Gulthamed Mohamedali Jivanji t/ a Jivanji Agencies v Sanyo Electrical Company Ltd [2003] eKLR

Key Facts

Issues

• The second issue involved whether the plaintiff's pleading for special damages was sufficient, given that the plaint contained a general prayer for damages and profits without explicitly electing between the two. The court considered the adequacy of the pleadings in light of the evidence presented.
• The court addressed whether Sanyo, as the trademark owner, could be awarded damages for losses suffered by its subsidiary, Sanyo-Armco, which was the entity that actually experienced reduced sales due to the infringement. The issue centered on the legal nexus between the parent company and the subsidiary in claiming damages.
• The third issue focused on the credibility of the evidence used to calculate damages. The trial judge awarded damages based on sales data and profit margins, but the appellant challenged the accuracy and reliability of this evidence, particularly the inclusion of advertising costs and the use of gross profit figures instead of net profit.

Holdings

• The court partially allowed the appeal on the third ground, adjusting damages from gross to net profits. The original award of over Ksh 10 million was reduced to Ksh 6,362,293 by applying a 2/3 discount to television profits and 1/3 to cooker profits, as gross profits alone were insufficient for recovery.
• The court dismissed the appeal on the first ground, affirming that Sanyo's pleadings and evidence through its subsidiary Sanyo-Armco were sufficient to establish its case. The trial judge's findings of fact were upheld, with no violation of procedural principles.
• The court rejected the second ground, ruling that the respondent's oral statement in court constituted a valid election to pursue lost profits under prayer (c), despite the pleadings being in the alternative. The trial judge's interpretation was upheld.

Remedies

• The Court granted an injunction restraining the appellant, his servants, or agents from importing, selling, supplying, distributing, or offering for sale any products bearing the plaintiff's trade mark 'Sanyo' that were not manufactured by the plaintiff, including specific television models and gas cookers.
• The Court dismissed the appeal with 3/4 of the costs to be paid by the appellant, affirming the trial judge's orders except for the adjustment to the damages calculation.
• The Court ordered the appellant to deliver up all equipment and goods trade marked as 'Sanyo' that infringed the plaintiff's trade marks, with verification on oath that no further infringing goods remained in his possession.
• The Court awarded damages for lost profits at Shs 6,362,293/=-, adjusted from the original Shs 10,865,480/=- by converting gross profit figures to net profits (2/3 for televisions and 2/3 for each cooker model) after determining that only net profits were recoverable under the law.

Monetary Damages

Legal Principles

• Special damages must be strictly proved in accordance with pleaded claims. The court upheld that damages based on unpleaded gross profit figures required adjustment to net profit calculations.
• The burden of proof for mitigation of damages lies with the defendant (appellant) who failed to demonstrate that the plaintiff did not act reasonably to minimize losses. The court found no merit in the claim that Sanyo failed to mitigate.

Precedent Name

• Ouma v Nairobi City Council
• Brooke Bond v Chai Ltd
• Selle v Associated Motor Boat Company
• Bashir Ahmed Butt v Uwais Ahmed Khan
• African Highland Produce Ltd v Kisoria EALR
• Kampala City Council v Nakaye
• Ratcliffe v Evans

Cited Statute

• Civil Procedure Rules
• Trade Marks Act

Judge Name

• Owuor
• Waki
• Omolo

Passage Text

• We agree with Mr Hira that the profits recoverable are net profits... The total figure for loss of profits would thus be Shs 6,362,293/=-.
• The submission made before us by learned counsel for the appellant Mr Hira on the first ground, as it was by Mr Jeevanjee before the superior court, was that the owner of the trade mark "Sanyo" suffered no loss since the goods belonged to a Kenyan Company, Sanyo-Armco, which through its employee who was the sole witness said it suffered loss. There was no nexus between the two legal entities.