Wakilii

Kioo Ltd v Attorney General of the Republic of Kenya (Application No.9 of 2020)

East African Court of Justice · [2020] EACJ 11 · 2020 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for interim orders arising from Reference No. 13 of 2020 challenging the legality of excise duty imposed on imported glass bottles
Decision
Interim orders granted staying application of the impugned excise duty provisions against the Applicant pending determination of the underlying Reference

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Court granted interim orders staying the application of section 41 of Kenya's Business Laws (Amendment) Act, 2020 to the Applicant pending determination of the underlying Reference. The Court held that the Reference raised serious triable issues concerning whether the imposition of 25% excise duty on imported glass bottles discriminated against goods from EAC Partner States in contravention of the Treaty and auxiliary Protocols. The Applicant demonstrated likelihood of irreparable injury through loss of market share, business disruption, reputational damage, and erosion of goodwill that could not be adequately compensated by damages. The balance of convenience favoured protecting the Applicant from potentially unwarranted duties that might not be readily recoverable.

Outcome

Interim orders granted staying application of the impugned excise duty provisions against the Applicant pending determination of the underlying Reference

Facts

Kioo Limited, a Tanzanian glass manufacturing company, challenged Kenya's Business Laws (Amendment) Act, 2020, which imposed a 25% excise duty on imported glass bottles (excluding pharmaceutical packaging). The Applicant filed Reference No. 13 of 2020 alleging the law discriminated against glass products from EAC Partner States, extended preferential treatment to Kenyan glass, and rendered imported glass uncompetitive. The Applicant sought interim orders staying the operation of the impugned provisions pending determination of the Reference. The Respondent opposed, arguing the measure was a lawful safeguard to protect Kenya's domestic glass industry from cheap imports. The Applicant presented evidence that the duty had already reduced demand for its products, increased costs passed to consumers, and threatened its market position, staff retention, and expansion plans in Kenya.

Issues

  1. Whether the Applicant has demonstrated a serious triable issue warranting the grant of interim orders.
  2. Whether the Applicant would suffer irreparable injury that cannot be adequately compensated by damages if interim orders are not granted.
  3. Whether the balance of convenience favours the grant of interim orders staying the operation of section 41 of the Business Laws (Amendment) Act, 2020 pending determination of Reference No. 13 of 2020.

Orders

  • Application granted.
  • Interim orders staying the operation of section 41 of the Business Laws (Amendment) Act, 2020 and paragraph 1 Part 1 of the First Schedule to the Excise Duty Act, 2015 against the Applicant pending determination of Reference No. 13 of 2020.
  • The Government of Kenya and institutions thereunder restrained from implementing the impugned laws against the Applicant until Reference No. 13 of 2020 has been heard and determined.
  • Costs of the Application to abide the outcome of the Reference.
  • Reference No. 13 of 2020 to be fixed for hearing forthwith.

Rules and key headnotes

Interim Orders — Test for Grant — Serious Triable Issue
The test for granting interim orders requires demonstration of a serious triable issue rather than a prima facie case with probability of success. A serious triable issue exists where the claim is not frivolous or vexatious and the cause of action has substance and reality, without the court attempting to resolve conflicts of evidence.
Interim Orders — Serious Triable Issue — Treaty Interpretation
A serious triable issue arises where a Reference raises a legitimate legal question under the Court's legal regime, specifically where the matter complained of is stated to violate national law of a Partner State or infringes any provision of the Treaty, rather than enforcement of common law rights.
Interim Orders — Irreparable Injury — Loss of Goodwill and Reputation
Injury to corporate reputation and goodwill constitutes irreparable harm that cannot be adequately compensated by damages where the injury is unquantifiable and virtually impossible to repair or redeem once lost. Business disruption, loss of market share, and reputational damage from staff lay-offs constitute irreparable injury justifying interim relief.
Interim Orders — Adequacy of Damages — Assessment Difficulty
Damages are inadequate as a remedy where they would be difficult to assess, including cases involving loss of goodwill, disruption of business, or where the defendant's conduct has the effect of killing off a business before it is established.
Interim Orders — Balance of Convenience — Commercial Justice
On the balance of convenience, a court must weigh the risk of doing injustice to either party. It is more just to stay collection of potentially unwarranted duties by a public entity than to subject a commercial entity reliant on financial resources and competitive pricing to payment of possibly crippling extra duties pending determination of the suit, particularly where recovery of such payments from the revenue authority may prove difficult.

Legislation cited (6)

  • Treaty for the Establishment of the East African Community Articles 5, 6, 7, 27, 30, 39, 75, 80, 151
  • East African Court of Justice Rules of Procedure, 2019 Rules 4, 52, 84
  • Business Laws (Amendment) Act, 2020 (Kenya) s.41
  • Excise Duty Act, 2015 (Kenya)
  • Protocol for the Establishment of the East African Community Customs Union Article 15, 19
  • Protocol for the Establishment of the East African Community Common Market Articles 2, 4, 5, 6, 32

Cases cited (16)

  • Francis Ngaruko v Attorney General of the Republic of Burundi (Application No. 3 of 2019)
  • British American Tobacco v Attorney General of the Republic of Uganda (Application No. 13 of 2017)
  • Arleen McBean v Sheldon Gordon & Others (2019) JMSC Civ. 38
  • Ericson Kenya Ltd vs. Attorney General & 3 Others
  • Giella v Cassman Brown (1973) EA 358
  • Prof. Peter Anyang' Nyong'o & 10 Others v Attorney General of the Republic of Kenya & 3 Others (Application No. 1 of 2006)
  • Timothy Alvin Kahoho v Secretary General of the East African Community (Application No. 5 of 2012)
  • FORSC & Others v Attorney General of the Republic of Burundi & Another (Application No. 16 of 2016)
  • Mbidde Foundation Ltd & The Rt. Hon. Margaret Zziwa v Secretary General of the East African Community (Consolidated Applications 5 & 10 of 2014)
  • American Cyanamid Company v Ethicon Limited (1975) AC 396
  • Sitenda Sebalu v Secretary General of the East African Community & Others (Reference No. 1 of 2010)
  • Simon Peter Ochieng & Another v Attorney General of the Republic of Uganda (Reference No. 11 of 2013)
  • Australian Broadcasting Corporation v Lenah Game Meats Pty Limited (2001) HCA 63
  • Samsung Electronics Limited v Apple Incorporation (2012) EWCA Civ. 1223
  • East African Industry v True Foods (1972) E.A. 420
  • Cayne v Global Natural Resources PLC (1984) 1 All ER 225

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Kioo Ltd v Attorney General of the Republic of Kenya (Application No.9 of 2020) [2020] EACJ 11 (27 November 2020)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.