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Court of AppealAllowedCivil Appeal 134 of 1986· [1993] KECA 32 (KLR)

BELUF ESTABLISHMENT v THE ATTORNEY-GENERAL [1993] KECA 32 (KLR)

Court of Appeal
23 September 1993
GAGachuhiAKAkiwumiOMOmolo
1,023 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenyan courts can order compensation in foreign currency — not shillings — when your loss was suffered in dollars or another foreign currency.

What this practically means

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Executive summary

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The Court of Appeal allowed the appellant Beluf Establishment's appeal against a judgment of the High Court (Sheikh Amin, J.) which, on an admitted liability in tort for goods lost in Kenya while in transit to the sea under an international convention permitting free passage, had awarded damages in Kenya currency (Shs 687,737/90, equivalent to 82,643/92 US Dollars at the prevailing rate of exchange). The appellant sought compensation in United States dollars, invoking restitutio in integrum and the House of Lords decision in Miliangos v George Frank (Textiles) (1976) AC 443, which permits judgments to be pronounced in foreign currency. The trial judge had rejected the authorities cited and treated the claim as a normal damages claim in local currency. Gachuhi JA, agreeing with Akiwumi JA, held that as a recipient of English common law under section 3 of the Judicature Act (cap 8), Kenya is affected by Miliangos, and that whether the claim is in tort or contract, where payment will be made in foreign currency, judgment should be entered in that currency. He reasoned that English decisions past and present continue to be applied here; that currency fluctuation and devaluation would under-compensate a foreign claimant paid in local currency; and that the development of the law is a continuous process. The appeal was allowed with costs, with orders for the appellant as proposed by Akiwumi JA, Omolo JA agreeing. The judgment binds subordinate courts on the currency in which judgments may be entered.

Key legal issues

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01

Currency of judgment where loss is suffered in foreign currency

Holding

Judgment should be entered in the foreign currency in which payment will be made, following Miliangos; the claim being in tort makes no difference.

Reasoning

The appellant's goods were lost in Kenya while in transit under an international convention allowing free passage to the sea, and the respondent was sued in tort. Liability was admitted and judgment was entered in Kenya currency equivalent to 82,643/92 US Dollars. Because of currency fluctuation the appellant would be paid much less than it lost. Applying Miliangos and the principle of restitutio in integrum, the trial judge was wrong to reject the authorities and treat the claim as a normal damages claim in Kenya currency.

p. 3
02

Continuing application of English decisions in Kenya

Holding

Decisions of English courts, past and present, continue to apply in Kenya as authorities under section 3 of the Judicature Act, so the rule in Miliangos is available to Kenyan courts.

Reasoning

Section 3 of the Judicature Act applies the common law and statutes in force in England on 12th August 1897, and English decisions past and present continue to be applied here as authorities. The commercial world has changed since independence, with Kenya entering foreign transactions denominated in foreign currencies; insisting on compensation in local currency for foreign claimants would be contrary to agreement and bring the country into disrepute.

p. 2

Legal principles established

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  • Kenyan courts, as recipients of common law, are bound by the rule in Miliangos: where payment will be made in foreign currency, judgment may be entered in that currency, whether the claim is in tort or in contract.
  • It is wrong for a trial court to reject the foreign-currency authorities and to award damages in local currency where the loss was suffered in foreign currency and currency fluctuation would under-compensate the plaintiff.
  • The development of the law is a continuous process which should be encouraged so that courts can effectively arbitrate on the rights of people in accordance with natural justice.

Court orders

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  1. 1.Appeal allowed with costs
  2. 2.Orders for the appellant as proposed by Akiwumi JA (judgment in US Dollars rather than Kenya currency)
On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No 2436 of 1978
Jurisdiction invoked
First appellate jurisdiction over a High Court civil appeal (judgment in tort claim for loss of goods; trial court entered judgment in Kenya currency)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "BELUF ESTABLISHMENT v THE ATTORNEY-GENERAL [1993] KECA 32 (KLR)", Case Analysis (1993). Civil Appeal 134 of 1986. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1993/32/eng@1993-09-23

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.