Active Partners Group Limited & another v Hassan Zubeidi; Dubai Bank Kenya Limited (Il) & another (1st Interested Parties) [2019] KECA 201 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that exclusive jurisdiction clauses bind parties and cannot be waived by silence or conduct.
What this practically means
#Executive summary
#Key legal issues
#Waiver of an exclusive jurisdiction clause by conduct
The High Court erred in holding that the appellants' non-objection to the Bank's joinder amounted to waiver of the exclusive Sudanese jurisdiction clause; waiver cannot be inferred from such conduct.
The judge had correctly found that entering an unconditional appearance contemporaneously with a jurisdiction-challenging application was not submission to jurisdiction. His contrary conclusion rested solely on the appellants' acquiescence in the Bank's joinder. The court held this was erroneous: the jurisdiction application was still pending, and the Bank's assertion that Zubeidi acted as its agent bound the Bank to the jurisdiction clause. Waiver required clear, unequivocal conduct or statement.
Joinder of a party as defendant against the claimant's wishes
A party cannot properly apply to be enjoined as a defendant; the choice of defendants lies with the plaintiff.
The court found no practice permitting a party to seek to be sued, and endorsed the English authority of Coulson J that a defendant cannot join another defendant against the claimant's wishes, since the claimant would bear potential costs liability. The Bank's joinder was therefore an improper basis for finding submission to jurisdiction.
Effect of the partition of Sudan on the exclusive jurisdiction clause
The split of Sudan into two states did not render the exclusive jurisdiction clause inoperable, because the agreement was to be performed in what is now Northern Sudan (Khartoum).
Zubeidi argued the clauses referred to a state ('The Sudan') that ceased to exist after South Sudan's independence in 2011. The court rejected this: the agreement alluded to Khartoum, so performance lay in Northern Sudan, and the forum remained there. The split could not oust the clause.
Setting aside a default judgment where no draft defence is exhibited
The High Court correctly set aside the default judgment despite absence of a draft defence, because the defendants' pending jurisdictional challenge legitimately preceded any defence and the application challenging jurisdiction barred entry of default judgment.
Distinguishing Tree Shade Motors, where default judgment was challenged on service, the court held the appellants deliberately declined to plead until jurisdiction was resolved. Since the unconditional appearance was filed simultaneously with a motion protesting jurisdiction, that application was sufficient notice to preclude entry of judgment in default of defence.
Legal principles established
#- Non-objection by a defendant to the joinder of a third party does not constitute waiver of an exclusive jurisdiction clause; waiver of jurisdiction must be express.
- Filing an unconditional memorandum of appearance simultaneously with an application challenging jurisdiction is not a submission to jurisdiction and bars entry of default judgment.
- Exclusive jurisdiction clauses should normally be respected and enforced according to the parties' intention.
- A party cannot properly seek to be enjoined as a defendant in a suit in which no claim is made against it, particularly where the claimant opposes the joinder.
Court orders
#- 1.Civil Appeal No. 395 of 2018 allowed with costs
- 2.Cross-appeal thereof dismissed with costs
- 3.Civil Appeal No. 414 of 2018 dismissed with costs to the appellants
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C No. 475 of 2016
- Jurisdiction invoked
- Appellate jurisdiction of the Court of Appeal under the Constitution and the Appellate Jurisdiction Act (not expressly cited; appeals from interlocutory rulings of the High Court)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (2)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Asunda v Ongoma & another[2023] KEELC 17183 (KLR)27 Apr 2023followed
- Sopra Steria (Luxembourg company) v Defendant (Kenyan limited liability company) - HUDUMA project IT contracts dispute[2020] KEHC 7322 (KLR)25 Feb 2020followed
Cite this brief
#Cite this brief
Caselaw, "Active Partners Group Limited & another v Hassan Zubeidi; Dubai Bank Kenya Limited (Il) & another (1st Interested Parties) [2019] KECA 201 (KLR)", Case Analysis (2019). Civil Appeal No. 395 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/201/eng@2019-11-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.