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Court of AppealDismissedNot stated in the judgment

Mwangi & another v Hashi Empex Limited (Civil Appeal 131 of 2017) [2024] KECA 92 (KLR)

Court of Appeal of Kenya
9 February 2024
3,777 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 upheld a Kshs.33.45 million award against Nation Media Group for wrongly linking a company to genocide fugitive Felicien Kabuga.

What this practically means

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Executive summary

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This was an appeal to the Court of Appeal at Nairobi against a High Court judgment of 8th December 2016 awarding Hashi Empex Limited a total of Kshs.33,450,000/- (general damages of Kshs.15,000,000/-, aggravated damages of Kshs.10,000,000/-, exemplary damages of Kshs.4,000,000/- and special damages of Kshs.4,450,000/-) plus costs, over a Nation Media Group online publication linking the respondent to Felicien Kabuga, the fugitive associated with the Rwandan genocide. The appellants, publisher and editor, challenged the suit on the basis that defamation is personal and that damage to the respondent's Rwandan sister company could not found the claim, and attacked the quantum and the awards of aggravated, exemplary and special damages. A panel of Okwengu, Ali-Aroni and Mativo, JJ.A delivered a single unanimous judgment. The Court framed four issues and held that the publication was defamatory in its natural and ordinary meaning, adopting the objective reader test. It endorsed the House of Lords' reasoning in Jameel v Wall Street Journal Europe that a trading corporation may recover general damages for libel without proving actual loss, holding that the harm to the Rwandan sister company merely bolstered the quantum. The Court found that the appellants neither pleaded nor proved justification, did not verify the information, did not seek the respondent's comment, never replied to a demand for an apology, and left the material on their website, justifying aggravated and exemplary damages and supporting the general damages award. Special damages were held to have been proved by documentary evidence. The appeal was dismissed with costs, affirming the trial judgment in full.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the claim for defamation was properly before the trial court.
  2. 2.Whether the impugned publication by the appellants on its website connecting the respondent to Felicien Kabuga was defamatory in its natural and ordinary meaning.
  3. 3.If the answers to (a) and (b) are in the affirmative, whether there was a basis for award of general, aggravated, exemplary and special damages.
  4. 4.Whether the damages awarded by the trial court were excessive as to justify intervention by this court.

Key legal issues

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01

Whether corporate libel is actionable without proof of actual damage, and whether damage to a foreign sister company can found a Kenyan action

Holding

A trading corporation may recover general damages for libel without pleading or proving special damage; damage to the sister company in Rwanda merely bolsters the quantum, and the respondent was properly the claimant as the entity named in the publication.

Reasoning

The Court adopted Lord Bingham's and Lord Scott's speeches in Jameel v Wall Street Journal Europe, subscribing to the principle that a company with a trading reputation may recover general damages without proving special damage. The Court held that the defamatory statement associating the respondent with Felicien Kabuga damaged the respondent's own reputation, and that the adverse effect on the sister company's contracts in Rwanda went only to the extent of damage. A claim by the sister company in Rwanda was not required.

p. 7
02

Whether the publication was defamatory in its natural and ordinary meaning

Holding

Yes. The words connected the respondent with Felicien Kabuga, a fugitive linked to the Rwandan genocide; the test is how the community reading the publication would view the words, and they connoted association with a criminal.

Reasoning

The appellants admitted publication but neither pleaded justification nor adduced evidence; the respondent's uncontroverted evidence denied any dealings with Kabuga. Applying the objective reader test, the Court found the words grave and injurious to the respondent's business reputation, and could not fault the trial court's finding that the natural and ordinary meaning was as pleaded.

p. 5
03

Whether general, aggravated and exemplary damages of Kshs.15,000,000, Kshs.10,000,000 and Kshs.4,000,000 respectively were justified

Holding

All three heads were justified: the defamation was grave war-crime libel; the failure to respond to a demand for apology and to withdraw the publication from the website warranted aggravated damages; and the appellants' conduct before and after publication connoted malicious intent supporting exemplary damages.

Reasoning

The Court found the appellants failed to verify the information or seek the respondent's comments before publication, aggravating the gravity of a war-crime libel. The unanswered letter demanding withdrawal and apology, the absence of any justification defence, and the continued presence of the material on the website evidenced malice and ill motive, justifying the awards without interference.

p. 8
04

Whether the award of special damages of Kshs.4,450,000 was proved

Holding

Yes. The engagement of the public relations firm, the terms of engagement, the costs incurred, and travel tickets and expenses were all produced and were not controverted.

Reasoning

The Court reiterated that special damages must be proved, but found on the record that the public relations firm was engaged specifically because of the publication, with documentary evidence of the engagement terms and costs, and travel documents for trips to Rwanda and Arusha. Since this evidence was not controverted, there was no basis to interfere with the award.

p. 8

Legal principles established

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  • Where defamatory words are published about a corporation, the cause of action is actionable per se and proof of actual (special) damage is not a prerequisite to recovery of general damages.
  • A publisher who fails to verify information, does not plead or prove justification, and fails to apologise or withdraw a defamatory publication risks awards of general, aggravated and exemplary damages.
  • Special damages in defamation must be specifically proved; where the claimant proves engagement of a public relations firm and associated expenses with supporting documents, the award will stand.
  • A mere denial in the defence, without evidence that the publication was justified, is insufficient to defeat a defamation claim.

Court orders

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  1. 1.The appeal is dismissed.
  2. 2.The appellants shall pay the costs of the appeal.

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority
majority
majority
On appeal from
High Court of Kenya
Not stated in the judgment
Jurisdiction invoked
First appeal to the Court of Appeal from the High Court in a civil suit (statutory first appeal); no specific constitutional or statutory provision is cited in the judgment.

Relief refused

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Setting aside of the entire trial judgment and/or substitution of the awards with appropriate awards

The Court found the publication defamatory, the damages heads justified, and no basis to interfere with the quantum.

p. 8

Costs

The appeal was dismissed with costs; the costs of the suit had been awarded to the respondent by the trial court.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

In the end we find no merit in the appeal. The same is dismissed with costs.
p. 8Disposition - appeal dismissed with costs
once you use defamatory words against a corporate, that in itself is actionable, you have to face the consequences of your actions, meaning in this instant case, the fact that the sister company in Rwanda was afiected only goes to bolster the damage that occurred.
p. 7Corporate libel actionable per se; damage to sister company goes to quantum
The test for this, in our view is how the community around, reading the publication would view the words.
p. 5Test for defamatory meaning in natural and ordinary meaning
The appellants did not adduce any evidence, nor did they plead that the publication was justifiable. Mere denial in their defence that the publication was not defamatory was not suficient.
p. 5Mere denial is not a substitute for a plea of justification
It is a reputation that needs to be fiercely protected and preserved. That is not to say that critics or the public ought to be gagged from making fair and reasonable comments on matters that touch on corporates for public good or where the comments are justified.
p. 6Protection of corporate reputation balanced against fair comment
Linking a big company in the league of the respondent to an international criminal, ought to have prompted the appellants to verify the information received, before publishing the same, which they either deliberately or otherwise failed to do.
p. 7Duty to verify before publication

Issues in the judgment

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minor

Internal inconsistency in the date of the impugned publication: the judgment states the publication was on 3rd June 2008 in the opening paragraphs, but the issue framed for determination refers to 3rd June, 2016.

minor

The learned trial judge is described inconsistently by gender ('his') at one point and the judgment contains recurring typographical errors (e.g. 'afiected', 'sufiered', 'verifies').

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, "Mwangi & another v Hashi Empex Limited (Civil Appeal 131 of 2017) [2024] KECA 92 (KLR)", Case Analysis (2024). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/92/eng@2024-02-09

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