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Court of AppealDismissedCivil Appeal No. 324 of 2010· [2019] KECA 1013 (KLR)

Kenya National Capital Corporation v Mohan Galot & 5 others [2019] KECA 1013 (KLR)

Court of Appeal of Kenya
8 February 2019
4,008 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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The Court of Appeal confirmed that once Kenyan parties agree to a consent order, it binds them like a contract and can only be set aside on the limited grounds that void a contract.

What this practically means

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Executive summary

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This appeal arose from a ruling of Kimaru J (High Court, HCCC No. 2054 of 1993) delivered on 29 October 2008, by which the Judge adopted a Deputy Registrar's decision of 27 August 2004 as a judgment of the court, decreeing Kshs 48,951,536 plus interest at 19% per annum in favour of the Galot respondents, while directing the remaining plaint reliefs and the appellant's counter-claim to full trial. The underlying litigation was governed by a consent order recorded in 1996 fixing interest rates for defined periods and referring the parties' accounts to the Registrar, with the parties agreeing that the Registrar's decision would be binding. The appellant had earlier failed in an application before Ringera J to review or set aside that consent order, a ruling that was never appealed. The Court of Appeal dismissed the appeal in its entirety. It held that the consent order, once adopted, had contractual effect and could only be set aside on grounds justifying setting aside a contract, following Flora N. Wasike v Destimo Wamboko. It agreed with Ringera J that the Deputy Registrar, acting as a referee by consent, was entitled to examine the accounts and make binding findings analogous to an arbitrator. The Court rejected the contention that Kimaru J overruled a judge of parallel jurisdiction, noting he merely applied the unappealed Ringera J ruling. No costs were awarded to the respondents as they did not attend the hearing.

Key legal issues

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01

Whether the Deputy Registrar exceeded his mandate by examining the parties' accounts and making binding findings

Holding

No. The parties' consent order, adopted as an order of the court, required the Registrar to examine the accounts and made his decision binding; the Deputy Registrar acted as a referee analogous to an arbitrator and did not exceed his mandate.

Reasoning

The consent order expressly provided that the Registrar examine the accounts and that his decision be binding. Ringera J had already ruled, in a decision never appealed, that the reference involved no jurisdictional issue. The Court of Appeal agreed that the Registrar acted within the mandate donated by the Civil Procedure Act and the parties' consent, performing a role analogous to an arbitrator.

p. 3
02

The binding effect of a consent order adopted by the court

Holding

Once parties enter a consent and it is adopted as an order of the court, it becomes binding and has contractual obligations, vitiatable only on grounds that would justify setting aside a contract.

Reasoning

The Court adopted the Flora N. Wasike decision, which holds that consent judgments have contractual effect and can only be set aside on grounds justifying setting aside a contract, or where conditions remain unfulfilled. The appellant did not attack the validity of the consent itself; it attacked the Registrar's authority, which Ringera J had already rejected in an unappealed ruling.

p. 6
03

Whether Kimaru J overruled Ringera J, a judge of parallel jurisdiction

Holding

No. Kimaru J did not overrule Ringera J; he applied the unappealed ruling of Ringera J in adopting the Deputy Registrar's findings, leaving the remaining plaint reliefs and the counter-claim for full trial.

Reasoning

The Court found the complaint baseless: Ringera J had found the Registrar entitled to examine the accounts, and that ruling was never appealed. Kimaru J merely adopted the Registrar's findings on accounts as the consent contemplated, while directing the remaining claims and counter-claim to full trial, which the Court held he was entitled to do.

p. 6

Legal principles established

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  • A consent judgment or order, once adopted by the court, has contractual effect and can only be set aside on grounds which would justify setting aside a contract
  • Parties may by consent refer their dispute to a referee (including a Registrar) whose findings bind them, and such reference does not raise an issue of jurisdiction

Court orders

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  1. 1.The appeal is dismissed
  2. 2.The respondents are not entitled to costs as they did not attend the hearing of the appeal

Authorities

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Legislation

  • Civil Procedure ActSection 80
  • Civil Procedure RulesOrder XLIV Rule 1 (numbering since changed)
  • Civil Procedure RulesSection 3A (inherent power; the judgment notes the reference should have been to the Civil Procedure Act)
  • Civil Procedure Rules, 2010Order 49
  • Transfer of Property ActSection 69

Cases cited (2)

  • Flora N. Wasike vs. Destimo Wamboko
    [1988] eKLR
  • S.M. Mwakio vs. Kenya Commercial Bank Ltd
    Civil Appeals 28 of 1982 and 69 of 1983
On appeal from
High Court of Kenya, Nairobi, Milimani
HCCC No. 2054 of 1993
Jurisdiction invoked
First appeal to the Court of Appeal from the High Court under the Constitution and the Court of Appeal Act (not expressly stated in the judgment)

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, "Kenya National Capital Corporation v Mohan Galot & 5 others [2019] KECA 1013 (KLR)", Case Analysis (2019). Civil Appeal No. 324 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/1013/eng@2019-02-08

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