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Court of AppealDismissedCivil Application No. SUP 9 of 2015· [2016] KECA 458 (KLR)

Glencore Energy (u.k.) Limited v Kenya Pipeline Company Limited

Court of Appeal
17 June 2016
3,347 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal refused Glencore permission to appeal to the Supreme Court, ruling that a big money dispute alone does not raise a matter of general public importance.

What this practically means

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Executive summary

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Glencore Energy (U.K.) Limited applied to the Court of Appeal under Article 163(4)(a) and (b) of the Constitution and Rule 31 of the Supreme Court Rules for a certificate that its intended appeal to the Supreme Court against the Court of Appeal's judgment in Civil Appeal No. 67 of 2014 involved matters of general public importance. The underlying dispute arose from a Transportation and Storage Agreement and a Collateral Financing Agreement between Kenya Pipeline Company Limited and Triton Petroleum Company Limited, under which Glencore claimed to have financed petroleum products and to be entitled to delivery of 31,752.39 metric tons held by Kenya Pipeline as bailee by attornment. The High Court entered judgment for Glencore for over USD 40 million, but the Court of Appeal allowed Kenya Pipeline's appeal, finding that Glencore was the true owner of the gasoil and had traded in the Kenyan oil market without a licence through Triton as a front, an illegality defeating all its claims. In the certification application, Glencore framed five issues: incorporation of terms by reference, ownership and reserved right of disposal under the Sale of Goods Act, assignment, the pleading of illegality, and an alleged denial of fair hearing. Applying the Steyn principles approved by the Supreme Court, the Court held that in commercial matters the test is not the size of the sum involved but whether a substantial point of law transcends the particular case. It found the appellate decision rested on peculiar findings of fact, that the proposed legal issues would indirectly challenge those findings, and that the real complaint was against the erroneous application of settled law. The application was dismissed with costs to the respondent.

Key legal issues

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01

Whether the legal principles relied on (incorporation by reference, ownership/reserved right of disposal, assignment, illegality) raise matters of general public importance

Holding

They do not; the appellate court's decision rested on its own findings of fact on the true character of the transactions, and invoking those principles would be an indirect challenge to factual findings

Reasoning

The Court of Appeal held that the doctrines of incorporation by reference, ownership, bailee by attornment and assignment would only be relevant on the factual setting pleaded by the applicant. The appellate court had rejected that factual setting and made independent findings on the true character of the transactions. For the legal principles to apply, those factual findings would have to be reversed, so the application is essentially an appeal on facts, not a substantial point of law of general public importance.

p. 6
02

Whether the alleged failure to investigate illegality sua sponte and afford the applicant a hearing raises a general public importance issue

Holding

No; the complaint is about the erroneous application of the illegality principle to the facts found, which is case-specific

Reasoning

The Court found that the gist of the applicant's complaint on illegality was the alleged erroneous application of the principle to the circumstances of the case. The application of the illegality principle was premised on the appellate court's findings of fact, which were contested between the parties. Such a complaint concerns the misapprehension of facts and law and an alleged miscarriage of justice, not a conflicting principle of law transcending the case.

p. 6
03

What is the test for certification in commercial matters

Holding

A large sum of money or a difficult question of commercial law does not suffice; the point of law must transcend the particular case and guide a substantial section of the commercial community

Reasoning

The Court restated the principles in Hermanus Phillipus Steyn as approved by the Supreme Court: where certification raises a point of law, it must be a substantial point whose determination significantly bears on the public interest, and it must have arisen and been determined in the courts below. In commercial transactions, the amount at stake or difficulty of the question is not the test.

p. 5

Legal principles established

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  • The test for certification of a matter of general public importance in commercial transactions is not the size of the sum involved or the difficulty of the commercial question, but whether a substantial point of law arises that transcends the circumstances of the particular case
  • A point of law for certification must be substantial, bear significantly on the public interest, and must have arisen in the court below and been the subject of judicial determination
  • A party cannot seek certification on legal principles where doing so would amount, directly or indirectly, to an appeal against findings of primary fact by the appellate court

Court orders

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  1. 1.The application for certification under Article 163(4) of the Constitution is dismissed
  2. 2.Costs of the application awarded to the respondent
On appeal from
High Court of Kenya
Civil Appeal No. 67 of 2014 (appeal from High Court suit)
Jurisdiction invoked
Article 163(4)(a) and 163(4)(b) of the Constitution and Rule 31 of the Supreme Court Rules (certification of matters of general public importance)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Glencore Energy (u.k.) Limited v Kenya Pipeline Company Limited", Case Analysis (2016). Civil Application No. SUP 9 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2016/458/eng@2016-06-17

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.