Weekly Newsletter 025/2018

Weekly Newsletter 025/2018



Kenya Law

Weekly Newsletter


Jurisdiction and Applicable Law over an International Contract of Employment between a Foreign Based Employer and a Kenyan Employee
Dorcas Kemunto Wainaina v IPAS [2018] eKLR
Cause No. 165 of 2015
Employment and Labour Relations Court at Nairobi
R. Stephen, J
April 13, 2018.
Reported by Kakai Toili
Download the Decision

Jurisdiction – jurisdiction of the Employment and Labour Relations Court – international employment contracts - where a foreign based employer entered into an employment contract with a Kenyan national – where the contract was partly performed in Kenya - whether the Employment and Labour Relations Court had jurisdiction over an international contract of employment between a foreign based employer and a Kenyan citizen where part of the contract was performed in Kenya
Contract Law – contract of employment - international contract of employment – where the contract was between a foreign based employer and a Kenyan employee - where there was no express provision on the law applicable – what was the applicable law to an international contract of employment which did not have an express provision on choice of law between a foreign based employer and a Kenyan employee which contract was majorly performed from Kenya
Conflict of Laws – jurisdiction – choice of law -  jurisdiction vis a vis choice of law –- what was the distinction between jurisdiction and choice of law
Contract Law – employment contracts -  international contract of employment - choice of law governing an international contract of employment - primary documents to be considered - what were the primary documents to be considered in the application of the choice of law governing an international contract of employment

Brief Facts:
The Respondent, a North Carolina, United States of America (USA) based company, advertised for the position of Senior International Human Resource Associate and included a job description in the advertisement. The advertisement indicated that the location was North Carolina, USA and Nairobi, Kenya. The Claimant, a Kenyan national, applied for the position and after interview, the Respondent wrote to her on October 9, 2012 to offer or confirm to her full-time regular employment to the said position.
The letter advised the Claimant that the employment would be governed by the Respondent’s Personnel Policies, that the employment was at will and was not for a fixed period and that termination would be at the option of either party at any time. On November 19, 2014, the Respondent wrote to the Claimant to inform her that the position of Senior Human Resources Advisor was being eliminated due to restructuring and therefore her services would no longer be required. The termination notice also advised the Claimant that her last day of work would be November 19, 2014, that her health insurance would be effective through November 30, 2015 and that under the terms of Severance Agreement and Release the equivalent of 3 months of premium would be paid. Aggrieved by the decision the Claimant filed the instant Claim.

Issues:

  1. Whether the Employment and Labour Relations Court had jurisdiction over an international contract of employment between a foreign based employer and a Kenyan employee where part of the contract was performed in Kenya.
  2. What was the applicable law to an international contract of employment which did not have an express provision on choice of law between a foreign based employer and a Kenyan employee which contract was majorly performed from Kenya.
  3. What was the distinction between jurisdiction and choice of law?
  4. What were the primary documents to be considered in the application of the choice of law governing an international contract of employment?
Held:
  1. Although the question of jurisdiction was connected to the issue of choice of law, the two were conceptually distinct. In other words, the question of application of foreign law could be irrelevant to the question of jurisdiction in certain instances, for instance an employment contract could be governed by the law of the USA but the Court would have jurisdiction to arbitrate in disputes alleging breach of contract but applying the law of the USA where the parties had expressly agreed or where the Court after assessment of the connecting or dominant features and the law assumed jurisdiction. A domestic Court could be called upon to apply foreign law in a contractual situation as in the instant case. The distinction in simple terms was on choice of jurisdiction and choice of law.
  2. A Court could not assume jurisdiction not granted by law. Parties could not consent to cloth a Court with jurisdiction. Jurisdiction of the Court was anchored primarily in article 162 of the Constitution, the Employment and Labour Relations Court Act, the Employment Act and the Labour Relations Act among other statutes. In determining the question of jurisdiction, the Court had to categorise the dispute presented to it for adjudication. The dispute before the Court arose out of a contract of service (contract of employment), albeit an international contract of employment. The Claimant partly operated out of Nairobi and therefore in terms of sections 3 and 87 of the Employment Act (the Act) and section 12 of the Employment and Labour Relations Court Act, the jurisdiction of the Court was provided for.
  3. The parties though entering into an international contract of employment did not expressly provide for the Court which would have jurisdiction in case of conflict or on allegations of breach of contract. In such an instant, there were factors a Court ought to consider before assuming jurisdiction. Those connecting or dominant factors equally applied when assigning choice of law where there was no express or tacit agreement and they included:
    1. locus contractus.
    2. locus solutionis.
    3. Domicile and nationality of the parties.
    The Court was expected to weigh up those features in a qualitative rather than quantitative basis. The Court had to also have regard to whether any judgment it rendered would be effective and capable of being enforced.
  4. Considering that the contract provided that the Claimant would be based in both Chapel Hill, North Carolina and Nairobi and that the remuneration was subject to Kenyan tax laws and that the dispute concerned breach of contract and unfair termination of employment, the Court had jurisdiction over the dispute.
  5. The primary documents on the construction, interpretation and application of the choice of law/proper law governing an international contract of employment were the contract documents, applicable municipal law as well as international law. Although providing that the contract was governed by the Respondent’s Personnel Policies, the letter of offer did not expressly subject the contract to the laws of the USA, North Carolina or the laws of Kenya. The letter equally did not oust the application of the laws of the USA or North Carolina or the laws of Kenya.
  6. The Respondent’s Personnel Policies seemed not to have contemplated the position of Senior International Human Resource Associate. They were not express on the applicable law especially in a position such as was held by the Claimant, considering that the location was given primarily as North Carolina and Kenya. The Policies were not of a decisive nature in the instant dispute as to choice of law or jurisdiction. There was a lacuna in the contractual documents presented in Court as to the choice of law in cases of conflict and therefore it was doubtful whether the Policies should be decisive in determining the applicable law.
  7. The Respondent was the employer and was based in North Carolina while the Claimant was domiciled in Kenya and mostly operated from Nairobi and that was recognised in the offer letter. Despite the fact that recruitment process was conducted from North Carolina, there was no evidence that the Claimant ever performed her contract in the USA or North Carolina. The Respondent paid the Claimant her salary in Kenya and effected deductions for the purpose of the income tax, Kenya. The dominant features connected the contract to Kenya rather than to the USA.
  8. Kenya could not be bound by the Convention on the Law Applicable to Contractual Obligations, (the Rome Convention). Perhaps the time was ripe to consider it. The Rome Convention was of persuasive value as it protected employees and nothing in it conflicted with the Constitution or Kenya’s labour laws. On the assumption that the Respondent was USA based and was entering into a contract with a Kenyan, the provisions of part XI of the Act on foreign contracts of service became implicated. No evidence was led that the requirements of part XI and more so sections 83, 84 and 86 of the Act were satisfied to bring the contract within the ambits of a foreign contract of service. That deficiency could not be attributed to the Claimant for at the time of her recruitment and preparation of the offer letter, she was under no obligation or duty to advise the Respondent’s on the terms of contract. The Court had jurisdiction and the laws of Kenya were applicable.
  9. In cases of international contracts where there was no express provision of choice of law and which contract was performed majorly from Kenya by a Kenyan citizen and where the employer had a presence within the country, the Court would have jurisdiction. Although the registration status of the Respondent in Kenya was not disclosed, it was doubtful whether it would have legally operated without such registration or licensing.
  10. The contract in contention expressly provided that it was at will and any of the parties could terminate it at any time. However, such a contractual provision would not pass legal muster under the statutory regime in Kenya in light of the clear and mandatory provisions of sections 35, 40, 41, 43, 45 and 47 of the Act.
  11. The termination of the Claimant’s contract of employment was on account of redundancy and the provisions of sections 40, 43 and 45(2)(a),(b)(ii)of the Act on termination on account of redundancy, proof of reason for termination and unfair termination respectively became directly implicated. The question of performance or negligence on the part of the Claimant was therefore not material. The Claimant and the labour officer were not given advance written notice of a month and on that singular ground the termination on account of redundancy was tainted with procedural unfairness.
  12. Considering the representation that the health cover in place would run through to November 30, 2015 was made by the Respondent, it was incumbent upon it to ensure that it paid premiums such as would ensure that the cover ran up to November 30, 2015. If at all, the 3 months premium was inadequate to cover the health scheme up to November 30, 2015, that was a breach of a promise by the Respondent and it would be liable for any medical expenses incurred by the Claimant during the period.
  13. The Respondent did not provide any particulars and the allegations of negligence remained just general and vague allegations. if indeed the allegations had any substance, the Respondent should have at the minimum produced copies of documentary proof of the negligence in terms of advice or show cause to the Claimant to explain her performance or negligence or misdavice. The termination of the Claimant’s contract was unfair


Claim partly allowed

Respondent to pay the Claimant a total of Kshs 1,578,157/- as follows ;

  1. Balance (pay in lieu of notice) of Kshs 310,816/-
  2. Compensation of Kshs 1,243,264/-
  3. Medical expenses of Kshs 24,077/-
Kenya Law
Case Updates Issue 025/2018
Case Summaries

CIVIL PRACTICE AND PROCEDURE Section 65 of the Kenya Ports Authority Act is Unconstitutional for Imposing a Requirement that Notice be Issued as a Pre-requisite to a Competent Suit

Bob Thompson Dickens Ngobi v Kenya Ports Authority and 2 others
Civil Suit No 87 of 2013
High Court at Mombasa
 P J O Otieno, J
 December 22, 2017
Reported by Ian Kiptoo

Download the Decision

Constitutional Law-fundamental rights and freedoms-right of access to justice-enforcement of fundamental rights and freedoms-where a provision sought to hinder access to justice-whether a requirement, under section 65 of the Kenya Ports Authority Act, that notice be issued against the 1st Defendant before commencing a suit failure to which would render a suit incompetent, was a violation of the Plaintiffs’ right to justice under article 48 of the Constitution of Kenya, 2010-Constitution of Kenya, 2010, article 48; Kenya Ports Authority Act, section 65
Limitation of Actions-institution of suit against a public authority-barring of suit by a statute-where a Plaintiff instituted a suit 12 months beyond the stipulated time-whether the suit against the 3rd Defendant was barred by statute as time had elapsed for which the Plaintiff could bring an action
Statutes-interpretation of statutes-interpretation of the applicability of Public Authorities Limitation of Action Act vis-à-vis the Limitation of Action Act-where a public authority sought to rely on the Public Authorities Limitation of Action Act-whether the 3rd Defendant could rely on the Public Authorities Limitation of Action Act as opposed to the Limitation of Action Act by virtue of the use of the word authority- Public Authorities Limitation of Action Act, section 39(1); Kenya Ports Authority Act, section 3(2)

Brief Facts:
Before court for determination were two Notices of Preliminary Objection by the 1st and 3rd Defendants. The Defendants contended that failure to issue a notice pursuant to section 65 of the Kenya Ports Authority Act rendered the suit incompetent and that section 39(1) of the Public Authorities Limitation of Action Act barred the suit that was filed.

Issues:

  1. Whether a requirement, under section 65 of the Kenya Ports Authority Act that notice be issued against the 1st Defendant before commencing a suit failure to which would render a suit incompetent, was a violation of the Plaintiffs’ right to justice under article 48 of the Constitution of Kenya, 2010.
  2. Whether the suit against the 3rd Defendant was barred by statute as time had elapsed for which the Plaintiff could bring an action.
  3. Whether the 3rd Defendant could rely on the Public Authorities Limitation of Action Act as opposed to the Limitation of Action Act by virtue of the use of the word authority.Read More...

Relevant Provisions of the Law
Kenya Ports Authority Act
Section 65     
 (1) No person shall be entitled to compensation for non-delivery of the whole of a consignment of goods, or for any separate package forming part of such consignment, accepted by the Authority for handling or warehousing unless a claim in writing, giving such particulars as may reasonably be necessary, is given to the Managing Director within six months of the date upon which such goods were accepted by the Authority.
 (2) No person shall be entitled to compensation for any goods missing from a packed or unpacked consignment or, or for misdelivery of, or damage to, any goods accepted by the Authority for handling or warehousing unless:-

 a. The Managing Director is notified of such fact in writing within four days of the date upon which such goods were delivered to the consignee or person entitled to take delivery thereof; and
 b. A claim in writing, giving such particulars as may reasonably be necessary, is given to the Managing Director within one month of such date.

 (3) Where the person claiming compensation proves that it was impracticable for him to notify the Managing Director, or give the Managing Director his claim, as set out in subsection (1) and (2) within the time specified therein and that such notification or claim was made or given in reasonable time nothing in those subsections shall prejudice the right of such person to obtain compensation

Section 66
Where any action or other legal proceeding is commenced against the Authority for any act done in pursuance or execution, or intended execution, of this Act or of any public duty or authority, or in respect of any alleged neglect or default in the execution of this Act or of any such duty or authority, the following provisions shall have effect:-

 a) The action or legal proceeding shall not be commenced against the Authority until at least one month after written notice containing the particulars of the claim, and of intention to commence the action or legal proceeding, has been served upon the Managing Director by the plaintiff or his agent.
 b) The action or legal proceeding shall not lie or be instituted unless it is commenced within twelve months next after the act, neglect or default complained of or, in the case of continuing injury or damage, within six months next after cessation thereof

Section 3(2) Cap 469:
  The Authority shall be a body corporate with perpetual succession and a common seal and shall, subject to this Act, be capable in its corporate name of:- 

 a)  Suing and being sued: Provided that any legal proceedings against the Authority arising from the performance of the functions or the exercise of any of the powers of the Authority under section 5 shall be deemed to be legal proceedings against the Government within the meaning of the Government Proceedings Act;
 b)  Taking, purchasing or otherwise acquiring, holding, charging or disposing of movable and immovable property;
 c)  Borrowing or lending money;
 d) Doing or performing all other things or acts for the furtherance of the provisions of this Act, which may be lawfully done or performed by a body corporate”.

Government Proceedings Act Chapter 40
Section 13A
(1) No proceedings against the Government shall lie or be instituted until after the expiry of a period of thirty days after a notice in writing has been served on the Government in relation to those proceedings.
 (2) The notice to be served under this section shall be in the form set out in the Third Schedule and shall include the following particulars:-

 a. The full names, description and place of residence of the proposed plaintiff;
 b. The date upon which the cause of action is alleged to have accrued;
 c. The name of the Government department alleged to be responsible and the full names of any servant or agent whom it is intended to join as a defendant;
 d. A concise statement of the facts on which it is alleged that the liability of the Government and of any such servant or agent has arisen;
 e.  The relief that will be claimed and, so far as may be practicable, the value of the subject matter of the intended proceedings or the amount which it is intended to claim.

Section 16
(1) In any civil proceedings by or against the Government the court may, subject to the provisions of this Act, make any order that it may make in proceedings between subjects, and otherwise give such appropriate relief as the case may require:
 Provided that:-

 (i)  Where in any proceedings against the Government any relief is sought as might in proceedings between subjects be granted by way of injunction or specific performance, the court shall not grant an injunction or make an order for specific performance, but may in lieu thereof make an order declaratory of the rights of the parties; and
 (ii)    In any proceedings against the Government for the recovery of land or other property the court shall not make an order for the recovery of the land or the delivery of the property, but may in lieu thereof make an order declaring that the plaintiff is entitled as against the Government to the land or property, or to the possession thereof.

Held:

  1. The 1st and 3rd Defendants suit was bad for having been filed prior to the notices that were considered mandatory and was also brought after the prescribed period had lapsed and hence time barred. After the promulgation of the Constitution of Kenya 2010, (Constitution) certain provisions of the hitherto existing laws had the option of being read as being modified by the Constitution so as to be compliant or just be rendered and declared unconstitutional. One of the many hallmarks of Kenya’s Constitution was the entrenched Bill of Rights with various rights including right to access justice unhindered.
  2. Various superior courts in Kenya had said more than once that a statutory provision that sought to hinder any person’s access to justice, impose hurdles on the way of citizens from seeking accountability, openness and efficiency in service delivery by government or government agencies had to be seen to violate article 48 of the Constitution and would be held to be unconstitutional for being antibusiness, oppressive and suppressed the need to interrogate the Constitutional values of accountability, transparency and efficiency expected of State Agencies.
  3. The 1st and 3rd Defendants were created by Acts of parliament and both had been given legal personality in that they were capable of suing and being sued independent of the office of the Attorney General. Furthermore, the two statutes creating the two Defendants were explicit and the two ran as distinct corporates not as a government department. Both recruited their personnel including their legal personnel independent of the office of the Attorney General whose involvement was limited to representation in the board of directors.
  4. A statutory corporation, unless the creating statute said otherwise, was not an appendage or department of the Government as contemplated under the Government Proceedings Act. One needed not invite the application of the Government Proceedings Act when parliament in its own wisdom had spent time and public resources to enact a statute to regulate the body so desired to be created.
  5. The provisions of section 65 of the Kenya Ports Authority Act were in Pari materia to sections 13A of the Government Proceedings Act and 3(2) of the Kenya Revenue Authority Act. That being so the interpretation which the superior courts had given to section 13A of the Government Proceedings Act and 3(2) of the Kenya Revenue Authority Act would apply to section 65 of Kenya Ports Authority Act. Being fully persuaded by the decisions of the High Court and fully bound by the findings of the Court of Appeal, section 65 of the Kenya Ports Authority Act was in violation of article 48 of the Constitution and to that extent unconstitutional. For that reason, the two limbs in the two Notices of Preliminary Objection could not stand but would fail and were dismissed.
  6. In any event section 65(3) also provided for a window for a claimant to explain inability to give the Notice. Such an explanation could only be given by evidence adducing facts hence that was a point that ought not to have been canvassed as a Notice of Preliminary Objection.
  7. The 3rd Defendant being a creature of the specific statute did not need to seek resort in other legislations on matters otherwise fully covered and which ought to have been covered by its parent statute. The Public Authorities Limitation Act did not apply to Kenya Revenue Authority at all. The use of the word public authority by itself did not invite the Application of the Act to the 3rd Defendant. Having stated that the 3rd Defendant was not a government department or a local authority and could not get refuge behind The Public Authorities Limitation Act.  That being the position the law on limitation pertaining to the 3rd Defendant, its parent act having not provided for limitation, had to be the limitation of Actions Act Cap 22. Accordingly, reliance by the 3rd Defendant upon the Public Authorities Limitation Act was ill founded conceived and advised and could not be sustained.
  8. In regards to the 1st Defendant, parliament had specifically provided a prescription on timelines within which to file suit to be twelve months after the act. In the instant case it was pleaded that the loss sued upon occurred on October 25, 2011 and the suit was not filed till July 19, 2013. That was clearly outside the time prescribed by the statute and it was not difficult to find that the Suit when filed was statute barred and had to be struck out as against the 1st Defendant.
  9. The Plaintiff pleaded and prayed specifically against the 2nd Defendant regarding the cost of freight and demurrage charges. Whether or not such claims were merited had to be left to the realm of trial by production and could not be adequately and lawfully determined by an application to strike out. It was not in dispute that striking out of a pleading was a drastic and draconian remedy that the Court had to never resort to freely and every time but would only be available for the clear of the clearest cases.
  10. The dispute on the demurrage charges was not available for determination if the 2nd Defendant was not a party to the suit, being the party claims was made against. In the instant level and before evidence was led, the Plaintiff was not nonsuited against the 2nd Defendant as there was no reasonable claim shown against the 2nd Defendant.

 Application partly allowed
Orders

  1. The Notice of Preliminary Objection by the 1st Defendant was upheld and the Suit against that 1st Defendant was struck out with costs for having been filed out of time statute barred.
  2. The Notice of Preliminary Objection by the 3rd Defendant being grounded upon the Provisions of section 3(1) Kenya Ports Authority Act and section 13A of the Government Proceedings Act lacked merit, was misconceived and therefore dismissed.
  3. The Application by the 2nd Defendant lacked merit and was dismissed.
  4. By way of directions the suit would proceed as between the Plaintiff, 2nd and 3rd Defendants and would be mentioned for case conference. For that reason, leave was granted to any party who desired to file any additional witness statements or bundles of documents to do so within 30 days from date of the ruling.
  5. Costs awarded to the Plaintiff.
TORT LAW Court Awards Kshs 30,000,000 Compensation as Damages in an Accident Claim

Brenda Nyaboke Michira v German International Co-Operation GIZ
Civil Case Number 78 of 2016
High Court at Nakuru
November 3, 2017.
 J N Mulwa, J
Reported by Ian Kiptoo

Download the Decision

Tort Law-vicarious liability-negligence-negligence vis-à-vis inevitable accidents-claim that the defendant’s driver’s actions were negligent-where a defendant sought the defence of inevitable accidents-whether the accident was caused by the negligent actions of the Defendant’s driver or as a result of inevitable accident
Civil Practice and Procedure-damages-considerations for award of damages- whether the Plaintiff was entitled to damages-what was the quantum of damages?

Brief facts:
The Plaintiff, a 22 year old Nairobi University student was involved in a road traffic accident while a lawful passenger in a motor vehicle registered in the Defendant’s name. The vehicle hit a pot hole, lost control and overturned causing the Plaintiff to sustain serious injuries from which she became paraplegic.
The Plaintiff blamed the Defendant for the negligence of its driver, and stated the following particulars of negligence, among others: Driving at an excessive speed; driving without due care and attention to other road users; failure to apply brakes and to ascertain that the road was clear. The Plaintiff claimed general damages and special damages.

Issues:

  1. Whether the accident was caused by the negligent actions of the Defendant’s driver or as a result of inevitable accident.
  2. Whether the Plaintiff was entitled to damages.
  3. What was the quantum of damages?Read More..

Held:

  1. The driver (DW1) could not explain why he could not see the pothole that precipitated the events that led the vehicle to loose control and overturn. The Investigating Officer’s opinion, though not legally binding to the Court, was credible. If indeed the driver was carefully and driving at the acceptable speeds on murram road as he said, 60-65 KPH, he would have seen the pothole and tried to avoid hitting it. He did not tell the Court what evasive action he took.
  2. The defence of inevitable accident was pleaded. That defence was based on the presumption that the Defendant could have done nothing, that he had no control of what happened despite exercise of reasonable care and caution. It was akin to an act of God. Where a party pleaded inevitable accident, the burden of proof shifted to such party to give particulars of the alleged inevitable accident, and then to prove the same. A tire burst that the Defendant blamed for the accident could not be regarded an inevitable accident.
  3. A tire burst, and more so in the instant case was preceded by hitting of a pothole. Furthermore, a tire burst had to be caused by some failure on behalf of the owner of a vehicle to do something, say check the pressure and condition of the said tires. If an owner of a vehicle let it on a road when it was defective and that defect caused an accident; he was liable for the same. Tires of the vehicle might have been recently purchased.  However no evidence was tendered that the said tires were fitted on the accident vehicle and that even if they were so fitted, they had been properly maintained, say by putting adequate pressure among other things.
  4. Evidence adduced by the Plaintiff and observations made by the Investigating Officer at the scene clearly indicated that the vehicle first hit the pothole and the driver tried to break as shown by the skid marks, after  which the vehicle lost control and overturned. That being the only reasonable sequence of events, the driver of the vehicle could not reasonably blame the tire burst for the accident but himself for driving too fast in the circumstances shown by his  inability to adequately break and avoid hitting the pothole and, carelessly driving without due regard of his passengers. Therefore, the Defendant had to be held vicariously liable for the negligence of its driver and the sequential damages.
  5. A claim for special damages towards medical expenses was claimed for the period April 2016 to April 2017. PW1 testified that after exhausting his medical cover of Kshs.1.5 Million, he continued to buy medicines from his pocket, and for the one year period he spent Kshs 184,487.  Having seen the receipts and how they related to purchases of medical items and drugs, the items as special damages had been pleaded and was strictly proved. Accordingly and in summary, there would be judgment for the Plaintiff against the defendant on 100% basis on liability.

Suit allowed
Orders

  1. The Court awarded damages at total  Kshs.30,884,487/=  as follows;
  2. Damages for pain and suffering      -        Kshs.8,000,000/=
  3. Loss of earning Capacity                 -        Kshs.9,000,000/=
  4. Nurse aid/caretaker                         -        Kshs.3,960,000/=
  5. Physiotherapy services                     -        Kshs.4,320,000/=
  6. Future medical treatment                -        Kshs.4,500,000/=
  7. Three electric chairs                         -        Kshs.   900,000/=
  8. Special damages (including Kshs.20,000/= medical report fees)-Kshs.  204,487/=
  9. Special damages in the sum of Kshs.204,487/= would attract interest at court rates from the date of filing suit until payment in full.
  10. The rest of the awards would accrue interest at court rates from the date of the Judgment.
  11. The Plaintiff was awarded costs of the Suit.
JURISDICTION The Employment and Labour Relations Court has Jurisdiction to Determine Questions on the Constitutionality of Legal Provisions Relating to Diplomatic Immunity

International Centre for Insect Physiology and Ecology (ICIPE) v Nancy McNally
Civil Appeal No 42 of 2017
Court of Appeal at Nairobi
P N Waki, R N Nambuye & D K Musinga, JJ A
May 25, 2018
Reported by Beryl A Ikamari
Download the Decision

Jurisdiction-jurisdiction of the Employment and Labour Relations Court-jurisdiction to determine the constitutionality of legal provisions in statute and international instruments-where the constitutionality of provisions which granted diplomatic immunity were in question-whether under those circumstances the Court could exercise jurisdiction and determine questions on constitutionality-Constitution of Kenya 2010, article 2(6) & section 7(1) of the Sixth Schedule.
Jurisdiction-jurisdiction of the Employment and Labour Relations Court-jurisdiction in relation to constitutional petitions-whether the Court could grant reliefs relating to an employment contract in a constitutional petition.

Brief facts:
The Appellant employed the Respondent on March 17, 2014, on a two year contract but her contract was terminated on October 17, 2014. The Respondent went to the Employment and Labour Relations Court seeking remedies for unlawful termination while stating that her probation period was wrongfully extended and that her fundamental rights and freedoms had been violated. In her constitutional petition, she alleged that her rights to property, fair labour practice, access to justice, privacy and human dignity had been violated. The Respondent acknowledged that the Appellant had diplomatic immunity but stated inter alia that the immunity enjoyed by the Appellant was a violation of articles 40, 41 & 48 of the Constitution and the Employment Act.
In Response, the Appellant raised a preliminary objection stating it was immune from the suit and it had not waived its immunity. The Appellant cited the provisions of sections 9 & 11 of the Privileges and Immunities Act, article 27 of the ICIPE Charter and article 2(5) of the Constitution to assert that it had immunity.
The Employment and Labour Relations Court made a finding that the claim was more than an employment claim; it was a claim that sought the interpretation of the instruments that granted immunity as compared to the Constitution. The Court said that a determination on such an interpretation was within the scope of its jurisdiction. The preliminary objection was dismissed and the Appellant filed an appeal against the finding at the Court of Appeal.

Issues:

  1. Whether the constitutionality of the diplomatic immunity of the International Centre for Insect Physiology and Ecology (ICIPE) could be challenged in court.
  2. Whether the Employment and Labour Relations Court could grant reliefs relating to an employment contract as sought in a constitutional petition. Read More...

Held:

  1. Diplomatic immunity from legal process was capable of forming the subject of a preliminary objection. Its effect was to raise a procedural bar to the Court's jurisdiction and it behoved the Court to first pronounce itself on it before it could embark on hearing the dispute. It was not necessary for a party to file any pleadings before filing a Notice of Preliminary Objection.
  2. A treaty ratified before the promulgation of the Constitution of Kenya 2010 was part of the laws of Kenya under article 2(6) of the Constitution. The constitutional text did not provide for a cut-off point; it only stated that any treaty or convention ratified by Kenya formed part of the laws of Kenya. The text did not suggest that treaties ratified before the promulgation of the Constitution were not part of the laws of Kenya. There was no bar to the retrospective application of article 2(6) of the Constitution.
  3. Constitutional issues of access to justice, the right to property, fair labour practices, the right to privacy and the right to human dignity were raised by the Respondent. The Court would not dismiss such issues casually.
  4. There were questions that arose from the issues raised. The questions were on whether the immunity was of an absolute nature and therefore constitutional provisions could not be raised against it and whether the instruments and laws that provided for the immunity were subject to section 7(1) of the Schedule to the Constitution. Section 7(1) of the Sixth Schedule to the Constitution provided that all law in force immediately before the effective date would continue in force and shall be construed with the alterations, adaptations, qualifications and exceptions necessary to bring it into conformity with the Constitution.
  5. The Employment and Labour Relations Court had jurisdiction to hear and determine constitutional issues arising from employment and labour relations. The relationship between the Appellant and the Respondent was not a private matter but a public activity intrinsically linked to the operations of the Appellant.
  6. The Court of Appeal and the Supreme Court had made determinations on the question concerning diplomatic immunity and the right of access to justice. The Courts opined that where diplomatic immunity was properly established, it was a legitimate limitation on access to courts.
  7. It would be prudent for the Trial Court to subject the matter to a full hearing. It would be necessary to explore the issue as to whether the immunity in question was qualified or absolute or restricted. In reaching at a conclusion on that question, there was need to follow a process and a summary process like a preliminary objection was not sufficient.

Appeal dismissed.

CONSTITUTONAL LAW Sections 4(2), 8, 12, 17(1), 18, 27, 40, 42, and 70 of the Public Audit Act 2015 are Unconstitutional.

Transparency International (TI Kenya) v Attorney General & 2 others
Petition No 388 of 2016
High Court at Nairobi
E C Mwita, J
February 16, 2018
Reported by Beryl A Ikamari
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Constitutional Law-interpretation of the provisions of the Constitution-independent office holders-Auditor General-alleged interferences with the independence of the Auditor General through provisions in the Public Audit Act-the constitutionality of statutory provisions which created a statutory role for the Public Service Commission, the Salaries and Remuneration Commission and the National Treasury in the recruitment of the Auditor General's staff, the requirement that the Auditor General would send staff on secondment to state organs, the requirement for inception meetings between the Auditor General and national security organs, with respect to audits that touched on national security, and provisions which gave the Cabinet Secretary of Finance powers to make regulations for purposes of enforcing the Public Audit Act which concerned the mandate of the Auditor General-Constitution of Kenya 2010, articles 229, 234, 248(3), 252 & 249; Public Audit Act, No 34 of 2015, sections 4(2), 8(a), 8(b), 8(c), 8(d), 8(e), 8(f), 17(1), 18(3), 40 & 68.
Constitutional Law-interpretation of constitutional provisions-Auditor General-functions of the Auditor General-whether the scope of functions that the Auditor General could perform were those expressly provided for under the Constitution and not any other functions provided for in written law-Constitution of Kenya 2010, articles 229 & 252(1)(d); Public Audit Act, No 34 of 2015, section 7(1)(g).
Constitutional Law-interpretation of constitutional provisions-Auditor General-appointment of an Acting Auditor General in the absence of the Auditor General-whether an Acting Auditor General could be appointed using a statutory procedure to serve the constitutional functions and duties of an Auditor General-Constitution of Kenya 2010, article 229; Public Audit Act, No 34 of 2015, section 12.
Constitutional Law-interpretation of constitutional provisions-Auditor General-powers of the Auditor General-power to access all records, documents, property and premises for purposes of undertaking an audit-whether a provision that limited such access to situations where it was reasonably necessary was unconstitutional-Constitution of Kenya 2010, article 229(4); Public Audit Act, No 34 of 2015, section 9(1)(e).
Constitutional Law-interpretation of constitutional provisions-Auditor General-scope of the powers and functions of an Auditor General-whether the Auditor General ought to have the capacity to question the merits of a policy adopted by the National Government, County Government or public entity, while undertaking an audit-Constitution of Kenya 2010, articles 19 & 201 ; Public Audit Act, No 34 of 2015, section 42.
Constitutional Law-interpretation of constitutional provisions-Auditor General-official reports of the Auditor General-public access to the official reports of the Auditor General-whether a limitation placed on access to the official reports of the Auditor General, in cases concerning national security, was constitutional-Constitution of Kenya 2010, articles 35; Public Audit Act, No 34 of 2015, section 72. 
Constitutional Law-the executive-the presidency-powers of the President-presidential assent and referral of Bills to Parliament-referral of a Bill back to Parliament for reconsideration by the President while noting any reservations concerning the Bill-scope of the President's powers when noting such reservations-the form and content of such reservations-whether the reservations could include several recommendations and suggestions on the drafting of a Bill-Constitution of Kenya 2010, article 115.

Brief Facts:
The Petitioner, a non-profit organization, established with the aim of developing a transparent and corrupt free society through good governance and social justice initiatives, sought to challenge the constitutionality of various provisions of the Public Audit Act 2015. In particular, the Petitioner challenged the validity of sections 4(2), 7(1)(g), 9, 12, 14, 17, 18(3), 25, 26, 27, 40, 42, 68, 70 and 72 of the Act.
Generally, some of the provisions were said to negatively impact on the independence of the Auditor General. For example, the constitutionality of sections 8(a)(b)(c)(d)(e) and (f) and 17(1) of the Act which created a role for the Public Service Commission, the Salaries and Remuneration Commission and the National Treasury as related to the staff in the Auditor General's office was questioned. On similar grounds, section 18(3) of the Public Audit Act, which required the Auditor General to second officers to state organs and the provisions on the functions of the Audit Advisory Board, which was to advise the Auditor General on questions concerning the discharge of his mandate, were questioned.
Additional provisions which were said to negate the Auditor General's independence included those providing for inception meetings to be held between the Auditor General and national security organs to discuss the scope of the audit of the national security organs and section 68 of the Act which gave Cabinet Secretary for Finance powers to make regulations for purposes of giving effect to the provisions of the Act.
Provisions which were said to unduly limit or extend the Auditor General's functions or powers were also challenged. Those provisions included section 7(1)(g) of the Public Audit Act which provided that the Auditor General would serve any other functions provided in written law, section 9(1)(e) of the Public Audit Act contained a proviso which limited the Auditor General's access to records, documents, property and premises for purposes of undertaking an audit to situations where such access was reasonably necessary and section 42 of the Public Audit Act, which provided that the Auditor General would not question the merits of a policy adopted by the National Government and the County Government.
The appointment of the Acting Auditor General under section 12 of the Act was also questioned as that entity would be appointed by statute to perform the constitutional functions of an Auditor General in the absence of an Auditor General. It was said that the position was not contemplated by the Constitution and could not be created by statute as it allowed the office holder to exercise constitutional powers.
A challenge was also raised against the constitutionality of section 72 of the Act which limited public access to the official reports of the Auditor General on national security grounds. Furthermore, the scope of the President's powers, under article 115 of the Constitution, when referring a Bill back to Parliament for reconsideration after its presentation for presidential assent was questioned. It was argued that in making recommendations and suggestions on the drafting of the Bill, the President went beyond what was required.

Issues:

  1. Whether section 4(2) of the Public Audit Act, which created and defined the office of the Auditor General, was unconstitutional as it had the effect of relegating the Auditor General into a statutory head and interfering with the independence of the Auditor General.
  2. Whether sections 8(a)(b)(c)(d)(e) and (f) and 17(1) of the Public Audit Act, which created a role for the Public Service Commission, the Salaries and Remuneration Commission and the National Treasury as related to the staff in the Auditor General's office, were unconstitutional on grounds of interfering with the Auditor General's independence.
  3. Whether section 7(1)(g) of the Public Audit Act which provided that the Auditor General would serve any other functions provided in written law was unconstitutional on the basis that it extended the Auditor General's functions beyond the scope of functions provided under the Constitution.
  4. Whether the provisions of section 9(1)(e) of the Public Audit Act contained a proviso which limited the Auditor General's access to records, documents, property and premises for purposes of undertaking an audit to situations where such access was reasonably necessary, entailed a limitation of access to such documents or property which was not contemplated by the Constitution.
  5. Whether section 12 of the Public Audit Act which gave the President power to designate the senior most person in the Auditor General’s office as the Acting Auditor General in the absence of the Auditor General, was unconstitutional as it gave the constitutional powers and functions of the Auditor General to an office holder created by statute in a manner not contemplated by the Constitution.
  6. Whether section 18(3) of the Public Audit Act which required the Auditor General to second an officer to a state organ interfered with the independence of the Auditor General and his officers and was therefore unconstitutional.
  7. Whether the requirement for inception meetings between the Auditor General and national security organs, with respect to audits that touched on national security, was unconstitutional on grounds of interference with the Independence of the Auditor General.
  8. Whether section 42 of the Public Audit Act, which provided that the Auditor General would not question the merits of a policy adopted by the National Government and the County Government was unconstitutional.
  9. Whether the provisions of section 68 of the Public Audit Act which gave the Cabinet Secretary for Finance powers to make regulations for purposes of giving effect to the provisions of the Act were unconstitutional as they gave the executive a role in the performance and duties and functions of the Auditor General.
  10. Whether section 72 of the Public Audit Act which limited public access to official reports of the Auditor General on national security grounds was unconstitutional.
  11. What was the scope of the President’s powers when noting reservations for purposes of referring a Bill back to Parliament for reconsideration after it was presented for Presidential assent? Read More...

Held:

  1. Article 259 of the Constitution provided for how the Constitution ought to be interpreted. The Constitution would not be given a narrow simplistic interpretation. The Court ought to strive to give effect to the values and principles that underlay the desires of the people it intended to govern. However, as a principle, the Constitution should not be given a rigged or artificial interpretation to avoid distorting the spirit, ideals and aspirations of the people.
  2. Although the Constitution had various provisions, it was one document that ought to be given a holistic interpretation, with each provision supporting the other. The rule on harmonization requires that the entire Constitution be read as one entity.
  3. The rebuttable presumption of the constitutionality of statutes states that statutes should be presumed to be constitutional until the contrary is proved. The philosophy behind the principle was that as the people's representative, Parliament enacts laws to serve the people and legislators understand the problems that the people face and enact laws to solve those problems.
  4. It was the duty of the person alleging constitutional invalidity of a statute or statutory provision to prove the alleged unconstitutionality. The Court would also consider whether the purpose and effect of implementing the statute or statutory provision would result in unconstitutionality.
  5. Under article 229(1) of the Constitution the Auditor General would be nominated by the President and after being approved by Parliament, he would then be appointed by the President. As a constitutional creature, the Auditor General was not a statutory head. The impression in section 4(2) of the Public Audit Act that the Auditor General was created by the statute or was a statutory office was erroneous. Therefore, the statute had an unconstitutional effect.
  6. Section 4(1) of the Public Audit Act recognized that the Auditor General existed by virtue of article 229(1) of the Constitution while subsection 2 of the same provision defined the Auditor General as a statutory head. That entailed reducing a constitutional office into a statutory one. Section 4(2) of the Act resulted in an unconstitutional effect and offended article 229(1) of the Constitution.
  7. Section 4(2) of the Public Audit Act created a problem when it subjected the appointment of the Auditor General's staff to the Public Service Commission. As the holder of an independent office under article 252(1)(c) of the Constitution, the Auditor General had power to recruit his own staff.
  8. Section 7(1) (g) of the Public Audit Act provided that the Auditor General shall perform any other functions prescribed by any other written law. Article 229 provided for the functions of the Auditor General which were to audit and report on financial expenditure of enumerated public entities. Article 229 did not provide any other duties for the Auditor General or subject him to any other legislation. However, under article 252(1)(d) of the Constitution, the Auditor General was allowed to perform any functions and exercise any powers prescribed by statute in addition to the functions and powers conferred under the Constitution. Therefore, the impugned section 7(1) (g) of the Act did not expand the powers and functions of the Auditor General beyond what the Constitution allowed.
  9. Section 8 of the Public Audit Act provided that the Auditor would recruit and promote qualified staff and human resource subject to article 234(5) of the Constitution. Article 234(5) of the Constitution provided for the delegation of functions and powers of the Public Service Commission to any officer, body or authority in the public service. The Auditor General was an independent constitutional office which would not operate while being subject to the Public Service Commission. It would not recruit and discipline staff subject to the Public Service Commission.
  10. Requiring the Auditor General to take action subject to article 234 of the Constitution would undermine and erode the independence bestowed on him by the Constitution. A holistic reading of articles 229, 234, 249 and 252 of the Constitution revealed that the Auditor General could not be subject to the Public Service Commission when either recruiting or disciplining his staff.
  11. The proviso to section 9 (1) (e) of the Act, allowed the Auditor General to access documents, reports, records and even properties for the purpose of carrying out his work if in his opinion the access was reasonably necessary for the audit. There was no limitation introduced in the proviso. It would have been different had the proviso left the question of necessity of access in the opinion of the state organ or public body to be audited. There was no ambiguity or vagueness in the proviso which would make it constitutionally invalid.
  12. Section 12 of the Public Audit Act which created the office of Acting Auditor General, presented various problems. Under the provision, it was the Public Service Commission which would recommend the appointment of the Acting Auditor General to the President in order to fill a vacancy in the office of Auditor General. There was no constitutional requirement that the Public Service Commission would recommend a person for appointment as Auditor General. The law was clear on how the Auditor General would be appointed and there was no alternative method.
  13. Any attempt to create a substantive position of Acting Auditor General by statute, appoint a person otherwise than as contemplated by the Constitution and allow him/her to exercise constitutional functions and powers of the Auditor General, would amount to an unconstitutional office and unconstitutional exercise of functions and powers of the constitutional independent office. Section 12 of the Act was inconsistent with article 229 of the Constitution and was invalid.
  14. Section 16 of the Act assigned functions and duties to the Senior Deputy Auditor General. It was clear that the holder of that office worked under the direction of the Auditor General. There was no friction between the provision and the Constitution and its implementation did not have an unconstitutional effect.
  15. Section 17(1) provided that the recruitment of staff of the Auditor General was subject to article 234(5) of the Constitution. Article 234(5) of the Constitution allowed the Public Service Commission to delegate its functions and powers to any other body. Given that the Auditor General was an independent office holder, the Public Service Commission could not delegate its functions and powers to the Auditor General. The Auditor General had powers to recruit staff independently. Section 7(1) was inconsistent with articles 249 (2) (b) and 252 (1) (c) of the Constitution.
  16. The Auditor General was allowed to employ staff for purposes of carrying out his functions and duties. Secondment of staff, under the terms of section 18 of the Public Audit Act, would be improper. It would lead to familiarity, undermine the independence of individual staff and interfere with institutional independence.
  17. Section 19 of the Act allowed the Auditor General to delegate powers and duties to subordinate officers. Independence did not mean that the Auditor General had to work alone. It was permissible for the Auditor General to have some staff perform duties under his watch. Therefore, section 19 of the Public Audit Act was not unconstitutional.
  18. Section 25 of the Public Audit Act established the Audit Advisory Board. The principal function of the Board was to advise the Auditor General on the exercise of his or her powers and the performance of his or her functions under the Constitution and the Public Audit Act. Section 25 and 26 of the Act were not unconstitutional as they concerned the establishment, composition and meetings of the Board. The Auditor General needed a team to help him conduct interviews to hire staff, to develop structures and budget plans.
  19. Section 27 of the Public Audit Act which provided for the functions of the Audit Advisory Board was problematic. The Auditor General was created by the Constitution as a holder of an independent office. Under article 229(2) of the Constitution, holders of independent offices were independent and not subject to direction or control by any person or authority. The word "independent office" under the Constitution meant an office that worked independent of all other state organs in the discharge of its duties and performance of its functions.
  20. An independent Auditor General was critical in establishing an office that dealt with public finance administration matters given that the Kenyan people put their trust on state organs and public bodies to use public funds to promote an equitable society. In undertaking an audit, the Auditor General was required to reveal any failures on the part of state organs and public bodies to comply with public finance regulations and he could not do that if his independence was curtailed. Independence guaranteed that the Auditor General would perform his duties without fear of repercussions.
  21. The principal function of the Audit Advisory Board was to advise the Auditor General on how to discharge his mandate. That was an interference with the Auditor General's institutional and individual independence. It was also a violation of article 249(2) (b) which was to the effect that the Auditor General was independent and not subject to direction or control of any person or authority. Section 27 of the Public Audit Act was therefore unconstitutional.
  22. Section 40 of the Public Audit Act was unconstitutional on grounds that it interfered with the independence of the Auditor General. It required the Auditor General, when auditing national security organs, to hold a pre-audit meeting at the highest level to agree on the areas to audit and the appropriate audit approach.
  23. Section 42 of the Act barred the Auditor General from questioning the merits of a policy or objective of any level of Government or public entity, when undertaking an audit. A statute could not impose conditions on the performance of the Auditor General's functions where the Constitution did not impose them. Section 42 of the Act was a violation of article 10 of the Constitution which provided for national values and principles of governance which included integrity, transparency and accountability and also article 201 of the Constitution which provided for financial openness.
  24. Section 68 of the Public Audit Act gave power to the Cabinet Secretary for finance to make regulations necessary for the operationalization of the Act. The Cabinet Secretary could make such regulations for purposes of enforcing provisions of the Act if the provisions were not unconstitutional and they did not interfere with the independence of the Auditor General. Where it was apparent that such regulations were interfering with the independence of the Auditor General, they would be open to challenge.
  25. Section 70 of the Public Audit Act was superfluous. It provided that the Act shall prevail in case of any inconsistency between the Act and any other legislation relating to the functions and powers of the Auditor General. It was the Constitution that provided for the powers and functions of the Auditor General and the Public Audit Act merely restated them. If any other legislation conflicted with those provisions, it would be unconstitutional under the terms of article 2(4) of the Constitution. Section 70 of the Act did not add anything new to what was already provided for under the Constitution.
  26. Section 72 of the Public Audit Act had the effect of limiting access to reports by the Auditor General on grounds of national security. Section 72 of the Act recognized the right of access to information as provided for in article 35 of the Constitution and any limitation placed on the enjoyment of that right would have to be justified.
  27. Article 94 (1) of the Constitution reposed legislative power on Parliament. Under article 109(1) of the Constitution, Parliament was to exercise its legislative mandate through Bills passed by Parliament and assented to by the President. There was separation of powers between the three arms of Government and it was the mandate of the Legislature to make laws.
  28. Article 115 of the Constitution provided for presidential assent and referral of Bills to Parliament. Within 14 of the presentation of a Bill, the President had to either assent to it or refer it back to Parliament for reconsideration noting any reservations he had concerning the Bill. Upon receipt of the Bill, Parliament could amend the Bill in light of the President's reservations or pass the Bill with a two-thirds majority vote from the National Assembly ( and the Senate where applicable).
  29. Where Parliament amended a Bill to accommodate the President's reservations, the Bill would be re-submitted to the President for assent. Where Parliament passed the Bill without amendments or with amendments that did not fully accommodate the President's reservations, the Bill would have to be passed with a vote of two-thirds of members of the National Assembly and the Senate where applicable. The Bill passed via  a two-thirds majority vote would have to be assented to by the President within 7 days and where the President did not assent to it within 7 days, it would be deemed to have been assented to.
  30. Where a Bill presented to the President for assent was referred back to Parliament, the Constitution stated that the President would refer the Bill back to Parliament while noting any reservations that he had concerning the Bill. The Constitution did not define the term "noting any reservations."
  31. The Concise Oxford English Dictionary, 12th Edition defined the word “reservation” as “a qualification or expression of doubt attached to a statement or claim.”  Macmillan English Dictionary for Advanced Learners, New Edition (2007), defines “reservation” as “a feeling of doubt about whether something was good or right.” The noting of reservations concerning a Bill by the President meant that the President had doubts or qualifications about the Bill as passed by Parliament and returned it for reconsideration.
  32. The President's reservations were expressed in his memorandum to Parliament which took the form of several recommendations and suggestions that Parliament eventually approved and passed without amendments. It was apparent that the drafters of the Constitution intended that the President's reservations ought to almost prevail when they imposed a higher threshold of two-thirds of members in order to reject or amend the reservations.
  33. The Bill was placed before the relevant committee of the National Assembly which considered the reservations and made a report to the whole house which passed the Bill as suggested by the President. The Bill was placed before Senate where it was passed without amendments. The President then assented to the Bill and the law-making process was complete.
  34. The reservations that the President would note down when referring a Bill back to Parliament, did not have to take any particular format. It was necessary for the President to make his views clear to Parliament. Parliament's role was to accept or reject the recommendations using parliamentary procedures.
  35. In referring the Bill back to Parliament, the President was exercising his mandate as provided for in article 115(2)(a) of the Constitution. Parliament considered the President's reservations over the Bill in the manner provided for under the Constitution. Therefore, there was no fault on the part of the President or Parliament in the manner in which the reservations were made or dealt with by Parliament.

Petition partly allowed.
Orders:-

  1. A declaration was issued issues to the effect that sections 4(2), 8, 12, 17(1), 18, 27, 40, 42, and 70  of the Public Audit Act 2015 were inconsistent with and  in contravention of the Constitution and were in valid.
  2. Each party was to bear its own costs.
STATUTES Forfeiture is not an Automatic Punishment in Relation to a Motor Vehicle Used to Transport Forest Produce as Part of the Commission of an Offence.

Peter Igiria Nyambura v Director of Public Prosecutions
Criminal Revision No 17 of 2018
High Court at Kajiado
R Nyakundi, J
April 20, 2018
Reported by Beryl A Ikamari

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Statutes-statutory interpretation-interpretation of section 68 of the Forest Conservation and Management Act-forfeiture of a vessel, motor vehicle or article used to convey forest produce during the commission of an offence, relating to removal of forest produce-whether it was automatic that where forest produce was illegally conveyed, the Court would order for the forfeiture of the motor vehicle, vessel or article used to convey it-Forest Conservation and Management Act, No 34 of 2016, section 68.
Statutes-statutory interpretation-interpretation of section 389A of the Criminal Procedure Code-criminal forfeiture-extent of applicability of section 389A of the Criminal Procedure Code to situations of criminal forfeiture for offences provided in other statutes-key elements of an application for forfeiture under section 389A of the Criminal Procedure Code-circumstances under which orders for criminal forfeiture would be made and the applicable procedural requirements-Criminal Procedure Code (Cap 75), section 389A.

Brief Facts:
On March 21, 2018, without having obtained a permit from the Director of Kenya Forest Service for the year 2018, an Accused person wrongfully transported 4 bags of charcoal using a motor vehicle along the Namanga-Nairobi Road. He was convicted of the offence of removing forest produce contrary to section 64(1) (a) as read with section 64 (2) of the Forest Conservation  Management Act 2016 and fined Kshs. 50, 000/= The vehicle used to transport produce was forfeited to the state.
The Applicant was the owner of the motor vehicle used to transport the charcoal. He made an application for the release of the motor vehicle under the provisions of articles 50 & 163 of the Constitution and sections 3, 362, 364 and 389A of the Criminal Procedure Code.

Issues:

  1. Whether forfeiture of a vessel, motor vehicle or article used to convey forest produce, in circumstances where the removal of the forest produce was a criminal offence, would automatically be ordered by the Court.
  2. What was the extent to which section 389A of the Criminal Procedure Code, which concerned provisions on forfeiture, would apply to situations where an enabling statute created an offence for which a sentence of criminal forfeiture could be meted out? Read More..

Relevant provisions of the law
Forest Conservation and Management Act, No 34 of 2016, section 68(1);
68. Compensation for loss or damage
(1) Where a person is convicted of an offence of damaging, injuring or removing forest produce from any forest, the forest produce shall be forfeited to the owner. The court may in addition to any other ruling order—

(a) that such person pay to the forest owner, by way of compensation, a sum equal to the determined value of the forest produce so damaged, injured or removed and where the value cannot be estimated, ten thousand shillings for each offence;
(b) if it is proved to the satisfaction of the court that the person so convicted is the agent or employee of another person, that other person to pay by way of compensation to the forest owner, the value of the forest produce, unless after hearing that other person, the court is satisfied that the offence was not due to his negligence or default;
(c) the vessels, vehicles, tools or implements used in the commission of the offence be forfeited to the Service:

Provided that the value of the forest produce shall be either the commercial value of the forest produce or the cost of restoring the damage caused to the forest as a result of the offence committed, whichever is higher 

Criminal Procedure Code (Cap 75), section 389A
389A. Procedure on forfeiture of goods
(1) Where, by or under any written law (other than section 29 of the Penal
Code), any goods or things may be (but are not obliged to be) forfeited by a court, and that law does not provide the procedure by which forfeiture is to be effected, then, if it appears to the court that the goods or things should be forfeited, it shall cause to be served on the person believed to be their owner notice that it will, at a specified time and place, order the goods or things to be forfeited unless good cause to the contrary is shown; and, at that time and place or on any adjournment, the court may order the goods or things to be forfeited unless cause is shown by the owner or some person interested in the goods or things:

Provided that, where the owner of the goods or things is not known or cannot be found, the notice shall be advertised in a suitable newspaper and in such other manner (if any) as the court thinks fit.

(2) If the court finds that the goods or things belong to some person who was innocent of the offence in connexion with which they may or are to be forfeited and who neither knew nor had reason to believe that the goods or things were being or were to be used in connexion with that offence and exercised all reasonable diligence to prevent their being so used, it shall not order their forfeiture; and where it finds that such a person was partly interested in the goods and things it may order that they be forfeited and sold and that such person shall be paid a fair proportion of the proceeds of sale.

Held:

  1. Section 68 of the Forest Conservation and Management Act did not automatically allow for forfeiture of a vessel, motor vehicle or article used in conveyance of forest produce. The objective of the provision was to ensure that there was compensation for loss or damage caused to the forest as a result of the commission of an offence. The Court ought to consider other remedial measures besides forfeiture.
  2. The right to forfeit private property had to be a subject of both the Constitution and the enabling statute. Where there was a lacuna on the procedure of forfeiture in the primary legislation, the Court would find recourse in section 389A of the Criminal Procedure Code. Section 389A provided for forfeiture determination. Under the provision, it was a requirement that an order of forfeiture would not be made in criminal proceedings unless the indictment or information contained a notice to the owner of the vessel or vehicle.
  3. The key elements in an application by the state seeking forfeiture in criminal proceedings are the following;
    1. The state must establish the requisite nexus between the property and the offence.
    2. The Court's determination may be based on evidence already on record including any plea and or adduced evidence accepted by the Court as relevant.
    3. If the Court seeks to forfeit specific property a notice of the order must be sent to any person who might reasonably appear to be a potential claimant with standing to contest the forfeiture in the proceedings.
    4. The notice of the order would especially be sent to a potential claimant when in practical terms the seized property is in the hands of an agent, employee, or servant of the person with proprietary interest or right.
  4. Criminal forfeiture, which referred to the Court's power to confiscate the Accused's property, had become an increasingly prevalent form of punishment in forest conservation statutes. Given that it was a form of punishment, the principle of proportionality was applicable to it. It is a generally acceptable principle in criminal law that punishment must fit the crime.
  5. There was no comprehensive legislative scheme governing the law of forfeiture. Each statute had its specific provisions with respect to forfeiture. Where the primary statute was silent, section 389A of the Criminal Procedure Code would apply. Therefore, the grant or denial of forfeiture by the state was within the Court's discretion and it was necessary for substantial evidence to be tendered to show ownership of the property and its relationship to the crime committed.
  6. The National Police Service and other agencies had a right to seize property associated with crime. However, after seizure administrative action for purposes of establishing the property's ownership was expected. If the agency found it fit to apply for forfeiture in Court, it would have to serve the owner with notice.
  7. The prosecution had to prove that the chattel, vessel or motor vehicle ought to be forfeited to the state and the owner would be allowed to raise a defence to the forfeiture. The procedural requirements that were applicable in forfeiture were overlooked by Trial Courts and the consequence was that it gave the High Court a burden related to applications for review.
  8. The owner of the motor vehicle was not served nor was he aware that his vehicle had been seized by the police for the alleged offence. That failure to issue notice occasioned prejudice and a failure of justice against the Applicant.
  9. The order of forfeiture was disproportionate to the nature and gravity of the offence for which the Applicant was fined Kshs. 50, 000/=. The fine constituted an adequate punishment for the offence. Furthermore, there was no evidence tendered to show that the offender was an employee or associate of the Applicant.

Application allowed.

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