[2022] KEHC 15520 (KLR)

Diwa Traders Limited v Petroco & another; Makupa Transit Shade Limited & another (Interested Parties) (Civil Case E055 of 2022) [2022] KEHC 15520 (KLR) (11 November 2022) (Ruling)

Neutral citation: [2022] KEHC 15520 (KLR)

Republic of Kenya

In the High Court at Mombasa

Civil Case E055 of 2022

OA Sewe, J

November 11, 2022

Between

Diwa Traders Limited

Plaintiff

and

Atran Petroco

1st Defendant

Atraco International (Kenya) Limited

2nd Defendant

and

Makupa Transit Shade Limited

Interested Party

Somo Commodities Limited

Interested Party

Ruling

1. The plaintiff, Diwa Traders Limited, commenced this suit by way of the Plaint dated September 1, 2022, by which it sued the two defendants, Atran Petroco and Atraco International (Kenya) Limited and enjoined Makupa Transit Shade Limited as an interested party (hereinafter, the 1st interested party). Its cause of action was that, sometime in June 2022, it procured the services of the 1st defendant for the supply of Bitumen Grade 60/70, weighing 597 metric tons and packed in 3,300 steel drum covered in the Bill of Lading from ARTABAZ No xxxx at the price of USD 317,604/=; and that it was a term of payment that 30% of the USD 319,200/=, which amount equals to USD 95,760 be paid in advance and the balance after presentation of the draft shipping documents.

2. The plaintiff further averred that, as at August 31, 2022, it had paid to the 1st defendant the sum of USD 163,724 of the purchase price, leaving a balance of USD 155,380; and that in spite thereof, the 1st defendant proceeded to unilaterally, arbitrarily, illegally and unlawfully cancel the contract aforementioned and to issue instructions to the 2nd defendant to transfer and/or sell the product procured by the plaintiff to a different consignee other than the plaintiff. It also mentioned that the 2nd defendant had already commenced the process of issuing instructions to the interested party to release the products to it for purposes of having the same transferred to a different consignee other than the plaintiff.

3. Accordingly, the plaintiff filed this suit praying for the following reliefs:(a)A permanent injunction restraining the defendants either by themselves, their employees, agents, servants, assignees or any person working under their express and/or implied instructions or authority from transferring and/or selling, alienating, disposing and/or dealing in any manner whatsoever with Bitumen Grade 60/70, weighing 597 metric tons and packed in 3,300 steel drums covered in the Bill of Lading from ARTABAZ No xxxx.(b)An order for specific performance compelling the 1st interested party to release to the plaintiff Bitumen Grade 60/70, weighing 597 metric tons and packed in 3,300 steel drums covered in the Bill of Lading from ARTABAZ No xxxx.(c)Costs of the suit.

4. Contemporaneously with the Plaint, the plaintiff filed an application dated September 1, 2022 seeking the following orders:(a)Spent(b)Spent(c)That the defendants and the interested party be restrained by way of temporary injunction either by themselves, their employees, agents, servants, assignees or any person working under their express and/or implied instructions or authority from transferring and/or selling, alienating, disposing and/or dealing in any manner whatsoever with Bitumen Grade 60/70, weighing 597 metric tons and packed in 3,300 steel drums covered in the Bill of Lading from ARTABAZ No xxxx and transferred to the 1st interested party’s terminal pending the hearing and determination of the main suit.(d)That the Court grants any other relief that it may deem appropriate in the interest of justice and fairness.(e)That the costs of the application be provided for.

5. The application was premised on the grounds that, sometimes in June 2022, the plaintiff procured the services of the 1st defendant for the supply of Bitumen Grade 60/70, weighing 597 metric tons per the Bill of Lading No xxxx; and that despite paying the 1st defendant some USD 163,724/= as at August 31, 2022, the 1st defendant, vide an email communication dated September 1, 2022 unilaterally cancelled the contract and issued instructions to the 2nd defendant to transfer and/or sell the products to a different consignee other than the plaintiff.

6. In support of the application, the plaintiff relied on the affidavit of its Managing Director, David Kamotho Waweru, sworn on September 1, 2022, to which the plaintiff annexed copies of the Proforma Invoice and Bill of Lading (Annexures 'DKW2 (a) and (b)' to the Supporting Affidavit. Mr Waweru also exhibited as Annexure 'DKW3' a copy of the Commercial Invoice evidencing payment of USD 163,724 as well as copies of the pertinent email communication between the protagonists (marked Annexure 'DKW4' (a) and (b) and 'DKW5' to the Supporting Affidavit). He added that the plaintiff was apprehensive that the 2nd defendant would issue instructions to the interested party to release the product to a different consignee other than the plaintiff, hence its prayer for temporary injunction in the interim.

7. The court record shows that counsel for the plaintiff thereafter filed an application dated September 14, 2022 seeking that the Court be pleased to adopt a consent dated September 12, 2022, negotiated between the plaintiff, the defendants and the interested party. However, before the said application could be heard and the orders sought granted, an application dated September 30, 2022 was filed by Somo Commodities Limited, seeking, inter alia, joinder to these proceedings as the 2nd interested party. The proposed 2nd interested party’s stance is that it is the lawful owner of the entire consignment the subject of this suit, having paid the full purchase price for the product.

8. As the prayer for leave to enjoin the proposed 2nd interested party was not opposed, the same was granted on October 12, 2022; whereupon directions were given that the two applications be responded to and canvassed simultaneously, by way of written submissions. As far as can be ascertained, no responses were filed by either the defendants or the 1st applicant in respect of the plaintiff’s application dated (hereinafter, the 1st application); which is understandable, granted their expressed intention to have the entire suit withdrawn by consent. As for the 2nd interested party, an Affidavit sworn on October 14, 2022 by its director, Osmail Maalim Hassan in opposition to the plaintiff’s application, by which the 2nd interested party adopted its averments in respect of its application dated September 30, 2022. In essence, the 2nd interested party averred that it is the rightful owner of the subject consignment and therefore that the same ought to be released to it forthwith on account of its legitimate concerns as to the degradation of the product that is currently stored at the 1st interested party’s premises. Mr Hassan further averred that, in the circumstances, it is only proper and just that the plaintiff’s application be disallowed in its entirety or summarily struck out with costs. He reiterated these averments in his supplementary affidavit sworn on October 17, 2022.

9. The 2nd application, which is also the subject of this ruling was filed by the 2nd interested party. It is dated September 30, 2022 and is expressed to have been brought under Order 40 Rule 1 of the Civil Procedure Rules, among other provisions of the law. The 2nd interested party sought orders that:(a)Spent(b)Spent(c)pending inter partes hearing of the motion, interim orders be issued ex parte in the first instance in terms of prayers 4-8 of the application;(d)There be immediate, unconditional stay of execution of the entirety of the orders given herein on September 6, 2022 and any/all orders and/or processes consequential and/or incidental thereto;(e)There be immediate, unconditional stay of the entirety of the proceedings related and/or consequential and/or incidental to the orders given herein on September 6, 2022 and any/all proceedings alternative to the proceedings relating to this motion.(f)That an order do issue directing the 1st interested party to release the consignment subject hereof detailed in the Bill of Lading No xxxx to the rightful, legal owner thereof as required by the express dictates of the law and maritime procedures, within 48 hours of the making of the order;(g)That the orders subject of Prayers [c]. [d], [e] and [f] above be served upon the Court Bailiff, Mombasa Law Courts; the OCS, Port Police Station, Mombasa; and the Kenya Revenue Authority (KRA). Mombasa County for purpose of ensuring compliance, supervising the execution of the order, providing security, and ensure no public disturbance ensues, whilst maintaining law and order throughout and after the execution of the order.(h)That an order do issue directing the plaintiff, Diwa Traders Limited, to deposit security equivalent to both USD 337,738 and 13,204,493 within 48 hours of the making of the said order.(i)That the Court be pleased to grant leave to the 2nd interested party to lodge a Defence and Counterclaim to the plaintiff’s suit within 48 hours of the making of the said order;(j)That costs of the application be provided for.

10. The 2nd interested party’s application was supported by an affidavit sworn by Osmail Maalim Hassan. He averred that the 2nd interested party is and remains the lawful owner of the entirety of the suit property, being the consignment detailed in the Bill of Lading No xxxx; and that the 2nd interested party approached the 1st defendant through the 2nd defendant and confirmed that the consignment was at the Port of Mombasa awaiting usual clearance procedures. Mr Hassan further averred at paragraph 6 of the Supporting Affidavit that, upon conclusion of the due diligence to confirm the veracity of the documentation supplied to the 2nd interested party, including a visit to the Container Freight Station (CFS) at the premises of the 1st interested party, the 2nd interested party agreed on the terms of sale as detailed in the Proforma Invoice No xxxx/DWA002/0622/0359 dated September 6, 2022.

11. Mr. Hassan deposed that, upon full payment of the purchase price, and confirmation by the 1st defendant that the 2nd interested party was the new consignee of the subject consignment, the shipping line, M/s Seven Seas Shipping Agencies (K) Ltd, delivered all the requisite documentation to the Kenya Revenue Authority for purposes of amending the Cargo Manifest to reflect Somo Commodities Limited as the new consignee; whereupon all relevant amendments were effected and a new Bill of Lading was issued in the name of the 2nd interested party. At paragraph 16 of the Supporting Affidavit, Mr Hassan averred that the 2nd interested party duly settled all the taxes due to KRA vide E-Slip Ref No xxxx-1 as well as storage charges due to the 1st interested party.

12. It was thus the contention of the 2nd interested party that, as it was about to arrange for the collection of the consignment from the 1st interested party’s premises, it was informed of the existence of a court order given on September 6, 2022 requiring that the status quo be maintained. Hence, the 2nd interested party asserted that, having paid a total of USD 337,738 and Kshs 13,204,473/= thus far in overt purchase of the subject consignment, it is only fair and just that the orders prayed for by it be granted by the Court.

13. In response to the 2nd interested party’s application dated September 30, 2022, the plaintiff filed a Replying Affidavit, sworn by Mr David Kamotho Waweru on October 14, 2022. The plaintiff thereby accused the 2nd interested party of material non-disclosure, in that it filed alternative proceedings before the Chief Magistrate’s Court, being Mombasa CMCC No 1422 of 2022: Somo Commodities Limited v Makupa Transit Shade Limited in respect of the same consignment in which it obtained orders for the release of the bitumen and was poised to collect the consignment when it was served with the status quo order issued herein on September 6, 2022.

14. At paragraphs 15-21, the plaintiff averred that, with regard to the consent dated September 12, 2022, it was the 2nd interested party’s director that approached him with a view of having an amicable solution to the stalemate occasioned by the continued stay of the consignment at the 1st interested party’s premises. Mr Kamotho added that, at all material times, he was in constant communication with the 2nd interested party’s director and was awaiting the signing of the consent by all parties to enable the withdrawal of this suit. Hence, the plaintiff asserted that the 2nd interested party has been mischievous, has approached the Court with unclean hands, and has failed to provide material disclosure to warrant the release of the suit property to it.

15. On behalf of the 1st interested party, a replying affidavit was sworn by Godwin Daudi Mwanjumwa on October 14, 2022. Mr Mwanjumwa deponed that the consignment that is the subject matter of this suit was brought to its CFS terminal by the plaintiff; but that subsequently they were notified by the 2nd interested party of changes in ownership. He further averred that, at around the same time, the 1st interested party was served with a court order stopping it from releasing the said consignment to a third party.

16. Mr Mwanjumwa further asserted that, although the 1st interested party was well aware that the plaintiff claimed to have made part-payment for the subject consignment to the shipper, the 2nd interested party also presented documents indicating full compliance with the applicable import procedures. He consequently urged that the 1st interested party be allowed to release the subject goods from its CFS Yard because they are occupying a lot of space, thereby preventing the 1st interested party from taking further business which it sorely needs. He added that demurrage charges are accruing every day at staggering amounts; and that both the plaintiff and the 2nd interested party’s interests will only be safeguarded if the cargo is offloaded and the containers returned to the Port as soon as possible.

17. On October 17, 2022, the plaintiff filed a reply to the affidavit of the 1st interested party. The said affidavit was sworn by David Kamotho on October 16, 2022. Mr Kamotho pointed out that counsel for the 1st interested party had indicated that the 1st interested party would not be filing any documentation to both applications. According to Mr Kamotho, the averment that the containers ought to be returned to the Port is not only misleading but also untrue. He averred that the consignment had been removed from the containers and the containers returned to the Shipping Line and could not be said to be hampering the business activities of the 1st interested party.

18. Mr Kamotho further deposed that, to allow the application by the 2nd interested party for the release of the suit property to it would, in effect, render the suit nugatory as the Court will have no subject matter for the parties to litigate upon. He further asserted that, to the best of his knowledge, no demurrage charges have accrued as the 1st interested party ordinarily allows for a 45-days storage grace period, before imposing demurrage charges on a consignee. Thus, Mr Kamotho prayed for the dismissal of the 2nd interested party’s application dated September 30, 2022 with costs; and asked the plaintiff’s application dated September 1, 2022 be allowed.

19. The two applications were canvassed by way of written submissions, pursuant to the directions issued herein on October 12, 2022. Mr Ombati, counsel for the plaintiff, relied on his written submissions dated October 14, 2022 in which he proposed the following cross-cutting issues for determination:(a)Whether the plaintiff’s application for temporary injunction is merited;(b)Whether the order sought for the release of the suit property by the 2nd interested party is final and whether the same can be granted at the interlocutory stage;(c)Who is the rightful and/or legal owner of the subject Bitumen, Grade 60/70, weighing 597 metric tons and packed in 3,300 steel drums covered in the Bill of Lading from ARTABAZ No xxxx?(d)Whether the defendants and the 2nd interested party, through their dealings, disobeyed the orders issued on September 6, 2022 and should therefore be held in contempt of Court;(e)Whether the 2nd interested party has approached the Court with clean hands;(f)Whether leave of the Court is mandatory in the service of summons upon the 1st defendant;(g)Who should bear the costs of the application?

20. Mr Ombati made reference toGiella v Cassman Brown & Co Ltd [1973] EA 358, Esso Kenya Limited v Mark Makwata Okiya, Civil Appeal No 69 of 1991 and Mrao Limited v First American Bank of Kenya & 2 Others [2003] eKLR, for the applicable principles to applications for temporary injunction; namely, the existence of a prima facie case, the likelihood of irreparable loss being suffered by the applicant and the balance of convenience. Hence, it was his submission that the plaintiff has established a prima facie case by annexing documents to demonstrate that it is the local designated agent and initial consignee of the suit property; and that he stands to suffer irreparable harm in the event his application dated September 1, 2022 is not allowed. Mr Ombati also urged the Court to find that the balance of convenience is in favour of preservation of the status quo pending the hearing and determination of the main suit.

21. On whether the 2nd interested party’s prayer for the immediate release of the suit property should be granted by the Court, Mr Ombati urged the Court to be guided by the decision of the Court of Appeal in Vivo Energy Kenya Limited v Maloba Petrol Station Limited & 3 Others [2015] eKLR and Westmont Power Kenya Ltd v Frederick & Another T/A Continental Traders & Marketing [2003] KLR 357, for the proposition that, at this stage, the Court ought not to make definitive and final conclusions before hearing the parties. He consequently submitted that the prayer for the immediate release of the subject consignment is untenable in the circumstances.

22. In respect of the third issue, as to who is the rightful and/or legal owner of the subject property, Mr Ombati drew the Court’s attention to paragraph 29 the plaintiff’s Replying Affidavit sworn on October 14, 2022 and the annexed Certificate of Conformity dated August 10, 2022, in which the plaintiff is named as the importer and consignee of the product. He further submitted that it is significant that the first Bill of Lading in time was issued to the plaintiff; and that all the documents presented by the plaintiff in connection with the shipment show that it was the initial consignee before the 2nd interested party interloped and laid claim to the property.

23. On whether the defendants and the 2nd interested party, through their dealings, disobeyed the orders issued on September 6, 2022, and should therefore be held to be in contempt of court, it was the submission of Mr Ombati that court orders must be obeyed, for otherwise the entire edifice that is the judicial system and the rule of law would crumble. He added that, although the defendants were duly served with the Court Order issued on September 6, 2022, they nonetheless proceeded to engage with the 2nd interested party and entered into various agreements and transactions in contravention of the status quo order for which they ought to be punished.

24. Mr Ombati further urged the Court to find that the 2nd interested party, having approached the Court with unclean hands, is not entitled to the orders sought in their application dated September 30, 2022. He relied on John Njue Nyaga v Nicholas Njiru Nyaga & Another [2013] eKLR, Anne Mumbi Hinga v Gaitho Oil Limited [2019] eKLR, Francis Munyoki Kilonzo & Another v Vincent Mutua Mutiso [2013] eKLR in this regard.

25. On whether the leave of the Court is mandatory for the service of summons upon the 1st defendant, Mr Ombati made reference to Order 5 Rule 21 of the Civil Procedure Rules in which the operative word used is 'may' as opposed to 'shall' and submitted that failure by the plaintiff to obtain leave is not fatal to the plaintiff’s application or suit. He relied on the definition of the word 'shall' as per Black’s Law Dictionary and the case of Republic v Council of Legal Education & Another Ex parte Sabiha Kassamia & Another [2018] eKLR. Counsel further pointed out that under Order 5 Rule 22B of the Civil Procedure Rules, the need to seek leave of the Court prior to service via electronic mail is no longer necessary. He relied on Mathews v Masika [2022] KEHC 12194 (KLR)in support of this proposition. Counsel added that, in any event, leave can be sought before the suit is fixed for hearing; and that no prejudice will be suffered, either by the defendants or the interested parties. He cited Premier Hospital Limited v Meditec Systems & Another [2021] eKLR and urged the Court to be guided by Article 159(2)(d) of the Constitution in this regard. Thus, counsel urged for the dismissal of the 2nd interested party’s application dated September 30, 2022; and prayed that the plaintiff’s application dated September 1, 2022 be allowed with costs.

26. On behalf of the 2nd interested party, composite submissions for the two applications were filed by Mr Ngonze on October 14, 2022. He thereby proposed the following broad issues for determination:(a)Whether the plaintiff’s motion is merited;(b)Whether the 2nd interested party’s motion is merited;(c)Who bears the costs of these proceedings?

27. At paragraph 9 of his written submissions, Mr Ngonze set out the applicable law that the 2nd interested party proposed to rely on in urging its application and in opposing the plaintiff’s application. Mr Ngonze also filed a List, Bundle and Digest of Authorities to augment his submissions. Thus, in opposing the plaintiff’s prayer for temporary injunction, he relied on Order 40 of the Civil Procedure Rules and the cases of Giella v Cassman Brown & Co Ltd [1973] EA 358 and EA Industries Ltd v Trufoods Ltd [1972] EA 420 to underscore his submission that the plaintiff was obliged to demonstrate a prima facie case and irreparable damage in addition to showing that the balance of convenience was in his favour; which the plaintiff failed to do.

28. In terms of jurisdiction, Mr Ngonze relied on Misnak International (UK) Limited v 4MB Mining Limited c/o Ministry of Mining, Juba, Republic of South Sudan & 3 Others [2019] eKLR and Raytheon Aircraft Credit Corporation & Another v Air Al-Faraj Limited [2005] eKLR, for the proposition that jurisdiction over a foreign defendant, such as the 1st defendant, can only be assumed by the Court upon service of Summons to Enter Appearance. As for stay of execution, reliance was placed by Mr Ngonze on Butt v Rent Restriction Tribunal [1979] eKLR; while in support of the 2nd interested party’s prayer for interlocutory mandatory injunction, counsel relied on Kamau Mucuha v Ripples Ltd [1993] eKLR and Gusii Mwalimu Investment Co Ltd & 2 Others v Mwalimu Hotel Kisii Ltd [1996] eKLRfor the general position that a mandatory injunction can be granted on an interlocutory application as well as at the hearing if the circumstances so warrant.

29. On the issue of ownership under maritime procedures, Mr Ngonze submitted that that it was sufficient proof that the 2nd interested party had a Bill of Lading in its name; and that it had paid all the sums due thereunder as well as the charges payable to the KRA. He cited PIL Kenya Limited v Joseph Oppong [2009] eKLR to buttress this argument. He further submitted that the 2nd interested party had made a justification for the payment by the plaintiff of security for costs pending the hearing and determination of this suit. The cases of Moses Wachira v Niels Bruel & 2 Others [2015] eKLR and Gatirau Peter Munya v Dickson Mwenda Kithinji & 2 Others [2014] eKLR were cited by Mr Ngonze in support of the 2nd interested party’s prayer for security for costs.

30. In conclusion therefore, Mr Ngonze urged the Court to find that the plaintiff has failed to make out a prima facie case on the merits to warrant the grant of any of the prayers sought in its Notice of Motion application dated September 1, 2022. Conversely, he posited that the 2nd interested party has sufficiently made out a prima facie case on the merits to warrant the grant of all prayers sought in the Notice of Motion application dated September 30, 2022. He consequently prayed that the plaintiff’s application be dismissed with costs; and that the 2nd interested party’s application be allowed as prayed.

31. I have given careful consideration to all the material placed before the Court in respect of the two applications. Accordingly, the two broad issues for consideration are:(a)Whether the plaintiff’s application for temporary injunction is merited;(b)Whether a mandatory injunction ought to issue in favour of the 2nd interested party for the immediate release of the suit property at this interlocutory stage;(f)Whether, in the absence of leave of the Court to serve summons upon the 1st defendant, this suit is tenable;(g)Who should bear the costs of the application?

32. Before endeavouring to consider and determine the issues aforementioned, it is imperative to determine the issue of jurisdiction as raised by Mr Ngonze. He submitted that, in respect of the 1st defendant, jurisdiction could only be assumed by the Court only after service of Summons to Enter Appearance with leave of the Court under Order 5 Rule 21 of the Civil Procedure Rules. At paragraph 2 of the Plaint dated September 1, 2022, the plaintiff averred that the 1st defendant is a privately owned company with registered offices in Tehran, Isfaham, UAE and Africa. It is therefore a foreign-based company. Accordingly, the plaintiff ought to have sought leave of the Court to serve the 1st defendant with Summons to Enter Appearance before seeking any orders against it. This is the essence of Order 5 Rule 21(g) and (h) of the Civil Procedure Rules.

33. That being the case, Order 5 Rule 25 of the Civil Procedure Rules, stipulates that:'Every application for leave to serve such summons or notice on a defendant out of Kenya shall be supported by affidavit or other evidence, stating that in the belief of the deponent the plaintiff has a good cause of action, and showing in what place or country such defendant is or probably may be found, and whether such defendant is not resident in Kenya or not, and the grounds on which the application is made; and no such leave shall be granted unless it is made sufficiently to appear to the court that the case is a proper one for service out of Kenya under this Order.'

34. In a discussion on the above provision in Law Society of Kenya v Martin Day & 3 Others [2015] eKLR the point was made thus:'It is not sufficient for a plaintiff to institute suit against a party. That party must be invited to submit to the authority of the court in order for the legal process of setting down the suit for trial to commence. The circumstances of this case are such that Summons must be served in the manner provided for in the rules to enable the defendants who have no registered office or business in Kenya submit to the jurisdiction of this court. It therefore follows that their knowledge of the existence of the suit is not sufficient enough to proceed against them. They may be aware of the suit but unless they are prompted by the summons in the manner provided for in the rules, the jurisdiction of this court is not invoked.'

35. And, in Misnak International (UK) Limited v 4MB Mining Limited C/O Ministry of Mining, Juba Republic of South Sudan & 3 others [2019] eKLR, the Court of Appeal explained that:'The manner in which such jurisdiction is assumed by the court is that firstly, the plaintiff has to seek leave of the court to serve such summons outside the court’s jurisdiction. The purposes of seeking leave is to enable the court to weigh the reasons adduced by the plaintiff and determine whether a proper case has been made out for service of summons outside its jurisdiction. The principles which govern the court in determining whether or not to grant leave are set out, though not exhaustively, under Order 5 Rule 25. '

36. Upon obtaining leave, the plaintiff must first serve Summons to Enter Appearance on the defendants in the prescribed manner and avail proof of such service before seeking the intervention of the Court. In Misnak International (UK) Limited v 4MB Mining Limited C/O Ministry of Mining, Juba Republic of South Sudan & 3 others (supra) the Court of Appeal proceeded to hold that:'Upon such leave being granted, the summons has to be served upon such a defendant. It is only upon such service of the summons that a court assumes jurisdiction over a foreign defendant and not a moment sooner. This Court in Raytheon Aircraft Credit Corporation & Another vs Air Al-Faraj Limited (supra) appreciated as much by stating that –'The High Court assumes jurisdiction over persons outside Kenya by giving leave, on application by a plaintiff to serve summons or notice of summons, as the case may be, outside the country after such summons are served in accordance with the machinery stipulated therein.'

37. I therefore find no merit in the arguments pitched by Mr Ombati that the operative word employed in Order 5 Rule 21 of the Civil Procedure Rules is 'may' as opposed to 'shall' and that under Order 5 Rule 22B of the Civil Procedure Rules, the need to seek leave of the Court prior to service via electronic mail is no longer necessary. It is instructive that he relied on Mathews v Masika [2022] KEHC 12194 (KLR) in support of this proposition, yet in that case, the issue was whether service via electronic mail constituted substituted service. Nowhere in that decision was it indicated that leave is not necessary where service is done via email. Moreover, the defendant in that suit was not a foreign based individual.

38. In the premises, I take the view that, whereas no orders can issue against the 1st defendant unless and until compliance is had with the requirements of the law as to service, that in itself does not spell doom for the plaintiff’s suit; granted the critical role played by the 2nd defendant in the handling of the subject consignment. The 2nd defendant having been duly served and the interested parties having been properly enjoined the suit is competently before the Court. Its merit or otherwise remains to be determined at the hearing.

39. In its application dated September 1, 2022 (the 1st application) the plaintiff herein basically prayed for a temporary injunction to restrain the Defendants from dealing in any way with the Bitumen Grade 60/70, weighing 597 metric tons and packed in three thousand three hundred (3,300) steel drum containers covered in the Bill of Lading from ARTABAZ Bill of Lading No xxxx and transferred to the interested party (hereafter the 1st interested party). In this connection, Order 40 Rule 1 of the Civil Procedure Rules provides that:'Where in any suit it is proved by affidavit or otherwise that any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit, or wrongly sold in execution of a decree the court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal, or disposition of the property as the court thinks fit until the disposal of the suit or until further orders.'

40. The above provision does give the Court the discretion to grant temporary injunction if warranted by the facts presented to it. Accordingly, in Giella v Cassman Brown & Co Ltd (supra), it was held:'The conditions for the grant of an interlocutory injunction are well settled in East Africa. First, an applicant must show a prima facie case 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.'

41. In determining whether sufficient cause has been shown for the grant of a temporary injunction the Court need not examine closely the merits or otherwise of the plaintiff's case. As was aptly stated by the Court of Appeal in Nguruman Limited vs. Jan Bonde Nielsen & 2 Others (supra):'In considering whether or not a prima facie case has been established, the court does not hold a mini trial and must not examine the merits of the case closely. All that the court is to see is that on the face of it the person applying for an injunction has a right, which has been or is threatened with violation. Positions of the parties are not to be proved in such a manner as to give a final decision in discharging a prima facie case. The applicant need not establish title it is enough if he can show that he has a fair and bona fide question to raise as to the existence of the right, which he alleges. The standard of proof of that prima facie case is on a balance or, as otherwise put, on a preponderance of probabilities. This means no more than that the Court takes the view that on the face of it the applicant’s case is more likely than not to ultimately succeed.'

42. And in Mrao Ltd vs First American Bank of Kenya Ltd & 2 Others [2003] KLR 123 a prima facie case was defined thus:'A prima facie case in a civil application includes but not confined to a genuine and arguable case. It is a case in which on the material presented to the Court a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter.'

43. The plaintiff has availed documentation showing that sometime in June, 2022, it procured the services of the 1st defendant for the supply of Bitumen Grade 60/70, weighing 597 metric tons for the price of USD 317, 604. The Plaintiff stated that as at August 31, 2022, it had paid USD 163,724 and there was therefore the balance of USD 155,380 to be paid upon delivery of the consignment. There is further evidence to show that despite the payment of USD 163,724, the 1st defendant vide an email communication dated September 1, 2022, proceeded to cancel the contract and instructed the 2nd defendant to transfer and/or sell the product to a different consignee.

44. These assertions by the plaintiff appear to have the support of the 1st interested party. It confirmed, vide an Affidavit sworn on October 14, 2022, that the subject consignment was taken to its terminal by the Plaintiff; and that it was subsequently notified of the changes in ownership by the 2nd Interested Party. The 1st interested party also acknowledged that, whereas the plaintiff had made partial payment, the 2nd Interested Party had gone ahead and settled all the statutory fees including custom fees with KRA and demurrage fees that had accrued at the time.

45. Thus, although the 2nd interested party maintained that it is the legal owner of the entire consignment as it also shipped the said consignment from the 1st defendant through the 2nd defendant and thereafter settled all custom duties, taxes, shipping, clearing, handling and storage charges in respect of the entire consignment, it cannot be gainsaid that the plaintiff also has a valid claim to the same consignment. I am therefore satisfied that the plaintiff has made out a case from which a tribunal properly directing itself would conclude that there exists a right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter.

46. That said, the next question to pose is whether the plaintiff has satisfied the second condition for the grant of a temporary injunction, namely, that unless the order is granted it stands to suffer irreparable loss for which an award in damages would not be an adequate recompense. The Court of Appeal made the point in the case of Nguruman Limited v Jan Bonde Nielsen & 2 others [2014] eKLR, that:'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. See Kenya 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.'

47. In this case it is evident that the key issue for determination is who is the legal owner of the consignment of Bitumen Grade 60/70, weighing 597 metric tons. Both the plaintiff and 2nd interested party claim to be the legal owners and it is clear that the defendants are yet to enter appearance and file responses. Consequently, the issue of ownership of the subject consignment can only be determined after the court has heard viva voce evidence from all the parties to this dispute.

48. In the premises, and bearing in mind that the plaintiff’s right to a fair hearing is enshrined in the Constitution itself at Article 50, I am convinced that the plaintiff has shown that it stands to suffer irreparable loss unless a temporary injunction is granted to it pending the hearing of the main suit. In Sharok Kher Mohamed Ali & Another vs Southern Credit Banking Corporation [2008] eKLR Hon Warsame, J (as he then was) expressed the view, which I agree with entirely that:'A party deprived of his property through an illegal process would suffer irreparable loss and/or damage. In any case, a party entitled to a legal right cannot be made to take damages in lieu of his right. In essence the damages and/or loss that would be suffered by the Plaintiffs would be significant if an injunction is not granted. My position is that a party in contravention of the law cannot be rewarded for his contravention. (see also Olympic Sports House Limited vs School Equipment Centre Limited [2012] eKLR)

49. In addition to the foregoing, I am convinced that the balance of convenience is also in favour of maintaining the current status quo pending expedited hearing and determination of this dispute. It is therefore in the interest of justice that this court grants a temporary injunction pending the hearing and determination of this suit.

50. In respect of the 2nd interested party’s application dated September 30, 2022 (the 2nd application for purposes of this ruling) the first issue arising is whether the 2nd interested party is entitled to the immediate and unconditional stay of execution of the orders given herein on September 6, 2022 and all orders and processes consequential thereto; and whether proceedings related to those orders need to be stayed as per prayers 4 and 5 of the 2nd application. Having considered the 2nd interested party’s Supporting Affidavit, I see no justification for these prayers. It appears it was hinged on Order 22 Rule 22 of the Civil Procedure Rules, yet, as matters stand, there is no decree of the court that has been issued or sent to this Court for execution that is capable of being stayed. Indeed, the order of September 6, 2022 was simply a status quo order to pave way for further directions on the 1st application by the Duty Judge in the Civil, Commercial and Admiralty Division.

51. In the same vein, I find absolutely no basis for staying the proceedings herein, granted the sense of urgency expressed by both sides of the disputation. Indeed, it is a constitutional imperative that such proceedings be disposed of without undue delay as mandated by Article 159(2)(b) of the Constitution. It is even more disconcerting that the application for stay of proceedings has been brought by an interested party. The peripheral role of interested parties was well articulated by the Supreme Court of Kenya in Methodist Church in Kenya v Mohamed Fugicha & 3 others [2019] eKLR thus:'This Court has been categorical that the most crucial interest or stake in any case is that of the primary parties before the Court. We did remark, in Francis Karioki Muruatetu & Another v Republic & 5 others, Sup Ct Pet 15 & 16 of 2015 (consolidated); [2016] eKLR, as follows (paragraphs 41, 42):'Having carefully considered all arguments, we are of the opinion that any party seeking to join proceedings in any capacity, must come to terms with the fact that the overriding interest or stake in any matter is that of the primary/principal parties’ before the Court. The determination of any matter will always have a direct effect on the primary/principal parties. Third parties admitted as interested parties may only be remotely or indirectly affected, but the primary impact is on the parties that first moved the Court.'

52. Thus, in Trusted Society of Human Rights Alliance v Mumo Matemo & 5 others [2014] eKLR the Supreme Court made it clear that:'A suit in Court is a ‘solemn’ process, 'owned' solely by the parties. This is the reason why there are laws and Rules, under the Civil Procedure Code, regarding Parties to suits, and on who can be a party to a suit.'

53. In the premises, I find no merit in Prayers 4 and 5 of the 2nd interested party’s application. In prayer 6, the interested party asked for a mandatory injunction directing Makupa Transit Shade Limited, the 1st interested party, to release the subject consignment to it as the rightful/legal owner thereof within 48 hours of the making of the order, yet, as matters stand, the interest of the 2nd interested party is only peripheral. No pleadings have been or can be filed by it herein unless it is joined as a defendant. I therefore find no basis for the bold prayers made by the 2nd interested party per prayers 6, 7, 8 of the 2nd application.

54. Prayer 9 of the 2nd application has to do with the 2nd interested party’s prayer for leave to lodge a defence and counterclaim to the plaintiff’s suit. As has been observed herein above, an interested party’s role cannot override the interests of the primary parties; and if indeed the 2nd interested party appreciated the magnitude of its interest, it ought to have sought for joinder as a defendant instead. No specific provision of the Civil Procedure Rules, was brought to my attention that permits the filing of a Defence and Counterclaim by an interested party. Indeed, in the case of Luka Kiplelei Kotut v Joseph Chebii & Another [2013] eKLR, Munyao, J, when confronted with a similar situation, held: -'I agree with the submissions of Mr Kiplimo that the interested party is not a defendant to this suit. She therefore had no mandate to enter an appearance and defence. Under Order 6 Rule 1, provides that Where a defendant has been served with summons to appear, he shall unless some order be made by the court, file his appearance within the time prescribed in the summons.It is therefore discernable that an appearance to a suit can only be entered by a defendant. Not any busy body can enter appearance to a suit. The Rules do not envisage a situation where a stranger to the suit enters appearance to the suit.A defence can also not be filed by a person who is not a defendant to the suit. Order 7 Rule 1 provides that: -Where a defendant has been served with a summons to appear he shall, unless some other or further order be made by the court, file his defence within fourteen days after he has entered an appearance in the suit and serve it on the plaintiff within fourteen days from the date of filing the defence and file an affidavit of service.A person who is not a defendant cannot therefore simply walk into the proceedings by filing a Statement of Defence.The court of course has leeway under Order 1 Rule 10 to order that a person be enjoined as a defendant upon an application being made.'

55. It is for the same reasons that I find no basis in the plaintiff’s assertions that the 2nd interested party did not make a full or frank disclosure of the lower court suit. As for Mr Ombati’s submissions that the defendants and the 2nd interested party be cited for contempt, needless to say that contempt of court is a serious process attracting criminal sanctions and therefore entailing a higher standard of proof, as well as strict regime that ensures the application in that regard is served on the alleged contemnors. There is no such application before the Court and the submissions of counsel are not aligned to any of the plaintiff’s prayers in the 1st application.

56. The upshot of the above is that I find no merit in the 2nd interested party’s application dated September 30, 2022, which I hereby dismiss with an order that the costs thereof be in the cause. On the other hand, I find the plaintiff’s application dated September 1, 2022 meritorious. The same is hereby allowed and orders granted as hereunder:(a)That the 2nd defendant as well as the 1st and 2nd interested parties be and are hereby restrained by way of temporary injunction either by themselves, their employees, agents, servants, assignees or any person working under their express and/or implied instructions or authority from transferring and/or selling, alienating, disposing and/or dealing in any manner whatsoever with Bitumen Grade 60/70, weighing 597 metric tons and packed in 3,300 steel drums covered in the Bill of Lading from ARTABAZ No xxxx and transferred to the 1st interested party’s terminal pending the hearing and determination of the main suit.(b)That the costs of the application be costs in the cause.It is so ordered.

DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 11TH DAY OF NOVEMBER, 2022. __________________OLGA SEWEJUDGEHCCC. NO. E055 OF 2022 RULING 0