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ELCDismissedOYO/CIV/159/2012· [2016] KEELC 93 (KLR)

Victoria Distributors Ltd v Synohydro Corporation [2016] KEELC 93 (KLR)

Environment and Land Court
14 December 2016
SKS. M. KIBUNJA
2,168 words in judgment
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The bottom line

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Kenya's Environment and Land Court refused to change a negotiated consent order, confirming such orders bind parties unless they prove fraud, collusion or genuine mistake.

What this practically means

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Executive summary

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Synohydro Corporation, the Defendant, moved by notice of motion dated 20th April 2016 seeking review and amendment of a consent order dated 16th July 2015 and issued 31st July 2015, contending that the order as drawn and extracted did not capture the parties' agreement, that the Plaintiff had already been monetarily compensated, that the fitting of a culvert was an act of good faith beyond the consent order, and that the error arose from oversight and the Defendant's officers' limited proficiency in English. Victoria Distributors Limited, the Plaintiff, opposed through the affidavit of Yogesh Dauda, asserting the consent was negotiated over several meetings, both parties had counsel, the extra works formed part of a negotiated settlement, and the Defendant had already satisfied parts 2 to 5 of the order. The court framed two issues: whether mistake, misapprehension or lack of consensus in the making of the consent order was established, and costs. Applying Hirani v Kassam as adopted in Flora Wasike and discussed in Products International Limited v PTA Bank, the court held that consent orders bind unless procured by fraud, collusion, mistake or misapprehension of material facts. It found the extracted consent order matched the signed consent letter; the Defendant produced no minutes or correspondence evidencing a different agreement; both parties were represented by counsel throughout; and the alleged scope-of-works misunderstanding was not a mutual mistake, distinguishing Products International where the error was apparent against the arbitration clause. The motion was dismissed with costs.

Key legal issues

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01

Whether the Defendant established mistake, misapprehension or lack of consensus to warrant review of the consent order

Holding

No; the consent order reflected a negotiated settlement between counsel-represented parties and the Defendant failed to establish any mistake entitling it to review

Reasoning

The court applied the principles in Hirani v Kassam and Products International Ltd, holding that consent orders stand unless fraud, collusion, mistake or misapprehension of material facts is shown. The Defendant alleged it misunderstood the scope of works in order 1, but both parties were represented by counsel throughout, the consent letter was in ordinary English, and the Defendant produced no correspondence or minutes evidencing a different agreement. The consent order, being a negotiated settlement, must be read as a whole, not in isolated items.

p. 4
02

Distinguishing Products International Limited v PTA Bank on mistake

Holding

Unlike that case, where the consent order contradicted the binding arbitration clause, here there was no apparent or mutual mistake

Reasoning

In Products International the mistake was apparent because the consent order on arbitration was contrary to Article XIV of the parties' Facility Agreement, and the lawyers were ignorant of or overlooked its binding effect. In the present case the consent order emerged from several negotiation meetings, and the alleged misunderstanding of the extent of works was not evidenced by any source documents, so the precedent was distinguished rather than followed on its facts.

p. 4

Legal principles established

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  • A consent order is binding and can only be varied or discharged on grounds such as fraud, collusion, mistake, or in misapprehension or ignorance of material facts, as for setting aside an agreement

Court orders

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  1. 1.The notice of motion dated 20th April 2016 seeking review and amendment of the consent order of 16th July 2015 is dismissed
  2. 2.Costs of the application awarded to the Plaintiff
Jurisdiction invoked
Order 45 of the Civil Procedure Rules 2010 (review of consent orders)

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, "Victoria Distributors Ltd v Synohydro Corporation [2016] KEELC 93 (KLR)", Case Analysis (2016). OYO/CIV/159/2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2016/93/eng@2016-12-14

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