[2004] KEHC 832 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT MOMBASA

MOMBASA COMMERCIAL CASE NO. 3 OF 2004

CROWN INDUSTRIES LTD. ………………………………..…… PLAINTIFF

Versus

MEDITTERENEAN SHIPPING COMPANY

S.A. (Sued Through Their Local Agents)

OCEAN FREIGHT (E.A.) LTD. ………………………..………. DEFENDANT

R U L I N G

By its application dated the 12th October 2004 brought under Order 39 Rules 2(1), 2(A) (1), 3 and 8 of the Civil Procedure Rules and Section 3A of the Civil Procedure Act the Plaintiff sought two injunctive orders. The first order sought is for a prohibitive injunction to restrain “the Defendant by itself, its servants and agents … from detaining the plaintiffs goods contained in 23 containers lying at the Port of Mombasa and 29 others enroute to Mombasa.” The second prayer was for a mandatory injunction compelling the defendant to release the 23 containers that had already arrived in Mombasa. I granted the second prayer. Ex-parte and the Respondent is not seeking to have the ex-parte order set aside. This ruling is therefore on the first prayer.

The plaintiff’s case is that on the 1st July 2004 it sent an e-mail to the defendants agent enquiring what the defendant would charge to freight some goods in 40ft containers from Shangai China to Mombasa. The defendant e-mailed back on the same day and stated that:-

“Freight Usd 2800 baf Usd 160 Msa the Usd 80 D/O fee Usd 50 per consignment.”

This was cheaper than what another company, Inchcape Shipping Services, had offered. The plaintiff accepted the defendant’s offer and gave instructions to its exporters to book its containers in the defendant’s vessel MSC Carmen which arrived in Mombasa on the 1st October 2004. The plaintiff then started clearing them and paid to Kenya Revenue Authority customs, value added tax and other statutory charges amounting to Ksh. 5,467,662/=. However when the plaintiff sought from the defendant Deliver Orders the defendant demanded USD 96170 which is USD 25950 more than the agreed freight charges. It would appear that the parties exchanged correspondence and discussed the matter but the defendant refused to budge. To mitigate on its loss the plaintiff offered to pay the said sum of USD 96170 reserving its right to sue for a refund. The defendant refused to accept payment on that condition. The plaintiff then filed this case.

The plaintiff further argues the goods comprised in those containers are raw materials for its factory. At the time of filing the application the plaintiff argued that it had no raw materials and was going to be forced to close down and face industrial action from its work force of 500 people. It was also going to be unable to meet its financial obligations and would be exposed to winding up and other legal proceedings. In addition the plaintiff was going to suffer loss by way of demurrage charges at a rate of USD 60 per container per day.

In those circumstances and for further reasons stated in my ruling of 13th October 2004 I issued a mandatory injunction compelling the defendant to release the containers upon deposit in court of the sum of USD 96170 demanded by the defendant.

That order was complied with and 19 further containers which arrived later were released to the plaintiff upon payment by the plaintiff to the defendant the undisputed charges and deposit of the disputed sum in a joint account in the names of the advocates for the parties. The parties have, however, been unable to reach any agreement regarding the remaining 10 containers which are in the high seas and are expected in Mombasa in a few days time hence the hearing of this application inter-partes.

The plaintiffs Advocate has repeated its earlier argument that the plaintiff will suffer irreparable loss if the remaining 10 containers on arrival are detained by the defendant. It has offered the same terms as those given earlier of paying to the defendants the undisputed sum and depositing the disputed sum in a joint account already opened in the names of the advocates for the parties.

The defendant on its part while admitting that the e-mails on the freight charges were indeed exchanged denies that any contract was reached with the plaintiff. It contended that in addition to the earlier e-mails already referred to, on the 8th July 2004 the plaintiff sent a further e-mail enquiring of the charges for freighting 20 containers every month reducing the number from the original 25. The defendant replied stating:

“the rates offered is the best we can give for now.”

According to the defendant this constituted a new offer which the plaintiff did not accept. Mr. Buti for the defendant, cited authorities and passages from Chitty on Contracts as to when an offer is accepted. He further argued that the defendant accepted and shipped the plaintiff’s containers to Mombasa and raised invoices for its current charges which are different from those earlier offered. In those circumstances, Mr. Buti concluded, there is no contract between the parties on the freight charges and that being so the plaintiff has not made out a prima facie case with any probability of success and this application must be dismissed with costs.

I have considered these rival submissions and the application as a whole. At this stage I cannot make any definitive findings on whether or not the parties reached a binding contract on the freight charges. That I have to leave for the trial judge to make after hearing the parties and receiving evidence especially on how the defendant came to ship the plaintiffs containers to Mombasa. Suffice it to say that having considered the application and the submissions made by counsel for the parties, I am satisfied that the plaintiff has made out a prima facie case for the grant of the injunction sought. If the remaining containers are, on arrival detained as it appears they will the parties having not reached any agreement, demurrage charges will be incurred. And as I do not know how soon this suit can be heard given the backlog we have those charges are likely to escalate to astronomical figures. Such an eventuality will not be in the interest of either party as the charges are payable to third parties. In addition either party can lose in this matter and suffer heavily. Even if the plaintiff had not made out a prima facie case I would still have granted the injunction sought on the balance of convenience, in this case of both parties.

For these reasons I allow this application and order that the defendant by itself, its servants and or agents is hereby restrained from detaining the remaining 10 containers upon their arrival in Mombasa. Upon their arrival the defendant shall immediately advise the plaintiff who shall pay to the defendant the undisputed charges, deposit the disputed sum in the joint account in the names of their respective advocates and take delivery of the containers. Costs in cause.

DATED and delivered this 19th day of November 2004.

D.K. Maraga

Ag. JUDGE