https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7434

Co-operative Bank of Kenya Ltd & another v Registrar of Companies (Miscellaneous Civil Application 584 of 2026) [2026] KEHC 7434 (KLR) (Civ) (30 May 2026) (Ruling) Neutral citation: [2026] KEHC 7434 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Civil Miscellaneous Civil Application 584 of 2026 MO Ado, J May 30, 2026 IN THE MATTER OF SECTIONS 878, 885, AND 888 OF THE COMPANIES ACT, 2015 AND IN THE MATTER OF AN APPLICATION FOR EXTENSION OF TIME TO REGISTER A CHARGE Between Co-operative Bank of Kenya Limited 1st Applicant Herminia Limited 2nd Applicant and Registrar Of Companies Respondent Ruling 1.Before the court is the Notice of Motion dated 14th April 2026 brought under Order 51 Rule 1 of the Civil Procedure Rules and Sections 878, 885 and 888 of the Companies Act, 2015. The Applicants seek an order extending the time within which a charge created by the 2nd Applicant in favour of the 1st Applicant may be registered at the Companies Registry. 2.The application is supported by the affidavit of Isaiah Mungai Kamau, an advocate in the firm representing the Applicants. He depones that the 2nd Applicant created a charge dated 10th March 2026 over Title Numbers Nairobi Block 37/288/121, Nairobi Block 37/288/163, Nairobi Block 37/288/148, Nairobi Block 37/288/158 and Nairobi Block 37/288/157 to secure banking facilities advanced by the 1st Applicant. 3.It is further deponed that the charge was lodged for registration through the ArdhiSasa platform, but due to system delays and challenges encountered in processing and registration, the Applicants were unable to complete registration at the Companies Registry within the thirty days prescribed under section 885 of the Companies Act. 4.The Applicants contend that all statutory requirements have been met, the security documents have been duly stamped and registered at the Lands Registry, and that no prejudice will be occasioned to any creditor or shareholder if the period for registration is extended. 5.The issue for determination is whether the Applicants have established sufficient grounds for extension of time to register the charge. 6.Section 885(1) of the Companies Act requires a registrable charge created by a company to be delivered to the Registrar for registration within thirty days after its creation. Failure to register a charge within the prescribed period renders the charge void against a liquidator, administrator and creditors of the company, although the underlying debt remains payable. 7.Parliament nevertheless recognized that circumstances may arise where registration cannot be completed within the prescribed period. Section 888 of the Companies Act empowers the court, where the omission to register a charge within time is accidental, due to inadvertence or some other sufficient cause, and where the interests of creditors and shareholders are not prejudiced, to extend the time for registration on such terms as it considers just. 8.The jurisdiction conferred by section 888 is discretionary and is intended to prevent injustice arising from technical non-compliance where a party has demonstrated good faith and where no prejudice will result to third parties. The court must therefore be satisfied that the delay has been satisfactorily explained and that the extension sought will not adversely affect creditors, shareholders or other persons dealing with the company. 9.The evidence before the court shows that the Applicants commenced the process of perfecting the security promptly after the charge was created. The explanation advanced is that delays encountered on the ArdhiSasa platform impeded completion of the registration process within the statutory period. The court takes judicial notice of the fact that transitions to electronic registration systems have on occasion occasioned operational and administrative delays beyond the control of users. There is no evidence that the omission was deliberate, reckless or intended to defeat the rights of creditors. 10.The Applicants have further demonstrated that the security documents were duly stamped and registered at the Lands Registry and that the process of perfection of the security had already commenced. The application was brought without undue delay after the lapse of the prescribed period. There is also no material before the court suggesting that any creditor, shareholder or other person will suffer prejudice if the registration period is extended. 11.In the circumstances, I am satisfied that the failure to register the charge within the time stipulated under section 885 of the Companies Act resulted from sufficient cause within the meaning of section 888 of the Act and that it is just and equitable to grant the relief sought. 12.Consequently, the Notice of Motion dated 14th April 2026 is allowed and I make the following orders:i.Pursuant to section 888 of the Companies Act, the time for registration of the charge dated 10th March 2026 created by Herminia Limited over Title Numbers Nairobi Block 37/288/121, Nairobi Block 37/288/163, Nairobi Block 37/288/148, Nairobi Block 37/288/158 and Nairobi Block 37/288/157 in favour of Co-operative Bank of Kenya Limited is hereby extended for a period of thirty (30) days from the date of this order.ii.The Registrar of Companies shall accept the said charge for registration upon compliance with all applicable statutory requirements.iii.There shall be no order as to costs. 13.It is so ordered. DATED, SIGNED, AND DELIVERED AT NAIROBI THIS 30TH DAY OF MAY 2026HON. MR. JUSTICE MOSES ADOJUDGE OF THE HIGH COURT