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Court of AppealAllowedCivil Appeal No. 56 of 2014· [2016] KECA 75 (KLR)

Unicom Limited v Ghana High Commission

Court of Appeal
2 December 2016
2,426 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~10 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal confirmed that foreign embassies can be sued over commercial deals like leases, since immunity only covers governmental acts, not private transactions.

What this practically means

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Executive summary

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The Court of Appeal (Azangalala, Gatembu Kairu and Murgor, JJ.A) allowed an appeal against a High Court ruling of 9th December 2011 (Musinga, J) which had struck out Unicom Limited's suit against the Ghana High Commission for recovery of rent and related losses following the allegedly unlawful termination of a five-year tenancy of a Muthaiga property. The High Court had held it lacked jurisdiction because the respondent enjoyed sovereign and diplomatic immunity under the Privileges and Immunities Act, Cap 179. Before the Court of Appeal, the appellant argued that the transaction was private and commercial and that immunity had been waived under clauses 3(ii) and 1(xii) of the tenancy agreement; the respondent relied on the UN Convention on Jurisdictional Immunities of States and Their Property, 2004, contending the purpose of the tenancy was to house its mission and that waiver could not be implied. The Court held that the 2004 Convention is not part of Kenyan law since Kenya has not ratified it, per Article 2(6) of the Constitution. Applying the restrictive doctrine of immunity from Ministry of Defence v Joel Ndegwa, Tononoka Steels and Karen Njeri Kandie, and Lord Denning's reasoning in Rahimtoola and Thai-Europe Tapioca, the Court held that the decisive question is the nature of the dispute, not the identity or purpose of the foreign entity: a tenancy agreement is a private, commercial transaction, so the respondent was not acting in a governmental capacity and could be sued. The Court set aside the strike-out order and substituted an order dismissing the respondent's application, with costs to the appellant in the High Court and on appeal.

Key legal issues

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01

Entitlement of the Ghana High Commission to sovereign/diplomatic immunity from a suit on a tenancy agreement

Holding

The High Commission was acting in a private, not governmental, capacity when it entered the tenancy agreement and is therefore not entitled to immunity from the suit.

Reasoning

The Court applied the restrictive doctrine of immunity adopted in Ministry of Defence v Joel Ndegwa and Tononoka Steels: immunity attaches only to governmental acts, not private or commercial ones. The relationship between the parties was purely a landlord-tenant one. Even though the purpose of the letting was to house the diplomatic mission, the nature of the transaction, not its purpose, is decisive. Lord Denning's opinion in Thai-Europe Tapioca that a landlord-tenant agreement would not enjoy immunity fortified the Court.

p. 4
02

Status of the UN Convention on Jurisdictional Immunities of States and Their Property, 2004 in Kenyan law

Holding

The Convention is not part of Kenyan law because Kenya has not ratified it; it could not be invoked either by the parties or by the Court.

Reasoning

Counsel argued the appeal on the basis of the 2004 UN Convention, but that Convention was neither invoked by the lower court nor in force, requiring the deposit of thirty instruments of ratification. Under Article 2(6) of the Constitution only ratified treaties form part of Kenyan law. Relying on Karen Njeri Kandie v Alssane B, the Court noted there is no evidence Kenya has ratified the Convention and it does not reflect Kenyan law on the subject.

p. 3
03

Whether immunity was waived under clauses 3(ii) and 1(xii) of the tenancy agreement

Holding

The Court found it unnecessary to resolve waiver definitively, resting its decision on the restrictive doctrine of immunity; the submission on implied waiver under the Convention was noted but the appeal was decided on the nature of the transaction.

Reasoning

The appellant contended that clause 3(ii), authorising the landlord to take 'whatever action they think fit', and the arbitration clause 1(xii) amounted to submission to Kenyan jurisdiction. The respondent, invoking Article 7 of the UN Convention, argued waiver cannot be implied and requires express consent. Since the Court held the transaction was non-immune in the first place, waiver did not determine the outcome.

p. 4

Legal principles established

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  • Sovereign and diplomatic immunity in Kenya is restrictive, not absolute; foreign states are not immune in respect of purely private or commercial transactions.
  • The critical determinant of immunity is the nature of the transaction or dispute, not the identity of the foreign government or the purpose for which it entered the transaction.
  • A tenancy agreement entered into by a foreign state or diplomatic mission is a private, commercial transaction in respect of which the mission may be sued.
  • A treaty or convention not ratified by Kenya does not form part of Kenyan law under Article 2(6) of the Constitution.

Court orders

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  1. 1.Appeal allowed
  2. 2.Order of the High Court dated 9th December 2011 set aside
  3. 3.Substituted order dismissing the respondent's application dated 27th July 2011
  4. 4.Appellant awarded costs of the application in the High Court and costs of this appeal
On appeal from
High Court of Kenya at Nairobi
HCCC No. 256 of 2011
Jurisdiction invoked
First appeal to the Court of Appeal from a ruling of the High Court exercising original civil jurisdiction

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, "Unicom Limited v Ghana High Commission", Case Analysis (2016). Civil Appeal No. 56 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2016/75/eng@2016-12-02

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