Mcdouglas Kagwa v Weekly Review LTD. [1992] KECA 56 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that courts can freeze a defendant's bank accounts and assets under Order 39 when the defendant may move money out of the country.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the High Court Judge exercised his discretion wrongly in granting orders restraining the appellant from withdrawing funds from his bank accounts
- 2.Whether the nature of the orders granted amounted to a Mareva injunction and whether Kenyan courts may grant such relief under order 39 of the Civil Procedure Rules
- 3.Whether a Mareva injunction can issue against a defendant resident within the jurisdiction but not permanently settled there, and whether an undertaking as to damages was required
Key legal issues
#Availability of Mareva relief in Kenya under order 39
The Mareva jurisdiction is available to Kenyan courts under order 39 of the Civil Procedure Rules, as confirmed in Chartered Bank v Daklouche.
The court adopted Lord Denning MR's definition of the Mareva injunction in the Siskina case, noting it is a procedure whereby courts aid a creditor against a debtor who has absconded or is overseas but has assets in the country. The English Court of Appeal in Daklouche held such an injunction may issue against a defendant served within the jurisdiction who is likely to leave and withdraw assets. The court held this jurisdiction can properly be exercised in Kenya under order 39.
Limits of the Mareva jurisdiction
The injunction is not available against defendants permanently settled in Kenya with assets here; it applies to persons resident but not permanently settled, as where nationality and asset retention are in doubt.
The evidence, including a replaced identity card and names suggesting Ugandan origin, raised doubt as to the appellant's nationality and indicated he could leave Kenya or move assets to Uganda. Although resident within the jurisdiction, he was not permanently settled, so the special jurisdiction applied. The court noted the substantive suit remained pending and declined further comment on nationality.
Exercise of discretion and undertaking as to damages
The trial Judge did not exercise his discretion wrongly; on the facts he made the only order that could meet the ends of justice.
The appellant's complaint that the judge exercised discretion wrongly and failed to order an undertaking as to damages was rejected. Given the prima facie evidence that the appellant could leave Kenya or move his assets beyond his creditors' reach, the injunction was justified. The court nonetheless directed an early hearing to protect the defendant from delay.
Legal principles established
#- Kenyan courts can properly and usefully exercise the jurisdiction to grant Mareva injunctions under order 39 of the Civil Procedure Rules.
- A Mareva injunction cannot be issued against defendants who are permanently settled in Kenya and have their assets here; it may issue where the defendant, though resident, is not permanently settled and may remove assets beyond the reach of creditors.
- Where a Mareva injunction is granted, the court should also order a speedy trial to avoid injustice to the defendant through delay.
Court orders
#- 1.Appeal dismissed with costs
- 2.An early hearing date to be fixed for the suit in the High Court
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court
- Jurisdiction invoked
- Appellate jurisdiction of the Court of Appeal under the Constitution/ Appellate Jurisdiction Act against a discretionary ruling of the High Court (order 39, Civil Procedure Rules)
Relief refused
#Setting aside of the injunction orders granted by Rauf J
The nationality of the appellant was in doubt and he was not permanently settled in Kenya, making him amenable to the Mareva jurisdiction; the Judge made the only order he could have made
Costs
Appeal dismissed with costs to the respondent
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
This is a jurisdiction which Courts in Kenya can properly and usefully exercise under order 39 of the Civil Procedure Rules.
But a “mareva” injunction cannot be issued against defendants who were permanently settled in Kenya and have their assets here.
Where the Court grants a “mareva” injunction, it should also order a speedy trial of the action in order to avoid any possible injustice that may be caused to the defendant by delay.
For these reasons, this appeal fails and it is ordered to be dismissed with costs.
As the trial Judge did not do so we direct that an early hearing date be fixed for the suit in the Superior Court.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mcdouglas Kagwa v Weekly Review LTD. [1992] KECA 56 (KLR)", Case Analysis (1992). Civil Appeal (Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1992/56/eng@1992-11-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.