Mareco Limited v Green Future Limited & 1 other
The bottom line
#Kenya's Court of Appeal confirmed that a buyer only owes payment for invoices it formally accepted through its own verification system, and courts cannot decide issues outside the pleadings.
What this practically means
#Executive summary
#Key legal issues
#Whether the trial Judge erred in considering the issue of 'duly accepted' invoices and the SCS verification procedure allegedly not raised by the parties
The issue of whether the invoices had been duly accepted arose from the pleadings and evidence; the Judge did not err in considering it or the SCS procedure.
The appellant's cause of action rested on assigned invoices it believed had been accepted, and the 2nd respondent's defence expressly contended it had not duly approved payment of those invoices. The meaning of 'duly accepted' was therefore in issue, and evaluating what 'duly accepted' entailed necessarily involved considering the 2nd respondent's evidence about the SCS approval procedure, which the 1st respondent did not challenge.
Whether the 2nd respondent was liable to pay the appellant on the assigned invoices
The 2nd respondent could only accept and pay invoices verified and entered in its SCS system; it had settled all payments under duly accepted invoices and was under no legal obligation to the appellant.
The 2nd respondent's witness explained in detail its invoice approval procedure, confirming that mere acknowledgment of receipt did not amount to acceptance, and that payment required submission of correct invoices in the SCS system per the payment terms in appendix 2 to the subcontract agreement. This uncontroverted evidence, corroborated by the contractual payment terms, supported the trial court's finding of no liability.
Whether the appellant was entitled to profit margin and loss of investment opportunity damages
There was no evidence warranting the award of those damages.
The appellant argued it had adduced uncontroverted evidence supporting the claims, but the court found nothing on the record justifying the award of profit margins or loss of investment opportunity, and the trial Judge was not faulted for disregarding those heads of claim.
Legal principles established
#- Issues for determination by a court must flow from the pleadings; a court cannot pronounce on issues not raised in the pleadings filed by the parties.
- On a first appeal, the Court of Appeal's role is to re-evaluate, re-assess and re-analyze the evidence and determine whether the trial court's conclusions should stand.
Court orders
#- 1.Appeal dismissed
- 2.Costs of the appeal to the 2nd respondent
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C No. 101 of 2014
- Jurisdiction invoked
- First appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction (statutory first appeal from the High Court)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mareco Limited v Green Future Limited & 1 other", Case Analysis (2017). Civil Appeal No. 265 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/113/eng@2017-12-15
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.