[2022] KEHC 13677 (KLR)

Instalaciones Inabensa S.A. v Kenya Electricity Transmission Co. Limited (KETRACO) (Miscellaneous Application E445 of 2019) [2022] KEHC 13677 (KLR) (Commercial and Tax) (7 October 2022) (Ruling)

Neutral citation: [2022] KEHC 13677 (KLR)

Republic of Kenya

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

Commercial and Tax

Miscellaneous Application E445 of 2019

EC Mwita, J

October 7, 2022

Between

Instalaciones Inabensa S.A.

Claimant

and

Kenya Electricity Transmission Co. Limited (KETRACO)

Respondent

Ruling

Background 1. This matter emanates from a contractual dispute between Kenya Electricity Traansmission Company Limited KETRACO) and Instalaciones Inabensa S.A, (Inabensa), relating to two engineering procurement and construction contracts both dated April 16, 2013, awarded to Inabensa in the tender. The contracts were for the construction of 400KV Lessos-Tororo line and extension of an existing substation at Lessos.

2. KETRACO purported to terminate the contracts on April 25, 2016 and the dispute was referred to arbitration in terms of clause 8. 2 of the contracts. In the final award dated July 30, 2019, the arbitral tribunal found KETRACO in breach of the contract and awarded Inabensa Euro 37,365,691 together with interest and costs.

3. KETRACO applied to set aside the award through chamber summons dated November 20, 2019 in Misc application No E602 of 2019. On the other hand, Inabensa moved the court to enforce the award in an application dated November 27, 2019 in this file. On February 13, 2020, the court directed that the two applications be heard together.

4. On February 12, 2021, the court dismissed KETRACO’s application to set aside the award and allowed the application for enforcement of the award with costs. The court granted 40 days’ stay of execution and directed that status quo in respect of the site be maintained.

5. Aggrieved, KETRACO filed a notice of motion dated March 23, 2021 seeking a stay of execution of the orders of February 12, 2021 pending the hearing and determination of it application for stay pending an intended appeal and for leave to appeal in the Court of Appeal (civil application No E056 of 2021. )

6. Inabensa opposed the application through a preliminary objection dated April 13, 2021, on grounds that KETRACO did not seek leave to appeal the ruling of February 12, 2021; that the application sought identical orders in this court as those in the Court of Appeal and that this court had no jurisdiction to issue the orders sought. On June 15, 2016, the court (Mativo, J) (as he then was), delivered a ruling upholding the preliminary objection and dismissed the application.

Application 7. KETRACO took out a motion on notice dated June 16, 2021, under articles 25 and 50 of the Constitution, sections 1A, 1B, 3 and 3A of the Civil Procedure Act (the Act) and order 45 rules 1 and 2 of the Civil Procedure Rules, (the Rules), seeking a review of the orders issued on June 15, 2021 and allow the application dated March 23, 2021 for stay of the ruling of February 12, 2021.

8. The motion is premised on the grounds on its face, supporting affidavit by Lydia Sitienei, KETRACO’s company secretary, sworn on June 16, 2021, further supporting affidavit sworn by Paul Nyamodi on September 16, 2021 and written submissions and supplementary submissions dated September 27, 2021 and February 11, 2022, respectively.

9. The basis of the application is that the court erroneously indicated that the application under consideration was dated December 23, 2019 instead of March 23, 2021; the court failed to specify the points of law in the preliminary objection dated April 13, 2021 by Instalaciones Inabensa S.A (Inabensa) had been upheld; misconstrued the application as seeking stay pending appeal instead of stay pending the hearing of an application for stay under rule 5(2)(b) in the Court of Appeal; erred in considering whether the intended appeal met the criteria for the grant of leave to appeal set out by the Supreme Court in Nyutu Agrovet Limited v Airtel Networks Kenya Ltd; Chartered Institute of Arbitrators-Kenya Branch (interested party) [2019] eKLR, SC petition No 12 of 2016 and the prospects of success of the intended appeal; and misconstrued the extent to which section 10 of the Arbitration Act applied to that application.

10. KETRACO urged that the application has met the threshold for review and relied on section 80 of the Act and order 45 rule 1 of the Rules and should be allowed. KETRACO identified the error on the face of record as the court’s reference to the application for consideration as one dated March 23, 2021 and not December 23, 2019.

11. KETRACO relied onMuyodi v Industrial and Commercial Development Corporation & Anor [2006] 1 EA 243 on what amounts to an error on the face of the record, and Paul Mwaniki v National Hospital Insurance Fund Board of Management [2020] eKLR, that a review may be granted whenever the court considers that it is necessary to correct an apparent error or omission on the part of the court.

12. KETRACO also argued that the court misconstrued the nature of the application dated March 23, 2021 by stating that the application sought stay pending appeal rather than stay pending hearing of the application under rule 5(2)(b) of the Court of Appeal Rules in civil application No E056 of 2021.

13. KETRACO again faulted the court for considering whether the intended appeal met the criteria for the granting leave to appeal and the prospects of success of the intended appeal in determining that application.

14. Based on these reasons, KETRACO asserted that the court stepped outside its jurisdiction because high chances of success of the intended appeal was not a consideration in determining whether or not to grant a stay pending determination of an application before the Court of Appeal. KETRACO, argued, therefore, that this fault constituted other sufficient reason when considering an application for review, and relied on Ajit Kumar Rath v State of Orisa & others 9 SCR 596. KETRACO further relied on Nairobi City Council v Thabiti Enterprises Limited[1997] eKLR where the court observed that a wrongful assumption of jurisdiction amounts to any other sufficient reason.

15. KETRACO again took the view that the court misapprehended the extent to which section 10 of the Arbitration Act applied to the application before it. According to KETRACO, the application dated March 23, 2021 sought a stay of decree of February 12, 2021 and the court, having exercised its jurisdiction under section 35 of the Arbitration act and arbitral proceedings concluded under section 33 of the Arbitration Act, the court retained a residual jurisdiction to grant an extension of the stay already granted on February 12, 2021.

16. Whether the court should set aside the orders of status quo of July 30, 2021, KETRACO relied on Emfil Limited v Attorney General & 424 others[2015] eKLR for the proposition that a formal application must be filed before the orders are discharged. KETRACO urged that the status quo orders be maintained as long as there is a possibility of appeal. Even though the application for leave to appeal before the Court of Appeal was dismissed an appeal against that decision has been lodged in the Supreme Court in petition No 17 (E024) of 2021.

17. KETRACO maintained that there is a possibility to refer the application for leave back to the Court of Appeal. relied on Amvir Trustee Limited v Guardian Bank Limited (Nairobi (Milimani) HCCC 795 of 1999) cited in Elijah Njagi & another v Yvonne Ndunge[2021] eKLR to argue that it is the duty of the court to ensure that the ultimate end of justice is not rendered nugatory and the right of appeal remains alive.

18. KETRACO was of the view that Inabensa will not suffer prejudice if the order for status quo is maintained because it had given a bank guarantee as a condition precedent. KETRACO urged that the notice of motion dated June 16, 2021 be allowed.

Response 19. Inabensa opposed the application through a replying affidavit sworn on June 28, 2021 by Miguel Angel Maseras Gutierrez and the further affidavit and supplementary replying affidavit sworn by James Muthui on 7th and September 22, 2021 respectively, and written submissions dated September 15, 2021.

20. Inabensa’s position is that the application has no legal foundation and does not meet the conditions for review under section 80 of the Act and order 45 rule 1(1) of the Rules. Inabensa asserted that KETRACO had not demonstrate that there was an error apparent on the face of the record necessitating review.

21. Regarding the error of dates, Inabensa argued that the indication by the court that the application was dated December 23, 2019 instead of March 23, 2021 at page 8 of the impugned ruling is a clerical mistake that can be remedied by the court on its own motion or on application by a party under section 99 of the Act, but is not a ground for review since the court correctly addressed itself on the application of March 23, 2021 at paragraphs 5 and 8 of that ruling. Reliance was placed onNyamogo & Nyamogo v Kogo [2001] EA 170 that a mere error or wrong view is certainly not a ground for review though it may be one for appeal.

22. Inabensa also disagreed with KETRACO’s argument that there is other sufficient reason for reviewing the impugned ruling, maintaining that KETRACO had not demonstrated the confusion caused by that ruling. According to Inabensa, the present application is an appeal disguised as an application for review. It relied on National Bank of Kenya Limited v Ndungu Njau, (civil appeal 211 of 1996) to support the assertion that the error or omission must be self-evident and should not require an elaborate argument to be established.

23. Inabensa further argued that there is no legal basis for the orders of stay or review sought as there is no substantive application for stay pending either in this court or the Court of Appeal. This is because the orders of February 12, 2021 are not positive orders capable of being stayed; KETRACO did not apply for leave to appeal or review the ruling of February 12, 2021 as required; when civil application No E056 came up for hearing, KETRACO’s advocate abandoned all the prayers sought in that application save for the prayer for leave to appeal; on November 19, 2021, the Court of Appeal dismissed the said application with costs finding that the application had no merits and there was nothing to be stayed.

24. KETRACO relied on the case of SFA v AOA [2021] eKLR for the proposition that interim applications cannot stand on their own without substantive prayers in the suit or application before court.

25. Inabensa took the view that this application had been made in bad faith and is an attempt to subvert and/or delay enjoyment of the fruits of the judgment in the award dated July 30, 2019 and will cause prejudice to Inabensa. The court was urged to dismiss the motion with costs and vacate the order for status quo issued by the court on July 30, 2021.

Determination 26. This court has been urged to review the order by Mativo J, (as he then was), dated June 15, 2021, set it aside and allow the application dated March 23, 2021 for stay of the ruling of February 12, 2021. The court dismissed the application dated March 23, 2021 though it indicated that the application was dated December 23, 2019.

27. KETRACO argument is that it was an error apparent on the face of the record for the court indicate that the application that was under consideration was dated December 23, 2019 instead of March 23, 2021, thus suitable for review. KETRACO also blamed the court for not specifying the points of law in the preliminary objection that were upheld; that the court misconstrued the application as seeking stay pending appeal instead of stay pending hearing of an application for stay pending before the Court of Appeal; that the court erred by considering whether the intended appeal met the criteria for the granting leave to appeal and misconstrued the extent to which section 10 of the Arbitration Act applied to that application

28. Inabensa’s position is that the application is not merited and does meet the threshold for review under the law. According to Inabensa, KETRACO had not demonstrate that there was an error apparent on the face of the record; that the error in dates is a clerical mistake that can be correction by the court on its own motion or on application by a party under section 99 of the Civil Procedure Act, but is not a ground for review and that the court correctly addressed itself on the application of March 23, 2021 at paragraphs 5 and 8 of that ruling.

29. Inabensa maintained that there is no other sufficient reason for reviewing the impugned ruling, and that the application is an appeal disguised as an application for review since the court is blamed for misconstruing the extent to which section 10 of the Arbitration Act applied to that application. A mere error or wrong view is not a ground for review but for appeal.

30. The motion invoked various provisions of the law, including the Constitution, Civil Procedure Act and the rules made thereunder. The jurisdiction of the court for review is provided for under section 80 of the Act while the grounds on which an application for review may be made are provided for in order 45 rule 1 of the Rules.

31. Section 80 provides that a person aggrieved(a) by a decree or order from which an appeal is allowed but from which no appeal has been preferred: or (b) by a decree or order from which no appeal is allowed, may apply for a review of the judgment or the order to the court which passed the decree or made the order, and the court may make such order as it thinks fit.

32. Under order 45, the court may allow an application for review where an applicant shows a mistake or error apparent on the face of the record; discovery of new and important matter that was not in the applicant’s knowledge, or for any other sufficient reason. This jurisdiction involves exercise of the court’s jurisdiction which, like all other discretion, must be exercised judicially.

33. The law on review is well settled in this country. A review may be granted whenever the court considers that it is necessary to correct an apparent error or omission on the part of the court. The error or omission must be self-evident and should not require an elaborate argument to be established. It will not be a sufficient ground for review where it is thought that another judge could have taken a different view of the matter. (National Bank of Kenya Ltd v Ndungu Njau [1977] eKLR).

34. In Pankras T Swai v Kenya Breweries Ltd [2014] eKLR, the Court of Appeal stated that a party cannot seek review on grounds of law since those are grounds of appeal and not review. The court then stated with regard to review:The power to review decisions on appeal is vested in appellate courts. Order 44 rule 1 (now order 45 rule 1 in the 2010 Civil Procedure Rules) gave the trial court discretionary power to allow review on the three limps therein stated or “for any sufficient reason.The court went on to state that the words, “for any sufficient reason” must be viewed in the context, firstly; of section 80 of the Civil Procedure Act which confers an unfettered right to apply for review and, secondly; on the current jurisprudential thinking that the words need not be analogous with the other grounds specified in the order.

35. InBenjoh Amalgamated Ltd & another v Kenya Commercial Bank Ltd [2014] eKLR, the Court of Appeal again stated:(26)The basic philosophy inherent in the concept of review, is acceptance of human fallibility and acknowledgement of frailties of human nature and sometimes possibility of perversion that may lead to miscarriage of justice. In some jurisdictions, courts have felt the need to cull out such power in order to overcome abuse of process of court or miscarriage of justice.(27)In the High Court, both the Civil Procedure Act in section 80 and the Civil Procedure Rules in order 45 rule 1 confer on the court power to review. Rule 1 of order 45 shows the circumstances in which such review would be considered range from discovery of new and important matter or mistake or error apparent on the face of the record or any other sufficient reason but section 80 gives the High Court greater amplitude for review.

36. The jurisprudence emerging from these decisions is that an applicant must base his application for review on the three limbs in order 45 rule 1, or on any other sufficient reason.

37. KETRACO’s case is that there is an error on the face of the record in that the court indicated that the application that was dismissed was dated December 23, 2019 yet the application before the court was dated March 23, 2021. In KETRACO’s view, this was an error that calls for review under section 80 of the Act as read with order 45 rule 1 of the Rules.

38. I have read the impugned ruling and in particular paragraphs 5 through 8 of the ruling dated June 15, 2021. The court was clear that the application it was considering was dated March 23, 2021. The fact that the court eventually stated that the application dismissed was dated December 23, 2019 was a mere slip that can be corrected under the slip rule. It is not, in my considered view, an error requiring review under section 80 of the Act as read with order 45 of the Rules. For purposes of review, the error or mistake must be one that may lead to miscarriage of justice but not a mere clerical error or typo.

39. KETRACO did not show how the error complained of led to miscarriage of justice which this court should correct through review. It is not enough for KETRACO to state that there is an error apparent on the face of the record. The error must be real and not an illusory and It must have negatively affected the right to a fair hearing and administration of justice, which KETRACO failed to demonstrate.

40. The other grounds that KETRACO relied on in seeking review, such as failure to specify the points of law in the preliminary objection that were upheld; misconstruing the application as one seeking stay pending appeal and not stay pending hearing of an application for stay in the Court of Appeal; considering whether the intended appeal met the criteria for the granting leave to appeal and misapprehending the extent to which section 10 of the Arbitration Act applied to that application are not, in my respectful view, grounds for review. Rather, these were grounds for appeal as they clearly attack the soundness of the decision.

41. Courts have repeatedly stated that it is not a ground for review where the argument is that the court proceeded on an incorrect exposition of the law and reached an erroneous conclusion of law, or misconstrued a statute or other provision of law. (National Bank of Kenya Ltd v Ndungu Njau) (supra); Nyamogo & Nyamogo v Kogo(supra).

42. This court must also not lose sight of the fact that KETRACO’s application that was dismissed had sought stay pending the hearing of an application for stay in the Court of Appeal. Both parties agree that the application before the Court of Appeal had finally been heard and dismissed for lack of merit. KETRACO argued, however, that an appeal had been lodged in the Supreme Court against the decision of the Court of Appeal and therefore that is a sufficient reason for granting the orders for review sought.

43. The application that dated March 23, 2021 was for stay pending the hearing and determination of an application for stay in the Court of Appeal. The Court of Appeal having heard and dismissed that application for stay, the application for stay before this court lost its substratum. If there is an application or appeal to the Supreme Court, only the Court of Appeal can grant stay pending any proceedings before the Supreme Court. In my view, this court would be wrongly exercising its jurisdiction if it were grant stay pending the hearing of a matter before the Supreme Court arising the decision of the Court of Appeal that is being impugned before the supreme.

44. Even if KETRACO had made a case for review, the view I take is that the application had sought stay pending the hearing an application for stay before the Court of Appeal. That application having been heard and determined, there would be no legal basis for allowing review and granting stay by this court.

45. Having given due consideration to the application, response and submissions, the conclusion I come to is that KETRACO has not put forward plausible grounds to persuade this court to exercise its jurisdiction for review. Consequently, the application dated June 16, 2021 is declined and dismissed with costs.

DATED, SIGNED AND DELIVERED AT NAIROBI THIS 7TH DAY OF OCTOBER 2022E C MWITAJUDGE