https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/9194

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **COMMERCIAL AND TAX DIVISION** **ITA NO. E188 OF 2023** **ECP KENYA LIMITED………………………………………………..APPLICANT** **VERSUS** **THE COMMISSIONER FOR DOMESTIC TAXES…………..RESPONDENT** **RULING** **Introduction** 1. Before the Court for determination is the Notice of Motion application dated **29 January 2025** in which the Applicant seeks, in the main, to have this Court vary and set aside its orders issued on **13 December 2024** dismissing their appeal, reinstate the appeal, and grant the Applicant an opportunity to prosecute the appeal. 2. The Applicant also seeks that, pending the hearing and determination of this appeal (once reinstated), this Honourable Court be pleased to issue an order staying the execution of the judgment of the Tax Appeals Tribunal in Tax Appeal No. 335 of 2022, *ECP Kenya Limited v Commissioner of Domestic Taxes*, delivered on **6 October 2023**. 3. The application is premised on the grounds that the Tax Appeals Tribunal upheld a tax assessment of **KES 773,796,052** against the Applicant, prompting the filing of the present appeal after obtaining stay orders upon depositing **KES 5 million**. The Applicant contends that delays in obtaining typed proceedings from the Tribunal occasioned several adjournments before the supplementary Record of Appeal was eventually filed. 4. The Applicant avers that, prior to the hearing, it resolved to pursue alternative dispute resolution (ADR) with the Respondent owing to similar ongoing negotiations in Tax Appeal No. E215 of 2023. It maintains that when the matter came up on **8 October 2024**, counsel intended to seek time to pursue ADR, but the Court indicated that the physical file was unavailable and that a fresh date would be issued. Subsequently, the Applicant discovered through the Judiciary Case Tracking System (CTS) that the matter had been placed before a different Judge who, in the absence of counsel, fixed the matter for judgment. 5. The Applicant further states that on **27 November 2024**, counsel informed the Court that an ADR request had been made and that a response from the Respondent was awaited, but the Court nonetheless retained the judgment date. The Applicant attributes its failure to file submissions and attend court to the mistaken belief that ADR discussions would proceed and to the erroneous cause listing of the matter. It asserts that it diligently prosecuted the appeal by filing the complete Record of Appeal and attending all previous court sessions. 6. The Applicant contends that it should not be punished for mistakes attributable to both its advocate and the Court registry, and that denying reinstatement would condemn it unheard contrary to the rules of natural justice. It expresses willingness to comply with any timelines, conditions or security requirements imposed by the Court and annexes draft submissions ready for filing. 7. The Applicant further avers that the stay orders previously granted have lapsed, exposing it to execution for the disputed tax sum of **KES 773,796,052**. It maintains that execution would occasion substantial loss and irreparable prejudice, as it would be unable to raise the entire amount at once. It therefore urges the Court to reinstate the appeal and grant stay of execution, arguing that the application was brought in good faith, without undue delay, and that the Respondent would suffer no prejudice if the orders sought were granted. **Respondent’s response** 1. The Respondent opposes the application through a Replying Affidavit sworn on **27 October 2025** by an officer in its Legal Services Division. 2. The Respondent contends that the application is intended to frustrate the court process and delay its enjoyment of the fruits of its judgment. It maintains that the Applicant has consistently demonstrated a lack of intention to prosecute the appeal and that reinstatement would amount to a waste of judicial time. 3. The Respondent avers that between the filing of the appeal on **15 November 2023** and its dismissal on **13 December 2024**, the matter came before the Court on seven occasions. It contends that the Applicant repeatedly sought adjournments on account of alleged delays in obtaining typed proceedings from the Tribunal, gave inconsistent explanations regarding the status of those proceedings, and continuously failed to file its submissions despite numerous extensions granted by the Court. 4. The Respondent states that on **22 July 2024**, the Deputy Registrar directed the Applicant to file submissions within fourteen days and ordered that highlighting would proceed on **8 October 2024** based on whatever was on record. Despite this direction, the Applicant failed to file submissions. Consequently, when the matter came up on **8 October 2024**, it was fixed for judgment. The Respondent maintains that the dismissal of the appeal was occasioned not by counsel’s absence in court but by the Applicant’s persistent failure to file submissions and prosecute the appeal. 5. The Respondent further contends that the Applicant only raised the issue of pursuing ADR after the matter had already been fixed for judgment and long after submissions had become due. It denies that any negotiations were ongoing and asserts that the Applicant was not condemned unheard, having been afforded ample opportunity to prosecute the appeal. 6. The Respondent also challenges the Applicant’s conduct after filing the present application, asserting that although the application was filed on **31 January 2025**, it was not served until **26 May 2025**. It is alleged that the Applicant misled the Deputy Registrar by indicating that service had been effected when it had not, contrary to the duties of honesty and integrity imposed on advocates under the Law Society of Kenya Code of Standards of Professional Practice and Ethical Conduct. 7. The Respondent further deposes that the Applicant is involved in other tax disputes with the Respondent, including Nairobi TAT No. 614 of 2022 and Nairobi HCOMMITA No. E215 of 2023, arising from tax assessments amounting to **KES 2,521,185,943**. It avers that while those disputes remain pending, the Applicant has also filed **Nairobi Insolvency Petition No. E063 of 2024**, which, in its view, demonstrates bad faith and an attempt to frustrate tax collection efforts. 8. The Respondent therefore maintains that the application lacks merit, constitutes an abuse of the court process, and is intended to delay the collection of taxes lawfully due. It urges the Court to dismiss the application with costs. **Applicant’s Rejoinder** 1. The Applicant filed a Further Affidavit sworn on **8 December 2025** by its counsel on record. 2. It maintains that it has always been vigilant and keen on prosecuting the appeal. 3. The Applicant explains that it encountered difficulties obtaining typed proceedings from the Tribunal and informed the Court of these challenges on **13 February 2024**. It avers that the Deputy Registrar acknowledged that other litigants were experiencing similar difficulties and offered assistance in obtaining the proceedings. The Applicant subsequently obtained the proceedings on **2 May 2024**, only to discover errors that required correction. It thereafter obtained the corrected proceedings and filed its supplementary Record of Appeal. 4. The Applicant further states that it informed the Court of the filing of the supplementary Record and was directed to serve the Respondent and file submissions. It contends that, in parallel proceedings in HCOMMITA No. E215 of 2023, the Respondent had engaged it in ADR, prompting it to pursue a similar process in the present appeal. 5. The Applicant avers that on **7 October 2024**, it formally proposed an out-of-court settlement to the Respondent and that, when the matter came up before Njoroge J on **8 October 2024**, counsel remained under instructions to pursue ADR. 6. The Applicant further deposes that it later discovered through the Judiciary CTS that the matter had inadvertently been placed before Musyoki J, who, in the absence of counsel, fixed the matter for judgment. Upon learning of the error, its advocates promptly sought intervention through the Deputy Registrar and secured a mention date on **27 November 2024**, during which it informed the Court that it was awaiting the Respondent’s response to its ADR proposal. 7. The Applicant explains that it did not file written submissions because it believed the Respondent would respond to the ADR request, particularly in light of the ongoing negotiations in Appeal No. E215 of 2023, and because counsel had been instructed to prioritise ADR. 8. It therefore argues that it should not be penalised for errors attributable to both the Court registry and its advocate and urges the Court to reinstate the appeal. 9. The Applicant further denies any undue delay, stating that the application was filed on **31 January 2025**, approximately one month after delivery of the ruling dismissing the appeal. 10. It also contends that the disputed tax liability of approximately **KES 770 million** is substantial and that it ought to be afforded an opportunity to be heard before being required to satisfy the assessment. 11. The Applicant therefore urges the Court to exercise its discretion under Order 42 Rules 6 and 21 of the Civil Procedure Rules and grant the orders sought. **Analysis and Determination** 1. I have duly considered the application, the affidavits on record and the written submissions filed by the Applicant. 2. The issue falling for determination is whether this Court ought to set aside the orders made on **13 December 2024** and reinstate the appeal. 3. By a ruling delivered on **13 December 2024**, *Musyoki J* dismissed the present appeal pursuant to Order 42 Rule 20 of the Civil Procedure Rules on the ground that the Appellant had demonstrated no interest in prosecuting the appeal. 4. In that ruling, the Court reviewed the history of the appeal from the date of its filing on **15 November 2023** and observed that the Appellant had been afforded several opportunities to prosecute the matter. The Court noted that the Appellant repeatedly sought adjournments on the basis that it had either received the Tribunal proceedings late or that the proceedings supplied were incomplete or inaccurate. Despite multiple extensions granted between February and July 2024, the Appellant failed to file its written submissions, whereas the Respondent had already filed its submissions on **12 February 2024**. 5. The Court further observed that when the matter came up for highlighting of submissions on **8 October 2024**, neither party attended court and the matter was consequently fixed for judgment. Thereafter, the Appellant sought a mention date on the basis that the parties were pursuing an out-of-court settlement. However, during the mention on **27 November 2024**, the Respondent informed the Court that no settlement negotiations were ongoing. The Court also found the Appellant’s explanation that it was still experiencing difficulties in obtaining portions of the Tribunal record to be unconvincing, particularly because the Appellant had already filed three volumes of the Record of Appeal and had previously informed the Court that the record was complete. 6. The learned Judge ultimately concluded that the Appellant’s conduct demonstrated a lack of seriousness and a clear absence of interest in prosecuting the appeal. Consequently, the appeal was dismissed with costs to the Respondent. 7. The Applicant now seeks reinstatement of the appeal on the ground that it remains desirous of prosecuting the appeal and that its counsel failed to attend court owing to an erroneous cause listing. 8. In **Richard Nchapi Leiyagu v Independent Electoral and Boundaries Commission & 2 Others, Civil Appeal No. 18 of 2013**, the Court of Appeal, while considering the circumstances under which an ex parte order may be set aside, stated as follows: *“We agree with the noble principles which go further to establish that the court's discretion to set aside an ex parte judgment or order, for that matter, is intended to avoid injustice or hardship resulting from an accident, inadvertence or excusable mistake or error, but not to assist a person who deliberately seeks to obstruct or delay the course of justice.”* 1. I am guided by the foregoing principles. The Applicant bears the burden of demonstrating that the exercise of this Court’s discretion is warranted and that reinstatement is necessary to avert an injustice occasioned by an accident, inadvertence or an excusable mistake. 2. In the present case, and having considered the history of this appeal, it is evident that since its inception on **15 November 2023**, the Applicant has been afforded numerous opportunities to prosecute the appeal and comply with the Court’s directions. 3. Various explanations have been advanced by the Applicant, including allegations that the Record of Appeal was incomplete and that difficulties were encountered in obtaining typed proceedings from the Tribunal. However, these explanations are unpersuasive, particularly because the Applicant had earlier informed the Court that it had received the typed proceedings and had already filed three volumes of the Record of Appeal. Indeed, the Applicant had previously represented to the Court that the record was complete. 4. In **Hunker Trading Company Limited v Elf Oil Kenya Limited [2010] eKLR**, the Court of Appeal observed that the overriding objective was never intended to aid parties who deliberately obstruct or delay the course of justice. 5. Likewise, in **Nicholas Kiptoo Arap Korir Salat v Independent Electoral and Boundaries Commission & 7 Others [2014] eKLR**, the Supreme Court stated: “This Court, indeed all courts, must never provide succour and cover to parties who exhibit scant respect for rules and timelines. Rules and timelines serve to make the process of judicial adjudication fair, predictable and certain.” 1. I agree with the Respondent that the dismissal of the appeal was not occasioned by counsel’s failure to attend court. Rather, it resulted from the Applicant’s persistent failure to file submissions and its general lack of diligence in prosecuting the appeal. 2. It is therefore inaccurate for the Applicant to contend that it was condemned unheard. The record demonstrates the contrary. The Applicant was afforded ample opportunity to prosecute the appeal and file its submissions, but failed to do so. 3. I am mindful that the appeal concerns a disputed tax liability of approximately **KES 770 million**, a substantial sum whose enforcement would undoubtedly have significant financial consequences for the Applicant. However, while the magnitude of the disputed amount is a relevant consideration in the exercise of the Court’s discretion, it is not, by itself, determinative. A substantial monetary claim cannot operate as a licence for a litigant to disregard court directions or repeatedly fail to prosecute its case. 4. In the present matter, the Applicant was afforded numerous opportunities over a prolonged period to prosecute the appeal, file its submissions and comply with the Court’s directions. Despite these indulgences, it persistently failed to do so and advanced inconsistent explanations regarding its non-compliance. The record demonstrates a pattern of delay and a lack of diligence which cannot be excused merely because the amount in dispute is substantial. 5. In the circumstances, I am not persuaded that there exists an excusable mistake or error that would warrant setting aside the ruling delivered on **13 December 2024** and reinstating the appeal. On the contrary, the Applicant’s conduct reveals a pattern of delay that has hindered the expeditious disposal of the matter. 6. Consequently, I find that the application lacks merit and hereby dismiss it with costs to the Respondent. 7. Having declined to reinstate the appeal, it is unnecessary to consider the prayer seeking an order of stay of execution of the Tribunal’s judgment pending the hearing and determination of the appeal. 8. Accordingly, the Applicant’s Notice of Motion dated 29 January 2025 is hereby dismissed with costs, assessed at Kshs. 50,000/-. 9. It is so ordered. **DATED, SIGNED, AND DELIVERED AT NAIROBI THIS 18TH DAY OF JUNE 2026** **** **HON. MR. JUSTICE MOSES ADO *Judge of the High Court*** **In the Presence of:** *Moses C/A* *Marube h/b for Dr. Nyaundi………………for the Applicant* *Ms. Almadi……………for the Respondent*