Automated Summary
Key Facts
On July 2, 2019, JTG Enterprises Limited and China Gezhouba Group Company Limited entered into a sub-contract (CTH-ENG-2019-014) for the Thwake Multipurpose Water Development Programme Phase 1, specifically for the Excavation and Support for Main Spillway Project. The contract was later adjusted by three supplementary agreements in July 2019 and August 2020. JTG claims it has completed the works and is seeking payment of KES 796,392,402.26, which the defendant disputes as the basis of this legal action.
Transaction Type
Sub-contract for Excavation and Support in Thwake Multipurpose Water Development Programme Phase 1
Issues
The court considered the plaintiff's application for security under Order 39, requiring proof that the defendant (a foreign company) intended to evade an anticipated judgment by relocating. The plaintiff argued the defendant might abscond after receiving government payments, while the defendant denied any such intent and accused the plaintiff of contract breach. The court dismissed the application, finding insufficient evidence of the defendant's intent to obstruct enforcement.
Holdings
The court dismissed the plaintiff's application for security, finding no evidence that the defendant (a foreign company) intended to relocate or obstruct the execution of a potential judgment. The plaintiff failed to prove the defendant's incapacity to comply with any future decree.
Remedies
The court dismissed the plaintiff's application dated June 15, 2022, with costs awarded to the defendant. The ruling concluded that the plaintiff failed to prove the defendant's intent to evade judgment or obstruct execution of an anticipated decree.
Legal Principles
- The court applied the Mareva principle to determine whether security for costs should be ordered against the defendant. It emphasized that such orders require a high standard of proof demonstrating the defendant's intent to evade enforcement, referencing precedents like Shivam Enterprises v Patel and Godfrey Oduor v Ukwala Supermarket. The application was dismissed due to insufficient evidence of the defendant's relocation plans.
- The court evaluated the costs principles, concluding that the plaintiff failed to establish a material basis for the security order. It highlighted that courts must avoid unfairly prejudicing defendants before judgment, aligning with established jurisprudence on costs and procedural fairness.
Precedent Name
- Shivam Enterprises Limited v Vijaykumar Tulsidas Patel T/A Hytech Investments
- Godfrey Oduor Odhiambo v Ukwala Supermarket Kisumu Limited
- Kuria Kanyoko t/a Amigos Bar and Restaurant v Francis Kinuthia Nderu and others
Cited Statute
- Civil Procedure Rules
- Civil Procedure Act
- Constitution of Kenya
Judge Name
Das Majanja
Passage Text
- In light of the decided cases, the applicant must therefore show that the action taken by the respondent has been taken with the sole aim of frustrating the applicant's enjoyment of a decree or anticipated decree... there must be more than an allegation, there must be facts upon which the court can conclude that the respondent intends to evade the consequences of a likely judgment in favour of the applicant.
- the plaintiff's application is anchored under order 39 of the Rules which empowers the court to order arrest and or attach before judgment. The court in Shivam Enterprises Limited v Vijaykumar Tulsidas Patel T/A Hytech Investments ML HCCC no 501 of 2006 [2006] eKLR stated that a party would need to meet a high standard of proof before a party is ordered to supply security for the amount claimed and that it is never the intention of that jurisdiction or the court to harass or to punish the defendant before judgment is entered against it.
- I find and hold that the plaintiff's apprehension lacks material basis and is not sufficient to warrant the court to order the defendant to furnish security. In sum, the plaintiff has failed to prove that the defendant will be incapable of complying with any decree that may be issued by this court should its claim be successful.
Damages / Relief Type
Plaintiff sought security for costs in the amount of KES 796,392,402.26 under Order 39 of the Civil Procedure Rules to prevent potential relocation by the foreign defendant.