RAYTHEON AIRCRAFT CREDIT CORPORATION & NAC AIRWAYS LIMITED vs AIR ALFARAJ LIMITED [1998] KECA 213 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that a negotiated choice of foreign court and law in a contract binds parties unless the plaintiff shows strong cause to ignore it.
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 intended appeal is frivolous or arguable
- 2.Whether a stay of proceedings could be granted where no formal application for stay was made in the superior court, the point having been raised as a preliminary objection
- 3.Whether the result of the intended appeal would be rendered nugatory if a stay is not ordered
- 4.Whether the High Court's jurisdiction under section 60(1) of the Constitution can be ousted by a freely negotiated choice of law and forum clause
Key legal issues
#Whether a stay of proceedings pending appeal could be granted where none was formally sought in the superior court
Yes. A jurisdictional point raised by way of preliminary objection suffices; a formal application is prudent but not mandatory.
The defendants raised the jurisdiction of the High Court by preliminary objection rather than a formal stay application. The court held that a preliminary objection is a point of law which, if successful, would dispose of the suit, and that the superior court had jurisdiction to decide it. Whilst prudence favours a formal application, the High Court may hear arguments and rule on such a point. The objection that no stay was sought below therefore failed.
Whether the intended appeal was arguable
The intended appeal was arguable and not frivolous; issues of forum and applicable law are weighty issues.
The court found the point in issue clearly arguable, noting that authorities relied on by both counsel establish that issues of forum and applicable law are weighty. It was also arguable whether the judge was right to find the forum term oppressive because it bound only the plaintiff while the first defendant had an unlimited choice of fora, and whether section 60(1) of the Constitution ousts a freely negotiated jurisdiction clause.
Whether the appeal would be rendered nugatory without a stay
Yes. The aircraft, the subject-matter, had been flown to South Africa and any order for its return might not be enforceable, while the defendants appeared able to pay damages.
The nugatory test was satisfied because the aircraft was outside the jurisdiction and an order for its return to Kenya might not be enforceable. The court reasoned that a court should not make an order it knows to be incapable of enforcement, and there was no suggestion the defendants could not pay damages for breach of contract. Both prime requirements for a stay of proceedings pending appeal were therefore met.
Whether convenience of the plaintiff alone can oust a jurisdiction and applicable law clause
No. Convenience of the plaintiff alone cannot by itself oust a jurisdiction and applicable law clause; strong cause must be shown by the plaintiff.
The court criticised the learned judge's reliance on Kuloba J's observations in Pattni v Ali regarding the High Court's unlimited original jurisdiction under section 60(1) of the Constitution, holding those remarks out of place and not germane. It held that a plaintiff's convenience in choosing a forum cannot by itself displace a freely negotiated jurisdiction and applicable law clause; strong cause, borne by the plaintiff, is required.
Legal principles established
#- A preliminary objection consists of a point of law which has been pleaded or arises by clear implication out of a pleading or application, and which if argued as a preliminary point may dispose of the suit.
- The High Court has jurisdiction to hear and rule on a jurisdictional point raised as a preliminary objection even where no formal application for stay of proceedings was filed.
- Strong cause must be shown to justify departure from a jurisdiction and applicable law clause, and the onus of showing such strong cause lies on the plaintiff.
- A court should not make an order which to its knowledge is incapable of enforcement.
Court orders
#- 1.Further proceedings in High Court Civil Case Number 1611 of 1998 stayed pending the hearing and determination of the intended appeal
- 2.Costs of the application to be in the intended appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.S. No. 1611 of 1998
- Jurisdiction invoked
- Appellate jurisdiction of the Court of Appeal over an intended appeal from the High Court (rule 5(2)(b) application for stay of proceedings pending appeal)
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.
A preliminary objection consists of a point of law which has been pleaded, or which arises by clear implication out of a pleading or an application before the court and which, if argued as a preliminary point, may dispose of the suit.
Strong cause must be shown to justify a departure from the jurisdiction and applicable law clause, and the onus of showing such strong cause lies on the plaintiff.
We allow the application and order that further proceedings in High Court Civil Case Number 1611 of 1998 be and are hereby stayed pending the hearing and determination of the intended appeal.
A court should not make an order which to its knowledge is incapable of enforcement
Issues in the judgment
#The delivery date is stated as 15th January 1998, which precedes the High Court ruling of 8th October 1998 that the application appeals from; the date is almost certainly 15th January 1999.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "RAYTHEON AIRCRAFT CREDIT CORPORATION & NAC AIRWAYS LIMITED vs AIR ALFARAJ LIMITED [1998] KECA 213 (KLR)", Case Analysis (1999). Civil Application No. Nai. 326 of 1998 (130/98 UR). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1998/213/eng@1998-01-15
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.