KEMIPHARMA (KENYA) LIMITED & 2 OTHERS vs NOVO INDUSTRI A/S [1997] KECA 337 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that ignoring a served summons leads to a default judgment you likely cannot reverse, and foreign currency decrees convert at the payment-date rate.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the High Court erred in refusing to set aside the default judgment entered against the defendants
- 2.Whether the defendants were misled by the plaintiff's advocate into not filing a defence
- 3.Whether the first defendant was owed commissions for which credit should have been given in the decree
- 4.Whether a decree expressed in foreign currency without specifying a rate of exchange is vague or defective
Key legal issues
#Setting aside default judgment
The appeal against refusal to set aside the default judgment fails; the defendants were served, admitted the debt, offered instalments and made payments, so there was no triable issue and no credible claim of being misled.
The court examined the ten grounds of appeal and found them without merit. The third defendant had met the plaintiff's advocate, promised and made payments, and returned the summons. Any commission claim could have been raised then; the guarantee made no reference to commission; an instalment scheme was inconsistent with a denial of the debt; and correspondence contained a clear admission. The judge's finding that the defendants were not misled was sound.
Foreign currency judgments and rate of exchange
A decree expressed in foreign currency is not vague for failing to specify a rate of exchange; conversion is at the rate prevailing on the date of payment or enforcement.
Relying on Akiwumi JA's earlier unreported decision in Beluf Establishment v Attorney-General, which itself drew on the English decisions in Milliangos and Despina R, the court endorsed the rule that the conversion date is when payment is made or judgment enforced, making a decree in foreign currency certain without an stated exchange rate.
Legal principles established
#- A regular default judgment entered after proper service will not be set aside where the defendant, though served, chose not to appear or defend; allegations of being misled by the plaintiff's advocate must be credible and are assessed on the evidence.
- Kenyan courts applying the common law may, in proper cases, express judgment in foreign currency convertible at the rates prevailing on the date of payment or enforcement of the judgment.
Court orders
#- 1.Appeal dismissed with costs
- 2.Stay of execution pending appeal granted by the learned Judge on 19th May, 1994 vacated
- 3.Money held in joint accounts to be released to the plaintiff forthwith
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi
- Civil Case No. 2250 of 1990
- Jurisdiction invoked
- First appellate jurisdiction over the High Court under the Constitution and the Civil Procedure Act (appeal from an order of the High Court dated 19 May 1994)
Relief refused
#Setting aside the ex parte judgment and leave to defend
The judgment was regular; the defendants were served and chose not to appear or defend, and the claim of being misled was disbelieved
Claim for credit for unpaid commissions
No commission was raised at the meeting with the plaintiff's advocate, the guarantee made no reference to commission, and there was a clear admission of the debt
Costs
Appeal dismissed with costs to the respondent
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
For all these reasons, this appeal fails and is dismissed with costs. The stay of execution pending appeal granted by the learned Judge on 19th May, 1994 is hereby vacated and the money held in joint accounts to be released to the plaintiff forthwith
I hope that it is now clear that Kenya courts in applying the common law can in proper cases, express judgment in foreign currency convertible at the rates prevailing on the date of payment or enforcement of the judgment.
He held that the judgment was regular as the defendants had been served with summons and had chosen not to appear or to defend.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "KEMIPHARMA (KENYA) LIMITED & 2 OTHERS vs NOVO INDUSTRI A/S [1997] KECA 337 (KLR)", Case Analysis (1997). Civil Appeal No. 228 of 1995. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1997/337/eng@1997-07-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.