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Court of AppealDismissedCivil Appeal No. 274 of 2015· [2017] KECA 393 (KLR)

W K, M W K (Both suing as the Administrators of the Estate of Dr. W K) & another v British Airways Travel Insurance & another [2017] KECA 393 (KLR)

Court of Appeal
28 July 2017
3,261 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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The Court of Appeal dismissed a family's insurance claim, confirming Kenyan courts cannot hear contract disputes against foreign companies without a clear Kenyan connection.

What this practically means

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Executive summary

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This appeal arose from a ruling by Ougo, J. in HCCC No. 309 of 2011 upholding a preliminary objection by the 2nd respondent, a UK-incorporated insurer, and striking out the appellants' suit. The suit was brought by the administrators and dependants of Dr. W K, who died following injuries sustained in an aircraft crash at Busia in 2003, seeking benefits under a worldwide annual travel insurance policy purchased in England in 2002. The insurer contended the High Court lacked jurisdiction: it had no place of business in Kenya, the policy was made and to be performed in England, English law applied, and no leave for service out of the jurisdiction had been obtained. Before the Court of Appeal, the appellants argued that the insurer's entry of appearance and application to set aside a default judgment amounted to submission to jurisdiction. The Court, in a single judgment of the whole bench, held that the KANTI principle on unconditional appearance was distinguishable: the 2nd respondent had no office in Kenya, raised the jurisdictional objection at the earliest instance, and an earlier ruling by Mwera, J. had made no finding on jurisdiction. Applying RAYTHEON and KARACHI GAS, the Court affirmed that Kenyan courts will not assume jurisdiction over contract claims against foreign defendants unless the contract was made in Kenya, is governed by Kenyan law, or the breach occurred in Kenya, absent leave for service out. None of these connecting factors existed; English law had the closest and most real connection. The appeal was dismissed with costs to the 2nd respondent.

Key legal issues

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01

Whether entry of appearance and an application to set aside a default judgment estopped a defendant from challenging the court's jurisdiction

Holding

No estoppel arose. Although entry of unconditional appearance ordinarily submits a defendant to the court's jurisdiction, the 2nd respondent had no office in Kenya, denied knowledge of the party served, and raised the jurisdictional objection immediately after entering appearance, so the objection was properly before the court.

Reasoning

The court distinguished the KANTI case, where the respondent had an office in Nairobi and was properly served there. Here the 2nd respondent had no place of business in Kenya and no authorised agent had accepted service. The ruling by Mwera, J. granting set-aside did not pronounce on jurisdiction, expressly deferring it for full argument. RAYTHEON confirms a foreign defendant may still challenge jurisdiction even where leave for service out has been granted. The objection was raised at the earliest opportunity and was properly entertained.

p. 5
02

Whether the High Court had jurisdiction over a foreign insurer under a contract governed by English law

Holding

No. The contract was made in England, the deceased resided in England, the insurer's registered office was in Middlesex, English law applied by default under the closest and most real connection principle, and no application for leave to serve out of the jurisdiction under Order 5 rule 21 was ever made.

Reasoning

Following RAYTHEON and the older KARACHI GAS decision, the High Court assumes jurisdiction over contract matters involving foreign defendants only where the contract was made in Kenya, is governed by Kenyan law, or the breach occurred in Kenya, or where leave is granted for service out of the jurisdiction. None of the three connecting factors applied. The choice-of-law clause in the policy pointed to English law absent an agreed election otherwise. The suit was therefore properly struck out for want of jurisdiction.

p. 6

Legal principles established

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  • A court without jurisdiction cannot take any further step in a matter, however weighty it may be
  • The High Court will not assume jurisdiction over a contract dispute involving a foreign defendant unless the contract was made in Kenya, is governed by Kenyan law, or the breach was committed in Kenya, or leave has been obtained for service out of the jurisdiction
  • A defendant who raises the jurisdictional objection at the earliest instance after entering appearance is not estopped from challenging jurisdiction, even after applying to set aside a default judgment

Court orders

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  1. 1.Appeal dismissed with costs to the 2nd respondent

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 165
  • Constitution of Kenya, 2010Article 165(3)
  • Civil Procedure RulesOrder 5 rule 21
  • Civil Procedure RulesOrder 5 rule 23
  • Civil Procedure (Revised) Rules, 1948 (K)Order V, rule 21
  • Council Regulation (EC) No. 44/2001 (Modified Brussels Convention)Article 9
  • Companies Act, 1985 (UK)Section 695

Cases cited (5)

  • KANTI & COMPANY LIMITED v SOUTH BRITISH INSURANCE COMPANY LIMITED
    [1981] KLR 1
  • UNITED INDIA INSURANCE COMPANY LIMITED v EAST AFRICAN UNDERWRITER (KENYA) LIMITED
    [1985] KLR 898
  • RAYTHEON AIRCRAFT CORPORATION & ANOTHER v AIR AL-FARAT LIMITED
    [2005] 2 KLR 47
  • OWNERS OF THE MOTOR VESSEL LILLIAN "S" v CALTEX OIL (K) LIMITED
    [1989] 1 KLR 1
  • KARACHI GAS CO. LIMITED v ISSAQ
    [1965] E.A. 42
On appeal from
High Court of Kenya at Nairobi
HCCC No. 309 of 2011
Jurisdiction invoked
First appeal from the High Court under the Court of Appeal's appellate jurisdiction (Constitution of Kenya, 2010); High Court's original civil jurisdiction under Article 165 considered

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, "W K, M W K (Both suing as the Administrators of the Estate of Dr. W K) & another v British Airways Travel Insurance & another [2017] KECA 393 (KLR)", Case Analysis (2017). Civil Appeal No. 274 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/393/eng@2017-07-28

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