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JudgmentECOBANK NIGERIA LIMITED AND ECOBANK KENYA LIMITED VS ZAKHEM INTERNATIONAL CONSTRUCTION LIMITED (NIGERIA) AND ZAKHEM CONSTRUCTION NIGERIA LIMITED AND 3 Others16 min read

ECOBANK NIGERIA LIMITED AND ECOBANK KENYA LIMITED VS ZAKHEM INTERNATIONAL CONSTRUCTION LIMITED (NIGERIA) AND ZAKHEM CONSTRUCTION NIGERIA LIMITED AND 3 Others

High Court at Milimani High Court · · J.W.W. Mongare


  1. On 21st June 2024, the Court (Mabeya J.,) issued a Ruling (“the Ruling”) where it inter-alia dismissed the Intended Interested Party’s(“Applicant”) application that sought to be enjoined in the suit as an interested party and further confirmed the consent orders of 14th February 2024 “provided that this does not exonerate any of the parties from its obligations under the law or any order in force against it.”
  2. The Applicant has now filed the Notice of Motion dated 9th August 2024 under Article 159(2)(d) of the Constitution, sections 1A, 1B, 3A,  63(e) and 80 of the Civil Procedure Act (Chapter 21 Laws of Kenya) and Order 45, Order 42  Rules 6(1),6(2),6(3) and 6(4) 45 & 51(1,3) and Order 51 Rule 1 of the Civil Procedure Rules 2010 seeking the following orders:
  3. Spent*
  4. THAT this Honourable Court do issue an Order to refer this matter to Hon. Justice Alfred Mabeya for review of his order to transfer this matter to this Honourable Court;
  5. THAT this Honourable Court be pleased to review its ruling delivered/orders issued on 21st June 2024 and consequently;
  6. Admit the Applicant as an Interested Party to these proceedings;
  7. Determine whether it allowed the 5th Defendant to release the sum of USD 31,308,248.80 being monies subject of Mareva Court Order issued in HCCOMARB NO. E042 of 2021 ZAKHEM INTERNATIONAL KENYA LIMITED vs. OILFIELDS ENGINEERING AND SUPPLIES LIMITED as affirmed by the Court of Appeal in COACAPPL/E436/2023: ZAKHEM INTERNATIONAL CONSTRUCTION LIMITED VS OILFIELDS ENGINEERING AND SUPPLIES LIMITED.
  8. THAT in the alternative to (a) and (b) above, this Honourable Court do issue an Order referring this matter to Justice P.J Otieno who is seized of HCC.COM ARB E042 ZAKHEM INTERNATIONAL KENYA LIMITED vs. OILFIELDS ENGINEERING AND SUPPLIES LIMITED for hearing and determination.
  9. THAT further/in the alternative to (c) above, this Honourable Court do issue an Order staying the instant proceedings pending ruling of Hon. Justice P. J Otieno in HCC.COM ARB E042 ZAKHEM INTERNATIONAL KENYA LIMITED vs. OILFIELDS ENGINEERING AND SUPPLIES LIMITED on whether the Mareva injunction should be set aside.
  10. THAT costs be provided for.
  11. The application is supported by the grounds on its face and the supporting affidavit of John Huba Waka, the Applicant’s director, sworn on 9th August 2024. The Application is opposed by the 1st - 4th Defendants (“the Defendants”) through the Replying Affidavit sworn by their Managing Director, Ibrahim Zakheem on 19th August 2024 and by the 5th Defendant through the Grounds of Opposition dated 13th August 2024. The parties have further supplemented their arguments by filing written submissions which I have carefully considered. 

The Application

  1. The Applicant avers that there is new, important and sufficient grounds for this Court to review the Ruling and that the Defendants are acting out of collusion with the 5th Defendant’s Board of Directors. It claims that contrary to the Ruling and in a bid to frustrate the Mareva injunction issued by the Court ( Mugambi J., ) on 31st  August 2023 in HCCOMARB NO. E042 of 2021; Zakhem International Kenya Limited v Oilfields Engineering And Supplies Limited they have purported to attempt to withdraw a sum of money being USD 25,000,000 from the 5th Defendant.
  2. That the Defendants have filed an application under Certificate of Urgency dated 1st August 2024, once again purporting to seek a release of USD 6,308,249.80 from the 5th Defendant, which sums are part of monies preserved via the Mareva injunction in HCCOMARB NO. E042 of 2021
  3. The Applicant states that rather than endorse this “unlawful enterprise”, Mabeya J., had qualified his order that the Ruling did not permit the Defendants to access the sums of USD 31,308, 248.80 preserved under HCCOMARB NO. E042 of 2021 as the Ruling at para. 45 found that the Mareva injunction issued against the 5th Defendant was still in force and had not been successfully challenged by any party.
  4. That the Court went ahead to state that the said orders are still binding upon the 5th Defendant to date and that further at para. 46 of the Ruling, the court clearly indicated that no party including the Plaintiffs and the Defendants can be allowed to circumvent a lawful court order by entering into a compromise (consents) with others even in separate proceedings such as the present one without regard to the Mareva order.
  5. That this was in keeping (at para. 47) with the ruling of the Court of Appeal in COACAPPL/E436/2023; Zakhem International Construction Limited v Oilfields Engineering and Supplies Limited which stated that the owner of the monies preserved in HCCOMMARB E042 of 2021 shall be determined in the arbitration proceedings pending hearing and determination and not in any other suit including this suit which the parties had tried to use to defeat the Mareva.
  6. That further, at para. 48 of the Ruling, the Court held that the 5th Defendant willingly entered into the impugned consents knowing very well of the existence of the Mareva injunction and therefore the 5th Defendant could not honour the said consents using the preserved monies. That in the said paragraph, the 5th Defendant had been cautioned that it will not be allowed to shield itself against the Mareva order.
  7. The Applicant contends that although the 5th Defendant was not made a party in HC. COMMARB E042 of 2021 the court in express terms held that the 5th Defendant was bound to comply with the said Mareva orders at para. 41 of the ruling therein and that unless and until the orders of Mugambi J., are varied and or set aside, the 5th Defendant is still barred from partying away with the sum of USD 31,308,204.80.
  8. That in fact, the Defendants have applied to set aside the mareva injunction on account of decrees emanating from consent orders in this matter, in HCCOMARB NO. E042 of 2021 which application is pending determination and its ruling date will be given on 27th August 2024 by PJ Otieno J. The Applicant claims that upon being served with the Orders issued by P.J Otieno J., on 23rd July 2024 and in a bid to embarrass this Court into issuing conflicting orders, the defendants proceeded to file the application seeking the release of USD 6, 308, 249.80 from the 5th Defendant as stated above.
  9. The Applicant states that there is now a risk that this Court is likely to issue contradictory orders which will undermine its adjudicatory authority if the orders sought are not granted and that the conduct of the Defendants after the Ruling and the developments in this matter thereafter, justify a review/clarification of the Ruling in relation to orders issued in HCCOMARB NO. E042 of 2021 and as well as the Court of Appeal in COACAPPL/E436/2023. The Applicant claims that this cause is part of a fraudulent scheme to embarrass the judicial process in Kenya and defraud and steal from a local contractor and taxpayers. For these reasons, the Applicant urges that the court should decline the invitation by the Defendants to issue conflicting orders to embarrass itself.

The Defendants’ Reply

  1. The Defendants depone that the application does not bear sufficient grounds under Order 45 of the Civil Procedure Rules, or any other law, to warrant the review of the Ruling and that the grounds cited therein are grounds for appeal purposely crafted as grounds for review under Order 45 owing to the Applicant’s failures to file a Notice of Appeal within the required timelines. That the court considered the Applicant’s application for joinder and after such consideration dismissed the application.
  2. The Defendants further state that an Intended Interested Party is a peripheral party to the proceedings and cannot introduce new issues for determination by the court and that in determining the matters before it, the court will only consider the issues raised in the pleadings by the principal parties. That this rule is particularly unyielding when the matter before court is a private matter as opposed to a public interest claim and that the overriding interest or stake in this matter is that of the primary/principal parties before this Court. The Defendants aver that from the Applicant’s depositions, it is evident that the issues sought to be raised at this juncture are not new matters which this Court (Mabeya J.,) has not already considered and dismissed. Further, that the facts therein demonstrate that the Applicant is aware that its claim is confined to HCCC E042 of 2021 being the proceedings where the Arbitral Award is under litigation.
  3. The Defendants assert that the application, beyond being a misadventure on the part of the Applicant, is unmerited for the reasons that there is no discovery of new and important matters or evidence that relates to the issuance of the Orders sought to be reviewed, there is no mistake or error apparent on the face of the record and there is no sufficient reason to warrant a review of the Ruling. The Defendants state that the issues framed by the Applicant are conveniently distorted so as to suit the Applicant’s misleading narrative. It is Defendants’ belief that when this Court reads the Ruling, it will come to the conclusion that the summation of facts in the application are totally fallacious and that if indeed the Ruling restrained the Defendants’ access to the funds preserved by the Mareva Injunction, then, the appropriate Application to be made in that case would be an application for contempt of court and not a review as is being sought herein.
  4. The Defendants urge that the Ruling was unequivocal in terms of its final orders which were that the Applications by the Applicant were dismissed, the applications by the Defendants were allowed and the Consent Orders of 14th February 2024 were confirmed. That the court was categorical that the Decree issued by the Court does not “exonerate any of the parties from its obligations under any other law or order in force against it” which means that none of the parties to this case could escape its obligations under any of the orders issued in this matter. The Defendants claim that the only other order surviving in this matter is the Order issued by Kasango J., on 29th November 2018 vide her Ruling confirming the Mareva Injunction restraining the 5th Defendant herein “from paying any proceeds or monies due under the Agreement dated 1st  July 2014 between 1st - 4th  Defendants and KPC, other than to Ecobank Nigeria Ltd and Ecobank Kenya Ltd”. That Kasango J.’s orders were the only orders subsisting against the 5th Defendant and this obligation was reiterated in the Consent dated 14th February 2024 and that it is therefore absurd for the Applicant to argue that the orders issued in HCCC E042 of 2021 have any bearing on this matter.
  5. The Defendants state that the usual theatrics of claiming the funds in dispute as being “public finance and tax payers money” holds no sway in this matter as the funds in dispute have been confirmed by this Court as belonging to the 3rd  Defendant herein and for which this Court attached in satisfaction of the 3rd  Defendant’s debt to the 1st  and 2nd Plaintiffs.  That essentially, there is no public interest in the funds already paid out to the Defendants and that there is no risk whatsoever that there will be double payment of the funds so far to them as there is no provision of the Decree issued on 16th February 2024 that would allow a double payment of the same funds.
  6. The Defendants present that the Applicant has no right to meddle in this matter as it has no right enforceable in law and that the Arbitral Award it is claiming under is yet to be recognized and adopted as a judgement and decree of this Court under the provisions of section 36 of the Arbitration Act and is thus not capable of enforcement. The Defendants have also denied that they have any pending application before the court in HCCC E042 of 2021. For these reasons, they urge the court to dismiss the application.

The 5th Defendant’s Reply

  1. The 5th Defendant agree with the other Defendants that the application does not meet the legal threshold for review prescribed by Order 45 Rule 1 of the Civil Procedure Rules which sets out the parameters for Review. That the application does not disclose discovery of any new and important matter that would necessitate a Review of the Ruling and that the Defendants’ Notice of Motion dated 1st August 2024, seeking full enforcement of the Consent dated 14th February 2024 from the 5th Defendant is not a new and important matter. It states that the application is Res Judicata and therefore a devious attempt to re-litigate issues determined by the Ruling and is an abuse of this Court’s Review process and should be dismissed in limine with Costs to the 5th Defendant.

Analysis and Determination

  1. From the parties’ pleadings and submissions, I note that the main issue that arise for determination is “whether the Ruling of 21/6/2024 ought to be reviewed and if so, whether this matter should be heard alongside HCCOMARB NO. E042 of 2021 and whether the matter should be referred back to Mabeya J., to determine/clarify/set record straight whether it allowed the 5th Defendant to release/interfere or in away part away with the sum of USD 31,308,249.80”.
  2. It is common ground that the principles governing the exercise of discretion to review a decree or order are now settled. Under section 80 of the Civil Procedure Act and Order 45 of the Civil Procedure Rules, an applicant is required to show either that there was an error apparent on the face of record or that there has been discovery of new and important matter which was not available despite the exercise of due diligence or for any other sufficient reason for the court to review.
  3. The Applicant’s application is anchored on the discovery of new information. On this ground, the Court of Appeal in Rose Kaiza v Angelo Mpanju Kaiza [2009] eKLR held as follows:

The motion before the superior court was based on the discovery of new facts.  However, it is not every new fact that will qualify for interference with the judgment or decree sought to be reviewed.  In the words of the rule itself, it is

“………discovery of new and important matter or evidence which, after the exercise of due diligence, was not within his knowledge or could not be produced by him at the time when the decree was passed…….”

The construction and application of that provision has been discussed in many previous decisions but we shall take it from the commentary by Mulla on similar provisions of the Indian Civil Procedure Code, 15th Edition at page 2726, thus:

“Applications on this ground must be treated with great caution and as required by r 4(2) (b) the Court must be satisfied that the materials placed before it in accordance with the formalities of the law do prove the existence of the facts alleged.  Before a review is allowed on the ground of a discovery of new evidence, it must be established that the applicant had acted with due diligence and that the existence of the evidence was not within his knowledge; where review was sought for on the ground of discovery of new evidence but it was found that the petitioner had not acted with due diligence, it is not open to the Court to admit evidence on the ground of sufficient cause.  It is not only the discovery of new and important evidence that entitles a party to apply for a review, but the discovery of any new and important matter which was not within the knowledge of the party when the decree was made.”

  1. As stated, the Ruling inter alia, dismissed the Applicant’s application for joinder as an interested party in this suit. I note that in its application, the Applicant does not state what new information it came across that now warrants its joinder as a party first, before it can argue the new information it apparently came across that warrants the review of the other orders in the Ruling. Without such a demonstration, it follows that the position of the court remains that the Applicant has no connection whatsoever with the dispute between the parties in this case. As such, I am in agreement with the Defendants that the Applicant lacks the locus standi to actively participate in this suit as it is not a proper party herein. In any event even if I am to assume that the Applicant was a proper party herein, it is my finding that there is no new and important information that warrants the court to review the Ruling. I say so for a number of reasons. First, I agree with the Defendants that the Applicant is re-litigating its previous application which was the subject of the Ruling. The Applicant already told the court in its previous application that the parties entered into the consent with an aim of defeating the adoption proceedings of the arbitral award and the Mareva injunction issued by the court in HCCOMARB NO. E042 of 2021. Second, the Applicant did not present the Mareva order before the court in its previous application but it has now done so in the present application in as much as it always had knowledge of the same. This is evidence of lack of diligence on the part of the Applicant. Third, the court also heard that the Mareva order had been litigated in the Court of Appeal and the court had sight of the directions of the Court of Appeal where it was stated that the ownership or otherwise of the monies garnisheed would be determined in those proceedings and not in these proceedings. This court cannot therefore state much in respect of the same.
  2. Fourth, it appears that the Applicant is aggrieved with the manner in which the Defendants have proceeded after the Ruling was the issued and it has just fallen short of accusing them of contempt of court orders. If at all this is the case, then I agree with the Defendants that the Applicant ought to have filed an application for contempt rather than review. Further, if at all the Applicant feels that the 5th Defendant is in contravention of the Mareva order, then it ought also to have instituted contempt proceedings against it in HCCOMARB NO. E042 of 2021 where the Mareva Injunctive orders emanated from. If anything, the Applicant has annexed court orders from the said court which demonstrate that the issue of the Mareva orders is a live matter and once again, this court cannot comment on ongoing proceedings of a court of concurrent jurisdiction. Fifth, it also my finding that if at all the Defendants had filed an application to set aside the Mareva orders in HCCOMARB NO. E042 of 2021, then the same is not an important matter to warrant a review of the Ruling.
  3. In the foregoing, this court maintains that the Applicant remains a busy body in so far as these proceedings are concerned and it should await the proceedings of HCCOMARB NO. E042 of 2021 to be concluded or file its grievances there. This Court is satisfied that the Applicant has not made a case to warrant an order of review the Ruling of the court for the reasons aforementioned.
  4. On whether this matter ought to be referred back to Mabeya J., to determine/clarify/set record straight whether it allowed the 5th Defendant to release/interfere or in away part away with the sum of USD 31,308,249.80, I note that Mabeya J., in his order of 9th August 2023 stated that due to sentiments he made in the Ruling, he found it not fit to hear the matter and directed that the matter be heard before this court. As such, this matter cannot be referred back to him for clarification in light of his personal reservations. In any case, this court has similar competence to issue any clarification of the Ruling.
  5. In the Ruling, Mabeya J., generally stated that the confirmed consents were not to “exonerate any of the parties from its obligations under the law or any order in force against it”. In the preceding paragraphs, Mabeya J., stated that neither party should circumvent any court order based on the consents recorded in court. As I have stated, the question of whether the 5th Defendant could release/interfere or in away part away with the sum of USD 31,308,249.80 is a live issue in HCCOMARB NO. E042 of 2021 and is to be litigated or determined there and not this court.
  6. On whether this matter should be heard alongside HCCOMARB NO. E042 of 2021, it is a cardinal rule of law by precedent that the threshold for consolidation, requires that the parties must be the same, the law applicable must be the same, the subject must be the same i.e. the evidence must be the same (See Stumberg and Another v Potgeiter 1970 E.A. 323). However, it is evident that the two suits are in respect of different parties, different subject matters and different applicable laws being that HCCOMARB NO. E042 of 2021 is dealing with the enforcement and recognition of an arbitral award issued in the arbitration between the 4th Defendant and the Applicant. Therefore, no meaningful purpose will be served if the two matters are consolidated and heard together. This prayer is therefore not merited. 

Conclusion and Disposition

  1. From the above, my net findings are that the Applicant’s application dated 9th August 2024 has no merit and the same is hereby dismissed in its entirety with costs to the Defendants.
  2. It is so ordered.

DATED, DELIVERED AND SIGNED ON THIS 22ND DAY OF AUGUST 2024

………………………………..

J W W MONGARE

JUDGE

In the Presence Of

        1. N/A     for the Plaintiffs/Respondent
        2. Mr. Ahmed Nassir (SC)    for 1st – 4th Defendants/ Respondents
        3. Mr.    Kisigwa holding brief for Mr. Mosota for the 5th Defendant/Respondent
        4. Mr. Odera, Mr. Okubasu and Ms. Misiati holding brief for Prof Tom Ojienda(SC)    for the Applicant/Intended interested party
        5. Amos - Court Assistant

Details

Delivered
Court rank
High Court
Station
Milimani High Court (High Court at Milimani High Court)
Division
High Court Commercial and Tax
Case type
Commercial Matters
Judge
J.W.W. Mongare

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