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Court of AppealPartially AllowedCivil Appeal (Application) No. 9 of 2012· [2014] KECA 144 (KLR)

Ethics & Anti-corruption Commission v National Cereals & Produce Board & 1 other

Court of Appeal of Kenya
18 December 2014
2,859 words in judgment
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The bottom line

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Kenya's Court of Appeal allowed the anti-corruption watchdog to join a KSh millions arbitration appeal involving a state corporation's public funds.

What this practically means

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Executive summary

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This is a ruling of the Court of Appeal at Nairobi (Visram, Mwera and M'Inoti, JJ.A.) on a Motion by the Ethics & Anti-Corruption Commission dated 5 November 2014 under section 3A of the Appellate Jurisdiction Act and rules 29, 31 and 42 of the Court of Appeal Rules, seeking joinder in the appeal as an interested party and leave to adduce additional evidence by affidavit. The underlying appeal is by Erad Supplies & General Contractors Ltd against the refusal by Njagi, J of the High Court to set aside an arbitral award of some US$3.1 million against the National Cereals & Produce Board, a state corporation, arising from a failed 2004 maize supply contract. By agreement of counsel, the Court confined this ruling to the joinder question. The Commission relied on evidence obtained from South Africa on 29 October 2014, in which directors of Chelsea Freight disowned the storage invoice of US$1,146,000 on which part of the award was based, suggesting forgery. The 2nd respondent opposed, contending the Commission lacked locus standi as a non-party and that the application was an abuse of process given a prior dismissed application by the 1st respondent for similar evidence. The Court held that the Commission's anti-corruption mandate, traceable directly to the Constitution through Article 79, gave it sufficient interest, and applying rule 77(1) case law, that it was now a person directly affected by the appeal. The Motion was allowed only to the extent of joinder; the additional evidence question was left open, and costs were made costs in the appeal.

Key legal issues

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01

Whether the EACC, which did not participate in the arbitral or High Court proceedings, is a person directly affected by the appeal and may be joined as an interested party

Holding

Yes. The Commission's constitutionally underpinned anti-corruption mandate, and the fact that the appeal concerns public funds, gave it sufficient interest; the information it received from South Africa made it a party directly affected by the appeal.

Reasoning

The Commission is established under the Ethics & Anti-Corruption Commission Act, itself enacted pursuant to Article 79 of the Constitution, and is mandated to protect public property and combat corruption. One of the parties to the appeal is a state corporation funded by public money, and Article 201 requires prudent use of public funds. Interpreting the Constitution in line with Articles 10 and 259, the Court held that affording the Commission a hearing best gives effect to the constitutional values of integrity, transparency and accountability.

p. 4
02

Whether the delay and non-participation below disqualifies the Commission from joinder under rule 77(1)

Holding

No. Rule 77(1) covers all persons directly affected, not only former parties; at the time of filing the notice of appeal the Commission would not have qualified, but the information received from South Africa changed that.

Reasoning

The Court relied on Onjula Enterprises Ltd v Summaria, Ahn v Openda and Ruithibo v Nyingi to hold that persons directly affected by an appeal include non-parties, and that the Court's inherent power under rule 1(3) allows an interested party who learned of the appeal otherwise than by service an opportunity to be heard. The property in issue was public property which the Commission is legally obliged to protect.

p. 5

Legal principles established

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  • A party who took no part in proceedings below may nonetheless be a person 'directly affected by an appeal' under rule 77(1) of the Court of Appeal Rules, and persons directly affected need not be only those who were parties to the proceedings.
  • Under its inherent power, the Court may afford an interested party who became aware of an appeal otherwise than by service of notice of appeal an opportunity to be heard.
  • The Ethics & Anti-Corruption Commission's anti-corruption mandate is constitutionally underpinned and suffices to give it standing to be joined in an appeal concerning public funds.

Court orders

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  1. 1.The applicant, the Ethics & Anti-Corruption Commission, is allowed to join Civil Appeal No. 9 of 2012
  2. 2.Costs of the application shall be in the appeal
On appeal from
High Court of Kenya
Misc. C. App. No. 639 of 2009
Jurisdiction invoked
Section 3A of the Appellate Jurisdiction Act and rules 29, 31 and 42 of the Court of Appeal Rules

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, "Ethics & Anti-corruption Commission v National Cereals & Produce Board & 1 other", Case Analysis (2014). Civil Appeal (Application) No. 9 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2014/144/eng@2014-12-18

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