https://new.kenyalaw.org/akn/ke/judgment/kekc/2026/1

Co-operative Bank of Kenya Ltd & another v Registrar of Companies (Miscellaneous Application E585 of 2026) [2026] KEKC 1 (KLR) (Civ) (4 June 2026) (Ruling) Neutral citation: [2026] KEKC 1 (KLR) Republic of Kenya In the Kadhis Court at Nairobi (Milimani Commercial Court) Civil Miscellaneous Application E585 of 2026 BK Terer, J June 4, 2026 Between Co-operative Bank of Kenya Ltd 1st Applicant Banyard Investments Ltd 2nd Applicant and Registrar of Companies Respondent Ruling 1.This Ruling is in respect to the Applicants’ exparte Notice of Motion dated 29th May, 2026, Through the said application, the Applicants have moved this Court seeking the following reliefs:1.That this application be certified as urgent, and service of this application be dispensed with and heard ex-parte in the first instance.2.That this Honourable Court be pleased to grant an Order pursuant to Section 888 of the Companies Act that the time for registration in the manner required by Section 885 of the said Act of the Charge issued by Banyard Investments Limited ("the Chargor) herein over properties Title Numbers Nairobi Block 37/288/15, Nairobi Block 37/288/41, Nairobi Block 37/288/45 and Nairobi Block 37/288/18 to secure banking facilities advanced to the 2nd Applicant by the 1st Applicant be extended for a period of thirty (30) days from the date of the Order herein or such other period as the Court shall deem fit.3.That costs of this application be in the cause 2.This Application was supported by the sworn affidavit of Isaiah Mungai Kamau, an Advocate of the High Court of Kenya, dated the same day as the Application. Mr. Kamau practices in the firm of M/S Muriu Mungai & Co Advocates LLP, who have conduct of this matter on behalf of the Applicants. The Court has also seen the Supplementary sworn on 03rd June, 2026 with annextures. Issues for Determination 3.The Court has carefully considered the Motion, the statutory provisions cited, the Supporting Affidavit, and the annexures thereto. Upon such consideration, the Court is of the view that only one issue arises for determination:(a)Whether leave should be granted to the Applicants to register the Charge issued by Banyard Investments Limited at the Companies Registry out of time. Analysis 4.Pursuant to Section 884 of the Companies Act, the Registrar of Companies is mandated to maintain a register of charges, register such charges, issue certificates of registration thereof, and authenticate the same with the Registrar’s Official Seal. Under Section 885 of the Act, the statutory timeline for registration of a charge is thirty (30) days from the date of its creation. In the event of non-compliance, Section 888(1) of the Companies Act empowers any interested party or the company itself to apply to the Court for an extension of the prescribed period for registration. 5.Further, when considering an extension under Section 888, the Court examines whether the delay was accidental or reasonably explained, whether it prejudiced creditors or members, whether granting the extension is just and fair, and whether the omission is rectifiable. This requirement that such a charge must be registered with the Registrar of Companies within thirty (30) days from the date of its creation is statutory and not discretionary. It is evident that the parties have complied with all the necessary legal requirements in the creation of the charge, save for the registration, which was delayed due to reasons sufficiently explained and which were beyond their control. 6.The Court has considered the reasons for delay as advanced by Counsel for the Applicants. The delay in registering the Co-operative Bank Security was occasioned by the system delay in assessment and registration of the same on the Ardhisasa platform. This resulted in lapse of the timelines for registration of the Charge provided for under the Companies Act. This led to the expiry of the period of thirty (30) days for the registration of the Charge. This delay is excusable. 7.Counsel averred that the 2nd Applicant created a Charge dated 9th March, 2026 over properties Title Numbers Nairobi Block 37/288/15, Nairobi Block 37/288/41, Nairobi Block 37/288/45 and Nairobi Block 37/288/18 (the "Charge"). This was to secure banking facilities advanced by the 1st Applicant to the Golf View Limited (Company Registration Number CPR/2010/33095). The 1st Applicant’s Advocate lodged the Charge for registration on the Ardhisasa platform on 9th March, 2026 at the Lands Registry in Nairobi. However, due to system delays experienced on the Ardhisasa platform, the Advocates were unable to complete registration of the Charge at the Companies Registry. This is because the thirty (30) days' period for registration had lapsed pursuant to Section 885 of the Companies Act. 8.That the Applicants want to have the Charge registered in the Companies Registry to secure banking facilities already extended to the Borrower on the strength of the Charge which has not yet been registered at the Companies Registry within the prescribed time in law or at all. 9.Counsel averred that, while they were able to obtain duly registered security documents from the Lands Registry, they were unable to register the Charge at the Companies Registry as the statutory period for such registration had already lapsed during the period taken to assess, stamp, and register the Charge at the Lands Office. Pursuant to Section 885 of the Companies Act, No. 17 of 2015, the Company was required to register the Charge with the Registrar of Companies within thirty (30) days from the date of its creation. The delay in presenting the Charge for registration at the Companies Registry was occasioned by delays in the registration of the Charge, which delay was unintentional and beyond the control of both the Applicants and the Chargor. 10.The omission in the present case pertains solely to the failure to register the Charge at the Companies Registry within the statutory period prescribed under Section 885 of the Companies Act. Notwithstanding this procedural lapse, the Charge was duly executed, assessed for stamp duty, duly franked, and registered at the Lands Registry. The omission is therefore procedural in nature and, in the Court’s view, clearly rectifiable. While it is acknowledged that non-registration at the Companies Registry may affect the enforceability of the Charge as against third parties, the failure to comply with the prescribed timeline was neither wilful nor negligent. In the circumstances, the delay should not defeat an otherwise valid security instrument. This approach aligns with the provisions of Article 159(2)(d) of the Constitution. The Article enjoins Courts to administer justice without undue regard to procedural technicalities, and with the general principles of the Companies Act. This favours the promotion of substantive rights and commercial certainty. 11.There is no evidence on record to suggest that the delay in registration has occasioned any prejudice to the company’s creditors or members. On the contrary, the regularisation of the registration will enhance the protection of the lender’s interest and promote commercial transparency. The affidavit and annexures confirm that all substantive steps in the creation of the Charge, execution, stamping, and registration at the Lands Registry, were duly undertaken in a timely manner, save for the delays stated which led to delays and late filing at the Companies Registry. Accordingly, the Court is satisfied that the Applicants have provided a reasonable explanation for the delay. That the omission is capable of remedy, and that no prejudice has been occasioned to any party. The Court therefore finds it just and equitable to exercise its discretion under Section 888(1) of the Companies Act. In the result, the prayers sought in the Notice of Motion dated 29th May, 2026 are hereby granted as follow; Determination 12.The application dated 29th May, 2026 is allowed as follows;1.That this application is HEREBY certified as urgent, and service of this application be dispensed with and the same is heard ex-parte in the first instance.2.That this Honourable Court HEREBY grants an Order pursuant to Section 888 of the Companies Act that the time for registration in the manner required by Section 885 of the said Act of the Charge issued by Banyard Investments Limited ("the Chargor) herein over properties Title Numbers Nairobi Block 37/288/15, Nairobi Block 37/288/41, Nairobi Block 37/288/45 and Nairobi Block 37/288/18 to secure banking facilities advanced to the 2nd Applicant by the 1st Applicant is hereby extended for a period of thirty (30) days from the date of the Order herein.3.That costs of this application be in the cause 13.It is so ordered. 14.The file is hereby marked as closed. DATED, SIGNED AND DELIVERED AT MILIMANI THIS 04TH DAY OF JUNE, 2026.NJOROGE BENJAMIN K.JUDGE