Automated Summary
Key Facts
The High Court of Kenya ruled on a motion by Equity Group Foundation to set aside an interlocutory judgment against it and the Kenya COVID-19 Fund. The judgment was set aside due to two primary reasons: (1) the plaintiff failed to properly serve the summons to enter appearance via direct email to the defendants' last confirmed addresses as required by Order 5 Rule 22B of the Civil Procedure Rules, and (2) the court lacked jurisdiction to proceed with the judgment because the defendants had already filed a pending arbitration motion under Section 6(2) of the Arbitration Act. The court found the default judgment irregular and ordered it to be set aside, while also directing the case to be referred to arbitration.
Issues
- The court addressed whether the service of summons on Equity Group Foundation and Kenya COVID-19 Fund was validly executed via the Judiciary e-filing system, as opposed to direct electronic mail service, and whether the absence of a delivery receipt and prior attempts to serve principal officers rendered the service irregular.
- The court considered whether the defendants' pending arbitration motion, filed before the interlocutory judgment, mandated the court to stay proceedings under Section 6(2) of the Arbitration Act, and whether the default judgment was void for ignoring this agreement.
Holdings
- The court ruled that the arbitration motion dated March 9, 2022 will be set down for hearing immediately following the setting aside of the default judgment. The motion for arbitration was not considered a red herring and requires adjudication.
- The court set aside the default judgment against the 1st Defendant (Equity Group Foundation) and the 2nd Defendant (Kenya COVID-19 Fund) due to irregular service of summons and the existence of a pending arbitration motion under Section 6(2) of the Arbitration Act. The judgment was deemed irregular because the registry failed to promptly print and file the arbitration motion, and the service of summons did not comply with Order 5 Rule 3 and 22B of the CPR.
Remedies
- The court set aside the default judgment against both Defendants due to improper service of summons and the existence of a pending arbitration motion, which rendered the judgment irregular.
- The court awarded thrown away costs to the 1st Defendant alone, as only they participated in the motion.
Legal Principles
The court applied Order 5 Rule 3 and Rule 22B of the Civil Procedure Rules regarding service of summons on corporations via electronic mail, emphasizing that service through the Judiciary e-filing portal does not satisfy the requirements of Rule 22B. Additionally, Section 6(2) of the Arbitration Act was invoked to argue that proceedings must be stayed when a valid arbitration agreement exists, rendering the default judgment irregular.
Precedent Name
- Continental Butchery Limited v Nthiwa
- Fidelity Commercial Bank Ltd v Owen Amos Ndungu & Another
- Westmont Power Kenya Limited v Kenya Oil Company
- Total Kenya Limited v Supa Hauliers Limited
- Kenya Broadcasting Corporation v National Authority for the Campaign against Alcohol and Drug Abuse
- Moniks Agencies v Kenya Airports Authorities
- Sameer Africa Limited v Aggarwal & Sons Ltd
- Kimani v Mc Connell
- UAP Provincial Insurance Company Ltd v Michael John Beckett
- Phillip Keipto Chemwolo & Another v Augustine Kubende
- Miarage Co Ltd v Mwichuiri Co Ltd
- Nanchana Foreign Engineering Company Limited v Easy Properties (K) Ltd
- Shah v Mbogo and Another
- Pithon Waweru Maina v Thuku Mugiria
- Multiscope Consulting Engineers v University of Nairobi & Another
- Gemstaviv Limited v Kamakei Ole Karia & 5 others
- Bouchard International (Services) Ltd v M'Mwereria
Cited Statute
- Civil Procedure Act (CPA)
- Civil Procedure Rules (CPR)
- Arbitration Act
Judge Name
C. Meoli
Passage Text
- the default judgment against the two Defendants is irregular and must be set aside ex debito justitiae. However, as only the 1st Defendant appeared to participate in the motion, the court will award thrown away costs to the 1st Defendant alone.
- Electronic service of summons as contemplated in Order 5 Rule 22B of the Civil Procedure Rules was intended to be effected between parties through electronic mail and not through the Judiciary E-filing System as appears to be what the Plaintiff attempted here. In the premises, while the Defendants evidently had notice of and filed notices of appointment and the arbitration motion in this suit, it cannot be said that there was proper service of summons to enter appearance upon the Defendants, in compliance with Order 5 Rule 3 as read with Rule 22B.