[2023] KEHC 24978 (KLR)

Tyreife Solutions Limited v Faem Agencies Limited (Commercial Suit E015 of 2023) [2023] KEHC 24978 (KLR) (6 November 2023) (Judgment)

Neutral citation: [2023] KEHC 24978 (KLR)

Republic of Kenya

In the High Court at Mombasa

Commercial Suit E015 of 2023

DKN Magare, J

November 6, 2023

Between

Tyreife Solutions Limited

Plaintiff

and

Faem Agencies Limited

Defendant

Judgment

1. The Plaintiff filed this case claiming for the following prayers: -a.A Declaration that a consignment that was shipped by the Plaintiffs’ agent Salvino Del Bene (thailand) Ltd for the exporter Zhongce Rubber (thailand) Co. Ltd through Mediterranean Shipping Company SA in Containers numbered TCLU9741234, GLDU0689164, MSDU7526851 and FFAU4125210 and Bill of Lading MEDUDJ405122 dated 10th May 2023 and a House Bill of Lading Number SDB875015026 is property of Top Draw Tyres Pty Ltd t/a Tyrelife Solutions and that the Defendant has no right to the consignment.b.A permanent injunction be issued restraining the 1st Defendant Plute Store Uganda Ltd from taking possession of the consignment that was shipped by the Plaintiff’s agents Salvino Del Bene (thailand) Ltd for the exporter Zhongce Rubber (thailand) Co. Ltd through Mediterranean Shipping Company SA in Containers numbered TCLU9741234, GLDU0689164, MSDU7526851 and FFAU4125210 and Bill of Lading MEDUDJ405122 dated 10th May 2023 and a House Bill of Lading Number SDB875015026. c.An order directing Mediterranean Shipping Company SA, the Kenya Ports Authority, Kenya Revenue Authority and any Government agency in control of the consignment that was shipped in containers numbered TCLU9741234, GLDU0689164, MSDU7526851 and FFAU4125210 and Bill of Lading MEDUDJ405122 dated 10th May 2023 and a House Bill of Lading Number SDB875015026 to release it to the Plaintiff. Top Draw Tyres Pty Ltd t/a Truelife Solutions or its agents and the consignment be repatriated to South Africa of such destination that the Plaintiff may choose.d.Costs of the suit be awarded to the Plaintiff

2. The Defendants were served. The Court directed the matter proceeds by way of case stated. This was also informed by the fact that in any case the Plaintiff was going to admit their statement and documents. I had certified the matter to be heard ed bene esce, due to the increase of port and other charges.

3. The Defendants were served with summons and pleadings but failed to enter appearance.

4. The Plaintiffs’ case is that the Plaintiff was in the business of exporting tyres and the 1st Defendant purported to be an affiliate of Pultegroup while the 2nd Defendant was the agent of the 1s Defendant.

5. Sometimes on 3rd January 2023, through a company by the name Dragon Sourcing Company, the Plaintiff was introduced to one John Chadwick who purported to be the chief operating officer of Pultegroup, an America Company and with whom they engaged for purchasing tyres.

6. On 17th February 2023, the said John Chadwick supplied the Plaintiff with an order seeking to be supplied with 10 containers of tyres for payment within 60 days.

7. The Plaintiff approved the purchase order honestly believing that Pultegroup was responsible for settling the consignment. And on 3rd May 2023 issued a commercial invoice for 4 containers to Mombasa for US $ 265,969. 72 which was shipped on 5th May 2023 and a master Bill of lading No. MEDUDJ405122 dated 10th May 2023 issued.

8. The particulars of the purchase orders were stated as follows:Quantity Amount Item Description714 US $ . 184,212 CM988 steer/trailer238 US $ . 66,640 AS668 steer/trailer714 US $ . 208,488 MD777 drive476 US $ . 142,324 AD735 Drive238 US $ . 64,260 AZ651 steer

9. Subsequently, the 1st and 2nd Defendants have done no payments for the orders and the goods are detained at the Port of Mombasa and are still in the hands of the Mediterranean Shipping Company SA and the Kenya Revenue Authority.

10. It turned out the 1st Defendant is not an affiliate of the American Company, Pultegroup. Inc, and is fictitious entity created to defraud the Plaintiff and 2nd Defendant is an accomplice of the 1st Defendant.

Analysis 11. The case is not opposed. The Defendant though using the name “Limited”, is not a limited liability but an unregistered business name. They were masquerading as the Pulte Store Uganda Ltd. It is part of the increased lapses in Maritime trade where, the fraudsters use names similar to established names in Europe and USA taking advance of language barriers, to import and defraud shippers. Under Section 41 and 42 of the Sale of Goods Act, the Plaintiff retains an unpaid sellers lien. The section provides as doth; -“41. (1) Subject to the provisions of this Act, the unpaid seller of goods who is in possession of them is entitled to retain possession of them until payment or tender of the price in the following cases—a.where the goods have been sold without any stipulation as to credit;b.where the goods have been sold on credit, but the term of credit has expired;c.where the buyer becomes insolvent.(2)The seller may exercise his right of lien notwithstanding that he is in possession of the goods as agent or bailee or custodier for the buyer.42. Where an unpaid seller has made part delivery of the goods, he may exercise his right of lien or retention on the remainder unless the part delivery has been made under such circumstances as to show an agreement to waive the lien or right of retention.”

12. In this case, without payment, and with the person contracting being fiction, then the Plaintiff is entitled to claims the lien and return its goods.

13. I find the Plaintiff, on the facts before me has proved its case. In the case of Ginegar Plastic Products Ltd v Victrex Ltd & another [2021] eKLR, the Court, NJOKI MWANGI stated as doth: -“In considering if the plaintiff still has good title to the consignment of goods after issuing a bill of lading in the name of the defendant, it is necessary to look into the value attached to the said document. Lexis Navigator Dictionary states as follows in regard to bills of lading-“A Bill of lading is a receipt signed by the person or his agent who contracts to carry certain specific goods, and setting out the terms of the contract of carriage under which the goods have been delivered to and received by the ship. The signed bill of lading is handed over to the shipper, who may either hold onto it or transfer it to a third person. During the voyage and transit, the bill of lading under the law merchant is considered the symbol of the goods described in it, and the endorsement and delivery of the bill of lading operates as a symbolic delivery of the goods. This person named in the Bill of lading as the person to whom the delivery of goods is to be made on arrival at the destination, in which case he is known as the consignee; if he is not named in the Bill of lading, he is usually known as the holder or endorsee of the Bill of lading. The holder of the bill of lading is entitled as against the shipper to have the goods delivered to him to the exclusion of other persons. It is thus the same position as if the goods were delivered to him or in his physical possession, subject to the qualification that he takes the risk of non-delivery of the goods by the ship owner, and that, in order to obtain actual delivery of the goods from the ship owner, he may be obliged to discharge the ship owner’s lien for freight. A bill of lading issued by the ship owner’s agent in the absence of any contract of carriage is a nullity.” (emphasis added).

14. In instances like the present one where the plaintiff has proved that the consignment of goods was obtained fraudulently, it is evident that the plaintiff through the bill of lading number 204673855 cannot pass good tile to the defendant for the said consignment. I am in agreement with Mr. Mugambi that the plaintiff has established the existence of a dubious contract with the defendant which was initiated through fraudulent misrepresentation of facts. The confirmation order, invoice and the bill of lading attached to the affidavit of the plaintiff’s deponent proves the plaintiff’s case.”

15. In the case of Junca Gelatines S.L v Hilton Ingredients (U) Ltd [202] eKLR, the Court stated as doth: -“22. Since the order for the consignment of goods was made fraudulently the title in the goods did not pass to the defendant. It is my finding that the plaintiff has discharged its burden of proof on a balance of probability. I therefore hold that the title to the consignment of goods remains with the plaintiff who is the rightful owner of the same.i.– pages 10 to 13 of the Plaintiff’s bundle of authorities.

16. In the case of Apliena Sau v Andrea Donato & 4 others [2021] eKLR, the court stated as doth: -: The Defendants neither entered appearance nor filed defence(s) to challenge the Plaintiff’s case. The Plaintiff has tendered evidence vide an Affidavit sworn by Fransisco Javia Garcia Alvarez on 9th June, 2021 and produced documents filed therewith as Exhibits P1 to P9. The evidence has not been challenged in any way by either Defendants. And as submitted by the Plaintiff, failure to respond to affidavit evidence is a clear indication that the Plaintiffs evidence is the only truth available in this case.In the circumstances, I find that the Plaintiff has demonstrated that the alleged affiliation between the 3rd Defendant and PX Manufacturing Ltd of Cambridge shire, UK is non-existent. The Plaintiff has also shown that the contract with the 3rd Defendant is dubious from the email correspondence, purchase order, invoice and Bill of Lading. The Defendants have also been shown to be fraudster and faceless entities since they have not shown up to confirm interest in acquiring the consignment lawfully or title to it. In the circumstances of this case as presented by the Plaintiff, the title in the consignment cannot pass to the Defendants and hence the Plaintiff remains the rightful owner thereof.”

17. The end result is that I have reached an inevitable conclusion that the suit is merited and is accordingly allowed with costs of US $ 10,400.

Determination 18. I therefore make the following orders: -a.A Declaration is hereby issued that a consignment that was shipped by the Plaintiffs’ agent SALVINO Del Bene (thailand) Ltd for the exporter Zhongce Rubber (thailand) Co. Ltd through Mediterranean Shipping Company SA in Containers numbered TCLU9741234, GLDU0689164, MSDU7526851 and FFAU4125210 and Bill of Lading MEDUDJ405122 dated 10th May 2023 and a House Bill of Lading Number SDB875015026 is property of Top Draw Tyres Pty Ltd t/a Tyrelife Solutions and that the Defendant has no right to the consignment.b.An order directing Mediterranean Shipping Company SA, the Kenya Ports Authority, Kenya Revenue or any person in control of the consignment that was shipped in containers numbered TCLU9741234, GLDU0689164, MSDU7526851 and FFAU4125210 and Bill of Lading MEDUDJ405122 dated 10th May 2023 and a House Bill of Lading Number SDB875015026 to release it to the Plaintiff. Top Draw Tyres Pty Ltd t/a Truelife Solutions or its agents and the consignment be repatriated to the country of origin or transshipped to the order of the Plaintiffc.Costs of the suit of US $ 10,400 be awarded to the Plaintiff Together with the cost of transshipmentd.The file is closed.

DELIVERED, DATED AND SIGNED AT MOMBASA ON THIS 6TH DAY OF NOVEMBER, 2023. JUDGMENT DELIVERED THROUGH MICROSOFT TEAMS ONLINE PLATFORM.KIZITO MAGAREJUDGEIn the presence of:Saloo for 4th Interested partyBwika for the PlaintiffNo appearance for Ndeti for 1st and 2nd Interested parties.