Cambria Africa PLC v Kabula Investments Ltd and Others (Commercial Case No. 263 of 2016) [2017] MWCommC 5 (11 October 2017);

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COMMERCIAL DIVISION
BLANTYRE REGISTRY
COMMERCIAL CASE NO 263 OF 2016

BETWEEN:

CAMBRIA AFRICA PLC.............................................................................................. PLAINTIFF

-and-

KABULA INVESTMENTS LTD....................................................................... 1st DEFENDANT

KHEMBO......................................................................................................... 2nd DEFENDANT

CHISALA......................................................................................................... 3rd DEFENDANT

 

CORAM

HON. RACHEL SOPHIE SIKWESE

Matumbi;        of Counsel for the Plaintiff

Gulumba;        of Counsel for the Defendant

Makonyo;       Court Interpreter

 


JUDGMENT


Sikwese J Facts and Issue

The plaintiff and the defendants entered into a Share Swap Agreement dated 11 August 2014. In this agreement the plaintiff undertook to issue shares in consideration of the defendants transferring to the plaintiff shares in a company, Chemical and Marketing Company Limited, whose members are the defendants. The agreement fell through for failure by the parties to fulfill one of the conditions. In that event the parties were at liberty under the agreement to invoke a Termination Agreement, which was duly executed. The Termination Agreement was made subject to the exclusive jurisdiction of the courts of England and Wales.

A dispute arose out of the Termination Agreement. The plaintiff filed a claim with this Court. The defendants put in a defence and a counter claim. The defence did not raise any objection as regards jurisdiction neither did the counter claim raise the issue of jurisdiction.

The issue before this Court was whether the plaintiff could bring an action between the parties under the Malawi jurisdiction? The defendants were of the opinion that the plaintiff had brought their action in a wrong forum and in contravention of a clear express term of a contract. The plaintiff opposed the objection. They raised the defence of waiver in that at the time the defendants purported to raise the jurisdiction objection they had already taken active steps in the action signifying their waiver of the jurisdiction clause.

The Law

A waiver is the intentional, voluntary and unilateral act of one person that results in the surrender of a legal right. The giving up of a right may either be by an express statement or by conduct. The key issue for a court reviewing a claim of waiver is therefore whether the person intentionally, voluntarily and unilaterally gave up a right.

The events giving rise to the preliminary objection can be outlined as follows: On 31 October 2016 a specially endorsed writ was issued by this Court commanding the defendants to within 21 days of service of the writ on them to satisfy the claim or return to this Court acknowledgement of service stating therein whether the defendants intended to contest the proceedings or not? On 16 November a notice of acknowledgement of service filed by the defendants signifying their intention to contest the proceedings was issued by this Court, followed by a defence and counterclaim issued by this Court on 28 November 2016. On 30 November 2016 the defendants filed a summons for Security of Costs of proceedings on the basis that the plaintiff is ordinarily resident out of the jurisdiction. On 27 January 2017 the plaintiff filed a notice of summons for Judgment on Admission and Summary Judgment. On 1 February 2017 the defendant filed a notice of preliminary objection to use an affidavit of one of the deponents in the application for Summary Judgment and a further application to cross examine the said deponent, issued on the same day. On 7 February 2017 the defendants filed a notice of preliminary objection to the jurisdiction of the Courts in Malawi.

Counsel for the defendants swore an affidavit in support of the application objecting to the jurisdiction of this Court. The main objection was to the effect that the parties specifically agreed in the Termination Agreement that the Courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim arising out of or in connection with the said Agreement.

In response counsel for the plaintiff argued that the defendants had taken out their objection way out of time considering the time lapse between the acknowledgement of service and intention to defend to the date of the preliminary objection. Secondly, the defendants took active steps in the action by suing the plaintiff in the counter claim, which suit gave jurisdiction to this Court. Thirdly that the conduct of parties in the action point to the fact that they both waived the jurisdictional clause. Fourthly, that there was no special circumstances that would render any prejudice if the matter was heard before this Court.

Finding

The factors to consider when faced with a case of this nature have already been outlined above. It is clear in this matter that the intentional, voluntary and unilateral conduct of the defendants in

conducting this matter, support the plaintiffs opposition to the insistence that the Courts of England and Wales should have exclusive jurisdiction over this matter. The defendants were not able to rebut the assumption that they had waived their right to insist on the jurisdiction clause. The preliminary objection on jurisdiction of this Court is thus dismissed with costs to the plaintiff. The defendant to file a notice for further directions on way-forward considering there is a pending contested application on security for costs.

Pronounced in Chambers this 11th day of October 2017 at High Court (Commercial Division) Blantyre.
 
____________________
Rachel Sophie Sikwese
JUDGE