Entreprise Generale Malta Forrest v Isolux Ingeneria S.A & another Kenya Eletricity Transmission Company (Interested Party) [2020] eKLR

Court
High Court of Kenya at Nairobi, Commercial & Tax Division
Category
Civil
Judge(s)
W. A. Okwany
Judgment Date
September 24, 2020
Country
Kenya
Document Type
PDF
Number of Pages
3
Explore the landmark case of Empresa Generale Malta Forrest v Isolux Ingeneria S.A & another, as it unfolds in the Kenyan legal context, addressing critical issues in construction and contractual obligations.


Case Brief: Entreprise Generale Malta Forrest v Isolux Ingeneria S.A & another; Kenya Eletricity Transmission Company (Interested Party) [2020] eKLR

1. Case Information:
- Name of the Case: Entreprise Generale Malta Forrest v. Isolux Ingenieria S.A & Data Concursal SLP
- Case Number: HCCC No. 350 of 2017
- Court: High Court of Kenya at Nairobi, Commercial and Tax Division
- Date Delivered: 24th September 2020
- Category of Law: Civil
- Judge(s): W. A. Okwany
- Country: Kenya

2. Questions Presented:
The court must resolve two central legal issues:
a) Whether the defendant's Preliminary Objection is merited and should result in a stay of proceedings.
b) Whether the applicant has established a case for setting aside or varying orders No. 5, 6, 7, and 8 of the consent order recorded on 6th October 2017.

3. Facts of the Case:
The plaintiff, Entreprise Generale Malta Forrest, entered into a subcontract with Isolux Ingenieria S.A, the 1st defendant, for the construction of an electricity transmission line. The 2nd defendant, Data Concursal SLP, was involved as well. A consent order from October 6, 2017, involved payments due to the plaintiff from the 1st defendant, which the applicant, Kenya Electricity Transmission Company, claimed would adversely affect it. The applicant sought to be joined in the proceedings as an interested party and to set aside certain orders from the consent judgment.

4. Procedural History:
The applicant filed an application on December 21, 2017, seeking to be enjoined in the suit and to vary or set aside specific orders from the consent judgment. The plaintiff opposed the application but did not contest the joinder. The 1st defendant raised a Preliminary Objection, asserting that the court should stay proceedings due to ongoing foreign insolvency proceedings in Spain. The parties submitted written arguments, leading to the court's ruling.

5. Analysis:
- Rules: The court considered the Insolvency Act 2015, particularly Section 22 of the Fifth Schedule, which provides for a stay of individual actions concerning a debtor's assets upon recognition of foreign insolvency proceedings.
- Case Law: The court referenced several precedents, including *Mukhisa Biscuits Manufacturers Ltd v. West End Distributors Ltd* [1969] E.A 969, which outlines the principles applicable to Preliminary Objections, and *Flora N. Wasike v. Destimo Wamboko* [1988] eKLR, establishing that consent judgments can only be set aside under specific conditions akin to contract law.
- Application: The court found the Preliminary Objection unmerited due to a lack of evidence regarding the foreign proceedings. The applicant's claim to set aside the consent order was also dismissed as the consent was deemed binding and no grounds for setting it aside were established. The applicant's claims of prejudice were countered by the court's findings regarding the assignment of debts and the nature of consent judgments.

6. Conclusion:
The court allowed the applicant's request to join the proceedings as an interested party but denied the request to set aside the consent order. The ruling emphasized the binding nature of consent judgments and the necessity for substantial grounds to alter them.

7. Dissent:
There were no dissenting opinions noted in the ruling.

8. Summary:
The High Court of Kenya ruled in favor of allowing Kenya Electricity Transmission Company to join the proceedings but denied its request to set aside specific orders from a prior consent judgment. This case underscores the importance of consent judgments in civil proceedings and the stringent requirements for altering such agreements. The decision reinforces the legal principle that consent orders have a contractual effect and can only be set aside under specific conditions.

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