Midrock Water Drilling Co Limited v National Water Conservation and Pipeline Corporation [2020] eKLR Case Summary

Court
High Court of Kenya at Nairobi, Milimani Law Courts, Commercial and Tax Division
Category
Civil
Judge(s)
Justice F. Tuyiott
Judgment Date
September 28, 2020
Country
Kenya
Document Type
PDF
Number of Pages
3
Explore the case summary of Midrock Water Drilling Co Limited v National Water Conservation and Pipeline Corporation [2020] eKLR, highlighting key legal insights and implications for water resource management.

Case Brief: Midrock Water Drilling Co Limited v National Water Conservation and Pipeline Corporation [2020] eKLR

1. Case Information:
- Name of the Case: Midrock Water Drilling Co. Limited v. National Water Conservation and Pipeline Corporation
- Case Number: HCCC NO. 45 ‘A’ OF 2013
- Court: High Court of Kenya at Nairobi, Milimani Law Courts, Commercial & Tax Division
- Date Delivered: 28th September 2020
- Category of Law: Civil
- Judge(s): Justice F. Tuyiott
- Country: Kenya

2. Questions Presented:
The court was tasked with resolving two primary legal issues:
i. Is the National Water Conservation and Pipeline Corporation (NWC) protected by the Government Proceedings Act, thereby rendering the execution against it unlawful?
ii. Should the defaulted sum attract simple or compound interest?

3. Facts of the Case:
The dispute arose from a contractual agreement between Midrock Water Drilling Co. Limited (Midrock) and NWC, wherein Midrock was contracted to construct a dam and boreholes. A consent judgment was adopted by the court on 5th July 2016, stipulating that NWC owed Midrock Kshs.194,219,651.24, to be paid within 60 days, failing which interest would accrue at a specified rate. Subsequent agreements included provisions for appointing accountants to determine the interest and conditions regarding attached equipment.

4. Procedural History:
The case progressed through various stages, culminating in a Notice of Motion filed on 6th August 2019. The court considered the consent judgments and submissions from both parties. It was determined that the issues requiring resolution were the applicability of the Government Proceedings Act and the nature of interest on the defaulted sum.

5. Analysis:
- Rules: The court referenced Section 21 of the Government Proceedings Act, which outlines the conditions under which execution against the government is permissible. It also considered Order 29 Rule 2(2)(c) of the Civil Procedure Rules, which prohibits certain orders against the government.
- Case Law: The court cited the case of Ikon Prints Media Company Limited v. Kenya National Highways Authority & 2 others [2015] eKLR, which clarified that NWC, as a corporate entity, is not considered a government body for the purposes of the Government Proceedings Act. The court also referenced decisions regarding the awarding of interest, including Veleo (K) Ltd v. Barclays and Feroz Nuralji Hirji v. Housing Finance Company of Kenya Ltd & Another, which discussed the conditions under which compound interest may be awarded.
- Application: The court concluded that NWC was not protected by the Government Proceedings Act, allowing for lawful execution against it. Regarding interest, the court determined that the parties had agreed to simple interest in their contract. The court noted that although the Plaintiff argued for compound interest, it was not explicitly sought in the pleadings, leading to the conclusion that simple interest was appropriate.

6. Conclusion:
The court ruled that the execution against NWC was lawful and that the interest on the defaulted sum would be calculated as simple interest. This decision emphasized the distinction between state corporations and government entities concerning legal protections and the importance of explicit pleadings in determining interest types.

7. Dissent:
There was no dissenting opinion noted in the ruling.

8. Summary:
The High Court of Kenya ruled in favor of Midrock Water Drilling Co. Limited, allowing for lawful execution against the National Water Conservation and Pipeline Corporation and determining that the interest on the owed amount would be simple interest. This case is significant as it clarifies the legal status of state corporations in relation to government protections and reinforces the necessity for clear contractual terms regarding interest calculations.

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