United India Insurance Co Ltd V East African Underwriters (Kenya) Ltd[1985] EKLR | ||
Civil Appeal 36 of 1983 | 25 Feb 1985 |
Alan Robin Winston Hancox, Alister Arthur Kneller, Chunilal Bhagwandas Madan
Court of Appeal at Nairobi
United India Insurance Co Ltd v East African Underwriters (Kenya) Ltd
United India Insurance Co Ltd v East African Underwriters (Kenya) Ltd[1985] eKLR
United India Insurance Co Ltd v East African Underwriters (Kenya) Ltd
Court of Appeal, at Nairobi
February 15, 1985
Madan, Kneller & Hancox JJA
Civil Appeal No 36 of 1983
(Appeal from the High Court at Nairobi, Platt J)
Jurisdiction – ouster of– clause in contract giving exclusive jurisdiction to foreign court – suit instituted in local court – application for stay of proceedings – factors court should consider in such application – whether local courts bound to give effect to foreign jurisdiction clause.
Contract - ouster clause – clause in contract conferring exclusive jurisdiction on foreign court – suit instituted in local court – application for stay of proceedings - whether local courts bound to give effect to foreign jurisdiction clause – matters which local court should consider in granting or refusing stay.
Judicial discretion – exercise of – circumstances in which appellate court will interfere with exercise of discretion by judge.
The first and third appellants were companies incorporated in India and registered in Kenya as foreign companies carrying on insurance business.
They entered into agreements appointing the respondent as their chief agent.
Both agreements contained a clause providing that all legal proceedings arising in connection with the agreement would be governed by the law of India and that only the courts of Bombay would have the jurisdiction to entertain any disputes between the parties. The respondent, alleging breach of the agreement by the appellants, filed suits against them in Kenya.
The respondents then moved the court for orders to stay all further proceedings or, alternatively, the dismissal of the suits on account of the provisions of the jurisdiction clause. The judge refused to stay the proceedings and the appellants appealed.
Held:
1. Kenyan courts have a discretion to assume jurisdiction over an agreement which is made to be performed in Kenya notwithstanding a clause in it conferring jurisdiction on a foreign court.
The discretion to assume jurisdiction should be exercised by granting a stay of proceedings in local courts unless a strong reason for not doing so is shown.
2. The Court of Appeal will interfere with a discretionary decision of a judge appealed from, where it is established that the judge:
a) Misdirected himself in law;
b) Misapprehended the facts;
c) Took account of considerations of which he should not have taken account;
d) Failed to take account of considerations of which he should have taken account;
His decision, albeit a discretionary one, is plainly wrong. In this case, the High Court judge did not err on any of these matters.
3. The onus of establishing a strong reason for avoiding the jurisdiction of Kenyan courts is on the party who seeks to avoid that jurisdiction, and that burden is a heavy one.
4. In exercising its discretion, the court should take into account all the circumstances of the particular case; such as:
a) In what country the evidence on the issues of fact is situated or more readily available and the effect of that on the convenience and expense of trial as between the courts of the two countries;
b) Whether and how differently the law of the foreign court applies;
c) With what country either party is connected and how closely;
d) Whether the defendants genuinely desire trial in the foreign country, or are only seeking procedural advantage; and
e) Whether the plaintiffs would be prejudiced by having to sue in the foreign court
Appeal dismissed.
Cases
1. Fehmarn, The [1958] 1 WLR 159; [1957] 2 Lloyd’s Rep 55
2. Makefjell, The [1976] 2 Lloyd’s Rep 29
3. Carl Ronning v Societe Navale Chargeurs Delmas Vieljeux Civil Appeal No 16 of 1982; The Francois Vieljeux [1984] KLR 1
4. Adolf Warski, The and Sniadecki, The [1976] 2 Lloyd’s Rep 241
5. Eschersheim, The [1976] 1 All ER 441; [1976] 2 Lloyd’s Rep 1; [1976] 1 WLR 430
6. Eleftheria, The [1969] 1 Lloyd’s Rep 237; [1969] 2 All ER 641
7. El Amria, The [1981] 2 Lloyd’s Rep 539
8. Chapparal, The [1972] 2 Lloyd’s Rep 315
9. YTC Universal Ltd v Trans Europa [1973] 1 Lloyd’s Rep 480
10. Holloway v Povey (1984) 271 EG 195
11. Commonwealth Shipping Representative v Peninsular & Oriental Branch Service [1923] AC 191
12. Abidin Daver, The [1984] 2 WLR 196; [1984] AC 398
13. Evans Marshall & Co Ltd v Bertola S A & Another [1973] 1 WLR 349; [1973] 1 All ER 992
14. Atlantic Star, The [1974] AC 436; [1973] 2 All ER 175
Texts Sarkar, S.K., Ahmad E. (1979) Law of Evidence Bombay: Ashoka Law House, Rajasthan Law House 10th Edn p 517
Statutes
1. Companies Act (cap 486)
2. Rules of the Supreme Court [UK] order 11 rules 1, 2
Advocates
Messrs RJ Buckley, QC, & MR Pabary for the Appellants
Messrs D Kemp , QC, & S Gautama for the Respondents
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