High Court at Nairobi (Milimani Law Courts)
Madhupaper International Ltd & another v Kenya Commercial Bank Ltd & 2 others
Madhupaper International Ltd & another v Kenya Commercial Bank Ltd & 2 others  eKLR
Madhupaper International Ltd & another v Kenya
Commercial Bank Ltd & 2 others
High Court, at Nairobi January 23, 2003
Civil Case No 1263 of 1992
Equity – unjust enrichment – basic elements of the doctrine – duress – what amounts to duress - economic duress.
The first plaintiff company, Madhupaper International Ltd, in order to effectively run the business for which it was formed, borrowed certain monies from Kenya Commercial Bank, the first defendant, on debenture security charging all the company’s undertakings, goodwill assets, books debts and property. Repayments by the 1st plaintiff were not forthcoming, whereby the defendants through receiver managers took over the company. Negotiations were undertaken between the plaintiffs and defendants and it was agreed that the plaintiffs were to pay the defendants Shs 54 million as the agreed amount owing. Upon settlement the plaintiffs carried out their undertaking and paid to the defendants the agreed sum of 54 million.
The defendants after receiving this money returned it to the plaintiffs without reason. The defendant made a turn-around and demanded from the plaintiffs the enhanced sum of 110 Million. The plaintiffs further paid the sum of 110 Million in a bid to recover their company.
The plaintiffs brought this suit claiming a sum of Kshs 54 Million on the ground that the defendant had unjustly enriched itself at the undeserved expense of the plaintiff by means of duress and coercive pressure.
1. The basic elements presupposed by the doctrine of unjust enrichment are that the defendant has been enriched by the receipt; that he has been so enriched at the expense of the plaintiff and that it would be unjust to allow the defendant to retain the benefit in the circumstances of the case.
2. On the part of the plaintiff there must be found in truth, factors which negative the voluntary character of the transfer of benefit to the defendant.
3. On the side of the defendant, there must have been free acceptance of the transfer in the sense that the defendant had a choice whether to accept or reject and had sufficient knowledge of the facts to make that choice a real one.
4. Any pressure which the law does not regard as legitimate is wrongful and amounts to duress; for the law under the influence of equity has developed from the old common law conception of duress by threat to life and limb, and has arrived at the modern generalisation of simply inquiring whether the plaintiff was subjected to an improper motive for the action.
Judgment for the plaintiff.
1. Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd  AC 32;  2 All ER 122; 111 LJKB 433; 167 LT 101
2. Ghaleb v Al Quaiti  EA 55
3. Chase International Investment Corporation v Laxman Keshra  KLR 143
4. Alec Lobb (Garages) Ltd v Total Oil GB Ltd  1 WLR 87;  1 All ER 944
5. Woolwich Building Society v IRC (No 2)  3 All ER 737;  AC 70;  3 WLR 366
6. Alev, The  1 Lloyd’s Rep 138
7. B & S Contracts and Design Ltd v Victor Green Publications Ltd  1 CR 419
8. Barton v Armstrong  AC 104;  2 WLR 1050;  2 All ER 465
9. Norweb plc v Dixon  3 All ER 952
10. Wolf v Marlton Corporation (1959) 154 A 2d 25
11. Thorne v Motor Trade Association  AC 797
12. Universe Tankships Inc of Monrovia v International Transport Workers’ Federation  1 AC 366;  2 All ER 67
13. Astely v Reynolds (1731) 2 Str 915
14. Ashmole v Wainwright (1842) 2 QB 837
15. Owen & Co v Cronk (1895) 1 QB 265
16. Snowdon v Davis (1808) 1 Taun 359
17. Maskell v Horner  3 KB 106; [1914-15] All ER Rep 595
18. Valpy v Manley (1845) 1 CB 594
19. Closs v Phipps (1844) 7 Man & G 586
20. Dooli Chand v Ram Kishen Singh (1881) 8 Ind App 93
21. Kanhaya Lal v National Bank of India (1913) 29 TLR 314
22. Mason v New South Wales (1959) 102 CLR 108
23. Sargood Bros v Commonwealth (1920-11) 11 CLR 258
24. Bell Bros Pty Ltd v Shire of Serpentine-Jarrahdale (1969) 121 CLR
25. Barton v Armstrong & others  AC 104;  2 WLR 1050;  2 All ER 465
26. Crescendo Management Pty Ltd v Westpac Banking Corporation (1989-1990) 19 NSWLR 40
27. Smith v Weldon (1924) 34 CLR 29
28. Riddoch Motors Ltd v Coast Region Co-op  EA 438
29. Broadways Construction Co v Kasule & others  EA 76
30. Zakayo v Naomi  EA 607
1. Chievely, G., Jones, G (1998) The Law of Restitution London: Sweet & Maxwell 5th Edn p11-12
2. Birks, P (1985) An Introduction to the Law of Restitution Oxford: Oxford University Press
3. Burrows, A (1993) The Law of Restitution London: Butterworths Chapter XV p420
4. Burrows, A (Ed) (1991) Essays on the Law of Restitution Oxford: Oxford University Press p49
Judicature Act (cap 8) section 3(c)
Messrs Hamilton Harrison & Matthews for the 3rd Defendant.