respondent’s notice of motion dated 25/11/2021. The same was brought under order 12 rule 7, order 51 rule 1,2,4,10 of the Civil Procedure Rules2010 and sections 1A, 1B, 3 and 3A of the Civil Procedure Act.

2. The respondent sought the setting aside of the made on November 23, 2021 that granted all the orders prayed for in the applicant’s application dated October 13, 2021. It also sought leave to file a replying affidavit to the applicant’s application dated October 13, 2021 out of time and for that application to be heard on merit.

3. The grounds for the application were that the Court had allowed the applicant’s application dated October 13, 2021 in its entirety as it was unopposed. That order number c) thereof was a temporary mandatory injunction allowing the applicant access to the respondent’s systems so as to retrieve software add-ons in the respondent’s installed SACCO management system based in Microsoft Dynamic Navision 2017; that the respondent’s systems were upgraded with the new partner in trade and the software of the applicant was not going to be used.

4. That any invasion of its premises by the applicant would result in irreparable loss being occasioned and would conclusively determine the suit at an interlocutory stage. That there is no dispute to be referred to arbitration as the termination of the agreement between the parties has been properly undertaken and performed.

5. The respondent’s advocates averred that they only discovered that they should have replied to the applicant’s application when its submissions were received in its offices on November 22, 2021.

6. That on the morning of the mention, the respondent’s advocates logged into the virtual session but could not be heard as their online system faced challenges which they were unable to resolve. That had they been heard, they would have sought for an extension of time to file a replying affidavit to the application.

7. In response, the applicant filed a replying affidavit sworn on December 13, 2021 by its Chief Executive Officer. It was averred that the application is misconceived, bad in law and tainted with false statements meant to delay and deny the applicant justice.

8. That the Master Services Agreement dated December 11, 2017 provided that any dispute that would arise in respect of the Agreement or termination thereof would be determined by way of arbitration.

9. That the applicant accepted the termination of the agreement by the respondent vide a letter dated 25/8/2021 and further the applicant requested to be allowed to retrieve its software add ons properties in accordance with the said agreement.

10. That the Master Services Agreement provided that all modules save for the Financial Management Module belong to the applicant as it’s add ons, patents and copyright. That the respondent was prohibited from copying, showing or contracting a third party to give any assistance on the same without seeking the applicant‘s consent.

11. The applicant contended that allowing a third party access without seeking the applicant’s consent was a recipe for dispute. That the respondent was seeking equity with soiled hands as it was a breach of the Master Service Agreement by allowing a third party access to its software add ons and the continued interference prejudiced them.

12. That there was no attempt to reach out to the applicant’s advocates on record to have the file set aside as they sort out their technological failures. That the excuse is deliberate with the intention of buying time while the third party continues to meddle with the software add ons.

13. The respondent filed a supplementary affidavit sworn on 2/2/22 in response to the applicant’s replying affidavit.

14. In the affidavit, it was reiterated that there was no dispute to be referred to arbitration as the applicant’s software was not and is not being interfered with.

15. The court has considered the entire record including the submissions filed by both of the parties.

16. This is an application to vary and/or set aside the order given on November 23, 2021.

17. On November 23, 2021, the court directed the respondent to file a response to the application dated October 13, 2021 within 14 days, which directions were not adhered to. The application being unopposed, the court allowed prayers b), c) and d) and ordered costs to be in the arbitration.

18. When the court gave directions requiring the respondent to file its response to the application dated October 13, 2021 within 14 days and directions to have the next mention date on November 23, 2021, the respondent’s counsel was present.

19. In its application, the respondent’s reason not complying with the above directives was that it’s Advocates logged in virtually to the mention on November 23, 2021 but could not be heard as their online system faced challenges which it was unable to resolve. Further the respondent alleged administrative mix up in its offices whereby the arbitral clause was misplaced.

20. In Mbogo v Shah 1968 EA 93 which was cited with approval by the Court of Appeal in Patriotic Guards Ltd v James Kipchirchir Sambu [2018] eKLR, it was held: -“The discretion to set aside an ex parte judgment is intended to be exercised to avoid injustice or hardship resulting from accident, inadvertence or excusable mistake or error but it is not designed to assist a person who has deliberately sought whether by evasion or otherwise to obstruct or delay the cause of justice.”

21. In the present case, there was no satisfactory reason that was advanced why the replying affidavit was not filed in time or at all. Court directions are not given in vain. They are not for beautifying court records. They are given with a view to dispense with justice.

22. The respondent having failed to comply with the directions that it responds to the application, was in breach of the provisions of section 1A of the Civil Procedure Act.

23. In the present application, no reason has been advanced why there was failure to file the replying affidavit within time or at all. Even if the respondent’s Advocates were able to log in the virtual session of 23/11/2021, still they would have been expected to explain to Court why the replying affidavit had not been filed as directed. Since they had the opportunity to explain in the present application and they have not, still the applicant’s application would have been undefended.

24. Further, I am of the opinion that since a dispute has arisen between the parties, there would be no prejudice to be suffered as the parties would ventilate their respective cases before the Tribunal.

25. The upshot is that the application November 25, 2021 lacks merit and is dismissed with costs.

It is so ordered.DATED and DELIVERED at Nairobi this 2nd day of December, 2022. A. MABEYA, FCIArbJUDGE