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Court of AppealAllowedCivil Application E026 of 2022· [2022] KECA 1121 (KLR)

Starryway Trading & Shipping Company Limited v ET Timbers PTE Limited & another

Court of Appeal
21 October 2022
SKS G KairuPNP NyamweyaJLJ Lesiit
3,982 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal paused an admiralty case so a shipping company can appeal without losing its legal hold on cargo worth the dispute.

What this practically means

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Executive summary

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This is a ruling of the Court of Appeal at Mombasa (Kairu, Nyamweya and Lesiit, JJA) on two applications by Starryway Trading & Shipping Company Limited arising from an admiralty dispute over the motor vessel 'Dolphin Star'. The applicant, a disponent owner under a time charter and a charterer under a voyage charter with ET Timbers PTE Limited containing a London arbitration clause, sought stay of proceedings in HC Admiralty Claim No. E003 of 2021 pending an intended appeal from the High Court's rulings of February 25 and March 18, 2022, which dismissed its application for joinder and declined stay pending arbitration. An earlier stay application by the vessel's owners had been disallowed in December 2021. The court first dealt with the applicant's application dated July 12, 2022 for leave to adduce additional evidence, namely orders of the English High Court in matters between the same parties. Applying Archer & Archer, it granted leave, holding the judgment did not exist when the appeal was filed so no diligence could have obtained it, and it was relevant and a court order of which judicial notice could be taken. On the April 27, 2022 application under rule 5(2)(b), the court applied the twin principles in Kinyanjui v Ketter. It found the appeal arguable on the jurisdiction of the High Court and the joinder of the applicant as a necessary party, and found the appeal would be rendered nugatory because transshipment of the cargo would destroy the applicant's lien, the substratum of the appeal. The court granted a stay of all proceedings in the admiralty claim, conditioned on the applicant filing its memorandum and record of appeal within 30 days, failing which the stay lapses. Costs were to abide the outcome of the appeal.

Key legal issues

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01

Whether leave to adduce additional evidence should be granted

Holding

Leave granted; the English judgment did not exist when the appeal was filed so no diligence could have availed it, and it is relevant and a court order subject to judicial notice.

Reasoning

The court applied the Archer & Archer principles. The evidence sought was a judgment of the English High Court not in existence when the appeal was filed, so the reasonable-diligence test was satisfied. The judgment was between the same parties, touched the same matters, and was a court order of which the court could take judicial notice, so admitting it caused no harm.

p. 5
02

Whether the intended appeal is arguable

Holding

Yes; the issues of the High Court's jurisdiction and whether the applicant is a necessary party are arguable.

Reasoning

Applying Kinyanjui v Ketter and Gachau v Pioneer Holdings, it is sufficient to raise a single bona fide arguable ground. The court found the appeal not frivolous because the jurisdictional challenge and the joinder question were arguable, without making definitive findings that could embarrass the main appeal.

p. 6
03

Whether the appeal would be rendered nugatory without stay

Holding

Yes; if the cargo is transshipped the applicant loses its lien, destroying the substratum of the appeal.

Reasoning

The court applied the test that nugatory-ness depends on whether what is sought to be stayed is reversible or compensable in damages. The applicant held a lien over the cargo and a partial arbitral award; loss of the cargo through transshipment would be irreversible and destroy the appeal's substratum.

Legal principles established

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  • Leave to adduce additional evidence is discretionary and requires that the evidence could not have been obtained with reasonable diligence, would probably have an important influence on the result, and is apparently credible.
  • An applicant under rule 5(2)(b) must satisfy both twin principles: an arguable appeal and that the appeal will be rendered nugatory absent stay.
  • The sole purpose of a rule 5(2)(b) stay application is to preserve the substratum of an intended appeal so that the right of appeal is not rendered nugatory.
  • Where impecunity of a respondent is alleged as the ground of nugatory-ness, the onus shifts to the respondent to rebut it by evidence.

Court orders

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  1. 1.Leave granted to adduce additional evidence (the English High Court orders in HC CL-2022-000124 and HCCL-2022-000199)
  2. 2.Stay of all proceedings in the superior court in HC Admiralty Claim No E003 of 2021 pending the hearing and determination of the intended appeal
  3. 3.Applicant to file and serve its memorandum and record of appeal within 30 days; appeal to be fixed for case management and thereafter for hearing on priority basis in the first term of 2023
  4. 4.In default of filing the appeal within 30 days, the orders of stay to automatically lapse and stand discharged
  5. 5.Costs of the application to abide the outcome of the appeal

Authorities

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Legislation

  • Court of Appeal Rulesrule 5(2)(b)
  • Court of Appeal Rulesrule 29 (now rule 31 of the 2022 rules)
  • Court of Appeal RulesULE 1(3)
  • Supreme Court Act 1981 (UK)section 35A
  • Senior Courts Actsection 20(2)(g) and (h)

Cases cited (8)

  • Archer & Another v Archer & 2 Others
    (Civil Application E058 OF 2021) [2022] KECA 9(KLR)

    Principles applicable to an application for adduction of new evidence.

  • Stanley Kangethe Kinyanjui v Tony Ketter & 5 others
    [2013] eKLR

    Twin principles for grant of stay or injunction under rule 5(2)(b).

  • David Morton Silverstein v Atsango Chesoni
    Civil Application No Nai 189 of 2001

    Whether an appeal will be rendered nugatory depends on its own facts and peculiar circumstances.

  • Damji Pragji Mandavia v Sara Lee Household & Body Care (K) Ltd
    Civil Application No Nai 345 of 2004

    A single bonafide arguable ground of appeal suffices.

  • Ahmed Musa Ismael v Kumba Ole Ntamorua & 4 Others
    CA No 256 of 2013

    Purpose of the nugatory-ness inquiry is to preserve the integrity of the appellate process.

  • Oliver Collins Wanyama v Engineers Board of Kenya
    [2019] eKLR

    Reiteration of the nugatory-ness principle.

  • Joseph Gitahi Gachau & Another v Pioneer Holdings (A) Ltd & 2 others
    Civil Application No 124 of 2008

    Arguable appeal need not succeed; one triable issue suffices; nugatory-ness test on reversibility and damages.

  • International Laboratory for Research on Animal Diseases v Kinyua
    [1990] KLR 403

    Onus on impecunity shifts to respondent to rebut by evidence.

On appeal from
High Court at Mombasa
Admiralty Claim No. E003 of 2021
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules; inherent jurisdiction and rule 29 (now rule 31 of the 2022 rules) for the additional-evidence application

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, "Starryway Trading & Shipping Company Limited v ET Timbers PTE Limited & another", Case Analysis (2022). Civil Application E026 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/1121/eng@2022-10-21

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