Afro Forex Bureau Limited v Wilex GmbH [2015] KECA 223 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that accepting money with instructions to transfer it creates a binding oral contract, even when a regulator has blocked the service.
What this practically means
#Executive summary
#Key legal issues
#Existence of a contractual relationship
By receiving Kshs.500,000/= from the respondent with instructions to transfer it to Germany, the appellant entered into an oral contract to provide telegraphic transfer services, notwithstanding the absence of a written agreement
The parties had a long-standing business relationship from September 2004 to March 2006 in which the appellant provided telegraphic transfer services. On the basis of that relationship, the respondent handed over the sum in January 2006 for onward transmission to Germany. The appellant's receipt of the money and acceptance of the instruction constituted a binding oral contract, which it breached by failing to remit the funds.
Illegality of the contract due to the CBK circular
The contract was not illegal; the prohibition in the CBK circular was addressed to the appellant, which bore the onus of informing its clients and should have declined to accept the money
The transaction of wiring money on behalf of a client was not in itself unlawful; the CBK circular of 2nd December 2005 prohibited the appellant from telegraphic transfers without consent. The circular was issued to the appellant, which therefore had the duty to notify its clients and to decline the funds. The respondent never requested the appellant to breach the regulations, so enforcing the contract against the appellant did not offend public policy or amount to enforcing an illegal contract.
The appellant's explanation for holding the funds
The claim that the money was held pending withdrawal of the CBK circular was untenable; the appellant ought not to have retained the money until April 2006
The appellant knew it could not wire the money yet accepted and retained the Kshs.500,000/= from January to April 2006. The trial judge had rejected the explanations regarding the employee Najma and the alleged request to purchase US dollars, and this court concurred. The retention of the funds knowing remittance was impossible caused the respondent to lose its customer's order for the diagnostic equipment, justifying the judgment against the appellant.
Legal principles established
#- On a first appeal, the Court of Appeal is entitled to re-evaluate and re-analyse the evidence and reach its own conclusion, while bearing in mind the trial judge's advantage of observing witness demeanour
- An appellate court will not normally interfere with a finding of fact of the trial court unless it is based on no evidence, on a misapprehension of the evidence, or on a wrong principle
- A party prohibited by a regulatory circular from providing a service has the onus of informing its clients and should decline to receive money it cannot lawfully remit
Court orders
#- 1.The appeal is dismissed with costs
- On appeal from
- High Court of Kenya at Milimani
- H.C.C.C. No. 253 of 2006
- Jurisdiction invoked
- First appeal to the Court of Appeal under the Constitution/statute governing appeals from the High Court (the judgment does not cite the specific provision)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Afro Forex Bureau Limited v Wilex GmbH [2015] KECA 223 (KLR)", Case Analysis (2015). Civil Appeal No. 275 of 2009. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/223/eng@2015-11-13
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.