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

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.

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.

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

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