https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11853

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **MILIMANI LAW COURTS COMMERCIAL & TAX DIVISION** **HCCC NO. 429 OF 2018** **MANSUKHLAL PREMCHAND DODHIA** ............................ **1ST PLAINTIFF** **PARIT MANSUKHLAL DODHIA** ...................................... **2ND PLAINTIFF** **PIRTIBALA MANSUKHLAL DHODHIA** ............................ **3RD PLAINTIFF** **-VERSUS-** **TAUSI INDUSTRIES (K) LIMITED** ................................... **1ST DEFENDANT** **ADZAH ENTERPRISES (K) LIMITED** ............................. **2ND DEFENDANT** **OSHWAL ALUMINIUM INDUSTRIES LIMITED** ............ **3RD DEFENDANT** **NEWMAN BOILA MLACHA** ...................................... **4TH RESPONDENT** **RAJEEV DUBEY** ......................................................... **5TH RESPONDENT** **SHANTHALAL GUNASEKERA** ................................... **6TH RESPONDENT** **MANSOORALI EBRAHIM DAHYA** ............................ **7TH RESPONDENT** **NURJAHAN MANSOORALI DAHYA** ....................... **8TH RESPONDENT** **RULING** 1. This is a post judgment motion. The corporate veil remains intact. It is merely threatened. This dispute pits the fundamental constitutional right to personal liberty and freedom of movement against the legitimate pursuit of a judgment creditor seeking to secure the fruits of a hard-won arbitral decree. 2. The Court must determine whether it is legally tenable to impose draconian preservatory orders—specifically a travel ban against a director in their personal capacity based on the mere anticipation that the corporate veil might eventually be pierced. The Court cannot anticipate the outcome of that process. The Court must balance the competing rights of an aggrieved creditor to secure a judgment against a litigant's inalienable constitutional right to freedom of movement under the Bill of Rights. This ruling seeks to resolve that tension. **Background of Facts** 3. The genesis of this protracted litigation traces back to a Share Sale and Purchase Agreement dated 17th March, 2014. The Plaintiffs agreed to sell their shares in the 3rd Defendant, **Oshwal Aluminium Industries Limited**, to the 1st and 2nd Defendants for a consideration of Kshs. 190,000,000. A dispute over the payment of the purchase price subsequently arose. The matter was referred to arbitration in accordance with the agreement. 4. On 7th December, 2021, the Sole Arbitrator, **Dr. Kariuki Muigua**, published a Final Award. He directed the Respondents to pay the Claimants the sum of Kshs. 86,660,100 together with simple interest at 12% per annum, alongside legal costs of Kshs. 2,184,897.50. The Arbitral Award was subsequently recognized and entered as a judgment of this Court by the **Honourable Justice D. S. Majanja** on 17th March, 2023. 5. Following the recognition of the Award, the Plaintiffs commenced execution proceedings. Warrants of attachment and sale were issued on 8th August, 2023. The execution was unsuccessful. On 12th September, 2023, the executing auctioneers, Okuku Agencies, returned the warrants unexecuted. They reported that the judgment debtors possessed no attachable assets and had ceased operations. 6. Faced with a barren corporate shell, the Plaintiffs filed a substantive application dated 28th April, 2026 seeking to lift the corporate veil among other orders. They alleged that the directors (the 4th to 8th Respondents) had utilized a complex web of corporate entities, including a newly incorporated entity named **Waltrim Holdings (K) Limited**, as mere façades to warehouse assets and evade lawful liabilities. 7. Pending the hearing of that substantive application, the Plaintiffs moved the Court ex parte. On 1st May, 2026, this Court issued ex parte interim preservatory orders against the 6th Respondent, **Shanthalal Gunasekera**. These orders imposed a strict travel ban in the interim. 8. Aggrieved by the ex parte orders of 1st May, 2026, the 6th Respondent filed a Notice of Motion dated 7th June, 2026 under a Certificate of Urgency. The Applicant seeks the following reliefs: 1. *THAT this application be certified as urgent and be heard ex parte in the first instance.* 2. *THAT this Honourable Court be pleased to review, vary, and/or set aside the ex parte Orders issued on 1st May, 2026 in their entirety, which were obtained without jurisdiction, by material non-disclosure, and which are unconscionable and oppressive to the 6th Respondent.* 3. *THAT this Honourable Court DO ORDER AND/OR DIRECT the Director General of Immigration Services to lift/withdraw the exit restriction and/or travel alert against the Applicant barring his departure from Kenya.* 4. *THAT the alternative to prayers 2 and 3 above, pending the hearing and determination of this application inter partes, this Honourable Court be pleased to stay the implementation and execution of the said ex-parte orders dated the 01st May 2026.* 5. *THAT this Honourable Court be pleased to lift the travel ban against the 6th Respondent forthwith, and direct the Director General of Immigration Services to remove all exit restrictions and travel alerts against the 6th Respondent.* 6. *THAT this Honourable Court be pleased to decline the application to issue a Mareva injunction and all ancillary orders- tracing, freezing, preservation applied for by the Plaintiffs/Respondents against the Applicant.* 7. *THAT this Honourable Court be pleased to strike out the Plaintiffs' Notice of Motion dated 28th April 2026 for being incompetent, bad in law, and an abuse of the court process.* 8. *THAT the costs of this application be borne by the Plaintiffs/Respondents.* 9. *THAT this Honourable Court be pleased to issue any other orders it deems fit and just in the circumstances.* 9. The 6th Respondent's application is supported by his affidavit sworn on 7th June, 2026. The Applicant advances several critical arguments. First, he contends that the Plaintiffs suppressed material facts. Specifically, they failed to disclose that the 3rd Defendant company was placed under administration by its secured creditor, **Bank of Baroda Kenya Limited**, for an outstanding debt of approximately Kshs. 230,000,000. Consequently, a Moratorium Order staying all legal actions was issued by the **Honourable Justice Alfred Mabeya** on 11th October, 2024. This was pursuant to **Section 560(1)(d) of the Insolvency Act No. 18 of 2015**. The Applicant argues that these fresh applications for travel bans and freezing orders are fundamentally an illegality that offends the moratorium. 10. Second, the Applicant fiercely contests the allegation that he is a flight risk. The evidence establishes that he is a Sri Lankan national who has lawfully resided in Kenya for over twenty years and holds Permanent Resident status. He has provided a Permanent Residence Certificate (File Reference number 1219365) and a Foreigner Certificate to that effect. His travel schedule is predicated on legitimate business engagements and pressing humanitarian needs. Specifically, he must provide care for his ailing 84-year-old mother in Sri Lanka. 11. The Applicant through his affidavit provided a detailed travel itinerary to the Court, demonstrating his intention to travel for the purpose of securing investors to restructure the corporate debt and reopen the closed factory: 12. Third, the Applicant asserts that he provided no personal guarantees for the corporate debts of **Oshwal Aluminium Industries Limited**. He argues that the Plaintiffs are unlawfully attempting to pierce the corporate veil at an interlocutory stage to seize personal assets for a corporate debt he does not personally owe. The Applicant posits that the blanket travel ban constitutes an unconstitutional infringement of his rights to freedom and security of the person, freedom of movement, and fair administrative action under Articles 27, 29, 39, 40, and 47 of the Constitution of Kenya, 2010. He notes that he is willing to abide by reasonable conditions imposed by the Court, but maintains the blanket ban is unconscionable. 13. The Plaintiffs/Respondents oppose the application through a Replying Affidavit sworn by **Mansukhlal Premchand Dodhia** on 9th July, 2026, buttressed by Grounds of Opposition and Written Submissions. The Plaintiffs argue that the application is incompetent, devoid of merit, and an impermissible attempt to invite the Court to sit on appeal over its own discretionary orders. 14. The Plaintiffs rely on the rigid threshold for review under **Section 80 of the Civil Procedure Act** and **Order 45 Rule 1 of the Civil Procedure Rules**. They argue that the Applicant has failed to demonstrate the discovery of new and important matters, an error apparent on the face of the record, or any other sufficient reason to warrant review. 15. The Plaintiffs aver that their actions are justified. Execution against the corporate Respondents proved futile because the companies possess no attachable assets. Investigations revealed that the Respondent companies are interconnected through a carefully structured shareholding arrangement. The Plaintiffs assert that **Waltrim Holdings (K) Limited** was incorporated to create a parallel corporate structure intended to warehouse assets while liabilities remained in the original company. 16. They further argue that the statutory moratorium under the Insolvency Act does not confer personal immunity upon directors or shareholders who are alleged to have abused the corporate personality or participated in fraudulent transactions. The Plaintiffs assert that the preservatory orders were a necessary and proportionate response to a real, substantial, and imminent risk of dissipation of assets. They maintain that the Applicant's own documents showing confirmed travel arrangements vindicate their apprehension that he intended to leave the jurisdiction before the satisfaction of the decree. The balance of convenience, they argue, overwhelmingly favours maintaining the *status quo* to preserve the efficacy of the pending substantive application seeking to lift the corporate veil. **Issues for Determination** 17. The Court has carefully considered the pleadings, the affidavits on record and the rival submissions made by Counsel for the parties. The Court frames the following issues for determination: 1. *Whether the Court should review, vary or set aside the ex parte travel ban imposed upon the 6th Defendant.* **Analysis** 18. The remedies sought in this application—specifically the discharge of injunctions and the setting aside of ex parte orders—invoke the equitable and discretionary jurisdiction of the Court. The exercise of such discretion must be guided by established legal principles, fairness, and the overriding objective of the Civil Procedure Act to achieve justice. 19. The Plaintiffs vehemently argue that the Applicant's motion is an appeal disguised as an application for review. They assert that the Applicant has not met the threshold **under Order 45 Rule 1 of the Civil Procedure Rules**. To buttress this point, they correctly cite the leading authority **National Bank of Kenya Ltd v Njau [1997] KECA 71 (KLR)**, where the Court of Appeal established the strict parameters for review: *"A review may be granted whenever the court considers that it is necessary to correct an apparent error or omission on the part of the court. The error or omission must be self-evident and should not require an elaborate argument to be established. It will not be a sufficient ground for review that another Judge could have taken a different view of the matter."* 20. While the principles enunciated in **Ndungu Njau** regarding **Section 80** and **Order 45 of the Civil Procedure Act** are unassailable, the Plaintiffs' reliance on this threshold in the present context is procedurally flawed. The orders issued on 1st May, 2026 were granted ex parte. The law distinguishes between seeking a formal review of a final judgment or order rendered after a full inter partes hearing, and seeking the discharge of an interim preservatory order obtained behind a litigant's back. 21. It is a fundamental tenet of natural justice and procedural fairness that a party affected by an ex parte order has an automatic right to approach the issuing Court to have the order discharged, varied, or set aside. **Order 40 Rule 7 of the Civil Procedure Rules** explicitly provides the necessary jurisdiction: *"Any order for an injunction may be discharged, or varied, or set aside by the court on application made thereto by any party dissatisfied with such order."* 22. An ex parte injunction is an extraordinary equitable remedy. It requires the applicant to approach the Court with utmost good faith *(uberrima fides).* Full and frank disclosure of all material facts is mandatory. An order obtained by misrepresentation or suppression of material facts is inherently vulnerable and may be set aside *ex debito justitiae*. 23. The Applicant has demonstrated that the Plaintiffs failed to disclose critical facts to the Court on 1st May, 2026. Specifically, the Plaintiffs omitted the fact that the 6th Respondent is a Permanent Resident of Kenya who has resided in the jurisdiction for over twenty years. They also failed to disclose the existence of a statutory Moratorium Order issued by a coordinate Judge of this Division protecting the 3rd Defendant company. 24. The suppression of the Applicant's Permanent Resident status fundamentally warped the Court's initial assessment of flight risk. A foreign national residing on a transient visa presents a markedly different risk profile compared to a twenty-year permanent resident with deep-rooted business ties within the jurisdiction. The failure to disclose these facts constitutes material non-disclosure. Consequently, the Court finds that it is entirely within its jurisdiction to re-evaluate, vary, or set aside the ex parte orders under **Order 40 Rule 7**. The Court is not strictly bound by the rigid confines of an error apparent on the face of the record as demanded by **Order 45.** 25. The Applicant contends that the ex parte orders are a nullity as they offend the Moratorium Order issued on 11th October, 2024 pursuant to **Section 560 of the Insolvency Act**. To this Court that is an issue that can be canvassed at the hearing of the Plaintiffs Notice of Motion dated 28th April, 2026 which is still subsisting. 26. The Plaintiffs' justification for the travel ban, asset freeze, and tracing orders rests entirely on their pending application to lift the corporate veil. They allege an elaborate corporate structure designed to defraud creditors and intermingle assets. The 6th Defendant has already responded to the Application. That is also an issue that can best be canvassed in the pending Notice of Motion dated 28th April, 2026. 27. In the present matter, the Court must explicitly acknowledge that the corporate veil has not been lifted. It is sought to be lifted. The Court cannot anticipate the outcome of that substantive process. 28. Furthermore, the Plaintiffs sought orders akin to a Mareva injunction (freezing orders) and arrest/attachment before judgment. Order 39 Rule 1 of the Civil Procedure Rules allows the Court to demand security or arrest a Defendant where the Defendant, with intent to delay the Plaintiff, or to avoid any process of the Court, or to obstruct or delay the execution of any decree, is about to abscond or leave the local limits of the jurisdiction of the Court. 29. The standard of proof for such orders is exceptionally high. As the Court noted in **Samuel Mtakai V Kenya Shell Limited [2011] KEHC 503 (KLR)**, mere hearsay or unverified apprehension of asset disposal or abscondment is insufficient to warrant attachment before judgment. The 6th Respondent has provided substantial evidence of his deep ties to Kenya, his permanent residency, and legitimate business and humanitarian reasons for his travel itinerary. The Plaintiffs' assumption that a scheduled flight equates to abscondment is unsupported by cogent evidence. A permanent resident of twenty years does not automatically become a flight risk merely because they schedule a flight to visit an ailing parent or source machinery to rescue a struggling business. Once again these are issues that will be raised at the hearing of the Plaintiffs’ Notice of Motion dated 28th April, 2026. **(a) Whether the Court should review, vary or set aside the ex parte travel ban imposed upon the 6th Defendant.** 30. The most pressing issue is the continuation of the travel ban. The Constitution of Kenya, 2010, at Article 39, guarantees fundamental freedoms of movement. It provides: "(1) Every person has the right to freedom of movement. (2) Every person has the right to leave Kenya." 31. While the 6th Respondent is a foreign national, his status as a lawful Permanent Resident entitles him to the protection of fundamental rights under the Bill of Rights. These rights apply to all persons within the Republic unless explicitly restricted to citizens. 32. A travel ban is a severe deprivation of personal liberty. It operates as a civil detention. The 6th Respondent has articulated compelling humanitarian grounds for travel: the care of his 84-year-old mother in Sri Lanka, who suffers from chronic illness. Additionally, his travel is necessary for the procurement of raw materials and machinery essential to his livelihood and his ongoing efforts to restructure the 3rd Defendant's debt. To maintain a travel ban under these circumstances would be unduly punitive and inhumane. 33. However, the Court does not operate in a vacuum. The Court must balance the competing rights of the parties. While the 6th Respondent asserts his right to freedom of movement, the Plaintiffs hold a valid decree for a substantial sum of Kshs. 86,660,100, which remains unsatisfied. The Plaintiffs possess a constitutional right under **Article 40** to the protection of their property, which includes the fruits of a lawful judgment. The Plaintiffs have legitimate apprehensions, given the insolvency of the corporate debtor and the impending substantive application to pierce the corporate veil. 34. The Court has broad inherent powers under Sections 1A, 1B, and 3A of the Civil Procedure Act to make such orders as may be necessary for the ends of justice and to prevent abuse of the process of the Court. The grant, lifting, or variation of an injunction is inherently an exercise of judicial discretion. 35. In balancing these competing rights, the Court must find a middle ground that restores the 6th Respondent's constitutional liberty without rendering the Plaintiffs' pending substantive application entirely nugatory. The 6th Respondent has explicitly indicated in his pleadings that he intends to travel out of the Country but is willing to abide by reasonable conditions set by the Court. 36. It is the determination of the Court that the blanket travel ban ought to be discharged. The Applicant has satisfied the requirements for the lifting of the ex parte travel ban. However, the Court is minded to allow the application but exercise discretion to safeguard the integrity of the judicial process pending the determination of the application to lift the corporate veil. The release of the travel restrictions shall therefore be subject to the provision of reasonable security. The Court directs that the lifting of the travel Ban is subject to the 6th Defendant depositing with the Court a sum of Kenya Shillings Five Hundred Thousand (Kshs.500,000/=) or a security valued at a like sum, to be held as security for the 6th Defendant’s return to the Country. The security will remain in place pending further orders and or the outcome of the Plaintiffs’ Application by way of a Notice of Motion dated 28th April, 2026. 37. As to costs the same lie at the discretion of this Court and ordinarily follow the event. To this Court the fair order in the circumstances is that let the costs be in the cause. **Determination** 38. The 6th Defendant/Applicant's application by way of a Notice of Motion dated 7th June, 2026 is HEREBY allowed in the following terms: 1. *THAT the 6th Defendant/Applicant shall deposit with the Court a sum of Kenya Shillings Five Hundred Thousand (Kshs.500,000/=) or a security valued at a like sum to be held as security for the 6th Defendant’s return to the Country. The security will remain in place pending further orders and or the outcome of the Plaintiffs’ Application by way of a Notice of Motion dated 28th April, 2026.* 2. *THAT upon and subject to the 6th Defendant’s compliance with the order above, the Honourable Court HEREBY reviews, varies, and sets aside the ex parte Orders issued on 1st May, 2026 in their entirety and this Honourable Court HEREBY lifts the travel ban against the 6th Respondent forthwith, and directs the* ***Director General of Immigration Services*** *to remove all exit restrictions and travel alerts against the 6th Respondent.* 3. *THAT parties do take directions for the hearing of the Plaintiffs’ Application by way of the Notice of Motion dated 28th April, 2026.* 4. *The costs of this Application do abide the outcome of the Notice of Motion dated 28th April, 2026.* 39. It is so ordered. **DATED, SIGNED AND DELIVERED AT MILIMANI THIS 30TH DAY OF JULY, 2026** **NJOROGE BENJAMIN K.** **JUDGE** In the presence of: N/A for Mr. Otieno for the Plaintiff/Respondent. N/A for Defendants Mr. Ondati for the 3rd Respondent Mr. Kimani Horeria for the 6th Respondent/Applicant. Mr. John Paul - Court Assistant.