https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/10368

Crown Bus Services Limited v Scania Credit Solution (Proprietary) Ltd & another (Civil Appeal E419 of 2024) [2026] KEHC 10368 (KLR) (Civ) (3 July 2026) (Judgment) Neutral citation: [2026] KEHC 10368 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Law Courts) Civil Civil Appeal E419 of 2024 RA Oganyo, J July 3, 2026 Between Crown Bus Services Limited Appellant and Scania Credit Solution (Proprietary) Limited 1st Respondent GG Kamiri t/a Westminister Commercial Auctioneers 2nd Respondent (Being an appeal from the entire decision, Ruling and order of Hon Wendy K. Micheni (CM) delivered on 15th March 2024 in Nairobi Chief Magistrates Court Civil Case No E451 of 2022) Judgment 1.This dispute arises from a suit instituted by Crown Bus Services Limited, (now the Appellant) in the Chief Magistrate's Court at Nairobi by a Plaint dated 3rd February 2022 against Scania Credit Solution (Proprietary) Limited (now the 1st Respondent), and GG Kamiri t/a Westminster Commercial Auctioneers (now the 2nd Respondent), seeking injunctive and other consequential reliefs to restrain the repossession of motor vehicles leased to the Appellant. By a Plaint dated 3rd February 2022 , the Appellant pleaded that it had entered into seven financial lease agreements with the 1st Respondent in respect of Motor Vehicle Registration Numbers KCX 074G, KCX 075G, KCX 076G, KCX 077G, KCM 098L, KCM 091L and KCM 413L for use in its public service vehicle (PSV) transport business, and that the 2nd Respondent had been instructed by the 1st Respondent to repossess the said motor vehicles. 2.The Appellant averred that while servicing its repayment obligations under the lease agreements, its business was adversely affected by the Government restrictions imposed during the COVID-19 pandemic, the increased costs of operations and maintenance, and the prevailing economic conditions, resulting in delays in remitting payments. It nevertheless continued making payments, proposed a repayment plan towards the outstanding sum of USD 67,916.54, and issued post-dated cheques in partial settlement of the debt. Despite those efforts, the 1st Respondent, by a letter dated 26th January 2022, demanded immediate payment of the outstanding balance in full and instructed the 2nd Respondent to repossess the motor vehicles, following which the 2nd Respondent issued a proclamation of repossession dated 27th January 2022. 3.The Appellant contended that the intended repossession was oppressive, commercially unreasonable, and contrary to the terms of the lease agreements, as it remained obligated to continue making payments notwithstanding repossession of the motor vehicles or termination of the lease agreements. The Appellant maintained that unless restrained by the Court, it would suffer irreparable loss and damage through the disruption of its transport business. Consequently, it sought an injunction restraining the Respondents from repossessing or otherwise interfering with its possession and use of the motor vehicles before the expiry of the lease period, an order permitting settlement of the outstanding amount by instalments, together with costs of the suit, interest, and such further or other relief as the Court deemed fit. 4.Subsequently, the 1st Respondent filed a Notice of Motion dated 28th November 2023 seeking orders to vacate and set aside the restraining orders issued on 4th April 2022 and to be granted leave to repossess Motor Vehicle Registration Numbers KCX 074G, KCX 075G, KCX 076G and KCX 077G. The application was premised on the grounds that the Appellant had breached the payment terms imposed by the Court, that the interim injunctive orders had lapsed after ninety (90) days, and that the Appellant was unlawfully continuing to enjoy the benefit of the expired orders to the prejudice of the 1st Respondent. The 1st Respondent therefore contended that it was in the interests of justice to vacate the restraining orders and permit the repossession of the motor vehicles. 5.Upon considering the Notice of Motion dated 28th November 2023, the learned trial magistrate delivered a ruling in which she identified the sole issue for determination as whether the 1st Respondent was entitled to an order discharging the injunction issued on 4th April 2022. The court observed that, under Order 40 Rule 7 of the Civil Procedure Rules, it had the discretion to discharge, vary or set aside an order of injunction where sufficient cause had been established. 6.The learned trial magistrate found that the Appellant had failed to comply with the conditions attached to the injunctive orders, particularly the obligation to make the periodic payments directed by the Court. The court further held that the interim injunctive orders had lapsed and that their continued subsistence would occasion prejudice to the 1st Respondent. In the circumstances, the court was satisfied that sufficient grounds had been established to warrant the discharge of the injunction. 7.Guided by the foregoing reasoning, the learned trial magistrate allowed the Notice of Motion dated 28th November 2023 and consequently vacated the injunctive orders issued on 4th April 2022. The court further ordered that the costs of the application would abide the outcome of the main suit. 8.Aggrieved by the ruling and orders of the trial court, the Appellant lodged the present appeal by a Memorandum of Appeal dated 25th March 2024, advancing seventeen (17) grounds of appeal. In summary, the Appellant faults the learned trial magistrate for allegedly erring both in law and in fact by discharging the interlocutory injunction issued on 4th April 2022; failing to appreciate the adverse effects of the COVID-19 pandemic and the Government of Kenya's directives under Legal Notice No. 50 of 2020 on the Appellant's PSV business and its ability to meet its financial obligations; failing to recognize the applicability of the doctrine of force majeure and the binding decision in Jomo Kenyatta University of Agriculture and Technology v Kwanza Estate Limited (Civil Appeal 64 of 2022) [2023] KECA 700 (KLR); failing to consider that the Appellant had continued servicing the facilities and had proposed settlement of the outstanding debt; and improperly exercising her discretion under Order 40 Rule 7 of the Civil Procedure Rules by vacating, rather than varying, the injunction. 9.The Appellant further contends that the learned trial magistrate failed to consider the balance of convenience; disregarded the Appellant's contention that the 1st Respondent had frustrated the reconciliation of the parties' accounts; violated the Appellant's constitutional right to a fair hearing; relied on extraneous and erroneous matters, including reference to a non-existent order and payment; failed to appreciate that some of the motor vehicles had allegedly been fully paid for; contradicted her own finding that interim injunctions are intended to preserve the subject matter pending trial; and consequently arrived at a decision that was unjust, oppressive, and occasioned hardship to the Appellant. 10.Contemporaneously with the Memorandum of Appeal, the Appellant filed a Notice of Motion dated 26th March 2024 seeking, pending the hearing and determination of the appeal, an order of injunction restraining the Respondents from repossessing, attaching, selling or otherwise interfering with the Appellant’s seven leased motor vehicles, and such other consequential orders as the Court deemed fit. 11.The learned Judge, Hon. T. W. Cherere, delivered a ruling on 22nd May 2025 in respect of the Appellant's Notice of Motion dated 26th March 2024, which had been filed following the trial court's ruling and sought an injunction pending the hearing and determination of the appeal to restrain the Respondents from repossessing or otherwise interfering with seven leased motor vehicles. The Appellant contended that its financial difficulties arose from the effects of the COVID-19 pandemic, which it argued constituted a force majeure event, and maintained that the trial court had erred in discharging the earlier injunction. The 1st Respondent opposed the application, arguing that the Appellant had persistently breached the conditions attached to the earlier injunctive orders by failing to make the required periodic payments and had therefore approached the Court with unclean hands. 12.Upon considering the application, the Court identified two issues for determination, namely whether the Appellant had met the threshold for the grant of an interlocutory injunction pending appeal and whether it could rely on the doctrine of force majeure. Applying the settled principles governing the grant of interlocutory injunctions, the Court found that the Appellant had failed to establish a prima facie case, irreparable harm, or that the balance of convenience favoured the grant of the orders sought. The Court further held that the Appellant's continued non-compliance with the conditions imposed by the trial court disentitled it to equitable relief and that the COVID-19 pandemic could not justify its continued default after the easing of the restrictions. Consequently, the Court found the application to be without merit and dismissed the Notice of Motion dated 26th March 2024. Issues for Determination 13.Having considered the pleadings and the applicable law, the Court frames the following issues for determination:i.Whether the learned trial magistrate properly exercised discretion under Order 40 Rule 7 of the Civil Procedure Rules in discharging the interlocutory injunction issued on 4th April 2022.ii.Whether the learned trial magistrate failed to properly consider the Appellant’s contention that the COVID-19 pandemic constituted a force majeure event affecting its ability to perform its obligations under the lease agreements. Analysis and Determination 14.The duty of this Court in this appeal is thus to reconsider the evidence, evaluate it itself and draw its own conclusions. In Selle & Another v Associated Motor Boat Co. Ltd & Others [1968] EA 123, this principle was enunciated thus:“...this court is not bound necessarily to accept the findings of fact by the court below. An appeal to this court ... is by way of retrial and the principles upon which this court acts in such an appeal are well settled. Briefly put they are that this court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect...”. 15.Turning to issue one namely, Whether the learned trial magistrate properly exercised discretion under Order 40 Rule 7 of the Civil Procedure Rules in discharging the interlocutory injunction issued on 4th April 2022 16.Order 40 Rule 7 of the Civil Procedure Rules empowers the court to discharge, vary, or set aside an interlocutory injunction upon application by a party dissatisfied with the order. The provision establishes a continuing supervisory jurisdiction over injunctive relief, ensuring that such equitable orders remain responsive to justice and changing circumstances. However, the discretion is not unfettered; it must be exercised judicially, on established principles, and not in a manner that re-litigates or sits on appeal over the original decision. 17.The controlling authority is Filista Chemaiyo Sosten v Samson Mutai [2012] eKLR, where the court held that the discretion under Order 40 Rule 7 must be exercised sparingly so as not to operate as an appeal against the original grant of injunction. The court emphasized that an injunction may only be discharged where it is shown that it was obtained through concealment of material facts that would have influenced the court’s decision, or where there has been a radical change in circumstances rendering the injunction unnecessary. The court further underscored that interlocutory orders are not immutable, but may only be interfered with where post-order developments justify such intervention in the interests of justice. 18.The learned trial magistrate discharged the injunction on the basis that the Appellant had failed to comply with the conditions attached to the injunctive orders, particularly the obligation to make periodic payments towards the outstanding lease obligations. The court further found that the Appellant was in continued default and that its conduct demonstrated non-compliance with the court’s directives, thereby altering the balance of equities in favour of the Respondents. The court also considered the lapse of time and concluded that continued protection under the injunction would occasion prejudice to the Respondents, who were entitled to enforce their contractual rights upon default. 19.The Appellant’s continued default and failure to comply with payment obligations constituted a material post-order circumstance capable of justifying the discharge of injunctive relief. An injunction premised on compliance and good faith cannot be sustained where the beneficiary fails to meet the very conditions upon which equitable protection was granted. 20.The principle that post-order conduct is a relevant factor in determining whether to sustain or discharge an injunction was affirmed in Leah Nyambura Mburu v Barclays Bank of Kenya Ltd [2012] eKLR, where the court held that an application under Order 40 Rule 7 may properly be grounded on subsequent conduct that renders the continued existence of the injunction unjustifiable, including where a party fails to diligently prosecute its obligations or acts in a manner that frustrates the course of justice. 21.Similarly, in Atlas Copco Customer Finance AB v Polarize Enterprises (2016) eKLR, the court identified key considerations in discharge applications, including concealment of material facts, radical change in circumstances, oppressive or abusive conduct, and whether sustaining the injunction would occasion injustice. In Ochola Kamili Holding Limited v Guardian Bank Limited (2018) eKLR, the court further emphasized that injunctions are equitable remedies that may be vacated where the beneficiary acts in bad faith or uses the order to prejudice the opposing party. 22.In the present case, the trial court’s reasoning was anchored on post-injunction conduct, specifically continued non-performance of payment obligations, which is a recognised ground for discharge under the cited authorities. The court did not purport to re-try the merits of the original injunction, nor did it sit on appeal over its earlier decision. Instead, it exercised jurisdiction based on changed circumstances arising after issuance of the order. 23.The Appellant’s argument that the court improperly interfered with a subsisting injunction therefore fails to appreciate the nature of discretion under Order 40 Rule 7, which permits intervention where continued enforcement of an injunction would defeat rather than serve the ends of justice. 24.An appellate court will only interfere with such discretion where it is demonstrated that the trial court acted on wrong principles, failed to consider relevant factors, or considered irrelevant matters. The trial court properly addressed itself to compliance, equity, and prejudice factors squarely within the legal framework governing discharge of injunctions. 25.Accordingly, the learned trial magistrate properly exercised her discretion under Order 40 Rule 7 of the Civil Procedure Rules in discharging the interlocutory injunction issued on 4th April 2022, as her decision was founded on post-order conduct, material change in circumstances, and settled principles of equity as articulated in binding precedent. 26.I now turn to issue two namely, Whether the learned trial magistrate failed to properly consider the Appellant’s case that the COVID-19 pandemic constituted a force majeure event affecting its ability to perform its obligations under the lease agreements 27.The Appellant contends that the learned trial magistrate failed to properly consider its argument that the COVID-19 pandemic constituted a force majeure event which materially affected its ability to meet its repayment obligations under the lease agreements. It is argued that this omission resulted in a flawed exercise of discretion under Order 40 Rule 7 of the Civil Procedure Rules. 28.The concepts of force majeure and frustration of contract, while often used interchangeably in commercial practice, are distinct in law. Force majeure is primarily contractual in nature, depending on the express terms agreed by the parties, while frustration is a common law doctrine implied by law where an unforeseen event renders contractual performance impossible or radically different from what was contemplated. Courts have consistently held that these doctrines must be applied cautiously and within the confines of the contractual framework and evidential record before the court. 29.In Pankaj Transport PVT Limited v SDV Transami Kenya Limited [2017] eKLR, the High Court held that a party relying on force majeure must demonstrate that the impediment was beyond its control, could not reasonably have been foreseen at the time of contracting, and that its effects could not reasonably have been avoided or overcome. Similarly, in Davis Contractors Ltd v Fareham Urban District Council (1956) AC 696, the court emphasized that frustration applies only where performance becomes fundamentally different, not merely more onerous or difficult. 30.The doctrine of frustration has therefore been described as a narrow exception, not lightly to be invoked or applied. Where parties have not expressly provided for force majeure in their contract, courts revert to the strict common law threshold of frustration, requiring proof of radical impossibility or fundamental alteration of obligations. 31.It is also judicially noticeable that the COVID-19 pandemic was an extraordinary global event that disrupted economic activity across sectors, including transport and leasing arrangements. However, as was observed in Haki Na Sheria Initiative v Inspector General of Police & 2 Others (Petition No. 5 (E007) of 2021) [2021] KESC 22 (KLR), while the pandemic was unprecedented in scale, its legal consequences must still be assessed within established legal principles and on a case-by-case basis depending on contractual terms and evidential proof. 32.In the present appeal, the issue before the trial court was not a final determination of contractual liability or the applicability of force majeure, but whether the existing injunctive orders should be discharged under Order 40 Rule 7 of the Civil Procedure Rules. At that interlocutory stage, the court was not required to make definitive findings on complex contractual defences, but rather to assess whether continued injunctive protection remained justifiable in light of the circumstances presented. 33.The trial court was alive to the Appellant’s contention regarding COVID-19 related disruptions. However, it properly determined the application on the basis of compliance with court orders, repayment conduct, and post-injunction default, which are the operative considerations under Order 40 Rule 7 of the Civil Procedure Rules. The COVID-19 argument was noted but could not, at that interlocutory stage, displace the central question of compliance or be treated as a conclusive defence to default without venturing into the merits of the contractual dispute. 34.This approach is consistent with the principle in Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR, where the Court of Appeal cautioned that interlocutory proceedings should not be used to determine substantive rights or finally adjudicate contested legal defences. The role of the court at that stage is to preserve equity, not to conclusively determine liability under contractual doctrines. 35.Further, in Filista Chemaiyo Sosten v Samson Mutai [2012] eKLR, the court held that discretion under Order 40 Rule 7 is not an avenue for re-arguing the merits of the original injunction, but is limited to post-order circumstances such as concealment of material facts or a radical change in circumstances. The COVID-19 argument, while relevant to the underlying dispute, did not itself displace the post-order findings of non-compliance and continued default. 36.This Court is not persuaded that the Appellant has demonstrated any procedural or substantive misdirection on the part of the learned trial magistrate. The discretion under Order 40 Rule 7 of the Civil Procedure Rules was exercised within lawful bounds, anchored on relevant considerations, and directed towards preserving fairness between the parties in light of the prevailing circumstances. 37.In the circumstances, the Appellant has not demonstrated that the learned trial magistrate failed to consider any relevant evidence or misapprehended the applicable legal principles. The record instead shows that the court properly confined itself to the jurisdiction under Order 40 Rule 7 of the Civil Procedure Rules and declined to engage in a premature determination of substantive contractual defences, which properly fall for adjudication at the full hearing. There is therefore no basis for appellate interference, and this ground of appeal fails. Disposition 38.In light of the foregoing analysis and findings, this Court makes the following orders:i.The appeal lacks merit and is hereby dismissed.ii.The ruling and consequential orders of the learned trial magistrate delivered on 15th March 2024 in Nairobi Chief Magistrates Court Civil Case No. E451 of 2022 are hereby affirmed.iii.The costs of this appeal shall be borne by the Appellant and are awarded to the Respondents.Orders Accordingly.Right of appeal 30 days. DATED, SIGNED AND DELIVERED AT NAIROBI THIS 3RD DAY OF JULY 2026.…………………..HON. R.A. OGANYOJUDGE.