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Court of AppealDismissedCivil Appeal No. 227 of 2018· [2021] KECA 522 (KLR)

Vert Limited v DB Schenker Limited [2021] KECA 522 (KLR)

Court of Appeal
4 June 2021
3,949 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~16 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal upheld a freight dispute judgment, confirming that signed agreements and email exchanges bind parties even when primary documents are missing.

What this practically means

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Executive summary

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This was a first appeal to the Court of Appeal at Nairobi (Sichale, J. Mohammed and ole Kantai, JJ.A) against the judgment of Ngetich, J. in HCCC No. 438 of 2015, in which the High Court entered judgment for DB Schenker Limited against Vert Limited for USD 74,286.46 for freight services, with costs and interest, and dismissed Vert Limited's counterclaim arising from offloaded produce. Vert Limited, a fresh produce exporter, contracted DB Schenker to provide freight services from Jomo Kenyatta International Airport to destinations including London. The appellant argued that there was no evidence of a Block Space Agreement; that the air waybill should have been treated as the primary document for ascertaining amounts due, rendering supplementary invoices double billings; that the learned Judge erred in relying on a force majeure clause neither pleaded nor submitted upon; and that the counterclaim for offloaded goods lay against DB Schenker for breach of duty in failing to claim against British Airways. The Court, applying the settled first-appeal jurisdiction to re-evaluate evidence, held that the BSA's existence was proved by a Hardblock Capacity Agreement, corroborative testimony of both parties' witnesses and email correspondence, and that continued dealings after the contract's expiry gave rise to an implied contract based on conduct. It held that an air waybill is only prima facie evidence of a contract of carriage under the Warsaw Convention as applied through the Carriage by Air Act 1993, and that the BSA superseded it. Following Kalpana H. Rawal, it held that a court may determine an unpleaded issue where evidence has been led and the issue left to the court at trial, and that contractual terms, including the force majeure clause, bind the parties. The appeal was dismissed with costs to the respondent.

Key legal issues

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01

Existence of a Block Space Agreement between the parties

Holding

The BSA was proved by the Hardblock Capacity Agreement dated 9th June 2011, corroborative testimony of both parties' witnesses, and email correspondence referencing BSA rates and re-adjustment; the learned Judge did not err in finding a BSA existed.

Reasoning

The Court re-evaluated the record: emails from the appellant's employees requesting BSA rates, a director's email seeking cancellation of the BSA contract on EK, and the testimony of Ms Ndegwa which did not dispute the BSA. Both parties' witnesses corroborated its existence. Continued engagement after the alleged expiry date gave rise to an implied contract based on conduct, per Ali Mohamed v Kenya Shell relying on The Aramis.

p. 4
02

Primacy of the air waybill as a document of the amounts due

Holding

An air waybill is only prima facie evidence of a contract of carriage; the BSA superseded its provisions and third-party charges such as handling and bond fees could legitimately appear in supplementary invoices.

Reasoning

Citing Articles 8 and 11 of the Warsaw Convention, applied in Kenya through the Carriage by Air Act 1993, the Court held the air waybill is prima facie evidence of the contract of carriage. The respondent's evidence was that the BSA superseded the air waybill provisions and that supplementary invoices reconciled over- or under-payments where airlines charged for booked rather than delivered weight. The burden was on the respondent and it was discharged.

p. 5
03

Reliance on an unpleaded force majeure clause

Holding

The learned Judge did not err in relying on the force majeure clause because it formed part of the contract which was the subject of the suit, and the terms of the contract are binding on the parties.

Reasoning

Relying on Kalpana H. Rawal v Judicial Service Commission, the Court accepted the principle that a court will not base its decision on unpleaded issues, but held that where evidence is led and the issue was left to the court at trial, the court can validly determine it. The clause was in the contract under suit, so reliance on it was legitimate.

p. 6
04

Liability for offloaded goods and the appellant's counterclaim

Holding

The counterclaim for USD 1,780.60 plus interest was properly dismissed; the respondent had no liability for offloads by British Airways, having lodged a claim with the airline on the appellant's behalf.

Reasoning

The appellant's claim was for breach of duty in failing to claim against British Airways after successive offloads of perishable produce in June 2012. The respondent produced an email attaching the claim lodged with British Airways; the claim had not been settled by the airline. The Court found the force majeure clause of the contract applicable, and the compensation claim lay against the airline, not the respondent.

p. 6

Legal principles established

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  • On a first appeal, the Court of Appeal is entitled to reconsider and re-evaluate the evidence and draw its own conclusions, while making allowances for not having seen or heard the witnesses.
  • A court may determine an unpleaded issue where evidence was led at trial and it appears from the cause followed at trial that the unpleaded issue was left to the court to decide.
  • Terms of a contract forming the subject of the suit, including a force majeure clause, are binding on the parties and may be relied upon by the court even if not specifically pleaded or submitted upon.
  • An air waybill is prima facie evidence of a contract of carriage by air, of acceptance of the cargo and of the conditions of carriage mentioned therein, under the Warsaw Convention as applied in Kenya through the Carriage by Air Act, 1993.
  • In civil claims the burden of proof is on a balance of probabilities; where both parties' explanations are equally unconvincing, the party bearing the burden of proof will lose.

Court orders

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  1. 1.Appeal dismissed with costs to the respondent
On appeal from
High Court of Kenya at Nairobi
HCCC No. 438 of 2015
Jurisdiction invoked
First appeal to the Court of Appeal under the Appellate Jurisdiction Act / Civil Procedure Rules (court exercising first appellate jurisdiction over the High Court judgment)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Vert Limited v DB Schenker Limited [2021] KECA 522 (KLR)", Case Analysis (2021). Civil Appeal No. 227 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/522/eng@2021-06-04

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