High Court Orders the Sale of a Vessel to Recover the Repair Costs of the Vessel

Summary
In the case of the owners of the vessel Midsummer vs. Southern Engineering Co. Ltd., the High Court of Kenya dismissed a claim by the claimant, the owners of the vessel Midsummer, attempting to cap money it owed to the defendant/counter-claimer, Southern Engineering Company, to US$ 157,574.59 and allowed the defendant/counter-claimer’s counterclaim in the sum of US$ 316,158.59 for repairs that were performed on the claimant’s vessel MV Midsummer. The court allowed the defendant/counter-claimer to sell the vessel to recover the amount owed to it. Okello Kinyanjui and Co. Advocates acted for the successful defendant/counter-claimer.

Brief facts
The brief facts of the case are that around, 2015 the claimant brought the vessel to the port of Mombasa and engaged the defendant/counter-claimer to carry out repairs on the said vessel. The defendant/counter-claimer and the claimant entered into an agreement where the defendant/counter-claimer was to repair the said vessel and invoice the claimant. In addition, the agreement provided that other terms and conditions of the defendant/counter-claimer remain as in the defendant/counter-claimer’s general terms and conditions, available on request. The “other terms and conditions” included berthing/jetty charges at US$ 168 per day. Under these terms and conditions, the defendant/counter-claimer carried out repairs and accordingly invoiced the claimant for USD 157,574.59 and the berthing charges. However, after receiving the invoice from the defendant/counter-claimer, the claimants refused, failed and/or neglected to respond to the defendant/counter-claimer, thus forcing the defendant, in 2017 almost two years after repairing the vessel, to seek legal advice from their legal advisors.

Thus in 2017, the defendant/counter-claimer through their legal advisors, wrote to the claimant and, under the Disposal of Uncollected Goods Act, Cap 38, gave the claimant notice to collect the vessel by a certain date failure to which the defendant/counter-claimer would dispose of the vessel under the Disposal of Uncollected Goods Act, Cap 38. The letter also informed the claimant that the amount now due and owing was US$ 310,851.66, owing to the daily berthing charges.

The receipt of this letter finally roused the claimant to action. The claimant rushed to court seeking orders that the defendant/counter-claimer should not invoice for more than US$ 157,574.59 and seeking to injunct the defendant/counter-claimer from selling the vessel under the Disposal of Goods Act. The defendant/counter-claimer responded by filing a defence in which it firstly denied that the claimants claim was an admiralty claim within the meaning of section 4 of the Judicature Act, Cap 8, as read with section 20 of the Senior Courts Act, 1981 of the United Kingdom, secondly, asserted that the defendant/counter-claimer had carried out repairs on the claimant’s vessel and the claimant’s claim was, in fact an admission to this fact and thirdly raised a counterclaim for, inter-alia, US$ 316,158.59 and the consequential sale of the vessel. The claimant did not respond to the defendant’s counterclaim and accordingly the defendant/counter-claimer made an application that the claimant’s claim, in itself, be deemed to be an admission of the fact that the defendant/counter-claimer had carried out repairs for the claimant at an agreed fee and that the silence of the claimant in the face of the defendant/counter-claimer’s counterclaim was a further admission by the claimant that the claimant was in fact indebted to the defendant/counter-claimer in the sum cited in the counterclaim.

Determination
The High Court of Kenya dismissed the claim by the claimant and allowed the defendant/counter-claimer’s counterclaim together with an order allowing the defendant/counter-claimer to sell the vessel to recover its claim.

Comment
The decision demonstrates the willingness of the High Court not to over-rely on technical issues and do substantial justice between the parties.