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Court of AppealAllowedCivil Appeal No. 314 of 2013· [2019] KECA 927 (KLR)

Government of the United States of America & another v Stephen Munga Mwangi & another; Garnishee Commercial Bank of Africa Limited (Garnishee) [2019] KECA 927 (KLR)

Court of Appeal of Kenya
22 February 2019
AMAsike MakhandiaDMD.K. MusingaPKP.O. Kiage
4,208 words in judgment
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The bottom line

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Kenya's Court of Appeal threw out an 11-year-late employment lawsuit against the US Government, confirming courts cannot extend the six-year limit for contract claims.

What this practically means

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Executive summary

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This appeal arose from a High Court ruling (Khaminwa, J.) refusing to set aside default judgment, a garnishee order-nisi and related orders obtained by Stephen Munga Mwangi against the Government of the United States of America and USAID, following his claim for employment benefits after termination of his contract in 1994. The Court of Appeal (Makhandia, Musinga and Kiage, JJ.A.) allowed the appeal on several grounds. First, it held the suit was statute barred: the cause of action in contract accrued in 1994 and the suit was filed in 2005, beyond the six-year period in section 4(1)(a) of the Limitation of Actions Act; following Divecon Limited v Samani, the Court held that limitation goes to jurisdiction and may be raised at any time, and that the ex parte leave to file out of time was of no legal effect since a contractual limitation period cannot be enlarged. Secondly, the Court held the summons invalid for affording only fifteen days to enter appearance, where customary international law and the US Foreign Sovereign Immunities Act require at least sixty days' notice through diplomatic channels; service of invalid summons was of no consequence and all proceedings flowing from it were null and void. Thirdly, the US Government's account at Commercial Bank of Africa was held immune from attachment under Article 21 of the Vienna Convention on Diplomatic Relations as incorporated in the Privileges and Immunities Act, rendering the garnishee order unlawful. Finally, the Court rejected the finding that failure to enter appearance amounted to waiver of sovereign immunity. The appeal was allowed, the High Court ruling and consequential orders set aside, the respondent's suit dismissed, with no order as to costs.

Key legal issues

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01

Limitation of actions in contract

Holding

The respondent's suit was statute barred; the ex parte leave to file out of time was of no legal effect because a limitation period for contract cannot be enlarged.

Reasoning

The cause of action arose on termination of employment in 1994 and the suit was filed in 2005, beyond the six-year period under section 4(1)(a) of the Limitation of Actions Act. Section 27 does not permit enlargement for contract claims. The Court, citing Divecon Limited v Samani, held limitation is a jurisdictional issue that may be raised at any time; the judge erred in estopping the appellants from raising it.

p. 5
02

Validity of summons to enter appearance

Holding

The 15-day notice period was inappropriate; foreign sovereigns require at least 60 days' notice under customary international law, rendering the summons invalid.

Reasoning

The summons gave only 15 days (initially 45, altered by hand to 15). Applying the Foreign Sovereign Immunities Act 28 U.S.C. section 1608(d) and the Kenyan Ministry of Foreign Affairs' statement of customary international law requiring at least sixty days' notice through diplomatic channels, and following Ceneast Airlines, the Court agreed the service was of no consequence.

p. 5
03

Immunity of the US Government account from garnishee execution

Holding

The account 'US Disbursing Officer Symbol 8769' held at Commercial Bank of Africa is used for official sovereign purposes and is immune from attachment; the garnishee order was unlawful.

Reasoning

The evidence showed the account is used for official purposes of the US Government and managed on behalf of the US Embassy, Nairobi. As property defined under Article 21 of the Vienna Convention on Diplomatic Relations as contained in Articles 22 and 31 of the First Schedule of the Privileges and Immunities Act Cap 179, it is immune from attachment and execution.

p. 5
04

Waiver of sovereign immunity

Holding

Failure to enter appearance on invalid summons did not amount to waiver of immunity by the 1st appellant.

Reasoning

The High Court judge had held that by reason of the defendants' failure to enter appearance, immunity was presumed waived. The Court of Appeal disagreed: the appellants had not appeared because the summons were invalid, and the US Government's policy and communications through the Ministry of Foreign Affairs showed no submission to jurisdiction. Respondent's suggested conduct did not amount to waiver.

p. 5

Legal principles established

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  • Limitation goes to jurisdiction and may be raised at any stage of the proceedings, including challenge to an ex parte grant of leave to file suit out of time.
  • No court may entertain an action founded on contract brought six years after the cause of action accrued, nor an application to extend such time.
  • Service of invalid summons is of no consequence and all proceedings emanating from it are null and void.
  • A foreign state's failure to enter appearance on invalid summons does not amount to waiver of sovereign immunity.

Court orders

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  1. 1.Appeal allowed
  2. 2.High Court ruling dated 12th May 2012 and all consequential orders made thereunder set aside
  3. 3.Substituted therefor an order dismissing the respondent's suit in the High Court
  4. 4.No order as to costs

Authorities

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Legislation

  • Limitation of Actions ActSection 4(1)
  • Limitation of Actions ActSection 27(1)
  • The Privileges And Immunities Act Cap 179Articles 22 and 31 of the First Schedule
  • Vienna Convention on Diplomatic RelationsArticle 21
  • UN Convention (on Jurisdictional Immunities of States and Their Property)Article 11
  • Foreign Sovereign Immunities Act 28 U.S.C. section 1608(d) (1976) (United States)section 4(a)
  • Civil Procedure RulesOrder 4 rule 3(4)

Cases cited (3)

  • Jimmy Mauta v Wilfred Gitonga
    [2006] eKLR
  • Ceneast Airlines Limited v Kenya Shell Limited
    Civil Appeal No. 174 of 1999
  • Divecon Limited v Samani
    [1995-1998] 1 EA 48
On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 1197 of 2005
Jurisdiction invoked
First appeal from the High Court under the Court of Appeal's appellate 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, "Government of the United States of America & another v Stephen Munga Mwangi & another; Garnishee Commercial Bank of Africa Limited (Garnishee) [2019] KECA 927 (KLR)", Case Analysis (2019). Civil Appeal No. 314 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/927/eng@2019-02-22

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