Opinion: Raphael Tuju's battle with EADB deserved better terms of adjudication

Associated with Dari Ltd, Raphael Tuju. [File, Standard] Eveline T. Feteris, a legal scholar, in her text, Fundamentals of Legal Argumentation: A Survey of Theories on the Justification of Judicial Decisions, makes a valid point: 'everybody, (including judges) who advances a legal standpoint and wishes this standpoint to be accepted by others, will have to present justifying arguments.' The need to make well-reasoned decisions is particularly important for apex courts, especially where the stakes are high. It is against this background that the High Court of Kenya decision in the case of East African Development Bank v Dari Limited & five others [2020] eKLR, deserves thorough scrutiny. This case, which pits a local borrower against an international lender, required a robust exploration of Private International Law principles in their fullness of detail. The matter originated from an application that the East African Development Bank made to the High Court of Kenya seeking recognition and registration of a judgment of the High Court of Justice Business and Property Courts of England and Wales, Queen's Bench Division, Commercial Court (referred to hereafter as English Court). The registration of the judgement sought to execute the English Court's in so far as a loan facility that EADB had extended to Dari Limited was concerned. The High Court of Kenya's (Okwany J) decision in Dari Limited & 5 Others versus The East African Development Bank followed a chronology of events. In 2015, the EADB approached Dari Limited with a proposal offering to fund a construction project that the defendant had in mind in Nairobi. The initial agreement required EADB to advance Dari, in two instalments, a loan facility towards the construction of houses in Nairobi's Karen estate. In a series of twists and turns, is alleged that EADB did not dispatch the second instalment because of a falling out of the parties. This led to EADB's filing a suit in the English court in accordance with the terms of the facility, seeking to enforce its power of sale. Judge Daniel Toledano QC, sitting as a deputy judge in the English court rendered a judgment and orders on June 19, 2019, that the bank ultimately sought to get recognized and enforced in Kenya -- the judgment and orders having been given in England. Contested The defendant contested the recognition and enforcement of the decision of the High Court in England on several grounds. First, it was Dari's case that it was not afforded an opportunity to advance its case in the United Kingdom, leading to the summary judgment that the bank wanted to enforce. Secondly, the defendant argued he was not granted the opportunity to present his evidence during the trial. Thirdly, Dari argued that recognition and reinforcement of the English decision would be contrary to Section 10(2) of the Kenyan Foreign Judgments (Reciprocal Enforcement) Act, which provides for instances that would lead to non-recognition and non-registration of any foreign judgment. One of the grounds for non-registration and recognition of a foreign judgment is registration and recognition that is manifestly contrary to public policy in Kenya. s This analysis of the case focuses on the High Court since as articulated hereinabove, it is a cardinal requirement that judicial decisions must not only be cogent but must also be well reasoned. Sound judicial reasoning is a function demanded by the Constitution of Kenya 2010 as a sine qua non of the ideal we call justice. This reasoning can be distilled from inter-alia, articles 1,2,3, 10,73, 159 and 160. The acceptability of any legal argument canvassed in a judicial hearing is dependent on the quality of the justification. The standpoint of a judge is usually given in his or her decision. This decision must be justified adequately to make it acceptable to the parties involved as well as to the entire legal community. The High Court of Kenya's decision in the case of East African Development Bank versus Dari Limited raises concern for a number of reasons. First, the High Court of Kenya applied the English Court decision without making any interrogations of it as if it were a fait accompli, never mind that Kenya has a statute in place -- the Foreign Judgments (Reciprocal Enforcement) Act that mandates conditional recognition and enforcement of any foreign judgment. Secondly, the High Court of Kenya failed to appreciate a trite rule of Private International Law; that there is no obligation to enforce any foreign judgments as a general rule. Thirdly, the Foreign Judgments (Reciprocal Enforcement) Act has set conditionality that must be met under sections 3 and 4, as well as providing grounds for setting aside any judgment in Section 10. Serious Concerns There was little if no interrogation of these provisions by the High Court of Kenya in the case pitting EADB against Dari. The approach adopted by the High Court of Kenya raises serious concerns for the following reasons. First, the requirement that a foreign judgment be recognized in conditional circumstances through statutorily enshrined rules renders any foreign judgment incapable of having legal effectiveness and not directly enforceable. Scrutiny prior to recognition and subsequent enforcement resonates with the constitutional edict under article 94 that only parliament has the authority to make any provision having the force of law in Kenya and no other body can make any item of law except under authority conferred by the Constitution. The East African Development Bank. [File, Standard] The authority giving an imprimatur to foreign judgment in Kenya must therefore accord to the rules under the Foreign Judgments (Reciprocal Enforcement) Act (hereinafter, the Act) so as to remain faithful to constitutional demands. One of the preliminary issues that a court must engage in is the question of international competence, an entrenched principle of Private International Law. International competence has been stated by Ghanaian Legal Scholar R.F. Oppong in his text, Private International Law in Commonwealth Africa, as denoting three occurrences; presence, residence and submission and that importantly, submission can be express, such as through jurisdiction agreements, or inferred from conduct. The capacity of international competence attaches to the question of whether the foreign court had jurisdiction over the matter. Buckley LJ in the celebrated case of Emanuel v Symon (1908) 1 KB 309 stated thus in terms of a court being jurisdictionally competent: "In actions in personam, there are five cases in which the courts of this country will enforce a foreign judgment: (1) where the defendant is a subject of the foreign country in which the judgment has been obtained; (2) where he was resident in the foreign country when the action began; (3) where the defendant in the character of the plaintiff has selected the forum in which he is afterwards sued; (4) where he has voluntarily appeared; and (5) where he has contracted to submit himself to the forum in which the judgment was obtained." Two contending positions In examining the question of competence, it is worth examining an allegation made by the Defendants/ Applicants. The English Court was presided over by an ad hoc (meaning temporary; acting only when necessary or needed) judge Daniel Toledano QC who the Defendants/Applicants say sat in the same chambers as the Barrister for EADB, the respondent bank Michael Sullivan QC and in did not recuse himself in the matter despite an application having been made. There are two contending positions on this issue by the parties: The Defendants/ Applicants argue that this issue goes to the heart of international competence whereas the bank argued that the issue of Judge Toledano's recusal was a procedural question that should have been dealt with in accordance with the lex fori, the law of England and Wales. The High Court of Kenya does not wade in to analyze and attempt to resolve the question of recusal. Public policy The Kenyan court should have required that the affidavit statements on the question of the impartiality of Judge Daniel Toledo QC be a triable issue and whether it was a matter for the lex fori be submitted on by an expert witness so as to assist the court. Section 2 of the Kenyan Evidence Act defines a fact in issue as 'any fact from which, either by itself or in connection with other facts, the existence, non-existence, nature or extent of any right, liability or disability, asserted or denied in any suit or proceeding, necessarily follows.' The "necessary constituents" of a right or liability called 'facts in issue', manifest if their existence is asserted by one party and is denied by the other. Instructive to note is that Section 4 of the Act (on jurisdiction) lays down rules on the examination of international competence, rules the High Court of Kenya did not bother to interrogate. Section 10 of the Act (titled 'Setting Aside') has as one of the grounds for which a judgment may be set aside as 'the (setting aside if-emphasis added) enforcement of the judgment would be manifestly contrary to public policy in Kenya.' The term public policy is not defined in the Act. However, a scholarly definition by G. Kirlpatrick, Definitions of Public Policy and the Law, for example, proximates the term public policy to stand for 'a system of laws, regulatory measures, courses of action, and funding priorities concerning a given topic promulgated by a governmental entity or its representatives.' Another scholar, Thomas Dye defines it as 'anything a government chooses to do or not to do'. Public policy in this manner defined would incorporate an indictment on a judge presiding over a matter in which a person from the same chambers is on record as counsel. Indeed, the Kenyan Judicial Code of Conduct, which draws its authority from Article 168 of the Constitution, declares that for purposes of judicial impartiality, that a judge shall use the best efforts to avoid being in situations where personal interests conflict or appear to conflict with the judges' official duties. Equally, it is a requirement that a judge may recuse himself/herself where the impartiality of the judge is questioned, in instances where the judge has a personal interest or is in a relationship with someone who has an interest in the outcome of the matter. High standard of conduct The Constitution of Kenya, as a requirement of the appearance of a fair trial, would frown on a judge presiding over a matter where a person who sits in the same chamber with him or her is representing a litigant. It is a principle in the Kenyan context that a judge will recuse himself or herself whenever the appearance of bias based on relationships is established. In the case of Stephen Njoroge Gichuha v Fred Nyagaka Ongarora & another [2014] eKLR, an application for disqualification of the presiding judge was made on the basis that one of the witnesses for the defendants' case was the husband of the judge and a brother-in-law of the second defendant. The Court allowed the application stating that an independent and honourable judiciary must maintain and enforce a high standard of conduct so that integrity and independence of the judiciary is preserved. From a public policy perspective, concerns can also be raised about the summary judgment as entered by the High Court in England. Under Kenyan law, a summary judgment can be entered in exceptional circumstances; where no appearance has been entered and no defence has been filed, where an appearance has been entered but a defence not filed within the stipulated time and in case a defence has been entered, the defence offers no sufficient or bonafide explanation necessitating the proceeding with a full trial. Policy questions It is important to also note that to obtain a summary judgment, the party that seeks one must file a Motion Application for consideration by the court stating reasons why the court should enter the summary judgment. In the case at the English High Court, it is on record that Dari raised a pertinent question on the failure or refusal by the bank to release the second tranche of finances as stipulated in the contract. Nowhere is it shown that this question was considered by the English Court, begging the question: can the Kenyan High Court endorse the decision of an ad hoc judge, whose impartiality was challenged and who proceeded to issue a summary judgment in a manner that raises legal concerns? These are public policy questions that needed to have been examined to the fullest if at all justice was to be rendered in this matter. We can do better in terms of judicial adjudication and the desire to get it right is more pressing when it comes to the apex courts such as the High Court of Kenya. Judicial decision-making involves both an epistemic and ethical assessment of a case. Indeed, it is argued that judicial ethos is 'best reflected in legal reasoning and the persuasive arguments of opinion, combined with the binding character of a judicial order, which is linked with the authority of the court (balance and sword)'. And whereas this article does not pretend to make a global assessment of the contradictions and differences between private international law and municipal law, any dialectic tensions between the two can only be resolved through sound and principled judicial decision-making. It can only be hoped that judicial decision-making can improve and the need for such improvement is dire particularly when the stakes are high. - Ogada is an advocate and researcher who serves in the Law Society of Kenya's Public Interest Litigation Committee and an adjunct law lecturer at the University of Nairobi.

Opinion: Raphael Tuju's battle with EADB deserved better terms of adjudication

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