Background and Introduction
1. Before court is the application dated 6th December 2024 brought under Order 21 rule 8, Order 22 rule 1, Order 40 rule 1, Order 51 rule 1 of the Civil Procedure Rules and Sections 1A, 1B and 3A of the Civil Procedure Act as well as Section 97 of the Land Act, Rule 10 of the Auctioneers Rules and Rule 9 of the Auctioneer Practice Rules.
2. The application seeks orders to set aside the ex parte proceedings on the settlement of terms before the Deputy Registrar on 15th November 2024 including all resultant orders and the decree issued thereafter. Additionally, the applicant seeks directions for a proper assessment to determine the actual decretal sum payable to the decree holder, the applicable USD conversion rate, whether VAT is chargeable, the rate of interest applicable to the decretal sum, and the actual amount of arbitration costs payable to the decree holder.
3. Further, the applicant seeks orders for the taxation of the decree holder’s bill of costs, as well as the taxation of related matters where the decree holder was ordered by the court to pay costs. Additionally, the applicant prays that the sale of the property known as L.R. No. 12882/28 proceed upon valuation by an independent valuer, with the applicant being allowed to redeem the property either through a private treaty or a public auction.
4. The application is supported by the affidavit and supplementary affidavit of Bapiny Montuel Wejang Wuor. It is opposed by way of a replying affidavit sworn by David Muriithi on behalf of the respondent.
5. The applicant's case is that the decree holder had applied for a decree and was at an advanced stage of executing the court's judgment delivered on 22nd October 2024. The applicant contends that the decree holder appeared in court without serving the applicant’s advocates, resulting in adverse orders to the applicant’s detriment.
6. It is further argued that, pursuant to Order 21 Rule 8(4) of the Civil Procedure Rules, the settlement of terms should have been handled by the judge rather than the Deputy Registrar. The applicant maintains that the Deputy Registrar's role was limited to listing the matter before the judge who heard the case. Consequently, the applicant asserts that, since the settlement of terms was not legally conducted, proceeding with the sale of the property in execution would amount to unjust enrichment.
7. Additionally, the applicant argues that the decree holder intends to dispose of the property at a gross undervalue, despite the property having been purchased for Kshs 146,000,000/= in 2015. The applicant further contends that the decree holder had not provided any evidence demonstrating its ability to reimburse the applicant in the event that the property was sold at an undervalue.
8. The respondent opposes the application, relying on the provisions of Order 22 Rules 18(3) and 20(2). The respondent argues that there was no requirement to give notice to the judgment debtor before execution. It is further contended that if the applicant had any concerns regarding the award, they should have sought an interpretation from the arbitrator. With respect to the valuation, the respondent asserts that a proper valuation was conducted and the report was duly served upon the applicant. Additionally, the respondent maintains that the costs awarded were clearly set out in the arbitral award, leaving no ambiguity regarding the amounts due.
Analysis and determination
9. The application was canvassed by way of written submissions which I have considered, alongside the pleadings, response and caselaw cited by the parties.
10. In bringing this application, the applicant relies on Order 21 rule 8(4) of the Civil Procedure rules which states as follows;
“On any disagreement with the draft decree any party may file the draft decree marked as “for settlement” and the registrar shall thereupon list the same in chambers before the judge who heard the case or, if he is not available, before any other judge, and shall give notice thereof to the parties”.
11. The purpose of settling the terms of a decree as envisaged under Order 21 rule 8(4), is for the court to clarify the exact meaning of its judgment. when the parties are unable to agree on its interpretation. However, when a judge is called upon to settle the terms of a decree or order, their role does not extend to re-evaluating the evidence or submissions that led to the court’s decision. Instead, the judge’s task is limited to resolving disagreements that have arisen between the parties or between any party and the Deputy Registrar regarding the form and content of the decree.
12. To initiate an application for settlement of terms, Order 21 Rule 8(4) requires that
“On any disagreement with the draft decree any party may file the draft decree marked as “for settlement” and the registrar shall thereupon list the same in chambers before the judge who heard the case or, if he is not available, before any other judge, and shall give notice thereof to the parties”.
13. I note in this case that the decree holder appeared ex parte, before the Deputy Registrar on 15th November 2024 when orders for warrants of attachment and sale were issued, prompting the present application. I however note that the draft decree for settlement has not been filed before this court as required for the settlement of terms. Nonetheless, since the application before me outlines the key issues, and the respondents have had the opportunity to respond, I shall proceed to address the identified issues accordingly.
14. Firstly, the applicant takes issue with the fact that the proceedings were conducted ex parte, without notice to his advocates. In this regard, Order 22, Rule 18 of the Civil Procedure Rules provides that;
Notice to show cause against execution in certain cases [Order 22, rule 18]
(1) Where an application for execution is made—
(a)more than one year after the date of the decree;
(b)against the legal representative of a party to the decree; or
(c)for attachment of salary or allowance of any person under rule 43,
the court executing the decree shall issue a notice to the person against whom execution is applied for requiring him to show cause, on a date to be fixed, why the decree should not be executed against him:
(2) …
(3) Except as provided in rule 6 and in this rule, no notice is required to be served on a judgment debtor before execution is issued against him.
15. Pursuant to Order 22 Rule 18(3), and subject to the exceptions therein, no notice is required if execution is sought within one year from the date of the decree. The rationale behind this provision is that once a judgment is delivered, the judgment debtor is presumed to be aware of the impending execution, particularly if it occurs within a year of the decree. Moreover, the judgment debtor is deemed to have been served with the draft decree, thereby providing notice of the impending execution and an opportunity to respond, as required under Order 21 Rule 8(3) and (4). Given that the decree was issued on 22nd October 2024, no notice was required to be served on the judgment debtor.
16. Regarding the prayer for a proper assessment of the actual sums due and payable to the decree holder, my ruling is simply this, that there is no ambiguity as the arbitral award was clear on the final orders. The arbitrator expressly directed that the judgment debtor pays the decree holder the sum of USD 124,072.32.
17. The applicant seeks directions on the exchange rate applicable. In response to this, Section 10 of the Arbitration Act limits this court's interference in arbitration matters, except in instances expressly provided for by the Act. The applicant ought to have raised any issues requiring clarification or correction before the arbitrator as required under Section 34 of the Arbitration Act.
18. Having failed to do so within the prescribed time, and the award having been adapted by this court means that the right is no longer available to the applicant. Be that as it may, if the arbitrator had intended for a specific exchange rate to apply, other than the prevailing market rate, nothing would have been easier than to state so explicitly.
19. A final determination was delivered allowing the recognition of the arbitral award on 20th September 2024. Short of an appeal being filed, the ruling remains as delivered.
20. The costs of arbitration, interest rate and VAT are explicitly provided for in the arbitral award and properly captured in the decree. Any additional costs beyond those stipulated in the award were imposed by this court when dismissing the application dated 4th December 2023 for setting aside the arbitral award. The costs arising from that application were subject to taxation. This falls squarely within the Deputy Registrar’s jurisdiction.
21. Finally, regarding the sale of the property, the decree explicitly directs that the property be auctioned immediately. The issue of varying this order to allow for a private treaty sale ought to have been raised before the arbitrator. In any event, the applicant has not provided any compelling reason to justify such a variation.
22. The applicant’s apprehension that the respondent intends to sell the property at an undervalue is unsubstantiated. Moreover, any difference in the value of the suit property can be adequately compensated by an award of damages. The applicant's further concern that the respondent may be unable to satisfy such damages is equally unsubstantiated.
23. Based on the uncontroverted evidence before the court, the respondent has already conducted a valuation, and the report has been duly served on the applicant. Accordingly, there is no basis for the court to interfere with the sale process at this stage.
Disposition
24. Accordingly, I find no merit in the application and the same is dismissed with costs.
DATED, SIGNED AND DELIVERED IN NAIROBI
THIS 18th DAY OF FEBRUARY 2025.
F. MUGAMBI
JUDGE