[2004] KEHC 125 (KLR)
The court found that neither party provided sufficient evidence to justify their proposed interest rates. The Plaintiff's claim for a higher rate was unsupported beyond the assertion of a commercial transaction, and the Defendant failed to show mitigating factors or justify excluding interest for the period the file...
Source-derived case information.
- Citation
- [2004] KEHC 125 (KLR)
- Parties
- Plaintiff: Trade Wings Limited; Defendant: Kenya National Trading Corporation Limited
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Law Courts)
- Jurisdiction
- Kenya
- Case Number
- Civil Suit 1950 of 1998
- Procedural Posture
- Civil Suit / Ruling on Interest Rate Following Consent Order
- Outcome
- Interest on the admitted principal sum awarded at 14% per annum from the date of filing suit until payment in full.
- Legal Topics
- Interest Awards, Consent Orders, Commercial Transactions, Exercise of Judicial Discretion
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Trade Wings Limited
Plaintiff
Kenya National Trading Corporation Limited
Defendant
Procedural Posture
Civil Suit / Ruling on Interest Rate Following Consent Order
Legal Issues
- 1 What is the appropriate rate of interest payable by the Defendant on the admitted principal sum.
- 2 From what date should the interest on the principal sum run.
Ratio Decidendi
The court found that neither party provided sufficient evidence to justify their proposed interest rates. The Plaintiff's claim for a higher rate was unsupported beyond the assertion of a commercial transaction, and the Defendant failed to show mitigating factors or justify excluding interest for the period the file was missing. Exercising its discretion under section 26 of the Civil Procedure Act, the court determined that the appropriate rate of interest on the admitted principal sum should be the court rate of 14% per annum, running from the date of filing suit (9th September 1998) until payment in full. The court emphasized the lack of a written agreement specifying interest and the...
Court Disposition
Interest on the admitted principal sum awarded at 14% per annum from the date of filing suit until payment in full.
Orders
- Interest on the admitted principal sum of Kshs. 22,250,000/- shall be paid by the Defendant to the Plaintiff at the court rate of 14% per annum from 9th September 1998 to the date of payment in full, both days inclusive.
Full Case Text
Judgment text and source record
18 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA
AT NAIROBI (NAIROBI LAW COURTS)
Civil Suit 1950 of 1998
TRADE WINGS LIMITED ……………………...............................................................…………. PLAINTIFF
versus
KENYA NATIONAL TRADING CORPORATION LIMITED ………………………..... DEFENDANT
R U L I N G
On the 24th May 2004, the parties recorded a consent in the following terms:-
'' By consent, the court do determine the rate of interest payable by the Defendant on the principal sum admitted by the Defendant and the date from which such interest shall run''
and a consent order was entered accordingly.
Submitting pursuant to this consent order, Mr. M. Billing for the Plaintiff while conceding that the rate of 42% per annum claimed in the plaint dated 8th September 1998 would be exorbitant in the current prevailing economic circumstances, urged that a rate of between 25% and 30% p.a. would be reasonable as the judgment entered herein arose from a commercial transaction. In support of this argument, he cited the Court of Appeal decisions in Ndiuco Ltd. v Nairobi City Commission (now Nairobi City Council) (Civil Appeal No. 40 of 1995) (unreported) and Shah v Guilders International Bank Ltd [2002] 1 EA 269.
In his response, Mr. T. A. K. Rutto for the Defendant urged (inter alia) that in the absence of any agreement between the parties as to payment of interest, interest should be payable at such rate as would be just, fair and not punitive which, in Mr. Rutto's opinion, would be the court rate of 14%. Mr. Rutto further contended that no interest should be payable for the period of two years when the court file was missing but offered no reasonable grounds for this plea.
Though the respective submissions of learned counsel were helpful, neither of the parties have placed any evidence whatsoever before me as to how I ought to exercise my discretion under section 26 of the Civil Procedure Act in determining the rate of interest payable by the Defendant notwithstanding that both parties are agreed that interest is payable. To assist the court in making this determination, the Defendant has not shown any mitigating factors that ought to be taken into account, including evidence of payment of the admitted principal sum or part thereof or of why the court file could not have been reconstructed earlier. Mr. Billing, on his part, has not justified the Plaintiff's claim for interest at a rate of between 25% and 30% p.a. other than by stating that the judgment herein arose from a ''commercial transaction'' as aforesaid. For a transaction of this magnitude, I would have expected the parties to have entered into an elaborate written agreement with adequate provision for 'penalties in the event of breach or default by either or both parties.
Having taken the foregoing factors into account, it is hereby ordered that interest on the admitted principal sum of Kshs. 22,250,000/- shall be paid by the Defendant to the Plaintiff at the court rate of fourteen per centum (14%) per annum from the date of filing suit namely the 9th September 1998, to the date of payment in full, both days inclusive.
Dated and delivered at Nairobi this 17th day of September 2004.
P. Kihara Kariuki
Ag. Judge