https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7815

African Banking Corporation Ltd v Oilpoint Kenya Ltd & 3 others (Commercial Case E093 of 2024) [2026] KEHC 7815 (KLR) (Commercial and Tax) (4 June 2026) (Ruling) Neutral citation: [2026] KEHC 7815 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Commercial Case E093 of 2024 MA Otieno, J June 4, 2026 Between African Banking Corporation Ltd Plaintiff and Oilpoint Kenya Ltd 1st Defendant Nimaa Abdirahman Kahiya 2nd Defendant Leila Arab Mohamed 3rd Defendant Mohamed Bare Elmi 4th Defendant Ruling 1.The Defendants, by the present application dated 31st August 2025, seek to set aside the judgment entered on 6th March 2025, stay execution, set aside the Notice to Show Cause and obtain leave to file their defence out of time. 2.The application is supported by the affidavit of Mohamed Bare Elmi, stated to have been sworn on 31st July 2025. The Defendants contend that although they instructed their advocates to defend the suit, their advocates failed to file a defence. They state that they only became aware of the consequences of that omission upon commencement of execution proceedings. They further contend that the draft defence raises substantial triable issues. 3.The Plaintiff opposed the application through the replying affidavit dated 26th November 2025 by Louis Omukhulu. The Plaintiff contends that the Defendants were represented throughout by the same advocates who entered appearance, were repeatedly notified of their failure to file a defence, and were granted opportunities by the court to regularize their position but failed to do so. The Plaintiff therefore contends that the Defendants have not demonstrated sufficient cause for the court to exercise its discretion in their favour. Analysis and Determination 4.I have duly considered the application, the response thereto and the applicable law. The application is brought under Order 10 Rule 11 of the Civil Procedure Rules, which provides that:“Where judgment has been entered under this Order, the court may set aside or vary such judgment and any consequential decree or order upon such terms as are just." 5.The principles governing the exercise of discretion to set aside a default judgment are settled. The discretion is wide and unfettered, but must be exercised judicially and upon reason. In Patel v E.A. Cargo Handling Services Ltd [1974] EA 75, the Court stated that the primary concern of the court is to do justice to the parties. Likewise, in Shah v Mbogo [1967] EA 116, the court emphasized that the discretion is intended to avoid injustice or hardship resulting from accident, inadvertence or excusable mistake, but not to assist a person who has deliberately sought to obstruct or delay the course of justice. 6.In determining whether to set aside a default judgment, the court considers, among other factors, the explanation for the default, the length of delay, whether the application was brought promptly, whether the draft defence raises triable issues, and the prejudice likely to be suffered by either party. 7.The record shows that the Defendants entered appearance vide a memo dated 7th April 2024, but failed to file a defence. On 1st August 2024, the Plaintiff's advocates wrote to the Defendants' advocates, notifying them that the time for filing a defence had lapsed and that judgment in default would be sought. The matter thereafter came before the court on several occasions. On 15th October 2024, counsel for the Defendants appeared and sought fourteen days to file their responses. The court granted that request. No defence was filed. When the matter came up again on 27th November 2024, there was neither compliance nor appearance by the Defendants. Judgment was eventually entered on 6th March 2025. 8.In these circumstances, I do not accept the Defendants' contention that the default was solely attributable to inadvertence of counsel. The failure to file a defence persisted for several months despite reminders from the Plaintiff and despite leave granted by the court. The explanation offered is therefore unsatisfactory. 9.I also find that there was considerable delay. Judgment was entered on 6th March 2025, and the present application was not filed until 22nd September 2025. 10.The Plaintiff has demonstrated that notices relating to the judgment and subsequent execution proceedings were served through the Defendants' advocates on record. The application was therefore not brought promptly. 11.The above finding notwithstanding, this Court is enjoined to consider the nature of the proposed defence. The draft defence disputes the amount claimed, challenges the validity and effect of the securities and guarantees relied upon by the Plaintiff, and alleges failure by the Plaintiff to account for proceeds realised from the charged properties. Those issues cannot be resolved without evidence. 12.As was stated in Patel v EA Cargo Handling Services Ltd (supra), the court's primary concern is to do justice to the parties. Further, where a proposed defence raises bona fide triable issues, the court ought to lean in favour of allowing the dispute to be determined on the merits. 13.While I am not persuaded by the explanation for the delay, I am satisfied that the draft defence raises issues deserving interrogation at a trial. Given the magnitude of the claim (exceeding Kshs. 237 million), and the nature of the dispute, the interests of justice would, in the view of the Court, be better served by permitting the Defendants to defend the suit, albeit on terms that safeguard the Plaintiff from further prejudice. 14.Consequently, I therefore allow the application on the following terms:i.The judgment entered on 6th March 2025 and all consequential orders are hereby set aside.ii.The Defendants shall file and serve their defence and all supporting documents within fourteen (14) days from the date hereof.iii.As a condition for setting aside the judgment, the Defendants shall deposit Kshs. 30,000,000/= in an interest-earning joint account in the names of the parties' advocates within thirty (30) days of this ruling.iv.In default of compliance with order (iii) above, the orders setting aside the judgment shall automatically lapse, and the judgment shall stand reinstated without further order.v.The Notice to Show Cause and all execution proceedings shall remain stayed pending compliance with these orders.vi.The costs of the application are awarded to the Plaintiff. 15.It is so ordered. DATED, SIGNED, AND DELIVERED AT NAIROBI THIS 4TH DAY OF JUNE 2026HON. MR. JUSTICE MOSES ADOJUDGE OF THE HIGH COURTIn the Presence of:Moses C/A………………for the Applicant……………for the Respondent