Injunctions – beyond the principles in Giella v Cassman Brown

Act of state doctrine

Injunction – temporary injunction –principles guiding the grant of temporary injunctions- principles established in Giella v Cassman Brown [1973] 1EA 35

1. Where a company owns land, and that company is one in which the government has shares but is registered under the Companies Act, is that land to be considered 'government land' and therefore protected by section 41(a)(1) of the Limitation of Actions Act as 'land which is otherwise enjoyed by the Government'? 

Held:

1. It is now well established in Kenya that there are three main factors to be considered in determining whether to grant a preliminary injunction (See Giella v. Cassman Brown). To those three factors, one might add another factor which a court is, at least, entitled to take into account after the first three: public interest. A temporary injunction will not normally issue if there will be harm to the public interest resulting from its issuance.
2. [Citing Musinga J in - Satrose Ayuma & 11 Others v The Registered Trustees of the Kenya Railways Staff Retirement Benefits Scheme & 2 Others [2011] eKLR] - while the three-prong test in Giella Case is the fulcrum in our jurisprudence on interlocutory injunctions, the Giella Principles acquire a different hue when fundamental rights are involved.
3. In an application for an interlocutory injunction to restrain breach of a fundamental right, the court may have to go beyond the ordinary tests as stated in Giella v Cassman Brown Co. Ltd. While the applicants must demonstrate that there has been breach or threatened reach of their Constitutional rights and thereby show that they have a prima facie case with a likelihood of success, the court has a duty to consider whether grant or denial of the conservatory relief will enhance the Constitutional values and objects of the specific right or freedom in the Bill of Rights. The court is enjoined to give an interpretation that promotes the values of a democratic society based on human dignity, equality, equity and freedom. Dignity of the people ought to be a core value in our Constitutional interpretation.
4. In international law, for purposes of act of state doctrine, the formal nature of the company is not determinative of the question whether the acts of the company are attributable to the state or not. Instead, most courts have come up with “functional” tests aimed at distinguishing when an entity claiming the protections normally available to sovereign states was acting primarily in its public or governmental capacity or whether it was acting predominantly as a commercial actor. For example, in the United States, under the restrictive theory of sovereign immunity, many courts consider the following five factors in making that determination:

1. Was the entity in question created for a national purpose?
2. Does the sovereign state supervise the entity?
3. Does the state requires the hiring of public employees and pays their salaries?
4. Does the entity hold exclusive rights to some right in the country? And,
5. How the entity in question is treated under the state law? See, for example, Ocean Line Holdings Ltd. v. China Nat’l Chartering Corp., 578 F. Supp. 2d 621, 624 (S.D.N.Y. 2008) and Filler v. Hanvit Bank, 378 F.3d 213, 217 (2d Cir. 2004)).

5. If we consider these factors as indicative of the kind of questions we need to ask to determine the issue at hand, Respondent has not put enough materials on the record to warrant a conclusion that it should be treated as sufficiently a governmental entity for its lands to be entitled to the protections afforded to public land under section 41(a) (i) of the Statute of Limitations

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