Pontrilas Investments Limited v The Central Bank of Kenya and Another

Application No. 14 of 2019

East African Court of Justice at Arusha First Instance Division

M K Mugenyi, Pl; A Ngiye & C Nyachae, JJ

June 15, 2020

Reported by Faith Wanjiku

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Civil practice and procedure – summoning of witnesses– witnesses required to give evidence or to produce documents – application for the production of documents from the witnesses by parties – how should an application for the production of documents under rule 66(1) of the Rules (2019) be in description – East African Court of Justice Rules of Procedure, 2019, rule 66 (1)

Brief facts:

Imperial Bank Limited, a financial institution registered in the Republic of Kenya, was on October 13, 2015 put under receivership by the 1^st respondent and placed under the supervision and management of the Kenyan Deposit Insurance Corporation (KDIC) for twelve months. The action by the 1st respondent was informed by allegations of fraudulent activities of substantial magnitude, as well as the misrepresentation of Imperial Bank’s financial status. Despite repeated assurances by the 1st respondent that the matter would be resolved in the interest of Imperial Bank’s depositors; the Governor of the Central Bank did on June 28, 2017 intimate that the Bank was due to be sold or liquidated.

On August 23, 2017, the applicant was assigned all the rights, title and interest of the Imperial Bank’s depositors. It thereupon lodged Reference No. 8 of 2017 in the court, challenging the 1^st respondent’s execution of its regulatory and bank supervisory function and seeking to hold both respondents to account for allegedly abdicating their fiscal management responsibility with regard to the Imperial Bank Ltd (in receivership) issue, a purported contravention of the Treaty for the Establishment of the East African Community and the Protocol for the Establishment of the East African Community Monetary Union.

Pursuant to rule 53 of the then applicable East African Court of Justice Rules of Procedure, 2013 (2013 Rules), it did transpire in the course of the Scheduling Conference that the applicant intended to summon the Governor of the Central Bank of Kenya as a witness, a preposition that was vehemently opposed by both respondents. The court did rule at the time that the applicant’s oral request be presented formally, hence the present application. However, in addition to the application for witness summons to issue in respect of the Central Bank Governor, the applicant further sought a further amendment to the amended reference.

Issues:

1. How should an application for the production of documents under rule 66(1) of the 2019 Rules be in description?
2. What was the import of direct evidence over circumstantial evidence in a trial process?

Relevant provisions of the law

East African Court of Justice Rules of Procedure, 2019

Rule 66(1) and (2)-Summoning witnesses

(1) Any party in a claim or reference may apply to the Court for summons to any person whose attendance is required to give evidence or to produce documents.

(2) Every witness summons shall specify the time and place of attendance, and whether the attendance is required for the purpose of giving evidence or to produce a document, or for both purposes and shall as well describe with reasonable accuracy the document required.

Held:

1. The authorities to which the court was referred pertained to decisions of municipal courts within the EAC region. They were neither decided by a superior court so as to have binding force upon the court nor by the First Instance Division of the court so as to necessitate good reason before departing from them. On the contrary, they spoke to an entirely different jurisdiction from that of which the court was seized. To compound matters, the legal regime within the EAC municipal courts was such that discovery proceedings entailed interrogatories, inspections and the production of documents in convoluted processes as spelt out in the respective Civil Procedure Rules or Codes.That was not necessarily the mischief of rule 66(1) of the court’s Rules
2. The discovery of documents was intended to provide the parties with the relevant documentary material before the trial so as to assist them in appraising the strength or weaknesses of their relevant cases, and thus to provide the basis for the fair disposal of the proceedings before or at trial. Rule 66(1) simply mandated parties to seek the court’s intervention in the summoning of witnesses for evidential purposes and/ or the production of documents for the same purpose. Thus, whereas the documents that were disclosed and/ or provided under the typical discovery proceedings would be for purposes of inspection to ascertain their relevance to a dispute, rule 66 would appear to address documents whose evidential worth had been pre-determined but were in possession or control of a 3^rd party (possibly including the opposite party).
3. The application sought the personal appearance of the Central Bank Governor for both evidential purposes, as well as the production of documents. That being so, rule 66(2) required the summons sought to specify the precise nature of documents he would be expected to produce. A purposive interpretation of that sub-rule would of necessity suggest that the court could not specify the requisite documents with reasonable accuracy without a related duty upon applicant to describe them with due specificity. It would be a tad absurd to expect a neutral arbiter, such as the court, to deduce with reasonable accuracy the documents sought in the absence of corresponding specificity in the application. An application for the production of documents under rule 66(1) should describe the documents with such degree of specificity as would enable the issuer of the summons to deduce from it, for inclusion within the summons, the levels of accuracy prescribed in rule 66(2).
4. The specificity of document identification would be the primary consideration in the context given the express provisions of rule 66(2) that re-echo the call for reasonable accuracy in the description of the documents sought. The question as to whether documents were either relevant or within the possession or control of a proposed witness could scarcely be interrogated in the absence of a reasonably explicit description of them. Having thereby ascertained the documents, they would then be subjected to the tests of relevance and possession or control of the party from which they were sought.
5. The documents sought under Items B1 to B12 (with the exception of Item B5 that had been conceded and Item B10 that was blank) had been described in generic rather than specific terms. They were not described in explicit terms beyond the generic reference to them as ‘All documents’ relating to a particular function. Such a broad categorisation of the documents depicted non-knowledge of the specific documents required, lending credence to the possibility of a fishing expedition. That could not have been the intention of the court’s Rules. With specific regard to the emails sought, the fact that various emails were referred to in paragraph 16 of the amended Reference underscored the need for a more specific description of the precise emails sought under clause 86, particularly in so far as some of them were ambiguously defined as ‘a series of email messages between Imperial Management and 1^st respondent. The documents outlined in clauses B1, B2, B3, B4, B6, 87, B8, 89, B11 and B12 had not been described in terms as would engender compliance with rule 66(2) of the court’s Rules.
6. The documents outlined in items B13(a), (b), (c), (e), (f) and (i) of Schedule A to had been duly identified for production, and had a bearing on the 1^st respondent’s supervisory and regulatory function in respect of the Imperial Bank ltd. They could shed light on the diligence with which it executed the cited functions, thus facilitating the adept determination of the matters in issue under the amended Reference. The cited documents relevant to the circumstances of the case.
7. Evidence obtained by persons directly involved, and who were subsequently cross-examined by judges skilled in examination and experienced in assessing large amounts of factual information, some of it of a technical nature, merited special attention. The court favoured direct evidence over circumstantial evidence. The court found factual evidence that had been put through the trial process more persuasive than factual evidence that had not withstood cross examination.
8. Evidence should, as much as was practicable, be direct evidence. In the instant case, with utmost respect to the Central Bank Governor, it was undoubtedly apparent that the Bank’s Supervisory Department would have first-hand knowledge of the matters in contention in the amended reference, as well as the documents sought to be produced. They were therefore the more competent witnesses to provide direct evidence therein. Although section 13(3) of the Central Bank of Kenya Act did designate the Governor as the Chief Executive Officer of the Central Bank, section 13(5) of the same statute empowered him to delegate any function thereunder to any other officers of the Bank. There was no reason to compel the Central Bank Governor to appear as a witness in Reference No. 8 of 2017.

Application partly allowed; each party to bear its own costs.

Orders

i. By consent of the parties, the application for amendment was allowed. The amended Reference stood duly amended by correcting the date of the meeting mentioned in paragraph 65B of the amended Reference to read June 28, 2017.

ii. The application for the production of the documentation delineated in items B13(c), (e) and (i) of Schedule A to the application was thereby allowed.

iii. The application for the production of the documents outlined in clauses B1, B2, B3, B4, B6, B7, B8, B9, B11, B12 and B13(a), (b), (d), (f), (g) and (h) of the same Schedule was thereby disallowed.

iv. The application for witness summons to issue in respect of Dr. Patrick Njoroge was thereby disallowed. v. Witness summons were thereby issued in respect of the Head of the 1^st respondent’s Bank Supervisory Department to appear in person for purposes of adducing evidence and production of the documents stipulated in clause 48(b) thereof.

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