[2022] KEHC 16560 (KLR)

Arwa & Change Advocates LLP v Muturi (Sued in his own capacity as the administrator of the Estate of the Late Florence Wangari Yongi) & another (Civil Case E129 of 2022) [2022] KEHC 16560 (KLR) (Commercial and Tax) (8 December 2022) (Ruling)

Neutral citation: [2022] KEHC 16560 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Civil Case E129 of 2022

WA Okwany, J

December 8, 2022

Between

Arwa & Change Advocates LLP

Plaintiff

and

Francis Yongi Muturi (Sued in his own capacity as the administrator of the Estate of the Late Florence Wangari Yongi)

1st Respondent

Smith Lacien LLP

2nd Respondent

Ruling

1. This ruling determines the application before court dated April 12, 2022 wherein the plaintiff/applicant seek the following orders; I.Spent

II.Spent

III.That pending the hearing and determination of this suit, the honourable court be pleased to grant temporary injunctive orders barring the 1st defendant/applicant either by themselves, their agents, representatives, assigns or whosoever otherwise from directing and/or instructing the 2nd defendant/respondent or any other person or entity to distribute, disburse, administer, remit any sums received, whether by trial, settlement or otherwise from the wrongful death claim filed in the United States District Court of Illinois as INC case l:l9-CV-03927, Francis Yongi Muturi vs The Boeing Company and Rosemount Aerospace as consolidated in INC case l:l9-CV-02170,Re: Ethiopian Airlines Flight ET 302 Crash or any other legal matter relating to or arising out of the claim against the boeing company, in any way that contravenes the duly executed tripartite retainer agreement dated July 17, 2020 between the plaintiff and the 1st & 2nd defendant/respondents.

IV.That pending the hearing and determination of this application, the honourable court be pleased to grant temporary injunctive orders restricting the 2nd defendant/respondent either by themselves, their agents, representatives, assigns or whosoever otherwise from receiving and acting on instructions from the 1st defendant/applicant that direct them to release any sums of money or make to be released any sums of money, that are recovered whether by trial, settlement or otherwise from the wrongful death claim filed in the United States District Court of Illinois as INC case l:l9-cv-03927, Francis Yongi Muturi v The Boeing Company and Rosemount Aerospace as consolidated in INC case l:l9-CV-02170, Re: Ethiopian Airlines Flight ET 302 Crash or any other legal matter relating to or arising out of the Claim against the Boeing Company, in any way that contravenes the duly executed Tripartite Retainer Agreement dated July 17, 2020 between the plaintiff and the lst & 2nd defendant/respondents.

V.That pending the hearing and determination of this suit, the honourable court be pleased to grant temporary injunctive orders restricting the 2nd defendant/respondent either by themselves, their agents, representatives, assigns or whosoever otherwise from receiving and acting on instructions from the is? defendant/applicant that direct them to release any sums of money or make to be released any sums of money, that are recovered whether by trial, settlement or otherwise from the wrongful death claim filed in the United States District Court of Illinois as lNC case l:l9-cv-O3927I Francis Yongi Muturi vs The Boeing Company and Rosemount Aerospace as consolidated in WC case l:l9-CV-0217OI Re: Ethiopian Airlines Flight ET 302 Crash or any other legal matter relating to or arising out of the Claim against the Boeing Company, in any way that contravenes the duly executed Tripartite Retainer Agreement dated l71h July 2020 between the plaintiff and the 1st & 2nd defendant/respondents.

VI.That in the alternative and without prejudice to the foregoing, pending the hearing and determination of this application, the Honourable Court be pleased to order the 1st defendant/respondent to furnish security for legal fees duly earned as per the tripartite retainer agreement dated July 17, 2020; in the sum of USD 980,000. 00 with the Honourable Court or in a joint interest earning escrow account between the advocates of the parties herein.

VII.That in the alternative and without prejudice to the foregoing, pending the hearing and determination of this suit, the honourable court be pleased to order the 1st defendant/respondent to furnish security for legal fees duly earned as per the tripartite retainer agreement dated July 17, 2020; in the sum of USD 980,000. 00 with the honourable court or in a joint interest earning escrow account between the advocates of the parties herein.

VIII.That costs in respect of this application be in the cause.

2. The application is supported by the affidavit sworn by Rupia JO Change and is premised on the following grounds;-1. That the 1st defendant is the administrator of the Estate of the late Sister Florence Wangari Yongi, (Hereinafter called "The Deceased") who lost her life in the infamous Ethiopian Airlines Plane Crash, while the plaintiff/Applicant is a duly registered and reputable law firm with its head office situated in Nairobi, within the Republic of Kenya, while the 2nd defendant/respondent is a law firm duly registered and practicing law in the United States of America.

2. That with a view to recovering compensation in connection with the sad demise of the deceased, the 1st defendant retained the plaintiff/ applicant, alongside the American firm of Power, Rogers and Smith LLP to represent the estate of the deceased (Hereinafter called " The Said Estate").

3. That the employment of the two law firms was necessitated by the complex conflict of law issues that arose in the case - due to the fact that the matter had a direct contact with at least three (3) jurisdictions (Kenya, Ethiopia, and United States of America) which meant that the recovery proceedings would not succeed unless they were spearheaded by a consortium of lawyers, comprising of at least an expert on Kenyan Law (who was also duly qualified to practice law in Kenya) as well as an expert on American law (who was also duly qualified to practice law in the United States of America).

4. That the 1st defendant/respondent Therefore signed a tripartite retainer agreement dated 3rd June 20i 9 ( Hereinafter called 'The Said Retainer Agreement") between himself on the one hand, and the plaintiff/Applicant and the firm of Power, Rogers and Smith LLP, on the other hand; whereby the 1st defendant/ Respondent bound himself to pay 28% of the compensation recovered to the two law firms jointly as their fees, and whereby the two law firms aforesaid also bound themselves to share the said fees equally as between themselves. It follows therefore, that under the Said Retainer Agreement, the plaintiff/ applicant was entitled to 14% of the total compensation recovered.

5. That the firm of Power Rogers and Smith LLP were subsequently replaced by the firm of Smith Lacien LLP on 17th July 2020 pursuant to another tripartite agreement which assigned all the rights and obligations of Power, Rogers and Smith LLP thereunder to Smith Lacien LLP.

6. That the said consortium comprising of an American and a Kenyan Law firm (Hereinafter called " The Said Consortium ”) have rendered virtually all the requisite legal services that they were contractually bound to render under the Said Retainer Agreement and are now just awaiting the final release of compensation, amounting to USD 7,000,000. It follows, logically therefore, that the Said Consortium has fully earned its fees as aforesaid.

7. That The Said Consortium was given a broad and general instructions, not only to recover compensation arising out of the death of the deceased, but to do everything that was - in their professional judgement - necessary to protect the best interests of the estate. Consequently, the Said Consortium has:a.Undertaken extensive legal research not only into the relevant laws of all the relevant jurisdictions that had a direct bearing on the matter, but also, into every other matter that could conceivably impact upon the recovery of compensation, whether positively or negatively;b)Written and exchanged various legal opinions on all relevant issues that were considered crucial to the recovery of compensation;c)Engaged in numerous meetings and discussions, on telephone, by email and virtually whether as between themselves only, or as between any of them and the 1st defendant/ respondent, or as between all the parties to the Said Retainer Agreement.d)Engaged oral, telephone and written communication with governmental and nongovernmental organizations and agencies that had any statutory or other mandates that had a direct or indirect bearing on the release of the requisite compensation to the said estate;e)instituted recovery proceedings in the United States of America (Being INC case 1:19-cv-03927, Francis Yongi Muturi vs The Boeing Company and Rosemount Aerospace, as consolidated in INC case i:i9-CV—02170, Re: Ethiopian Airlines Flight ET 302 Crash;f)Engaged in extensive and laborious settlement negotiations which have culminated in an agreement by the Boeing Company to settle the above case out of court.g)Received at least three preliminary compensatory amounts from The Boeing Company (titled "Funds" on behalf of the Said Estate and remitted the same to the 1st Defendant and the Said Estate.

8. That with intent to prevent the plaintiff/ Applicant from receiving its already earned legal fees, and/or to obstruct the plaintiff/Applicant from executing or in any way enforcing any decree or other order that may be issued herein in connection with the recovery of the same, the 1st defendant / respondent has purported to illegally terminate the Said Retainer Agreement - but only as against the plaintiff / Applicant.

9. That the purported termination of the Said Retainer Agreement as against the plaintiff / applicants is illegal, and therefore null and void for the following reasons:a.That the plaintiff/ applicants have rendered all the legal services that they were contractually bound to render under the said contract, and consequently what is awaited is just the final release of the money by Boeing;b.That an executory contract (as exemplified by the Said Retainer Agreement) cannot be terminated after the innocent party has rendered any part of the contractual obligations.c.That a tripartite contract cannot be unilaterally terminated by one of the three parties, without the involvement of the other partiesd.That a tripartite contract cannot be terminated only as against one only of the parties thereto.e.That the Said Retainer Agreement did not permit any termination thereof by any of the parties thereto, but only permitted any of the two law firms to withdraw therefrom, but of their own volition, and in their absolute discretion.f.That no reasonable ground given to justify the purported termination, with the 1st Defendant/ Respondent merely attempting to justify it ,by way of excuse, on a purported "need for more professional legal service" ,which is not only outrageous ( given that no complaint whatsoever has been raised by the 1st Defendant/ Respondent touching on the quality of legal service given by the plaintiff / applicant) but a fortiori, paradoxical ( in view of the fact that the 1st Defendant/ Respondent has purported to appoint a person who is not a lawyer, and who is therefore not .qualified to practice law in Kenya, to replace the plaintiff / applicant ).

10. That if this application is not certified urgent and the orders sought herein granted by this Honourable Court, there is a grave risk that this suit may be rendered completely nugatory by the release of ALL the compensation monies to the 1st defendant/respondent and/or the release of the fees due and payable to the plaintiff/applicant herein to any other third party.

11. That it is in the interest of Justice that this Honourable Court do grant the orders sought in the application annexed herewith.

3. The 1st respondent opposed the application through the replying and further Affidavits sworn by Francis Yongi Muturi who states that the plaintiff should not benefit unjustly from what they had not worked for. He states that the terms of the tripartite agreement were founded on misrepresentation, subterfuge and exploitation. He states that he retained the applicants law firm for the purpose of obtaining relevant documents and signature for the estate in order to process the claim. He avers that the applicant task was finite and vestigial as it involved clerical work. He further states that the case against boeing was still ongoing and that there was no guarantee that the respondent would be paid 14% of seven million dollars. He further states that the retainer agreement relied upon by the applicant is unlawful unconscionable and unreasonable.

4. The application was canvassed by written submissions which I have considered.

5. The main issue for determination is whether the applicant is entitled to the orders sought. The applicant seeks temporary orders of injunction to restrain the 1st defendant from instructing any other person and from disbursing or remitting any sums received in any way that contravenes the tripartite agreement. The applicant further seeks orders to restrict the 2nd defendant or its agents from releasing any sums other than what is indicated in the tripartite agreement.

6. The applicants case is that the plaintiff, 1st and 2nd defendants signed a tripartite agreement dated July 17, 2020 with a view of receiving compensation arising from the loss of the 1st defendant’s sister who died in the Ethiopian Airlines Flight ET302 crash. The plaintiff contended that the 1st defendant purported to terminate the retainer agreement as against the plaintiff only. It was the plaintiffs case that the tripartite agreement could not be unilaterally terminated by one of the three parties and could not be terminated as against one of the parties. The plaintiff further contended that the parties were awaiting the final release of USD 7,000,000. The plaintiff therefore seeks orders to stop the disbursement of the said sums in any manner that is against the retainer agreement.

7. The 1st defendant, on its part, termed the retainer agreement as unlawful. It was the 1st defendant’s case that the plaintiff ought to have disclosed all the material facts. It was further contended that the 1st defendant is an old man who did not know what a retainer entails. The 1st defendant further stated that the plaintiff’s work was merely clerical and that the 2nd defendant did the bulk of the work.

8. The principles governing the granting of orders of injunction were set out in the celebrated case of Giella vs Cassman Brown Co. Ltd (1971) EA 358 where the court expressed itself on the condition’s that a party must satisfy before the court can grant an interlocutory injunction as follows:-“First, an applicant must show a prima faciecase with a probability of success. Secondly, an interlocutory injunction will not normally be granted unless the applicant might otherwise suffer irreparable injury, which would not adequately be compensated by an award of damages. Thirdly, if the Court is in doubt, it will decide an application on the balance of convenience."

9. The above principles, were restated in Nguruman Limited vs Jan Bonde Nielsen & 2 Others, CA No. 77 OF 2012, as follows:-“In an interlocutory injunction application, the applicant has to satisfy the triple requirements to;(a)establish his case only at a prima facie level,(b)demonstrate irreparable injury if a temporary injunction is not granted, and(c)ally any doubts as to (b) by showing that the balance of convenience is in his favour.These are the three pillars on which rests the foundation of any order of injunction, interlocutory or permanent. It is established that all the above three conditions and stages are to be applied as separate, distinct and logical hurdles which the applicant is expected to surmount sequentially. SeeKenya Commercial Finance Co Ltd v Afraha Education Society [2001] Vol 1 EA 86. If the applicant establishes a prima facie case that alone is not sufficient basis to grant an interlocutory injunction, the court must further be satisfied that the injury the respondent will suffer, in the event the injunction is not granted, will be irreparable. In other words, if damages recoverable in law is an adequate remedy and the respondent is capable of paying, no interlocutory order of injunction should normally be granted, however strong the applicant’s claim may appear at that stage. If prima facie case is not established, then irreparable injury and balance of convenience need no consideration. The existence of a prima facie case does not permit “leap-frogging” by the applicant to injunction directly without crossing the other hurdles in between.” (Emphasis added).

10. On prima faciecase, the plaintiff has to demonstrate that he has a right that is likely to be infringed by the defendants if the orders for injunction are not granted.11. In the case of Omulele & Tollo Advocates vs Mount Holdings LtdCA 75 of 2015 court defined a retainer as:-“A retainer means the instruction, employment or engagement of an advocate by his client.On the other hand, a retainer agreement is merely a contract in writing prescribing the terms of engagement of an advocate by his client, including fees payable. Therefore, it is submitted while a retainer denotes a relationship between parties, the retainer agreement is merely the physical written document or manifestation of such a relationship…

12. While it is not disputed that the parties herein signed the tripartite agreement, what the parties contest is the legality of the said document and its interpretation with regard to its termination.

13. The plaintiff seeks orders to enforce the retainer agreement with respect to alleged payment which is yet to be received by the defendants. It is not disputed that the plaintiff received the 1st batch of the funds and remitted it to the 1st defendant upon subtracting 28% of the money.

14. The present application is therefore in respect to funds that none of the parties have in their possession. In my humble view this application is premature as the prayers sought in the application are the same prayers sought in the plaint. The issue of whether the documents were forged or the interpretation of the terms of the said contract will require evidence to be tendered and cannot be determined at this interlocutory stage.

15. In the premises, I find that no right has been breached or is likely to be breached so as to establish a prima facie case.

16. On irreparable injury, the dispute in question concerns money which can be compensated in the damages. Balance of convenience tilts in favour of allowing the parties to prosecute their dispute without burdening party with expenses.

17. In the upshot, I find no merit in the application and the same is dismissed with costs to the respondents.

DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 8TH DAY OF DECEMBER 2022. W. A. OKWANYJUDGEIn the presence of: -Ms Wanjau for Hassan for defendantMr. Pravin for Gad Ouma for plaintiff/applicantCourt Assistant- Sylvia