https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7621

DIB Bank Kenya Limited v Burgis Limited & 2 others (Civil Suit E579 of 2023) [2026] KEHC 7621 (KLR) (Commercial and Tax) (14 May 2026) (Ruling) Neutral citation: [2026] KEHC 7621 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Civil Suit E579 of 2023 PM Mulwa, J May 14, 2026 Between DIB Bank Kenya Limited Plaintiff and Burgis Limited 1st Defendant Lama Logistics Limited (Formerly Go Track Limited) 2nd Defendant Issack Aliow Sheikh Issack 3rd Defendant Ruling 1.This ruling determines three interrelated applications. 2.The first is the Plaintiff’s Notice of Motion dated 8th June 2025 seeking:(a)an order lifting the corporate veil of the 1st and 2nd Respondents and citing their directors and the 3rd Respondent for contempt for alleged breach of court orders dated 20th December 2023, and(b)an order compelling delivery of specified logbooks and possession of motor vehicles and trailers Registration Numbers: ZE 9279, KDB 224L, KDA 600Y, KDA 869Z, ZF 8320, ZG 3961, ZG 3948 and KDC 477U , ZG 4713 and ZG 3946 ZG9176, ZG9178, ZG9180, ZG9181, ZG9182, ZG9183, ZG9184, KCR108P and ZG1062, KDK768A, KDK767A and KDK766A, or, alternatively, committal to civil jail for contempt. 3.The second and third are Defendants’ applications both dated 2nd October 2025 seeking:(i)stay and/or setting aside/review/vacation of the ex parte orders of 20th December 2023 and a rehearing inter partes of the Plaintiff’s application dated 22nd November 2023, and(ii)leave to file statements of defence out of time. 4.The Plaintiff’s case is founded on the affidavit of James Karanja, Manager - Collections & Special Assets Management, and the pleaded fact that the 1st Respondent obtained a Wakala Murabaha Asset and Term Facility of Kshs. 206,902,370/= with the 2nd Respondent as guarantor, the facility became non-performing, and the Court ordered delivery of specified vehicles and logbooks on 20th December 2023. The Plaintiff avers service and persistent non-compliance by the Respondents. 5.The Defendants deny proper service of the originating process and of the orders of 20th December 2023, assert the ex parte proceedings were allowed undefended by reason of non-service, and explain delay by reference to mistaken appearances, the 2nd Defendant’s director’s ill-health and other evidential matters. They contend they have triable defences and seek to be heard. 6.The three applications were canvassed together by way of written submissions. Analysis and determination 7.I have considered the three applications, the affidavits on record, the annexures, and the rival submissions by counsel. The following issues fall for determination:i.whether the Defendants have established sufficient grounds to warrant review and setting aside of the ex parte orders issued on 20th December 2023;ii.whether the Defendants should be granted leave to file their defence out of time;iii.whether the Plaintiff has established a case for contempt against the Defendants. Whether there is established sufficient grounds to warrant review 8.The law governing review of court orders is set out under Section 80 of the Civil Procedure Act and Order 45 Rule 1 of the Civil Procedure Rules. A review may be granted where an applicant demonstrates there is discovery of a new and/or important evidence with reasonable diligence, which could not have been produced at the hearing, or where there is an error apparent on the face of the record, or for any other sufficient reason. 9.From the material placed before Court, the gravamen of the Defendants’ complaint is that they were never served with summons, pleadings and the orders issued on 20th December 2023. The issue of service goes to the root of the proceedings because a party condemned unheard suffers a violation of the rules of natural justice and the constitutional right to fair hearing under Article 50(1) of the Constitution. The Court, therefore, cannot ignore such allegations merely because ex parte orders were already issued. 10.The affidavits of service on record demonstrate that service was effected through email addresses associated with the Defendants, particularly info@burgis.co.ke. The Plaintiff has further exhibited documents allegedly generated by the Defendants bearing the same email address, including facility application documents and account opening forms. Of significance is the exhibited email allegedly forwarding the Plaintiff’s pleadings using the impugned email address. In my view, the evidence demonstrates prima facie that the email address used for service was indeed associated with the Defendants. 11.However, the Court also notes that the Defendants deny actual knowledge of the proceedings and contend that the person who principally handled the transaction subsequently developed a mental illness. Further, no prejudice incapable of compensation by costs has been demonstrated by the Plaintiff if the Defendants are allowed to defend the suit on merits. 12.Courts have consistently held that disputes should, where possible, be determined on merits rather than technical defaults. The Court’s inherent jurisdiction (Sections 1A, 1B and 3A of the Civil Procedure Act) is available to prevent miscarriage of justice and to ensure the right to be heard. 13.In the present case, while I am not persuaded that the Defendants have strictly satisfied the threshold for review under Order 45 of the Civil Procedure Rules, I am nevertheless satisfied that sufficient cause has been demonstrated to warrant the setting aside of the ex parte orders. 14.Having found that the ex parte orders issued on 20th December 2023 ought to be set aside, it follows that the substratum of the contempt application collapses. In any event, there exists an unresolved factual dispute as to service and knowledge of the impugned orders. 15.Contempt proceedings being quasi-criminal in nature demand a standard of proof higher than proof on a balance of probabilities though not as high as proof beyond reasonable doubt. In Mutitika v Baharini Farm Limited [1985] KLR 229, the Court held that the standard of proof in contempt proceedings must be higher than in ordinary civil cases because of the penal consequences’ attendant thereto. 16.It is now settled that for an applicant to succeed in contempt proceedings, he must demonstrate: the existence of a lawful and binding court order; service of the order upon, or knowledge thereof by, the alleged contemnor; and deliberate and willful disobedience of that order. (See Shimmers Plaza Limited v National Bank of Kenya Limited [2015] eKLR). 17.In the present case, the uncertainty surrounding service and knowledge of the orders, coupled with the setting aside of the ex parte orders themselves, disentitles the Applicant from the relief sought. The contempt application is therefore devoid of merit and is hereby dismissed. 18.Turning to the Defendants’ application for leave to file their statements of defence out of time, the Court is guided by the overriding objective under Sections 1A and 1B of the Civil Procedure Act as well as the constitutional imperative under Article 50 of the Constitution guaranteeing every party the right to a fair hearing. The Court’s discretion in such matters ought to be exercised judiciously and in a manner that facilitates the determination of disputes on their merits rather than on procedural technicalities. In Philip Keipto Chemwolo & Another v Augustine Kubende [1982-88] KAR 103, the Court observed that blunders will continue to be made from time to time and that unless there is fraud or intention to overreach, parties should not be denied an opportunity to ventilate their cases on merit. 19.Similarly, in Patel v E.A. Cargo Handling Services Ltd [1974] EA 75, the Court held that the main concern of the Court is to do justice to the parties and that discretion should be exercised to avoid injustice or hardship resulting from accident, inadvertence or excusable mistake. The Court has also considered whether the delay is inordinate and whether any prejudice incapable of compensation by an award of costs would be occasioned to the opposing party. 20.In the present case, although there was delay in filing the statements of defence, the Plaintiff has not demonstrated that the delay was so egregious as to warrant shutting out the Defendants from being heard, nor has it demonstrated any prejudice that cannot adequately be compensated by costs. In the interests of substantive justice and upon balancing the competing rights of the parties, I am satisfied that the Defendants ought to be granted an opportunity to defend the suit. 21.Consequently, the Court makes the following orders:i.The ex parte orders issued on 20th December 2023 are hereby set aside.ii.The Defendants are granted leave to file and serve their Statements of Defence within fourteen (14) days from the date hereof. The Plaintiff shall thereafter be at liberty to file any further pleadings, if necessary, within fourteen (14) days of service.iii.The Plaintiff’s application dated 8th June 2025 seeking contempt orders is dismissed.iv.The Plaintiff’s application dated 22nd November 2023 shall be heard afresh inter partes on a priority basis.v.The costs of the three applications shall abide the outcome of the suit.It is so ordered. RULING DELIVERED VIRTUALLY, DATED AND SIGNED AT NAIROBI THIS 14TH DAY OF MAY 2026.P.M MULWAJUDGEIn the presence of:Mr. Orwenyo h/b for Mr. Owuor for PlaintiffCourt Assistant: Lispa