Oilfield Movers Limited v Zahara Oil and Gas Limited [2020] eKLR Case Summary

Court
High Court of Kenya at Nairobi, Commercial & Tax Division
Category
Civil
Judge(s)
Justice F. Tuiyott
Judgment Date
October 05, 2020
Country
Kenya
Document Type
PDF
Number of Pages
3
Explore the key findings of Oilfield Movers Limited v Zahara Oil and Gas Limited [2020] eKLR, highlighting legal principles and implications in the oil and gas sector.

Case Brief: Oilfield Movers Limited v Zahara Oil and Gas Limited [2020] eKLR

1. Case Information:
- Name of the Case: Oilfield Movers Limited v. Zahara Oil and Gas Limited
- Case Number: HCCC No. E 054 of 2019
- Court: High Court of Kenya at Nairobi, Commercial and Tax Division
- Date Delivered: October 5, 2020
- Category of Law: Civil
- Judge(s): Justice F. Tuiyott
- Country: Kenya

2. Questions Presented:
The court must resolve whether Zahara Oil and Gas Limited and its officials are in contempt of court for failing to comply with a court order issued on July 31, 2019, regarding the furnishing of a bank guarantee.

3. Facts of the Case:
The plaintiff, Oilfield Movers Limited, filed a Notice of Motion on September 12, 2019, alleging that Zahara Oil and Gas Limited and its officials—Country Manager Mr. Peter Nduru, Chief Financial Officer Mr. John Patrick Barr, and Local Representative Sonal Sejpal—were in contempt of a court order issued on July 31, 2019. This order required Zahara to furnish a bank guarantee of USD 600,705.30 within 45 days, which Zahara failed to do. The plaintiff sought sanctions including committal to civil jail and prohibiting the defendant from participating in the proceedings until the contempt was purged.

Mr. Nduru represented the alleged contemnors, asserting that he and Mr. Barr were only made aware of the court order on November 26, 2019, and that Sonal Sejpal was not an officer of Zahara. The defendant claimed they did not have the means to comply with the order and argued against the presumption of knowledge of the order.

4. Procedural History:
The proceedings began with Oilfield Movers filing a motion for contempt against Zahara Oil and Gas Limited and its officials. The court initially issued a ruling on July 31, 2019, which established the requirement for the bank guarantee. As the defendants did not comply by the deadline, the plaintiff sought to hold them in contempt. The case was argued, and the court had to consider the defendants' claims of lack of knowledge and inability to comply.

5. Analysis:
Rules:
The court examined the relevant provisions of the Judicature Act and the English Civil Procedure Rules regarding contempt of court. Specifically, the court analyzed the necessity of personal service of court orders and the implications of knowledge of such orders.

Case Law:
The court referenced previous rulings, including *Basil Criticos v. Attorney General & 8 others* and *Kenya Tea Growers Association v. Francis Atwoli*, which established that knowledge of a court order can suffice for contempt proceedings, negating the need for personal service. The court also cited *Shimmers Plaza Limited v. National Bank of Kenya*, affirming the principle that a party is deemed aware of a court order if their advocate is aware.

Application:
The court found that the officers of Zahara, including Mr. Nduru and Mr. Barr, were deemed to have knowledge of the court order as their advocate was present when it was issued. The court rejected the argument that personal service was necessary to establish contempt, emphasizing that knowledge of the order was sufficient. The defendants failed to provide evidence of their inability to comply with the order, leading the court to conclude that they were in willful disobedience of the court order.

6. Conclusion:
The court ruled that Zahara Oil and Gas Limited, Mr. Peter Nduru, and Mr. John Patrick Barr were in contempt of court for failing to comply with the order issued on July 31, 2019. The court provided the contemnors an additional 14 days to comply with the order before imposing sanctions, which included prohibiting them from participating in the proceedings until the contempt was purged.

7. Dissent:
There was no dissenting opinion recorded in this case.

8. Summary:
The High Court of Kenya found Zahara Oil and Gas Limited and its officials in contempt for failing to comply with a court order requiring a bank guarantee. The ruling underscores the importance of knowledge of court orders in contempt proceedings and clarifies that personal service may not be necessary if the party's advocate is aware of the order. The case highlights the court's commitment to upholding the integrity of its orders while balancing the rights of litigants.

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