Agrinco Limited v Standard Chartered Estate Management Limited [2014] KECA 796 (KLR)
The bottom line
#Kenya's Court of Appeal threw out Agrinco's claim for over USD 400,000 because it never invoiced the buyer for the exchange-rate shortfall it was claiming.
What this practically means
#Executive summary
#Key legal issues
#Duty of a claimant to invoice and prove a special claim for exchange-rate shortfall
The appellant, having agreed that invoices were the mode of consummating transactions, could not claim sums owed in US Dollars other than by raising an invoice; failure to invoice and to demonstrate how the shortfalls arose was fatal to the claim
Both parties agreed that invoicing was central to their trade practice. The appellant claimed shortfalls on both invoiced Cuprocaffaro payments and uninvoiced Clortocaffaro deliveries but never invoiced the respondent for those shortfalls, even eight years after delivery. It also produced no evidence of pursuing the Central Bank for foreign exchange allocation or that its Italian principal remained unpaid. The burden lay on the appellant as claimant, and it was not discharged.
Burden of proof in a claim for a shortfall
The burden of proving the special claim rests on the party alleging the shortfall; it should not be shifted to the payer to prove full payment
The appellant alleged the respondent underpaid for goods supplied. The trial judge correctly held that the plaintiff bore the burden to prove within the balance of probability its claim and how it was computed. The Court of Appeal affirmed that no burden should be shifted to the respondent to show it was fully paid, and that the respondent was legally entitled to mitigate losses by paying at the delivery-date rate after waiting months for an invoice.
Applicability of Section 29 of the Sale of Goods Act (Cap 31)
The trial judge was right to hold that Section 29 did not apply because the conduct of business between the parties did not envisage those provisions; payments were to be made on invoice
The trial judge found, on the pleadings, evidence and submissions, that Section 29 of the Sale of Goods Act, which deals with payment at the time of delivery, did not apply since the parties' course of dealing was invoice-based. The Court of Appeal, re-appraising the evidence, found the trial judge made the correct findings on the issues, including this one, and affirmed them.
First appeal principles
A first appeal is by way of retrial; the appellate court reconsiders and evaluates the evidence and draws its own conclusions while making due allowance for not having seen or heard the witnesses
The Court invoked Rule 29(1) of the Court of Appeal Rules and the classic statement in Selle v Associated Motor Boat Company, adopting the settled principles that the appellate court is not bound by the trial judge's findings of fact where he clearly failed to take account of particular circumstances or probabilities, but must have regard to the advantage the trial judge had in observing witness demeanor.
Legal principles established
#- A party claiming a special claim arising from currency fluctuation must specifically claim and strictly prove it, including invoicing the debtor for the shortfall claimed
- On a first appeal, the Court of Appeal re-appraises the evidence and draws its own inferences of fact while making due allowance for not having seen or heard the witnesses
Court orders
#- 1.The appellant's appeal is dismissed in its entirety
- 2.The respondent will have costs both on the appeal and in the High Court
- On appeal from
- High Court of Kenya at Nairobi
- H.C.CC. No. 4119 of 1993
- Jurisdiction invoked
- First appeal to the Court of Appeal under the Court of Appeal Rules (Rule 29(1) of the Court of Appeal Rules 2010)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Agrinco Limited v Standard Chartered Estate Management Limited [2014] KECA 796 (KLR)", Case Analysis (2014). Civil Appeal No. 240 of 2005. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2014/796/eng@2014-02-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.