IPTL, Pan Africa Solutions awarded $8 million in legal costs

The Court of Appeal had earlier struck out the banks’ appeal with costs, holding: “Being guided by the above legal principles and having sustained the first preliminary objection, we also find the instant appeal incompetent.Consequently, we are constrained to strike it out with costs.”

The dispute originated in the High Court, Commercial Division, where the respondent had successfully registered, ex parte, a foreign judgment from the High Court of England, Commercial Division.

The registration was later set aside upon objection. The foreign judgment carried a decretal amount of $168 million. In the taxation proceedings, counsel for the applicants, Mr Musa Mhagama, sought instruction fees of $5.04 million for each company, amounting to a combined $10.08 million.

He argued that IPTL and Pan Africa Power Solutions were separate legal entities that had independently instructed him to defend their respective interests in the appeal. Mr Mhagama further submitted that the appeal involved complex issues relating to the domestication of a foreign judgment and had remained before the Court for about four years, during which it was listed and adjourned several times before being determined.

Counsel for the respondents, Mr Deogratius Tesha, opposed the claim, arguing that the appeal did not involve an ascertainable monetary value because it challenged the setting aside of the registration of a foreign judgment rather than the judgment itself.

He also contended that the applicants should not have been awarded separate instruction fees and proposed Sh5 million as a reasonable instruction fee for both claims combined. In his ruling, Dr Fovo rejected the respondents’ argument that separate instruction fees had been improperly charged.

“On a plain reading, item 17 is engaged where an advocate acting for two or more parties has taken separate proceedings on their behalf; it is in that context that the taxing officer must ask whether the separateness of the proceedings was necessary and proper. That is not the position here,” he ruled.

The Taxing Officer accepted that the appeal involved substantial financial consequences because it arose from a foreign judgment worth $168 million, but observed that although the matter had remained before the Court for several years, it was ultimately determined at the preliminary stage without arguments on the merits.

He also rejected the respondents’ proposed instruction fee of Sh5 million, saying it understated the value of the case and the work undertaken.

“Weighing the amount involved, the complexity attending the domestication of a foreign judgment of this nature, the four years the matter remained before the Court, and the volume of the record, against the fact that the appeal was in the end concluded at the preliminary stage without argument on the merits, I am satisfied that the instruction fee of $5,040,000 claimed by each applicant is excessive and unreasonable,” the ruling states.

Dr Fovo reduced the instruction fee to $4 million for each applicant, bringing the total legal costs awarded to $8 million, together with Sh210,000 in respect of the uncontested items.