Haria & another v Shah (Civil Appeal 362 of 2018) [2024] KECA 527 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed an Ethiopian court's Kshs. 36 million judgment against two Kenyan businessmen is enforceable, with 12% interest from 2007.
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 foreign judgment was not conclusive because it offends the provisions of section 9(c) of the Civil Procedure Act
- 2.When the interest on the decretal sum should start running and what rate should be applicable
Key legal issues
#Whether the Ethiopian judgment is conclusive under section 9 of the Civil Procedure Act despite the alleged breach of the separate legal personality principle
The judgment is conclusive; the distinctiveness of a company from its shareholders was never litigated or relied on in the Ethiopian courts, and the appellants failed to bring the judgment within the section 9(a)-(f) exceptions
The Court perused both Ethiopian decisions and found the dispute concerned liability to refund USD 250,000, not corporate distinctiveness. The Federal High Court's decision had been overturned by the Federal Supreme Court, so its findings could not be relied upon. The dispute was contractual between private parties with no incorrect view of international law or refusal to recognize Kenyan law. None of the section 9 exceptions was demonstrated.
The rate of interest applicable to the decretal sum
The interest rate should remain at 12% as adjudged by the Ethiopian Federal Supreme Court, since Kenyan courts cannot sit in appeal over that court's decision
The contract stipulated 18% but the Ethiopian Federal Supreme Court capped it at 12% under Article 2479(1) of the Ethiopian Civil Code. Because the dispute was settled with finality by the Ethiopian courts and the Kenyan court cannot purport to sit as an appellate court over that decision, the 12% rate stands rather than the contractual 18% or the 5% urged by the appellants.
The date from which interest on the decretal sum runs
Interest on a contractual liquidated sum runs from the date of filing suit, not from judgment
The Court distinguished liquidated contractual sums from general damages, which must first be assessed by the court so interest runs from judgment. Here the money was due to the respondent, who was kept out of it, and following South Nyanza Sugar Company Limited v Oreko, interest on a sum due is awarded from the date of filing suit to ameliorate the loss of being kept out of the money.
First appellate court's mandate on re-evaluation of evidence and interference with discretion
A first appellate court re-evaluates the evidence and arrives at its own conclusions, but will not interfere with a judge's discretion absent misdirection or manifest error
Relying on Selle v Associated Motor Boat Co and Peters v Sunday Post, the Court restated its duty to re-evaluate the evidence before the trial court and arrive at its own independent judgment. Citing Mbogo v Shah, it affirmed that an appellate court interferes with a discretionary decision only where the judge misdirected himself or was clearly wrong in the exercise of his discretion.
Legal principles established
#- A foreign judgment from a non-designated country is enforceable in Kenya as a claim in common law read with section 9 of the Civil Procedure Act
- Once a foreign judgment has been conclusively adjudicated by the rendering court, Kenyan courts cannot revisit the merits or impeach the judgment except within the section 9 exceptions of the Civil Procedure Act
- A party cannot rely on findings of a lower foreign court that have been set aside by that country's appellate court
- Section 9(c) of the Civil Procedure Act applies only where the foreign proceedings were founded on an incorrect view of international law or a refusal to recognize Kenyan law where applicable
Court orders
#- 1.The appeal is dismissed
- 2.The judgment of the High Court is set aside only to the extent of varying the date that the interest should start running and the rate of interest payable, adjudged at 12%
- 3.Interest on Kshs. 36,191,604/= to run from the date of filing suit, 19th July 2007, at 12% until payment in full
- 4.The respondent shall have the costs of this appeal and of the suit in the High Court
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the judgment
Wrote the judgment
- On appeal from
- High Court of Kenya
- High Court Civil Case No. 488 of 2007
- Jurisdiction invoked
- First appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction; underlying jurisdiction of the High Court founded on section 3 of the Judicature Act and Article 165(3) of the Constitution
Relief refused
#Appellants' prayer that the High Court judgment be set aside and the respondent's claim dismissed
The appeal was found to be without merit; the Ethiopian judgment was held conclusive and enforceable
Appellants' submission that interest should be capped at 5% based on international Dollar rates
The Court held that the rate adjudged by the Ethiopian Federal Supreme Court should remain
Costs
The respondent shall have the costs of this appeal and of the suit in the High Court.
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.
The net effect of our findings is that the appeal is devoid of merit and it is hereby dismissed. The judgement of the High Court is set aside only to the extent of varying the date that the interest should start running and the rate of interest payable, which we have adjudged to be at 12%.
The respondent shall have the costs of this appeal and of the suit in the High Court.
we cannot revisit the issue as it was conclusively adjudicated upon by the Ethiopian courts. The only courts which can settle the issues between the parties herein are the Ethiopian courts.
a party cannot be heard to refer to the proceedings which have been set aside by a superior appellate court.
it is our view that the interest rate at which the decretal sum should be paid should remain at 12% as adjudged by that Court, and we so hold.
this being a contractual liquidated sum, the interest should run from the date of filing the suit as this was money due to the respondent but he was kept out of it.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Haria & another v Shah (Civil Appeal 362 of 2018) [2024] KECA 527 (KLR)", Case Analysis (2024). Civil Appeal. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/527/eng@2024-05-09
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.