Kingsley Construction Limited Vs. The Federal Republic of Somalia (High Court of Kenya at Commercial and Tax Division, 2023)

Introduction

Under international law, states are granted immunity from both execution and judgment by foreign jurisdictions. However, as the frequency of transactions between states and private entities increases and with the rise of industrialization during the 19th century, the international community demands greater protection of the rights of these entities against potential infringement by foreign governments. Therefore, a number of States including the Republic of Kenyan develop the restrictive theory of foreign State immunity, resting upon a distinction between acts of purely governmental in character and acts of the government that had commercial transactions traits, which are scarcely any different from the activities of private individuals and companies. Under the restrictive theory, foreign States are immune in respect of acts of government but not in respect of commercial acts.

Litigation History

1. Proceedings in the High Court
2. The Federal Republic of Somalia and the Kenyan government were sued by Kingsley Construction Limited in September 2019 over renovations being made to an old Somali embassy located on Jabavu Likon Lane off Dennis Prit Road in Nairobi.

81. Kingsley pleaded it entered into an agreement, with the Embassy sometimes in 2016, where upon it was agreed that Kingsley would refurbish the Embassy’s premises at the total costs of Ksh 53,514,214 ($349,081.63). That agreement, as it was pleaded, was partly in writing and partly oral. Kingsley pleaded that the Embassy breached the agreement by failing to allow Kingsley’s employees access the site of the project, by failing to pay the outstanding sum of Ksh 23,493,004.00 ($153,298.56) and, by terminating the contract without notice to Kingsley. Kingsley final prayers in this claim are for judgment for Ksh 23,493,004 ($153,298.56) for general damages and; interest and costs.

• Kingsley, according to the affidavit service of Kivisu Amos Mutambu, served the Embassy with summons and plaint on 2^nd September 2019, along other documents. The Embassy did not file an appearance or defence within the requisite period. Indeed, to date none of those documents have been filed. Kingsley therefore filed a request for judgment against the Embassy in default of an appearance. Kingsley was directed by the court to file a formal application for leave to enter judgment. It filed a chamber summons dated 20th June 2020 seeking to enter judgment against the Embassy in default of appearance. That application is premised on the ground that the Embassy was served with the pleadings on 2nd September 2019; the Embassy failed to enter an appearance and; that the Embassy is a government and it is necessary for leave of the court to enter judgment against it.

1. Before I begin to consider the application it is important to point out, as I believe it is already obvious, that the Embassy, the defendant, is an Embassy representing the state of Somalia. In my view the Embassy, in that representative capacity is not capable of suing or being sued.

1. Applicable Law

• Vienna Convention on Diplomatic Relation 1961, both Kenya and Somalia are signatory-1965 and 1968 respectively
• Privilege and Immunity Act (Cap 179 laws of Kenya)
• Civil Procedure (Amendment) Rules (Cap 21 laws of Kenya
• With leave of court

1. Kingsley Construction Ltd., the plaintiff, filed this lawsuit against the wrong party

The Kingsley, by its civil suit or plaint described that, foreign countries are generally immune from legal action with some exception. This was so stated in the decision of the High Court namely Talaso Lepalat v Embassy of the Federal Republic of Germany & 2 others [2015] KLR the court had this to say: “A foreign Government which enters into an ordinary commercial transaction with a trader … must honour its obligations like other traders and if it fails to do so, it [should] be subject to the same laws and answerable to the same tribunals as they are”

It should be noted that, the courts have sufficiently wide discretionary powers under which they can compel parties to comply with the rules of pleadings (Order 2, Rule 15 of the Civil Procedure Rules).  The courts may, at any stage of the proceedings, make orders as to the striking out or amendment of pleadings (Order 5, Rule 5 of the Civil Procedure Rules) for the following reasons: they disclose no reasonable cause of action or defence; they are scandalous, frivolous and vexatious; they may prejudice, embarrass, or delay fair trial; or they are an abuse of the court process. The procedure for applying for leave to amend is provided for in Order 5, Rule 3, which states that a party should make an application to court for leave to amend the plaint at any stage of the proceedings, and it shall be granted as the court thinks just to do so.

On 20^th May-2020, Justice Mary Kasango of the High Court of Kenya held that, ‘the embassy is incapable of suing or being sued’. Rather it was open for Kingsley to lodge a suit against the state of the Federal Republic of Somalia, but not its embassy in Kenya’’. The Court dismissed the case with no orders as to costs.

The Federal Republic of Somalia Failed to Respond

Previously, the Kingsley, according to the affidavit service of Kivisu Amos Mutambu, served the Embassy with summons and plaint on 2nd September 2019, along other documents, after a protest letter to the Kenyan Foreign Ministry to pursued the court case. Kingsley also accused the embassy of detaining and torturing a process server who attempted to deliver court documents. The Embassy did not file an appearance or defence within the requisite period of 14 days.

After the Embassy declined to file an appearance or defence, Kingsley requested the court to enter judgment in its favour. The judge stated that the contractor should have sought permission from the court to serve summons out of Kenya as required its rules. The court also added that in a ruling dated 2020, the Embassy could not sue or be sued’.

In November 2021, following the Kingsley’s amendment of the complaint and provided of the correct party as the defendant in compliance with Order 5, Rule 5 of the Civil Procedure Rules –Kenyan law, Kingsley served court documents to the Somali government via DHL Express International Shipping, a globally recognized courier service provider, according to the court’s records. Kingsley attached the shipping receipt as evidence.

The court observed that since the dispute was about a commercial transaction and that the Federal Republic of Somalia and the Attorney General of Kenya were properly sued.

Lastly, the Federal Government of Somalia did not appear again in court or file a defence in 2023. According to Justice Mabeya stated that; ‘Having considered the evidence produced, this court is satisfied that service was done in accordance with the provisions of the law. Having been duly served, the defendants failed to enter appearance contrary to the Civil Procedure Rules 20210.

Decision of the Court

The High Court upheld the company’s claim. Kenya’s Kingsley Construction Company Claims Sh. 23 million (($153,298.56) against the Federal Republic of Somalia in connection with embassy renovation.

This article is intended as a general overview and discussion of the case dealt with. This information is not intended to be, and should not be used, as a substitute for taking legal advice in any specific situation. The Legal Archives Centre (LAC) is not responsible for any actions taken or not taken on the basis of this article.