Alba Petroleum Limited v Total Marketing Kenya Limited [2019] KECA 846 (KLR)
The bottom line
#Kenya's Court of Appeal upheld a Ksh. 14.7 million judgment for Total Marketing against Alba Petroleum, but cut the 20% interest rate to court rates because no evidence supported it.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether this Court has jurisdiction to re-open the issue of limitation determined by Mwera, J.'s ruling of 7th March 2001, against which no appeal was filed
- 2.Whether Section 26(c) of the Limitation of Actions Act required a specific prayer for relief from the consequences of mistake, and whose mistake suffices to postpone the running of time
- 3.Whether the trial court erred in awarding interest at the prevailing commercial rate of 20% per annum without evidence
Key legal issues
#Jurisdiction to re-open the limitation issue determined in an unappealed interlocutory ruling
The Court lacks jurisdiction to re-open the limitation issue because the ruling of 7th March 2001 determined a substantive right and was immediately appealable, yet no appeal was lodged against it
The Court held itself bound by the Supreme Court's decision in Mawathe Julius Musili vs. Irshadali Sumra and guided by Nguruman Limited vs. Shompole Group Ranch. It reasoned that Mwera, J.'s ruling determined the trial court's jurisdiction to entertain the claim and the substantive right to pursue it, making it immediately appealable. Failure to appeal meant the limitation issue was conclusively determined between the parties, and the notice of appeal against the 2011 final judgment could not serve as an appeal against the 2001 ruling.
Scope of Section 26(c) of the Limitation of Actions Act on mistake
A specific prayer for relief from the consequences of mistake is not indispensable; Section 26(c) does not specify which party must have committed the mistake, and time runs from discovery of the mistake
Relying on Deutsche Morgan Grenfell v. HMRC, the Court noted a limitation period in a claim for mistake starts to run when the mistake is discovered. It was persuaded by Neuberger J. in Nurdin & Peacock that the precise nature of the mistake should not be decisive. Since the re-amended plaint expressly invoked the mistake and sought relief therefrom, and Mwera J. had fixed discovery at 31st December 1997, the suit filed on 29th April 1999 was within time even on the appellant's own 1996-discovery argument.
Award of interest at 20% per annum without evidence
The award of 20% interest was set aside and substituted with interest at court rates from the date of filing suit, because no evidence proved the commercial rate
Under Section 26(1) of the Civil Procedure Act the award of interest is discretionary, to be exercised judicially. The respondent pleaded 26% but led no evidence of the prevailing commercial rate, and the trial court gave no reasons for awarding 20%. Guided by Twiga Properties, KCB vs. Oyalo and the Lesotho decision in Boliba Multipurpose Cooperative Society, the Court held a claimant must prove entitlement to the rate asserted; absent proof, interest is at court rates, which at the time of the judgment was 14% per annum.
Legal principles established
#- Where no appeal is lodged against a ruling on limitation that determined a substantive right, an appellate court lacks jurisdiction to re-open, review or reconsider that issue on appeal from the final judgment
- Section 26(c) of the Limitation of Actions Act does not specify which party must have committed the mistake; it suffices that a mistake of fact or law exists, and time begins to run when the mistake is discovered
- Interest on a debt is payable at court rates from the date of filing suit unless there is agreement to the contrary or a trade custom otherwise dictates, and a claimant must prove entitlement to any asserted higher rate
- An appellate court should not interfere with a trial court's exercise of discretion unless the judge misdirected himself or was clearly wrong resulting in misjustice
Court orders
#- 1.Affirmed and upheld the judgment of the trial court entering judgment in favour of the respondent in the sum of Ksh. 14,778,257/70
- 2.Set aside the interest awarded at the rate of 20% per annum and substituted interest at court rates with effect from the date of filing suit on 29th April 1999
- 3.Ordered that monies deposited and held in the joint account of counsel for the parties be released to the respondent
- 4.Ordered that accrued interest on the sum deposited shall be taken into account in computing the interest due at court rates
- 5.Each party to bear its own costs in the appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C. No. 503 of 1999
- Jurisdiction invoked
- First appellate jurisdiction under the Court of Appeal's appellate jurisdiction (appeal from the High Court); no specific constitutional provision invoked
Relief refused
#Re-opening of the limitation issue determined by Mwera, J.'s ruling of 7th March 2001
The appellant never appealed against that ruling, so the Court lacked jurisdiction to reconsider it
Interest at the prevailing commercial rate of 20% per annum as awarded by the trial court
No evidence was led to prove the prevailing commercial rate of interest and the trial court gave no reasons for the 20% rate
Costs
Each party is to bear its own costs in this appeal. It is so ordered.
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.
we find that the failure by the appellant to appeal against the ruling of Mwera, J. on the limitation period makes this Court lack jurisdiction to re-open, review and reconsider the issue of limitation as determined on merit by Mwera, J. in his ruling. The issue of the respondent’s suit not being time-barred was conclusively determined by the ruling of 7th March 2001.
Section 26 (c) of the Limitation of Actions Act does not specify which party must have committed the mistake. It suffices that the court is satisfied a mistake of fact or law exists and time begins to run when the mistake is discovered.
The upshot is we hereby affirm and uphold the judgment of the trial court dated 3 rd June 2011 that entered judgment in favour of the respondent in the sum of Ksh. 14,778,257/70. However, we hereby vary the said judgment and set aside interest awarded at the rate of 20% per annum and substitute it with an order that interest of the said sum of Ksh. 14,778,257/70 be at court rates with effect from the date of filing suit on 29th April 1999.
Each party is to bear its own costs in this appeal. It is so ordered.
Issues in the judgment
#Internal inconsistency on the date of the trial judgment: the header states it was delivered on 2nd June 2011, but the disposition refers to 3rd June 2011, and the appeal notice discussion refers to a judgment 'delivered on 2nd December, 2010' in the quoted passage from Nairobi City Council vs. Resley
Contradiction on the date the error was said to have been discovered: the appellant argued the auditors picked up the error on 31st December 1996, while Mwera J.'s ruling and the Court's discussion fix discovery at 31st December 1997
Inconsistent figures for the claim sum in the record: the plaint is repeatedly stated as Ksh. 14,778,257/70 but one passage refers to Ksh. 14,778,251.70
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
Cite this brief
#Cite this brief
Caselaw, "Alba Petroleum Limited v Total Marketing Kenya Limited [2019] KECA 846 (KLR)", Case Analysis (2019). Civil Appeal No. 43 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/846/eng@2019-03-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.