KEMIPHARM (KENYA) LIMITED & 2 others v NOVO INDUSTRI. A/S [1997] KECA 68 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that ignoring a court summons is costly, and foreign currency judgments are converted at the exchange rate on the payment date.
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 defendants were misled by the plaintiff's advocate into failing to enter appearance or file a defence, justifying setting aside the default judgment
- 2.Whether the decree should be set aside on the ground that the plaintiff owed the first defendant unpaid commissions not credited in the decree
- 3.Whether the decree expressed in foreign currency without specifying a rate of exchange was defective, and at what date conversion should occur
Key legal issues
#Setting aside ex parte judgment for alleged misleading by the plaintiff's advocate
The appeal grounds on this issue had no merit; the third defendant's claim that he was misled was disbelieved and the defendants' conduct (offering installments and making payments) showed an admission of the debt.
The court examined the ten grounds and found no substance: any commission claim could have been raised at the meeting with Mr Omwela; the guarantee made no reference to commission; a liquidation-by-installments scheme was inconsistent with a denial of the claim; and payments continued even after instructing an advocate to set aside the default judgment, evidencing admission of the debt.
Foreign currency judgments and the conversion date
Adopting Akiwumi JA's statement in Beluf Establishment v Attorney-General, the conversion date is when payment is made or judgment enforced.
On the complaint that the decree was vague for lacking a rate of exchange, the court endorsed the rule from Milliangos and Despina R that conversion should occur at the date of payment or enforcement, holding that Kenyan courts may in proper cases express judgment in foreign currency convertible at prevailing rates at that date.
Legal principles established
#- Kenyan courts, applying the common law, may in proper cases express judgment in foreign currency, convertible at the rates prevailing on the date of payment or enforcement of the judgment.
- A regular default judgment entered after proper service will not be set aside where the defendants, though served, chose not to appear or defend and continued making installment payments on an admitted debt.
Court orders
#- 1.Appeal dismissed with costs
- 2.Stay of execution pending appeal granted by the learned judge on 19th May, 1994 vacated
- 3.Money held in joint accounts to be released to the plaintiff forthwith
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi
- Civil Case No. 2250 of 1990
- Jurisdiction invoked
- First appeal from the High Court under the Civil Procedure Act/Court of Appeal's appellate jurisdiction (not expressly stated in the judgment)
Relief refused
#Setting aside the ex parte judgment and decree
The judgment was regular; the defendants were served and chose not to appear or defend, and the claim of being misled by the plaintiff's advocate was disbelieved
Claim of set-off for unpaid commissions
No commission was raised at the meeting with the plaintiff's advocate, the guarantee made no reference to commission, and there was a clear admission of the debt
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.
For all these reasons, this appeal fails and is dismissed with costs. The stay of execution pending appeal granted by the learned judge on 19th May, 1994 is hereby vacated and the money held in joint accounts to be released to the plaintiff forthwith.
Kenya courts in applying the common law can in proper cases, express judgment in foreign currency convertible at the rates prevailing on the date of payment or enforcement of the judgment.
He held that the judgment was regular as the defendants had been served with summons and had chosen not to appear or to defend.
Issues in the judgment
#The judgment inconsistently describes the currency of the decree: the claim is stated in Danish Kronors but the decree is recorded in Swedish Kronors.
The coram lists 'G. S. PALL' as a Judge of Appeal, a name not otherwise verifiable within the judgment; recorded as printed.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "KEMIPHARM (KENYA) LIMITED & 2 others v NOVO INDUSTRI. A/S [1997] KECA 68 (KLR)", Case Analysis (1997). Civil Appeal 228 of 1995. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1997/68/eng@1997-07-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.