Westmont Power (Kenya) Limited v Kenya Oil Company Limited [2014] KECA 454 (KLR)
The bottom line
#Kenya's Court of Appeal ordered Kenya Oil Company to repay money it had received under a court decree that was later overturned, plus interest and legal costs.
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 respondent should make restitution of the decretal sum obtained under a decree in HCCC 106/2002 that was reversed by this Court on 1st April 2011
- 2.Whether interest at court rates should be paid on the sum to be restituted with effect from 1st May 2003
- 3.Whether the applicant should instead execute this Court's order requiring the respondent to deposit the decretal sum, rather than seek restitution
Key legal issues
#Whether restitution lies where this Court's prior judgment directed deposit of the decretal sum rather than expressly ordering restitution
Yes. The Court varied its orders of 1st April 2011 so that the decretal sum be restituted to the applicant, rather than requiring execution of the deposit order.
The Court held that neither executing the deposit order nor setting aside the stay order referring the dispute to arbitration would serve the interests of justice. The respondent had neither deposited the sum as directed nor proceeded to arbitration, and the arbitral process was time-barred. Requiring the applicant to execute the deposit order and then apply for payment out would unnecessarily consume time and resources. The Court invoked its inherent powers under the Appellate Jurisdiction Act to vary its own orders in the interests of justice.
Whether interest is payable on the sum to be restituted
Yes. The decretal sum to be restituted carries interest at court rates from 1st May 2003 until payment in full, as part of the normal relief in restitution.
Relying on Mulla's Code of Civil Procedure concerning the corresponding Indian provision (section 144 of the Indian Civil Procedure Act), the Court accepted that restitution must restore the parties to their original position and that interest is part of the normal relief given in restitution. Interest was awarded at court rates from 1st May 2003, the date from which it was prayed, as consequential relief under section 91 of the Civil Procedure Act.
Whether the respondent's continued retention of the decretal sum was justifiable
No. It was unconscionable, unfair and unjust for the respondent to hold onto money paid under a decree reversed by the Court, amounting to detriment to the applicant.
The respondent had failed to comply with the Court's order to deposit the decretal sum without any reason, had not proceeded to arbitration for some two years and allowed the arbitral process to become time-barred, yet continued to hold the money paid under a decree that had been reversed. The Court found there was no justification for this and that it amounted to detriment to the applicant, warranting restitution with interest.
Legal principles established
#- Where a decree is reversed, restitution under section 91 of the Civil Procedure Act must place the parties in the position they would have occupied but for the decree, and interest forms part of the normal relief given in restitution.
- A party who fails to comply with an order to deposit a decretal sum and gives no explanation for that failure cannot resist restitution of the sum from a decree that has been reversed.
Court orders
#- 1.The respondent do make restitution of all sums obtained by it from the applicant pursuant to the decree in HCCC 106/2002 within the next thirty (30) days in default execution to issue
- 2.The sums payable be subject to court rates of interest with effect from 1st May 2003 until payment in full
- 3.Costs herein shall be paid by the respondent to the applicant
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya
- HCCC 106/2002
- Jurisdiction invoked
- Sections 3(2), 3(3), 3A, 3B and 4 of the Appellate Jurisdiction Act; Section 91 of the Civil Procedure Act; Rule 57(2) of the Court of Appeal Rules
Relief refused
#Direction that the applicant instead execute this Court's 1st April 2011 deposit order and thereafter apply for payment out
The Court found this course would unnecessarily consume time and resources when the end result would be restitution of the decretal sum
Respondent's proposal to apply to the High Court to set aside Kimondo, J's orders referring the dispute to arbitration
The arbitral process had been time-barred, making such an application an exercise in futility
Costs
Costs herein shall be paid by the respondent to the applicant.
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.
the path we take and which we believe will lead to the ends of justice in this matter is to allow the prayers laid, by varying our orders of 1st April, 2011 in the terms that the decretal sum be restituted to the applicant
And finally we find it unconscionable, unfair and unjust after all the foregoing omissions that the respondent still holds onto the money it was paid in the decree that was reversed by this Court on 1st April, 2011.
Interest is part of normal relief given in restitution.
In sum we make the following orders: (i) that the respondent do make restitution of all sums obtained by it from the applicant pursuant to the decree in HCCC 106/2002 within the next thirty (30) days in default execution to issue
Costs herein shall be paid by the respondent to the applicant.
Issues in the judgment
#The cross-reference to the prior appeal appears as 'CIVIL APPEAL NO.154 OF 3003' in the heading, which conflicts with the body text referring to Civil Appeal 154/2003
The supporting affidavit is described as filed on 5th June 2014 although the motion is dated 20th September 2013; the application of 11th May 2012 before Havelock, J is also mentioned alongside an application dated 12th March, 2002 before Kimondo, J, with dates in the record that appear inconsistent
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Westmont Power (Kenya) Limited v Kenya Oil Company Limited [2014] KECA 454 (KLR)", Case Analysis (2014). Civil Application No. NAI 254 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2014/454/eng@2014-07-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.