Kobil Petroleum v Patrick Olasa Wabidonge [2010] KECA 165 (KLR)
The bottom line
#Kenya's Court of Appeal cut a KES 12.1 million wrongful termination award to KES 6.65 million but confirmed the fuel dealer was wrongfully terminated.
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 had jurisdiction to entertain the respondent's suit, the case having been transferred from the Senior Resident Magistrate's Court at Busia by consent order
- 2.Who breached the dealership agreement and the lease agreement between the parties
- 3.Whether the quantum of damages awarded by the learned Judge was justified and, if not, what figure should be awarded
Key legal issues
#Jurisdiction of the High Court over a suit transferred from the subordinate court by consent
The High Court had jurisdiction; the appellant, having consented to the transfer, participated fully in the proceedings and filed its counter-claim in the High Court without objection, could not later challenge jurisdiction.
The claim was initially filed in the Senior Resident Magistrate's Court at Busia and transferred to the High Court at Bungoma by consent order dated 14th March 2000. The Court of Appeal, invoking Sections 3A and 3B of the Appellate Jurisdiction Act, held that the appellant had fully participated in the transfer and in the High Court proceedings without ever raising the jurisdictional point, and rejected grounds 1 to 7 of the appeal.
Breach of the dealership and lease agreements
The appellant was in breach when it terminated the agreements by letter of 14th December 1999 without valid reasons and without notice, the dumping allegation having been investigated by no one.
The appellant's Area Representative for Western Kenya (DW1) conceded that the licence was terminated because of dumping, that he relied only on telephone information and did not investigate the dumping. On this evidence the Court of Appeal agreed with the trial judge's finding that the appellant, not the respondent, wrongfully brought the agreements to an end. The respondent's claim for the refund of Shs.3,690,105/= paid for products never delivered was conceded by DW1.
Quantum of damages
The itemised awards by the trial judge were excessive; a global sum of Shs.3 million for loss of profit and business was substituted, producing a total of Shs.6,654,996/= after deducting licence fees of Shs.35,109/= from the refund and global award.
Guided by the principle in Bashir Ahmed Butt v. Uwais Ahmed Khan that an appellate court will not disturb a damages award unless it is entirely erroneous, the Court nevertheless perused the itemised awards and concluded that a global figure of Shs.3 million would sufficiently compensate the respondent for loss of business and expected profits flowing from the unilateral termination. Together with the conceded refund of Shs.3,690,105/= and the deduction of Shs.35,109/=, the respondent's entitlement was Shs.6,654,996/=.
Legal principles established
#- An appeal from the High Court to the Court of Appeal is by way of retrial; the Court must re-consider and re-evaluate the evidence and draw its own conclusions while making due allowance for not having seen or heard the witnesses.
- An appellate court will not disturb an award of damages unless it is so inordinately high or low as to represent an entirely erroneous estimate, proceeding on wrong principles or misapprehending the evidence in a material respect.
- A party who fully participates in proceedings, including filing a counter-claim, without raising an issue of jurisdiction cannot later successfully impeach those proceedings for want of jurisdiction.
Court orders
#- 1.Rejection of grounds 1 to 7 of the Memorandum of Appeal on jurisdiction
- 2.Reduction of the judgment sum from Shs.12,119,236/= to Shs.6,654,996/= in favour of the respondent
- 3.Interest at court rates on the reduced figure from the date of the superior court's judgment until payment in full
- 4.The appellant awarded half the costs of this appeal and in the superior court
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Bungoma
- H.C.C.C. No. 44 of 2000
- Jurisdiction invoked
- Sections 3A and 3B of the Appellate Jurisdiction Act (appeal from the High Court to the Court of Appeal)
Relief refused
#The respondent's claim for the full Shs.12,119,236/= awarded by the High Court
The Court found the itemised awards excessive and substituted a global figure for loss of profits
Costs
The appellant, having partially succeeded, was awarded half the costs of this appeal and in the superior court: "Since the appellant has partially succeeded in this appeal, we order that it shall be entitled to half the costs of this appeal and in the superior court."
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.
This appeal therefore succeeds to the extent that the figure awarded by the learned Judge is reduced from 12,119,236/= to Shs.6,654,996/=. The respondent will be entitled to interest at court rates on this reduced figure from the date of the superior court's judgment until payment in full.
Since the appellant has partially succeeded in this appeal, we order that it shall be entitled to half the costs of this appeal and in the superior court.
An appeal from the High Court to this Court is by way of a re-trial and as this Court has pointed out on various occasions, it is not bound necessarily to accept the findings of fact by the court below
we are satisfied that the appellant was in breach when it terminated the agreements without valid reasons and without any notice
An appellate court will not disturb an award of damages unless it is so inordinately high or low as to represent an entirely erroneous estimate.
Issues in the judgment
#The judgment states the respondent paid Shs.3,690,105/= but quotes his evidence as 'I sent them Shs.3,650,000/= by bankers cheque and cash Shs.38,000/=', which sums to Shs.3,688,000/=, a discrepancy internal to the judgment.
The respondent's evidence places the payment representation on '7th February, 1999' while the narrative elsewhere records the payment as made on 8th December 1999 following a representation of 7th December 1999.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kobil Petroleum v Patrick Olasa Wabidonge [2010] KECA 165 (KLR)", Case Analysis (2010). Civil Appeal No. 36 of 2004. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2010/165/eng@2010-07-09
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.