[2021] KEHC 6872 (KLR)
The court held that the applicant, as administratrix of the estate of a deceased shareholder, lacked the requisite locus standi to be enjoined as an interested party for the purpose of effecting the consent order. The court emphasized the legal distinction between a company and its shareholders, stating that any...
Source-derived case information.
- Citation
- [2021] KEHC 6872 (KLR)
- Parties
- Plaintiff: Alcon Holdings Limited; Defendant: Kenya Commercial Bank Limited; Applicant: Alka Roshanlal Harbanslal Sharma
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Civil Case 1766 of 2020
- Procedural Posture
- Miscellaneous Application / Ruling on Application for Review and Joinder as Interested Party
- Outcome
- application struck out with costs
- Judges
- F Tuiyott
- Legal Topics
- Company Law, Shareholder Rights, Joinder of Parties
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Alcon Holdings Limited
Plaintiff
Kenya Commercial Bank Limited
Defendant
Alka Roshanlal Harbanslal Sharma
Applicant
Procedural Posture
Miscellaneous Application / Ruling on Application for Review and Joinder as Interested Party
Legal Issues
- 1 Whether an individual shareholder or estate of a shareholder can be enjoined as an interested party to challenge or effect a consent order entered by a company.
- 2 Whether the applicant, as administratrix of a deceased shareholder's estate, has locus standi to seek review and joinder for purposes of effecting a consent order involving the company.
Ratio Decidendi
The court held that the applicant, as administratrix of the estate of a deceased shareholder, lacked the requisite locus standi to be enjoined as an interested party for the purpose of effecting the consent order. The court emphasized the legal distinction between a company and its shareholders, stating that any grievance regarding the consent order belongs to the company itself, not to individual shareholders or their estates. Since the company is the proper party to challenge or effect such orders, the application by the applicant was struck out with costs.
Court Disposition
application struck out with costs
Orders
- The application dated 12th June 2020 is struck out with costs.
Full Case Text
Judgment text and source record
28 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA
AT NAIROBI
COMMERCIAL & TAX DIVISION
MILIMANI LAW COURTS
HCCC NO. 1766 OF 2000
ALCON HOLDINGS LIMITED............................................................................... PLAINTIFF
VERSUS
KENYA COMMERCIAL BANK LIMITED........................................................ DEFENDANT
AND
ALKA ROSHANLAL HARBANSLAL SHARMA....... INTERESTED PARTY/APPLICANT
RULING
1. The Motion of 12th June 2020 by Alka Roshanlal H. Sharma seeks the following substantive order:-
[2] A review of the order herein made on 13th March 2020 be made, to authorize the Applicant herein ALKA ROSHANLAL H. SHARMA be enjoined in the suit herein as an interested party for purposes of effecting the Consent Order dated 8th November 2017. ”
2. The Applicant is the Administratrix of the Estate of her Deceased husband Kultar Hanspal which claims to be a shareholder of the Plaintiff Company.
3. Without going into the merits of the Application, I would think that the following holding made by this Court today in considering the application dated 29th June 2020 in this very suit holds true in this matter as well:-
“That said the application faces a more unforgiving challenge. The substantive parties to this suit are the Company and the Bank. The true nature of the grievance of the Applicant is that the consent was entered without the authority of Company as there was no Board of Directors or living shareholders. That grievance in my view, belongs to the Company and although the shareholders or estates of the shareholders could feel aggrieved by the Consent, still, because of the legal distinction between a company and its owners, the person to challenge the consent is the Company. Individual shareholders acting outside the corporate entity cannot do so”
4. The application of 12th June 2020 is struck out with costs.
DATED, SIGNED AND DELIVERED IN COURT AT NAIROBI THIS 11TH DAY OF MAY 2021
F. TUIYOTT
JUDGE
ORDER
In view of the declaration of measures restricting Court operations due to the COVID-19 pandemic and in light of the directions issued by his Lordship, the Chief Justice on 17TH April 2020, this Ruling has been delivered to the parties through virtual platform.
F. TUIYOTT
JUDGE
PRESENT:
Ms Wamuyu holding brief for Ngugi for the Defendant.
Kinyanjui for the Interested Party.