[2022] KEHC 13354 (KLR)

Republic v Chief Registrar of Judiciary & 3 others; NK Brothers Limited (Exparte Applicant) (Judicial Review Application E1147 of 2020) [2022] KEHC 13354 (KLR) (Judicial Review) (15 September 2022) (Judgment)

Neutral citation: [2022] KEHC 13354 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Judicial Review

Judicial Review Application E1147 of 2020

AK Ndung'u, J

September 15, 2022

Between

Republic

Applicant

and

Chief Registrar of Judiciary

1st Respondent

Cabinet Secretary National Treasury

2nd Respondent

Principal Secretary National Treasury

3rd Respondent

Attorney General

4th Respondent

and

NK Brothers Limited

Exparte Applicant

Judgment

1. The ex parte applicant (hereinafter “the applicant”) moved this court vide a notice of motion application dated October 26, 2021 seeking the following orders:a.An order of mandamus do issue compelling the respondents to pay the ex-parte applicant the sum of Kshs 532,590,842. 74/= comprising the principal amount of Kshs 380,000,000/=, interest and the administration cost from the June 30, 2018 until the October 4, 2021 when leave was granted by this honourable court.b.An order of mandamus do issue compelling the respondents to pay theex parte applicant the applicable rate of interest and the administration cost from the October 4, 2021 on the said sum of Kshs 532,590,842. 74/= until payment in full.c.In default of payment of the stated sums of money an order do issue for a notice to show cause against the respondents.d.The respondents be condemned to pay the costs of this application.

2. The application is founded on the grounds set out on the face therein, the statutory statement dated October 26, 2021 and the verifying affidavit sworn by Pravinchandra Mavji Khoda on even date. The applicants’ case is that on the October 21, 2004, the applicant and the 1st respondent entered into a written agreement for the conversion of the Income Tax House to Law Courts at Nairobi Milimani by way of a formal document titled “tender documents”. Subsequent to the said agreement the applicant moved on to the site and commenced the execution of the works set out in the said agreement. However, on November 8, 2016 the applicant invoked the provisions of clause 37 of the said agreement after a dispute arose between it and the 1st respondent and referred the matter to arbitration but they later expressed their desire to negotiate “an out of court” settlement between themselves.

3. Subsequently and after extensive negotiations the parties entered into a consent to settle the dispute pending between them on the February 20, 2018 before their appointed arbitrator and the same was duly recorded as the arbitrator’s final award. The applicant being the beneficiary of the said final award moved the court vide a chamber summons application dated the April 25, 2018 seeking recognition of the arbitral award as binding on the parties and enforceable and the same was allowed and a decree was issued on October 24, 2018. To date, the 1st respondent has not honoured payment of the first instalment of Kshs 50,000,000/= being part of the total decretal sum, the principal sum having already attracted interest of Kshs 208,363,265. 75/= as of the October 4, 2021.

4. The applicant contended that it is unable to service its loan with the bank due to the default by the 1st respondent to honour the decree and the loan continues to accrue interest and penalty and unless compelled by this honourable court, the 1st respondent has no intention of settling the said decretal sum.

5. The application is bolstered by the applicant’s written submissions dated February 11, 2022. In sum, counsel submitted that the applicant had met the threshold for granting the orders sought, that is, compliance with section 21(1) and (2) of the Government Proceedings Act. Accordingly, it was urged that the orders sought be granted.

Respondents’ Case 6. In response to the application, the respondents filed replying affidavits sworn by Anne A Amadi on April 26, 2021 and January 28, 2022 respectively. The deponent is the chief registrar of the judiciary. She confirmed that the instant judicial review proceedings are predicated upon a decree issued on October 24, 2018 in miscellaneous cause No E010 of 2018 N.K Brothers Ltd v The Chief Registrar of the Judiciary whereupon the 1st respondent entered into a consent with the applicant that the 1st respondent pays the applicant an all-inclusive sum of Kenya shillings three hundred and eighty million (Kshs 380,000. 000/=) in full and final settlement of the claim.

7. The contract was thereafter, subject to investigations by the Directorate of Criminal Investigations (DCl) who vide inquiry files DCl file No 88A/2019 and 888/2019 carried out investigations into allegations of irregular variation of the contract by members of the judiciary tender committee. Upon submission of theDCI inquiry files to the Office of the Director of Public Prosecutions (ODPP), vide a letter dated August 5, 2019, they notified the 1st respondent’s office that the investigations were complete and that the file was under review by a joint team comprising of the DCI and ODPP.

8. It is contended that during this intervening period of investigations referenced in paragraph 5 & 6, no payments could be made to the applicant. Subsequently, the ODPP vide a letter dated November 25, 2019 to the DCI advised that upon review of the file, they had found that there was no basis for criminal charges against the judiciary tender committee. The contract having been cleared by the ODPP and in a bid to settle the decretal sum, the judiciary vide their letter dated February 18, 2020 wrote to the principal secretary national treasury requesting for funds of Kshs 380,000,000/= to settle the claim and further engaged the office of the Attorney General requesting for advice on how to satisfy the decretal amount.

9. That despite the judiciary‘s pursuit for the above resource commitment which is colossal in nature, the judiciary has been unable to settle the decretal sum due to lack of a budgetary allocation but nonetheless the judiciary is committed in pursuing for the said allocation and seeing to the full settlement of the applicant's claim. Further, the above actions by the judiciary are in accordance with the elaborate constitutional and statutory legal regime that governs the appropriation and utilization of funds from the exchequer which is to the effect that there cannot be expenditure of public funds without budgetary allocation from the national treasury.

10. That notwithstanding, the deponent confirmed that the judiciary has at all times been ready and willing to comply with court orders but the delay in paying the same has been occasioned by the budgeting cycle and financial constraints. She however urged that vide the consent dated February 8, 2018, the decree dated October 24, 2018 and the certificate of order dated February 15, 2021 all annexed herewith, the parties consented to an all-inclusive figure of Kshs 380,000,000/= in full and final settlement of the claim with no interest payable and/or accruing therefore the amount ofKshs 532,590,842. 74/- as presented by the applicant is erroneous.

11. The respondents also filed written submissions dated February 24, 2022 opposing the application. Counsel submitted that in the instant case, it is apparent that the respondents have not declined to settle the applicant’s account neither have they neglected the applicant’s claim and have tendered evidence to show that serious negotiations and budgetary planning are being carried out to ensure that the applicant’s account is fully settled. Therefore, it was submitted that the requirements for an order of mandamus to accrue have not been met and this is heavily dependent on the fact that there has not been any evidence of neglect or refusal by the respondents on their part in fulfilling their obligation as per the consent order. It was therefore submitted that the 1st respondent be given an opportunity to budget and settle the applicant’s account.

12. On whether the applicant’s demands amount to rewriting the consent entered by the parties, counsel submitted that for the applicant to claim Kshs 532,590,842. 74 is preposterous since there is no provision for interest in the said consent. Similarly, there is no default clause which the applicant could probably rely on to justify its demands of Kshs 532,590,842. 74/- and this amounts to re-writing the consent without the involvement of the 1st respondent. Counsel therefore urged the court to decline the applicant’s invitation to re-write the consent entered by the parties. In conclusion therefore, counsel submitted that the applicant has not satisfied the conditions for issuance of an order of mandamus and the 1st respondent should be granted an opportunity to amicably settle the account without an order ofmandamus hanging over its neck.

Analysis and Determination 13. I have considered the arguments presented by both parties and the issue for determination is whether the applicant has satisfied the conditions precedent to warrant the orders sought and whether the final decretal sum was subject to accruing interest.

14. It is settled law that before an order of mandamus is issued against the government, an applicant must abide by the procedure in section 21 of Government Proceedings Act which provides:“(1) Where in any civil proceedings by or against the government, or in proceedings in connection with any arbitration in which the government is a party, any order (including an order for costs) is made by any court in favour of any person against the government, or against a government department, or against an officer of the government as such, the proper officer of the court shall, on an application in that behalf made by or on behalf of that person at any time after the expiration of twenty-one days from the date of the order or, in case the order provides for the payment of costs and the costs require to be taxed, at any time after the costs have been taxed, whichever is the later, issue to that person a certificate in the prescribed form containing particulars of the order:Provided that, if the court so directs, a separate certificate shall be issued with respect to the costs (if any) ordered to be paid to the applicant.”

15. Section 21 (3) of the said Act on the other hand provides:“If the order provides for the payment of any money by way of damages or otherwise, or of any costs, the certificate shall state the amount so payable, and the accounting officer for the government department concerned shall, subject as hereinafter provided, pay to the person entitled or to his advocate the amount appearing by the certificate to be due to him together with interest, if any, lawfully due thereon:Provided that the court by which any such order as aforesaid is made or any court to which an appeal against the order lies may direct that, pending an appeal or otherwise, payment of the whole of any amount so payable, or any part thereof, shall be suspended, and if the certificate has not been issued may order any such direction to be inserted therein.”

16. Githua, J in Republic v Permanent Secretary, Ministry of State for Provincial Administration and Internal Security Exparte Fredrick Manoah Egunza[2012] eKLR while dealing with the said provisions expressed herself as follows:“In ordinary circumstances, once a judgment has been entered in a civil suit in favour of one party against another and a decree is subsequently issued, the successful litigant is entitled to execute for the decretal amount even on the following day. When the government is sued in a civil action through its legal representative by a citizen, it becomes a party just like any other party defending a civil suit. Similarly, when a judgment has been entered against the government and a monetary decree is issued against it, it does not enjoy any special privileges with regards to its liability to pay except when it comes to the mode of execution of the decree. Unlike in other civil proceedings, where decrees for the payment of money or costs had been issued against the government in favour of a litigant, the said decree can only be enforced by way of an order of mandamus compelling the accounting officer in the relevant ministry to pay the decretal amount as the government is protected and given immunity from execution and attachment of its property/goods under section 21(4) of the Government Proceedings Act. The only requirement which serves as a condition precedent to the satisfaction or enforcement of decrees for money issued against the government is found in section 21(1) and (2) of the Government Proceedings Act (hereinafter referred to as the Act) which provides that payment will be based on a certificate of costs obtained by the successful litigant from the court issuing the decree which should be served on the Hon Attorney General. The certificate of order against the government should be issued by the court after expiration of 21 days after entry of judgment. Once the certificate of order against the government is served on the Hon Attorney General, section 21(3) imposes a statutory duty on the accounting officer concerned to pay the sums specified in the said order to the person entitled or to his advocate together with any interest lawfully accruing thereon. This provision does not condition payment to budgetary allocation and parliamentary approval of government expenditure in the financial year subsequent to which government liability accrues.”

17. The effect of these provisions is that whereas execution proceedings as are known to law are not available against the government, the accounting officer for the government department concerned is nevertheless under a statutory duty to satisfy a judgment made by the court against that department upon compliance with the provisions of the Government Proceedings Act.

18. There is on record a consent order dated February 8, 2018 annexed to the applicant’s verifying affidavit as “PMK 1” and a decree dated October 24, 2018 and marked “PMK 2” in which an all-inclusive sum ofKshs 380,000,000,000/= was agreed upon by the parties together with various correspondences between the applicant and the 1st respondent. There is also on record a certificate of order against the government dated February 15, 2021annexed to the 1st respondent’s replying affidavit and marked “AA 1” served on the Attorney General on March 1, 2021. The 1st respondent has equally adduced evidence that the contract was under investigation and the same are marked as “AA 3” and “AA 4” in their replying affidavit.

19. While the 1st respondent has elaborated steps taken to ensure that the decretal sum is settled, in the letters dated February 11, 2021 and August 24, 2021 and marked as “AA 7” and “AA 8” respectively, the 3rd and 4th respondents have stated categorically that “the judiciary is advised to review its approvedFY2020/21 and FY2021/22 budget allocations and identify areas of savings to cater for the expenditure through reallocation of funds. This is to mean that the judiciary was to comply and settle existing carry overs pending bills including arbitral awards within the approved allocations in the respective allocations in FY2020/21 and FY2021/22 budget allocations but it has failed to do so necessitating the instant application.

20. The court in the case of Republic v Principal Secretary, Ministry of Defence & another ex parte David Gitau Njau & 9 others[2018] eKLR held as follows;“I associate with the said decision and it is therefore my view that settlement of decretal sum by the government and its agencies does not necessarily depend on the availability of funds. This position was appreciated by this court inWachira Nderitu, Ngugi & Co Advocates v The Town Clerk, City Council of Nairobi miscellaneous application No 354 of 2012 in which this court pronounced itself as follows:“I have however considered the other issues raised by the respondent with respect to its debt portfolio as against its financial resources. It is neither in the interest of this court nor that of the ex parte applicant that the respondent should be brought to its knees. The court appreciates and it is a matter of judicial notice that most of the local authorities are reeling under the weight of the debts accrued by their predecessors and that they are trying to find their footing in the current governmental set up. Accordingly, I am satisfied based on the material on record that the respondent ought to be given some breathing space to arrange its finances and settle the sum due herein.”In my view a party facing financial constraints is at liberty to move the court for appropriate orders which would enable it to settle its obligations while staying afloat. That however, is not a reason for one to evade its responsibility to settle such obligations. In other words, financial difficulty is only a consideration when it comes to determining the mode of settlement of a decree but is not a basis for declining to compel the respondent to settle a sum decreed by the court to be due from it.In my view it is the obligation of the government department concerned in conjunction with the treasury to ensure that funds are allocated towards the settlement of the liabilities owed by the government. The failure to do so amounts to failure to perform a statutory obligation hence warrants the grant of an order of mandamus. Whereas difficulties in the settlement of decretal sum may be a basis for seeking accommodation with respect to settlement, such difficulties cannot be a basis for seeking that an otherwise merited application for mandamus ought not to be granted.”

21. I am in agreement with the above decision as in my opinion settlement of court decrees ought not to be subject to the availability of funds. Financial constraints should only be taken into account when deciding how to settle a decree; they should not be used as an excuse for refusing to compel the respondent to pay a sum that the court has determined is owed.

22. As opposed to execution proceedings against other entities, execution by way of attachment against government is not available to the applicant herein. The available remedy to ensure he enjoys the fruits of his decree is an order of mandamus. The court in Republic v The Attorney General& another ex parte James Alfred Koroso stated:“…in the present case the ex parte applicant has no other option of realising the fruits of his judgement since he is barred from executing against the government. Apart from mandamus, he has no option of ensuring that the judgement that he has been awarded is realised. Unless something is done he will forever be left baby sitting his barren decree. This state of affairs cannot be allowed to prevail under our current constitutional dispensation in light of the provisions of article 48 of the Constitution which enjoins the state to ensure access to justice for all persons. Access to justice cannot be said to have been ensured when persons in whose favour judgements have been decreed by courts of competent jurisdiction cannot enjoy the fruits of their judgement due to roadblocks placed on their paths by actions or inactions of public officers. Public offices, it must be remembered are held in trust for the people of Kenya and public officers must carry out their duties for the benefit of the people of the Republic of Kenya. To deny a citizen his/her lawful rights which have been decreed by a court of competent jurisdiction is, in my view, unacceptable in a democratic society. Public officers must remember that under article 129 of the Constitution executive authority derives from the people of Kenya and is to be exercised in accordance with the Constitution in a manner compatible with the principle of service to the people of Kenya, and for their well-being and benefit…The institution of judicial review proceedings in the nature of mandamus cannot be equated with execution proceedings. In seeking an order for mandamus the applicant is seeking, not relief against the government, but to compel a government official to do what the government, through parliament, has directed him to do. The relief sought is not “execution or attachment or process in the nature thereof”. It is not sought to make any person “individually liable for any order for any payment” but merely to oblige a government officer to pay, out of the funds provided by parliament, a debt held to be due by the High Court, in accordance with a duty cast upon him by parliament. The fact that the accounting officer is not distinct from the state of which he is a servant does not necessarily mean that he cannot owe a duty to a subject as well as to the government which he serves. Whereas it is true that he represents the government, it does not follow that his duty is therefore confined to his government employer. In mandamus cases it is recognised that when statutory duty is cast upon a public officer in his official capacity and the duty is owed not to the state but to the public any person having a sufficient legal interest in the performance of the duty may apply to the courts for an order of mandamus to enforce it. In other words, mandamus is a remedy through which a public officer is compelled to do a duty imposed upon him by the law. It is in fact the state, the republic, on whose behalf he undertakes his duties, that is compelling him, a servant, to do what he is under a duty, obliged to perform. Where therefore a public officer declines to perform the duty after the issuance of an order of mandamus, his/her action amounts to insubordination and contempt of court hence an action may perfectly be commenced to have him cited for such. Such contempt proceedings are no longer execution proceedings but are meant to show the court’s displeasure at the failure by a servant of the state to comply with the directive of the court given at the instance of the republic, the employer of the concerned public officer and to uphold the dignity and authority of the court.”

23. The circumstances under which judicial review order ofmandamus is issued as was set out in Republic v Kenya National Examinations Council ex parte Gathenji & 8 others civil appeal No234 of 1996, where the Court of Appeal cited with approval, Halsbury’s Law of England, 4th Edn Vol 7 p 111 para 89 thus:“The order of mandamus is of most extensive remedial nature and is in form, a command issuing from the High Court of justice, directed to any person, corporation or inferior tribunal, requiring him or them to do some particular thing therein specified which appertains to his or their office and is in the nature of a public duty. Its purpose is to remedy the defects of justice and accordingly it will issue, to the end that justice may be done, in all cases where there is a specific legal right and no specific legal remedy for enforcing that right and it may issue in cases where although there is an alternative legal remedy, yet that mode of redress is less convenient, beneficial and effectual."...These principles mean that an order of mandamus compels the performance of a public duty which is imposed on a person or body of persons by a statute and where that person or body of persons has failed to perform the duty to the detriment of a party who has a legal right to expect the duty to be performed.”

24. The applicant herein has moved this court to compel the satisfaction of a decree by a competent court of law in his favour. The respondent on the other hand has stated that the delay has been occasioned by the budgeting cycle and financial constraints. Be thus as it may, if this court were to decline to grant the prerogative order of mandamus, the applicant would be left without an effective remedy despite holding a decree since 2018.

25. It is worthy of note that the consent dated February 8, 2018 was entered into by the applicant and the 1st respondent in the agreed all-inclusive sum of Kshs 380,000,000/= There was no provision for the payment of interest on the said sum. Without a formal application to vary the consent, this court would fall into error were it to re write the terms of the consent for the parties.

26. In the premises, I am satisfied that the applicant has made a case for the grant of an order ofmandamus and I hereby grant the same in terms of the certificate of order dated February 15, 2021. The applicant shall also have costs of this suit.

DATED, SIGNED AND DELIVERED AT NAIROBI THIS 15TH DAY OF SEPTEMBER 2022………………………………A. K. NDUNG'UJUDGE