[2023] KEHC 23124 (KLR)

Top Draw Tyres PTY Ltd t/a Tyrelife Solutions v Pulte Store Uganda Limited & another (Commercial Case E015 of 2023) [2023] KEHC 23124 (KLR) (2 October 2023) (Ruling)

Neutral citation: [2023] KEHC 23124 (KLR)

Republic of Kenya

In the High Court at Mombasa

Commercial Case E015 of 2023

DKN Magare, J

October 2, 2023

Between

Top Draw Tyres PTY Ltd t/a Tyrelife Solutions

Plaintiff

and

Pulte Store Uganda Limited

1st Defendant

Faem Agencies Limited

2nd Defendant

Ruling

1. The Applicant filed suit seeking among other Orders, several declarations and injunctions They also filed an application dated 10/8/2023, seeking inter alia, following orders, simultaneously with the filing of the Plaint: -a.Spentb.Spentc.Pending the hearing and determination of this Application, there be an order restraining Mediterranean Shipping Company SA, Kenya ports Authority, Kenya Revenue Authority or any other government agency having possession or control of the consignment that was shipped in container Numbers TCLXXX234, GLDXXXX164, MSDXXX851, and FFAXXXX510 under Master bill of lading number MEDXXX122 dated 10/5/2023 and or house bill of lading No SDBXXX026 dated 10/5/2023 from parting with possession of the same and or releasing the same to the defendants/ Respondents.d.Pending the hearing and determination of this suit, there be an order restraining Mediterranean Shipping Company SA, Kenya ports Authority, Kenya Revenue Authority or any other government agency having possession or control of the consignment that was shipped in container Numbers TCLXXXX234, GLDXXXX164, MSDXXXX851, and FFAXXX510 under Master bill of lading number MEDXXXX122 dated 10/5/2023 and or house bill of lading No SDBXXXX026 dated 10/5/2023 be immediately released to the custody of the Plaintiff /Applicant and or their agents and be repatriated to the Plaintiff’s choice to avoid escalation of demurrage charges, ware house rent and custom charges.e.The OCS port police station do supervise and ensure the court orders are implemented.

2. The Plaintiff’s Application was supported by the affidavit of Carl Fredrick Wiere. He averred that the 1st Defendant purported to be a branch of Pult group Inc of business address 3350 Peachtree road North East suit, Atlanta GA 30326.

3. The Plaintiff organized shipping from Thailand to the Defendants in Uganda. A commercial invoice was issued for USD 265,969. 72 on 3/5/2023 with the 2nd Defendant as the notifying party.

4. The difficulty I have faced in this matter is that there is no indication that the Plaintiff is the shipper. The goods did not originate from South Africa. The plaintiff is said to have bought the tires from Zhongce Rubber (Thailand) Company Limited. They engaged the manufacturer’s agents, Savino del bene Thailand limited, to have the consignment shipped to Uganda via Mombasa port.

5. The Applicant paid 30% for the 10 containers. The four containers were shipped in container Numbers TCLUXXX234, GLDXXXX164, MSDXXX851, and FFAXXXX510 under Master bill of lading number MEDXXX122 dated 10/5/2023 and or house bill of lading No SDB875015026 dated 10/5/2023 from Thailand.

6. In contrast with disputes of this nature, Mediterranean shipping company and Ocean Freight East Africa limited, as shown in the affidavits of service were not joined to the suit. It is important to deal with this issue given the fact that the evidence tendered falls far short of grant of mandatory orders in interlocutory stage.

7. This is informed by the fact that to return means to send back to the port of origin. As the same is done, there is a need to confirm whether the documents of title have been endorsed in favour of a third party. There is also a need to establish who the shipper was. There is also paucity of clear evidence of payment and release of any lien held by the shipper or the manufacturer.

8. On the other hand, the goods have not been paid for. The Plaintiff positively averred that they have paid the manufacturer.

9. The American company that was said to be the importer has denied ownership of the cargo. It is therefore important that the goods be held pending determination of the issues raised herein.

10. It is the Applicant’s views that the goods are in danger of being released, unless the orders are issued preserving the subject matter. The pleadings were served and affidavits of service were filed. The Application was not opposed and the Defendant did not bother to enter appearance. I gave directions and directed I was to rule today on the interlocutory application.

Analysis 11. This being an application for both interlocutory and mandatory injunctions, my duty is settled. I have to ascertain whether the applicant has met the test for issuance of interlocutory injunction in the circumstances of the case. Thereafter, I will also find out if the applicant has met the threshold for grant of mandatory injunction.

12. Before proceeding, I have noted that there is an increased number of companies that purport to be of Ugandan origin but are fictitious. My take could be that it is a means of smuggling goods tax free purporting the same to be in transit. It therefore calls for concerted efforts within the Kenya Ports Authority to stem the rising cases of import fraud, a majority of which, in these few months, I have noted succeed. I digress.

13. The test for temporary injunction was settled in the locus classicus decision of Giella vs Cassman Brown & Co. Ltd (1973) EA, 358, 360, which set out principles for grant of injunction. The former Court of Appeal for East African, through Spry VP, as then he was, stated as follows: -“The conditions for the grant of an interlocutory injunction are now, I think, 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.”

14. Subsequently, the Court of Appeal in the case of Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR, stated as follows: -“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.”

15. The case is documentary in its nature. In disputes where documents are involved, then the same ought to be self-explanatory.

16. The court’s duty is to read documents on the face value, at this stage and without needing any explanation. There cannot be a different explanation for a document that is clear in its literal meaning. It can only take other documents to dispel the documents.

17. My preliminary view is that on prima facie basis the Plaintiff has shown interest in the consignment. They need however to do more. In the case of Fidelity & Commercial Bank Ltd V Kenya Grange Vehicle Industries Ltd (2017) eKLR, the Court of Appeal, Ouko, Kiage and Murgor JJA held as doth:-“Courts adopt the objective theory of contract interpretation and profess to have overriding view sometimes called Four Corners of an Instrument, which insists that a documents meaning should be derived from the document itself, without reference to anything outside of the document, extrinsic reversed…”

Prima facie case 18. The first test is the issue of Prima facie case. Different courts have labored on what constitutes a prima facie case. In the case of Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR, the Court of Appeal, indicated the following a regards prima facie case: -“We adopt that definition save to add the following conditions by way of explaining it. The party on whom the burden of proving a prima facie case lies must show a clear and unmistakable right to be protected which is directly threatened by an act sought to be restrained, the invasion of the right has to be material and substantive and there must be an urgent necessity to prevent the irreparable damage that may result from the invasion. We reiterate that 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.”

19. It is my considered view that the matters pleaded, have raised a prima facie case. The goods were sent on the order of the Plaintiff to the Defendant. The Plaintiff has not been paid. This means they retain an unpaid seller’s lien over the goods. The Plaintiff has an arguable case. In other words, the Plaintiff has established a prima facie case.

Irreparable loss 20. The goods are said to be in danger of being released to faceless parties. Even if they are not released, there is a danger of them accumulating port charges, demurrages and other statutory dues. These will be payable notwithstanding that the Applicant will not have gotten value. Further, under the East African customs management act 2004, the Kenya Revenue Authority is bound to dispose unclaimed goods. Once disposed, the shipper or the Plaintiff will have no claim.

21. Further, under section 43 of the Sale of Goods act, the seller losses lien if delivery is made. The section provides as doth: -“43. (1)The unpaid seller of goods loses his lien or right of retention thereon—(a)when he delivers the goods to a carrier or other bailee or custodier for the purpose of transmission to the buyer without reserving the right of disposal of the goods;(b)when the buyer or his agent lawfully obtains possession of the goods; (c) by waiver thereof.(2)The unpaid seller of goods, having a lien or right of retention thereon, does not lose his lien or right of retention by reason only that he has obtained judgment or decree for the price of the goods.”

22. In the case of Succession Cause No. 374 of 2010: Francis Muriithi Ndirangu v Ruth Wanjiku Nderitu [2016] eKLR], the court cited with approval Halsbury’s Laws of England, Third Edition, Volume 21, paragraph 739, page 352, which reads as doth:-“It is the very first principle of injunction low that primo facie the Court will not grant an injunction to restrain an actionable wrong for which damages are the proper remedy. Where the Court interferes by way of an injunction to prevent an injury in respect of which there is a legal remedy, it does so upon two distinct grounds first, that the injury is irreparable and second, that it is continuous. By the term irreparable injury is meant injury which is substantial and could never be adequately remedied or atoned for by damages, not injury which cannot possibly be repaired and the fact that the plaintiff may have a right to recover damages is no objection to the exercise of the jurisdiction by injunction, if his rights cannot be adequately protected or vindicated by damages. Even where the injury is capable of compensation in damages an injunction may be granted, if the act in respect of which relief is sought is likely to destroy the subject matter in question”

23. In the case of Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] [supra], the court of appeal held as follows regarding irreparable loss: -“On the second factor, that the applicant must establish that he “might otherwise” suffer irreparable injury which cannot be remedied by damages in the absence of an injunction, is a threshold requirement and the burden is on the applicant to demonstrate, prim facie, the nature and extent of the injury. Speculative injury will not do; there must be more than an unfounded fear or apprehension on the part of the applicant. The equitable remedy of temporary injunction is issued solely to prevent grave and irreparable injury; that is injury that is actual, substantial and demonstrable; injury that cannot “adequately” be compensated by an award of damages. An injury is irreparable where there is no standard by which their amount can be measured with reasonable accuracy or the injury or harm is such a nature that monetary compensation, of whatever amount, will never be adequate remedy.”

24. I will dare add that even where the amount is known but the chances of recovery from the particular circumstances are slim, then it amounts to irreparable loss.

25. For issuance of orders the applicant has to show irreparable loss. The case of Paul Gitonga Wanjau v Gathuthi Tea Factory Company Ltd & 2 others [2016] eKLR, the court, justice John M. Mativo, as then he was stated as doth:-“I stand guided by the said passage. Steven Mason & McCathy Tetraut in their well-researched article entitled "Interlocutory Injunctions: Practical Considerations"[9]have authoritatively stated as follows: -"With some exceptions, the first branch of the injunction test is a low threshold. As stated by the Supreme Court in R. J. R. Macdonald Vs. Canada (Attorney General)[10]"Once satisfied that the application is neither vexatious nor frivolous, the motions judge should proceed to consider the second and third tests, even if of the opinion that the Applicant is unlikely to succeed at the trial. Justice Henegham of the Federal Court explained the review as being "on the basis of common sense and a limited review of the case on the merits."[11] It is usually a brief examination of the facts and law.In certain circumstances, the court will impose a more restrictive standard and require the moving party to demonstrate that it has a more strong prima facie case. If the injunction will likely end the dispute between the parties, then the court may hold the Applicant to this higher standard. Similarly, where the nature of the relief sought is mandatory, or when the question is a question of mere law alone, then this higher standard will apply..."

26. In the circumstances I am satisfied that the Plaintiff has established that they will suffer irreparable harm

Balance of convenience 27. The third limb is usually applicable where there is doubt. I have no doubt so far. In any case, the goods are at the port but the purchasers have not paid for the same.

28. The Defendants are unknown entities. If the goods are released, they may never be found. It is better for the goods to remain in the Port as the parties litigate. A balance of convenience was defined in the case of Pius Kipchirchir Kogo v Frank Kimeli Tenai [2018] eKLR, where the court held as doth: -“The meaning of balance of convenience in favor of the Applicant is that if an injunction is not granted and the suit is ultimately decided in favor of the Applicants, the inconvenience caused to the Applicant would be greater than that which would be caused to the defendants if an injunction is granted but the suit is ultimately dismissed. Although it is called balance of convenience it is really the balance of inconvenience and it is for the Applicants to show that the inconvenience caused to them would be greater than that which may be caused to the defendants. Should the inconvenience be equal, it is the Applicants who suffer. In other words, the Applicants have to show that the comparative mischief from the inconvenience which is likely to arise from withholding the injunction will be greater than which is likely to arise from granting it.”

29. There is another aspect for the court needs to note. The matter raised herein is a blot to international trade and commerce. The Court should be able to give an effective remedy lest there be long term effect on commerce. It is against public policy not to give an effective remedy that will allow the ease of doing business.

Mandatory injunction 30. The last main order sought is in its nature a mandatory nature. A Mandatory injunction is given sparingly. Even where the orders are deserving the court, may on its discretion still decline to issue the same. In this matter, if the mandatory injunction is issued, then there is nothing else to hear. If the court issues the orders, and turns out that it is not correct, then the Defendant will suffer irreparable harm.

31. In the case of Joseph Kaloki t/a Royal Family Assembly v Nancy Atieno Ouma [2020] eKLR, the court of Appeal, was of the considered view that; -“As this Court stated in Kenya Breweries Limited & another vs. Washington O. Okeyo [2002] eKLR a mandatory injunction can be granted on an interlocutory application as well as at the hearing but should not normally be granted in the absence of special circumstances but that if a case is clear and which the court thinks it ought to be decided at once, a mandatory injunction will be granted at an interlocutory application.

32. In do not find there are special circumstances for issuance of mandatory order. This is because there are aspects that the Plaintiff should address before giving the order. Further, if I release the goods, nothing remains. Unfortunately, the Plaintiff did not liaise with Port Authorities to give a clean bill of health. In any case, it is important to have all the parties that have international obligations over the carriage of goods by sea to be served and be party herein.

33. In the case of Kenya Breweries Ltd & Another vs Washington O. Okeya [2002] eKLR, the Court of Appeal stated as doth: -“A mandatory injunction ought not to be granted on an interlocutory application in the absence or special circumstances, and then only in clear cases either where the court thought that the matter ought to be decided at once or where the injunction was directed at a simple and summary act which could be easily remedied or where the defendant had attempted to steal a march on the plaintiff. Moreover, before granting a mandatory interlocutory injunction, the court had to feel a higher degree of assurance that at the trial it would appear that the injunction had rightly been granted, that being a different and higher standard than was required for a prohibitory injunction

34. The Court of appeal in the case of stated in Shariff Abdi Hassan v Nadhif Jama Adan [2006] eKLR, restated the position on mandatory injunction as follows: -“The courts have been reluctant to grant mandatory injunction at the interlocutory stage. However, where it is prima facie established as per the standards spelt out in law as stated above that the party against whom the mandatory injunction is sought is on the wrong, the courts have taken action to ensure that justice is meted out without the need to wait for full hearing of the entire case.”

35. In this case, I am reluctant to issue a mandatory order at interlocutory stage. There is nothing that will spoil, if the orders are not given. The sky will not fall if the orders are not issued now.

36. The case of Kenya Power & Lighting Co. Ltd v Samwel Mandere Ogeto [2017] eKLR, comes in handy. In that case, the High Court sitting at Kisii, stated as doth:“A mandatory injunction is different from a prohibitory injunction in the sense that while an in prohibitory injunction the applicant must, as was stated in the celebrated case of Giella vs Cassman Brown & Co. Ltd (1973) EA 358, establish the existence of a prima facie case with high chances of success, and that he will suffer irreparable loss/damage which cannot be adequately compensated by an award of damages if the injunction is not granted, and further that the balance of convenience tilts in his favor, an applicant in a mandatory injunction must, in addition, establish the existence of special circumstances. Furthermore, an applicant for mandatory injunction must prove his case on a standard higher than the standard in prohibitory injunctions.”

37. The issuance of Mandatory injunction, cannot issue without existence of special circumstances. In the case of Nation Media Group & 2 Others vs John HarunMwau [2014] eKLR, the Court of Appeal stated as follows in that regard;“… .[for] an interlocutory mandatory injunction to issue, an applicant must demonstrate existence of special circumstances… A different standard higher than that in prohibitory injunction is required before an interlocutory mandatory injunction is granted. Besides existence of exceptional and special circumstances must be demonstrate as we have stated a temporary injunction can only be granted in exceptional and in the clearest of cases.”

38. I therefore, decline to grant prayer of the application (e) the Application.

39. The goods belong, on a prima facie basis, to the Plaintiff. If the goods are released, they will never be found. The goods have been unpaid. These are chemicals that are likely to spoil or be used up. Therefore, there is a likelihood that the Applicant will suffer irreparable loss.

Determination 40. In the circumstances, the application dated 10/8/2023 is allowed in the following terms: -a.An order do issue directing Mediterranean Shipping Company S.A and their agents the Kenya Ports Authority, the Kenya Revenue Authority from releasing a consignment that was shipped in container numbers TCLXXXX34, GLDXXX164, MSDXXXX851 and FFXXXX210, under the master bill of lading No. MEDXXXX122 dated 10th May 2023 and House Bill of Lading No. SDBXXXXX026, from parting with possession of the consignment and or releasing the same to the Defendants/Respondents Pending the hearing and determination of this suit.b.An order do issue restraining the defendants, their agents or assigns from taking possession, clearing or otherwise taking possession a consignment shipped though Mediterranean Shipping Company S.A in container numbers TCLXXXX234, GLDXXXX164, MSDXXXX851 and FFAXXXX210, under the master bill of lading No. MEDXXXX122 dated 10th May 2023 and House Bill of Lading No. SDBXXXX026, Pending the hearing and Determination of this suit.c.The other prayers are declined and shall be dealt with at the final judgment.d.The plaintiff to amend the Plaint and join Mediterranean Shipping Company S.A and Ocean Freight East Africa as Co-defendants within 7 days from today.e.The Defendants be served forthwith.f.Directions on hearing to be given upon amendment.

DELIVERED, DATED AND SIGNED AT MOMBASA ON THIS 2ND DAY OF OCTOBER 2023. JUDGMENT DELIVERED THROUGH MICROSOFT TEAMS ONLINE PLATFORM.KIZITO MAGAREJUDGEIn the presence of:Mr Bwika for the ApplicantMr. Kinyua Kelvin for KRANo Appearance for the RespondentCourt Assistant - Brian