Blue Thaitian SRL (Owners of the Motor Yacht "Sea Jaguar") v Alpha Logistics Services (EPZ) Limited
The bottom line
#Kenya's Court of Appeal ordered the yacht's owner to deposit Kshs 15 million as security for costs within 45 days, or its appeal will be struck out.
What this practically means
#Executive summary
#Key legal issues
#Competency of Grounds of Opposition in the Court of Appeal
Grounds of Opposition are not provided for in the Court of Appeal Rules; facts may only be introduced by affidavit, so the respondent was restricted to legal arguments.
The Court contrasted Order 51 Rule 14 of the Civil Procedure Rules, which recognises Grounds of Opposition in the High Court, with the Court of Appeal Rules which contain no such provision. Definitions of 'ground' and 'affidavit' from Black's Law Dictionary were used to conclude that factual assertions via Grounds of Opposition are incompetent.
Whether two sets of security for costs can coexist in an in rem claim
Arguments against dual security in an in rem claim are precluded by the clear provisions of Rule 111(3), which confers an unfettered discretion to order further security.
The respondent argued that the arrest and sale of the res was comprehensive security and that additional security in an in rem claim is available only in restricted circumstances. The Court held these arguments are expressly overtaken by Rule 111(3), and noted the English CPR Part 61 provisions relied on apply only where alternative security has been given, of which there was no evidence.
Threshold for an order for further security for costs
The applicant must show the respondent, if unsuccessful, would be unable to pay costs due to poverty; prima facie uncontroverted evidence suffices, and the Court applies the Mama Ngina Kenyatta considerations.
The Court adopted the principles in Gatirau Peter Munya and the seven considerations in Mama Ngina Kenyatta v Mahira Housing Company. Evidence that the respondent appears to be in liquidation, unrebutted by any replying affidavit, prima facie demonstrated possible inability to meet costs. The Court declined to determine the legal effect of the foreign liquidation, as that would venture into the merits.
Prospects of success of the appeal
The undisputed settlement agreement of May 23, 2019, not set aside by any evidence, tilted the balance in favour of ordering security.
Although the Court declined to determine whether the admiralty action was in rem, in personam or hybrid, it noted the respondent did not dispute the claim, the warrant of arrest, or the judgment in default. The existence of an unchallenged settlement agreement covering part of the decretal amount weighed against the respondent under the Mama Ngina Kenyatta considerations.
Instructions of the respondent's counsel
The question whether Muregi Okere Advocates had instructions from the liquidator was of no legal consequence because the liquidator was not joined as a party.
The party before the Court was Blue Thaitian SRL as Owners of the Motor Yacht, which had filed a notice of change of advocates served on the applicant. Since neither party joined the liquidator, the alleged lack of instructions from the liquidator could not affect the competency of the response.
Legal principles established
#- The Court of Appeal has power and unfettered discretion under Rule 111(3) (formerly Rule 107(3)) to at any time direct further security for costs and security for past costs relating to matters in question in the appeal.
- Facts in an application before the Court of Appeal can only be introduced by affidavit, not by Grounds of Opposition; a respondent is restricted to issues of law in Grounds of Opposition.
- In a security-for-costs application the Court will not be drawn into the merits of the appeal.
- An applicant for further security for costs need only adduce prima facie, uncontroverted evidence that the respondent may be unable to meet the costs.
Court orders
#- 1.Blue Thaitian SRL, the Owners of the Motor Yacht 'Sea Jaguar', to deposit further security of Kenya Shillings Fifteen Million (Kshs 15,000,000/=) to guarantee the costs of the High Court proceedings and of the appeal
- 2.The said sum to be deposited within 45 days of the date of the ruling into a joint account to be opened by the Applicant's and Respondent's Advocates prior to the hearing of the appeal
- 3.In default of the deposit, the appeal shall stand struck out with costs to the Applicant
- On appeal from
- High Court of Kenya at Mombasa
- Mombasa Admiralty Claim No 3 of 2018
- Jurisdiction invoked
- Sections 3A and 3B of the Appellate Jurisdiction Act; Rule 107(3) of the Court of Appeal Rules 2010 (succeeded by Rule 111(3) of the Court of Appeal Rules 2022); inherent jurisdiction of the Court
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (3)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Markaba Dahir v Francis Juma[2025] KEHC 112 (KLR)16 Jan 2025applied
- Ndambiri & another v Nairobi Metropolitan Services & 6 others; Harambee Sacco & Co-operative Society Limited & 6 others (Interested Parties) (Environment & Land Petition E026 of 2022) [2024] KEELC 6205 (KLR)[2024] KEELC 6205 (KLR)23 Sept 2024
- Ndambiri & another v Nairobi Metropolitan Services & 6 others; Harambee Sacco & Co-operative Society Limited & 6 others (Interested Parties) (Environment & Land Petition E026 of 2022) [2024] KEELC 6205 (KLR)[2024] KEELC 6205 (KLR)23 Sept 2024applied
Cite this brief
#Cite this brief
Caselaw, "Blue Thaitian SRL (Owners of the Motor Yacht "Sea Jaguar") v Alpha Logistics Services (EPZ) Limited", Case Analysis (2022). Civil Appeal (Application) E012 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/1240/eng@2022-11-04
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.