[2023] KEHC 2446 (KLR)

Zubeidi v Active Partners Group Limited & 2 others; Mungu and Company Advocates (Interested Party) (Commercial Case 475 of 2016) [2023] KEHC 2446 (KLR) (Commercial and Tax) (17 March 2023) (Ruling)

Neutral citation: [2023] KEHC 2446 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Commercial Case 475 of 2016

DAS Majanja, J

March 17, 2023

Between

Hassan Zubeidi

Plaintiff

and

Active Partners Group Limited

1st Defendant

Mohamed Fagir

2nd Defendant

Dubai Bank Limited (In Liquidation)

3rd Defendant

and

Mungu And Company Advocates

Interested Party

Ruling

1. The 1st and 2nd Defendants and the Interested Party have moved the court by the Notice of Motion dated November 2, 2020 made, inter alia, under Order 2 Rule 15(1) (d) of the Civil Procedure Rules (“the Rules”) where it seeks to strike out the Plaintiff’s suit against them and also the Counterclaim by the 3rd Defendant against them.

2. The application is supported by the Interested Party’s affidavit sworn on October 23, 2020. It is opposed by the Plaintiff through his replying affidavit sworn on February 28, 2023. The parties’ respective advocates made brief submissions in support of their respective positions.

3. The facts leading rise to the application are not in dispute and are as follows. The Plaintiff sued the Defendants for an aggregate sum of USD 110,070,000. 00, he also sought, inter alia, to restrain the Interest Party from releasing any monies held or received by him, documents and other records received by him on behalf of the 1st Defendant on account of certain arbitral proceedings between 1st Defendant and the Government of South Sudan in respect of an agreement dated June 16, 2015. It also sought an order to compel the Interested Party to release the said monies to him or in the alternative deposit the same in a joint account held between his advocates and the Interested Party.

4. The 1st and 2nd Defendants challenged the jurisdiction of the court to adjudicate the dispute on the basis that the agreements upon which the dispute was based had an exclusive jurisdiction clause which provided that the dispute be resolved by the court in Sudan. Tuiyott J, heard the application to strike out the suit and by a ruling dated May 29, 2018, declined to strike out the suit. While the application to strike out the suit was pending, the Plaintiff applied for and the court entered default judgment against the 1st and 2nd Defendant. The learned Judge therefore dealt with 1st and 2nd Defendants’ application to set aside default judgment. On November 1, 2017, the court set aside the default judgment.

5. The two rulings precipitated two appeals; NRB CA Civil Appeal No 395 of 2018 filed by the 1st and 2nd Defendant and NRB CA Civil Appeal No 414 of 2018 filed by the Plaintiff. The appeals were consolidated and by a judgment dated November 8, 2019, the Court of Appeal allowed the 1st and 2nd Defendants’ appeal and dismissed the Plaintiff’s appeal (see Active Partners Group Limited and Another v Hassan Zubeidi; Dubai Bank Kenya Limited and Another [2019] eKLR. The Plaintiff’s petition to the Supreme Court, Petition No 44 of 2019, was struck out by a ruling dated 4th August 2020 (see Hassan Zubeidi v Active Partners Group Limited and Others [2020] eKLR).

6. It is the appellate proceedings that have set the stage for the application before this court. The Applicants urge that the effect of the decision of the Court of Appeal is to effectively hold that this court lacks jurisdiction and that the suit should be struck out. It also seeks to strike out the counterclaim filed by the 3rd Defendant and further seeks costs of the suit. The Plaintiff takes the position that the application before the court is res judicata and an abuse of the court process, that the court is functus officio and lacks jurisdiction to determine the application and that it frivolous and without merit. The 3rd Defendant has not opposed the application by filing grounds of opposition and a replying affidavit. Its counsel however submits that it should be absolved from paying costs of the counterclaim.

7. I have considered the uncontested facts which I have outlined above and I hold that the Court of Appeal by allowing the appeal came to the conclusion that this court lacked jurisdiction to entertain the Plaintiff’s claim on account of the exclusive jurisdiction clause contained in the contracts subject of this suit. Having reached that conclusion, the only option for this court is to give effect to the judgment of the Court of Appeal. I reject the Plaintiff’s argument that the application is res judicata or that this court is functus officio as what the Defendants seek is to actualize the decision of the Court of Appeal by formally striking out the suit against them. This court has a duty to give effect to the decision of the Court of Appeal. I therefore allow the application, strike out the suit and since costs follow the event, order that the Plaintiff pay the costs of the application and the suit.

8. Turning to the issue of the 3rd Defendant and the issue of its counterclaim, I am guided by the observation of the Court of Appeal which stated as follows:Additionally, and as urged by the appellants, the Bank had asserted that Mr Zubeidi had entered into the agreements as its agent. The action of Mr Zubeidi of being an agent of the Bank bound the Bank, hence the jurisdictional clause submitting to the exclusive jurisdiction of Sudan bound the Bank ......

9. Since the jurisdictional clause binds the 3rd Defendant, its Counterclaim must suffer the same fate as the Plaintiff’s suit. It Counterclaim is therefore struck out. There is no reason why the costs should not follow the event since the 3rd Defendant elected to file the Counterclaim.

10. For the reasons I have set out, I allow the 1st and 2nd Defendant’s and Interested Party’s application dated November 2, 2022 on the following terms:a.The Plaintiff’s suit against the 1st and 2nd Defendants and Interested Party is struck out with costs to be paid by the Plaintiff.b.The 3rd Defendant’s Counterclaim against the Plaintiff is struck out with costs.c.The Plaintiff and 3rd Defendant shall bear the costs of the application.

DATED AND DELIVERED AT NAIROBI THIS 17TH DAY OF MARCH 2023. D S MAJANJAJUDGECourt of Assistant: Mr M OnyangoMr Kiplagat instructed by Wagara, Koyokko and Company Advocates for the Plaintiff.Mr Mungu instructed by Mungu and Company Advocates for the 1st and 2nd Defendant and Interested Party.Mr Obuya instructed by TripleOKLaw LLP Advocates for the 3rd Defendant.