https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12478

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **MILIMANI LAW COURTS** **COMMERCIAL AND TAX DIVISION** **COMM. CASE NO. E308 OF 2023** **BETWEEN** **DUBAI GEMS LIMITED...………………………………………………….PLAINTIFF** **AND** **TATU CITY LIMITED………………………………….……………1ST DEFENDANT** **CEDAR IV LIMITED.......................................................................2ND DEFENDANT** **RULING** **Introduction and Background** 1. By their application dated 6th September 2023, the Defendants seek to strike out the Plaintiff’s plaint. The application is supported by the grounds on its face and the supporting affidavit of the 1st Defendant’s Executive Vice President, Country Head, Kenya, **Preston Marshall Mendenhall** sworn on 5th September 2023 and it is opposed by the Plaintiff through the Grounds of Opposition dated 16th November 2023. 2. The application was canvassed by way of written submissions which are on record and I will be making relevant references to the same in my analysis and determination below. **Analysis and Determination** 1. The main issue for the court’s determination is whether the Plaintiff’s suit ought to be struck out. As submitted by the Defendants, their application is grounded under **Order 2 rule 15 (b), (c) & (d)** of the ***Civil Procedure Rules*** as follows:- ***15. Striking out pleadings [Order 2, rule 15.]*** *(1) At any stage of the proceedings the court may order to be struck out or amended any pleading on the ground that—* *(a) ……………..* *(b) it is scandalous, frivolous or vexatious; or* *(c) it may prejudice, embarrass or delay the fair trial of the action; or* *(d) it is otherwise an abuse of the process of the court,* *and may order the suit to be stayed or dismissed or judgment to be entered accordingly, as the case may be.* 1. As submitted by the parties, Madan JA., in **D.T. Dobie & Company (Kenya) Limited v Joseph Mbaria Muchina & another [1980] KECA 3 (KLR)** held that:-“*No suit ought to be summarily dismissed unless it appears so hopeless that it plainly and obviously discloses no reasonable cause of action and is so weak as to be beyond redemption and incurable by amendment. If a suit shows a mere semblance of a cause of action, provided it can be injected with real life by amendment, it ought to be allowed to go forward for a court of justice ought not to act in darkness without the full facts of a case before it.”* 2. Further, the Court of Appeal, in case of **The Co-operative Merchant Bank Ltd vs. George Fredrick Wekesa (Civil Appeal no.54 of 1999)** held that:- “*The power of the Court to strike out a pleading under Order 6 rule 13(1)(b)(c) and (d) is discretionary and an appellate Court will not interfere with the exercise of the power unless it is clear that there was either an error on principle or that the trial Judge was plainly wrong...Striking out a pleading is a draconian act, which may only be resorted to, in plain cases...Whether or not a case is plain is a matter of fact...Since oral evidence would be necessary to disprove what either of the parties says, the appellant’s defence cannot be said to present a plain case of a frivolous, scandalous, vexatious defence, or one likely to prejudice, embarrass or delay the expeditious disposal of the respondent’s action or which is otherwise an abuse of the process of the court. The defence raises a fundamental issue, namely, whether there was any misrepresentation as alleged by the respondent, a question which, cannot possibly be answered at the stage of an application for striking out; nor will it be competent for the court of appeal to try to answer it as its jurisdiction only extends to identifying whether, if any, there are issues which are fit to go for trial. The court has no doubt whatsoever, that the above is a fundamental triable issue...A Court may only strike out pleadings where they disclose no semblance of a cause of action or defence and are incurable by amendment. The appellant’s defence cannot be said to fall into that category and had the trial Judge considered fully all the matters alluded to, he would not have come to the same conclusion as he did.”* 1. In **Yaya Towers Limited vs Trade Bank Limited (in liquidation) (Civil Appeal No. 35 of 2000),** Lakha JA., expressed himself as follows:- *On an application to strike out a plaint…….. on the ground that it discloses no reasonable cause of action……… the truth of the allegations contained in the plaint is assumed and evidence to the contrary is inadmissible……..This is because the Court is invited to strike out the claim in limine on the ground that it is bound to fail even if all such allegations are proved. In such a case the court’s function is limited to a scrutiny of the plaint. It tests the particulars which have been given of each averment to see whether they support it, and it examines the averments to see whether they are sufficient to establish the cause of action. It is not the Court’s function to examine the evidence to see whether the plaintiff can prove his case, or to assess its prospects of success.* 1. The Defendants’ position is that the Plaintiff is a total stranger to the 1st Defendant as it is neither its shareholder, director, nor member. That the 1st Defendant is the sole registered proprietor of the property L.R. Number 28867 and the Plaintiff has no claim or interest in it and because there is no relationship or connection between the parties, the Plaintiff's suit does not disclose a reasonable cause of action against the 1st Defendant. The 1st Defendant thus avers that the suit is frivolous, vexatious and an abuse of the court process, intended to harass them. 2. In response, the Plaintiff states that the application is itself a "wanton and reckless abuse" of the court's due process and is completely without merit. The Plaintiff accuses the Defendants of using this application as a calculated tactic to delay the fair trial and disposal of the suit. The Plaintiff claims that the issues raised by the Defendant were already argued and determined in two earlier applications before the court, meaning the matter is *res judicata* and cannot be litigated again. The Plaintiff avers that the evidence the Defendant relies on, specifically, being registered as the proprietor of the property and as a company with the Registrar of Companies is not conclusive proof. The Plaintiff explicitly states that the application is a fraud and urges the court to dismiss the application, effectively allowing the suit to continue. 3. I am in agreement with the Plaintiff that in the court’s ruling of 4th September 2023, I held that *"The route to membership is convoluted through an intricate and complex web of transactions and will require to be established with evidence that can be tested through examination of the material... This is not something that the court can determine at an interlocutory stage and without conducting a full hearing."* In short, the court found that the Plaintiff's claim to membership is not outright and must be established by evidence, the issues cannot be determined at an interlocutory stage and that the matter requires a full hearing with *viva voce* evidence. The issue of whether the Plaintiff has a valid claim to membership and/or shareholding of the 1st Defendant is the very question that the court said must go to trial. Indeed, striking out the suit at this stage would directly contradict the court's earlier finding. 4. It is also my finding that the Plaintiff's case is far from "hopeless” as it involves a Deed of Transfer from **Stephen Mbugua Mwagiru** to the Plaintiff, a Power of Attorney executed by **Etienne Delbar** and a Subscription and Shareholders Agreement dated 16th June 2008 which as I stated in the previous ruling are complex factual issues that require evidence, cross-examination and a full trial. 5. As stated, a "triable issue" is not one that the Plaintiff must ultimately succeed on, it need only be *bona fide*. The Plaintiff has raised several triable issues including whether the Deed of Transfer and Power of Attorney validly transferred beneficial interest in the shares, whether the Plaintiff has been unlawfully excluded from the affairs of the Defendant companies and whether the Certificate of Title held by the 1st Defendant is conclusive or whether the Plaintiff's equitable and/or beneficial interests prevail. Whereas the Defendants have contended that the Plaintiff lacks *locus standi* because it is not a shareholder or director, the Plaintiff claims beneficial ownership of shares through a Deed of Transfer which is a triable issue that must be determined at trial. The court cannot determine *locus standi* in a summary manner where the facts are disputed. 6. It is for the above reasons that I find that the Plaintiff’s suit ought not be struck out. In the court’s previous ruling of 7th November 2025, I did not strike out the suit or find that the Plaintiff has no case. The court simply found that the Plaintiff cannot invoke arbitration and it must pursue its claims through this court, not through arbitration. This is consistent with the court's earlier Ruling of 4th September 2023, which found that the Plaintiff's membership claim is convoluted and requires a full hearing. **Conclusion and Disposition** 1. In the upshot, I find that the Defendants’ application dated 6th September 2023 has no merit and it is dismissed with costs. **DATED SIGNED and DELIVERED virtually at MACHAKOS this 27TH DAY of JULY 2026** **............................................................................** **J.W.W. MONGARE** **JUDGE** **IN THE PRESENCE OF** 1. Ms. Muthoni holding brief for Ahmednassir Abdulahi SC for the Plaintiff. 2. N/A for the Defendant. 3. Amos- Court Assistant