https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/9246

In re ABSA Bank Kenya PLC for Extension of Time to Register a Charge (Miscellaneous Cause E721 of 2026) [2026] KEHC 9246 (KLR) (Commercial and Tax) (24 June 2026) (Ruling) Neutral citation: [2026] KEHC 9246 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Miscellaneous Cause E721 of 2026 MO Ado, J June 24, 2026 IN THE MATTER OF THE COMPANIES ACT, 2015 AND IN THE MATTER OF AN APPLICATION BY ABSA BANK KENYA PLC FOR EXTENSION OF TIME TO REGISTER A CHARGE Ruling 1.Before the Court is the Notice of Motion dated 17th June 2026 brought by Absa Bank Kenya PLC under section 885 of the Companies Act, 2015, Rules 59 and 60 of the Companies Regulations and section 3A of the Civil Procedure Act. 2.The Applicant seeks principally an order extending time within which a Charge dated 15th August 2025 and created by Benchmark Distributors Limited over Title Number Nairobi Block 240/890 may be presented to and registered by the Registrar of Companies. 3.The application is supported by the affidavit of David Onyono Nyangena, Advocate, sworn on 17th June 2026. 4.The Applicant states that it instructed its advocates to prepare and register a further charge over the suit property to secure banking facilities advanced to Benchmark Distributors Limited. The Charge was executed on 15th August 2025. 5.It is deponed that although the Charge was executed in August 2025, registration processes at the Lands Registry were not completed until 5th May 2026. The title documents were subsequently received by the advocates in June 2026. The Applicant further avers that the authority necessary for completion of registration at the Companies Registry was received on 16th June 2026. 6.According to the Applicant, the delay was occasioned by circumstances beyond its control, particularly the time taken to complete registration at the Lands Registry and receipt of the requisite authority from the Bank. It is contended that the omission to register the Charge within the statutory period was inadvertent and not intended to defeat the rights of creditors or any interested party. 7.The Applicant argues that unless time is enlarged, the Charge may become void against a liquidator, administrator or creditors and thereby expose both the lender and borrower to substantial prejudice. Analysis and Determination 8.Having considered the application and the material on record, I find that the sole issue arising for determination is whether the Applicant has established sufficient cause to warrant extension of time for registration of the Charge. 9.Section 885 of the Companies Act empowers the Court, where it is satisfied that the failure to register a charge within the prescribed period was accidental, due to inadvertence, or some other sufficient cause, and where the interests of creditors and shareholders will not be prejudiced, to order that the time for registration be extended. 10.The jurisdiction conferred upon the Court under the section is discretionary and is intended to relieve parties from the consequences of genuine mistakes or procedural omissions where no prejudice is occasioned to third parties. 11.In exercising this discretion, the Court is always guided by the principle established in National Bank of Kenya Ltd v Michael Ndungu [2018] eKLR, which emphasizes that where a delay is explained, and no third-party interests are prejudiced, the Court should favor the perfection of substantive security interests over procedural technicalities. 12.The material before the Court shows that the Charge in question was executed on 15th August 2025 and was intended to secure a facility of Kshs. 20,000,000 advanced by the Applicant Bank to Benchmark Distributors Limited. 13.The evidence further shows that registration at the Lands Registry was only completed on 5th May 2026. The Applicant has exhibited the registered Charge and explained that registration at the Companies Registry could not be completed before the statutory period lapsed. 14.The explanation offered for the delay has not been shown to be false, dishonest or calculated to evade the law. The delay appears to have arisen from the process of perfection of securities and the time taken for completion of registration formalities. 15.Importantly, there is no evidence before the Court that any creditor, shareholder or other person has acquired rights that would be prejudiced by the grant of the orders sought. The Charge relates to an existing financing transaction between the Applicant and the Chargor, and the purpose of the application is to perfect the security already intended by the parties. 16.The Court is therefore satisfied that the omission to register the Charge within the prescribed period resulted from inadvertence and sufficient cause within the meaning of section 885 of the Companies Act and that no prejudice to creditors or shareholders has been demonstrated. 17.Accordingly, the Notice of Motion dated 17th June 2026 is merited and is allowed on the following terms: 18.Time for presentation and registration of the Charge dated 15th August 2025 created by Benchmark Distributors Limited over Title Number Nairobi Block 240/890 in favour of Absa Bank Kenya PLC is hereby extended. 19.The said Charge shall be presented for registration with the Registrar of Companies within thirty (30) days from the date of this Order. 20.Each party shall bear its own costs of the application. 21.It is so ordered. DATED, SIGNED, AND DELIVERED AT NAIROBI THIS 24TH DAY OF JUNE 2026HON. MR. JUSTICE MOSES ADOJUDGE OF THE HIGH COURT