[2000] KEHC 520 (KLR)

[2000] KEHC 520 (KLR)

The court held that the defendant's liability under the performance bonds was unconditional and not subject to extrinsic terms alleged by the defendant, as such terms were not contained in the written bonds and no supporting documents were produced. The parol evidence rule precluded the introduction of external conditions. The performance bonds, having been properly stamped, were admissible. The plaintiff's claim was limited to the aggregate sum stated in the bonds, as there was no provision for interest or amounts beyond those specified. The defence raised no triable issues and was a sham. Accordingly, summary judgment was entered for the plaintiff for the sum stated in the bonds plus...

Citation
[2000] KEHC 520 (KLR)
Parties
Plaintiff: Victoria Commercial Bank Ltd; Defendant: Intra Africa Assurance Co. Ltd
Court
High Court
Court Station
High Court at Nairobi (Milimani Law Courts)
Jurisdiction
Kenya
Judgment Date
11 October 2000
Case Number
Civil Case 1810 of 1999
Procedural Posture
Summary Judgment Application / Ruling on Application for Summary Judgment
Outcome
summary judgment for the plaintiff; defence struck out
Legal Topics
Performance Bonds, Bank Guarantees, Summary Judgment, Parol Evidence Rule, Loan Security, Contractual Liability
Source Language
English
Commercial and Corporate Civil Procedure Performance Bonds Bank Guarantees Summary Judgment Parol Evidence Rule Loan Security Contractual Liability

Case Brief

Summary, issues, holding and outcome

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Parties

Victoria Commercial Bank Ltd

Plaintiff

Intra Africa Assurance Co. Ltd

Defendant

Procedural Posture

Summary Judgment Application / Ruling on Application for Summary Judgment

Legal Issues

  1. 1 Whether the defendant's liability under the performance bonds is unconditional and enforceable upon demand by the plaintiff.
  2. 2 Whether extrinsic terms alleged by the defendant can be imported into the written performance bonds.
  3. 3 Whether the plaintiff is entitled to summary judgment for the amounts claimed under the performance bonds.

Ratio Decidendi

The court held that the defendant's liability under the performance bonds was unconditional and not subject to extrinsic terms alleged by the defendant, as such terms were not contained in the written bonds and no supporting documents were produced. The parol evidence rule precluded the introduction of external conditions. The performance bonds, having been properly stamped, were admissible. The plaintiff's claim was limited to the aggregate sum stated in the bonds, as there was no provision for interest or amounts beyond those specified. The defence raised no triable issues and was a sham. Accordingly, summary judgment was entered for the plaintiff for the sum stated in the bonds plus...

Court Disposition

summary judgment for the plaintiff; defence struck out

Orders

  • Judgment entered for the plaintiff against the defendant for Kshs 77,452,000 plus interest at commercial rates from 2/4/1998 until payment in full.
  • The defendant shall bear the plaintiff's costs of the suit and of the application plus interest thereon at court rates.