https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12824

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **COMMERCIAL & TAX DIVISION** **CIVIL SUIT NO. E096 OF 2019** **-BETWEEN-** **EMBAKASI RANCHING COMPANY LIMITED.........… PLAINTIFF** **-VERSUS-** **THE REGISTRAR OF COMPANIES ..…….………... 1ST DEFENDANT WANJIRU RICHU ………………………………………. 2ND DEFENDANT** **ANDREW OKUMU………………………………………..3RD DEFENDANT GABRIEL GITONGA ……………………………………. 4TH DEFENDANT** **JAMES MINGI NJOROGE ……………………………. 5TH DEFENDANT** **SISTO TUTA MWAMBIA ……………………………... 6TH DEFENDANT PENINAH NYAIREGI MWANGI ………….………... 7TH DEFENDANT JAMES NJEHU MBOCHI NJEHU………….……..…8TH DEFENDANT** **DAVID MWANGI WANDERI ………………………...9TH DEFENDANT PHIDELIS WANGARI …………………………........ 10TH DEFENDANT** **JANE NJERI MUREGI ………………………….…….. 11TH DEFENDANT CHRISTOPHER ELIUD GAKURU NGIGE ........ 12TH DEFENDANT** **JOSEPH KINYANJUI NJENGA …………………... 13TH DEFENDANT** **CHARLES KIHAGI THUAH ………………………… 14TH DEFENDANT** **JOSEPH JUAN KANANI …………………………….. 15TH DEFENDANT** **RULING** **Background** 1. Before this Court for determination is the 8th and 12th Defendants’ (the Applicants) Notice of Motion dated 27th March, 2026, brought underSections 1A, 1B, and 3A of the Civil Procedure Act, Order 51, rule 1 of the Civil Procedure Rules 2010. The Applicants seek the orders that this court; 2. ***spent*** 3. ***spent*** 4. ***set aside the orders issued by Lady Justice Grace Nzioka on 31st July 2019 and all other orders stemming therefrom;*** 5. ***strike out the entire suit; and an award for costs.*** 6. The application is supported by the grounds on its face and the supporting affidavit sworn by the 8th Defendant, James Njehu Mbochi Njehu,on 27th May, 2026. The Applicants’ case is that the orders issued by Lady Justice Grace Nzioka on 31st July, 2019, preserving the status quo of the Plaintiff's directorship reflected in the CR12, were an extension of the status quo orders granted by Lady Justice W. Okwany on 29th April, 2019. They contend that the latter orders arose from a consent allegedly recorded in the presence of Howard Njoroge Mburu, an advocate who had died thirteen years earlier, and, in any event, lacked instructions from the parties on whose behalf he purported to act. In the circumstances, they urge that all subsequent orders flowing from the impugned consent, including those issued by Lady Justice Grace Nzioka on 30th July, 2019, were tainted with fraud and were unlawful and ought to be set aside. 7. Further, the Applicants contend that the suit is incompetent and incurably defective because it was instituted by persons without authority to act on behalf of the Plaintiff company. Moreover, without prejudice to the foregoing lack of capacity, they argue that there was no resolution whatsoever by the Plaintiff’s directors to institute the present suit. The Applicants also urge that the suit is moot, as, pursuant to Section 275A (1) of the Companies Act, upon the lapse of one year, another Annual General Meeting (AGM) fell due, thereby rendering the suit devoid of any practical effect. They postulate that the existence of this suit and the earlier referenced orders impedes the Plaintiff company’s compliance with the provisions of the Companies Act, particularly section 275A. 8. The application is supported by the 3rd, 4th, 6th, 7th and 9th Defendants. The 3rd Defendant filed its replying affidavit on 19th May, 2026, and supplementary affidavit of 29th May, 2026, fully associating himself with the Applicant’s contention. The 3rd Defendant further urges that no meeting of the Board of Directors was held, convened or constituted at the registered office of the Plaintiff on 10th June, 2019, as alleged by the Plaintiffs. 9. The 4th Defendant’s replying affidavit was sworn on 9th April, 2026, restating the Applicants’ case. Particularly, that the impugned orders are tainted by fraud and illegality, and therefore, all consequential acts and orders are equally vitiated. He also contends that the suit was instituted without authority from the Plaintiff company; the issue raised in the suit have been overtaken by events as the Plaintiff held a General Annual Meeting under Section 275A(1) of the Companies Act altering the composition and governance structure of the Plaintiff, hence the impugned orders are of no legal consequent; and the continued subsistence of this suit and the said orders only serves to hinder the proper governance and statutory compliance of the Plaintiff; and the proceedings founded on irregular, unlawful, and defective processes should not be allowed to stand. 10. The 7th Defendant filed her replying affidavit on 26th May, 2026, essentially reiterating the Applicants’ case and averring that the impugned orders maintaining the status quo have paralysed and crippled the operations of the Plaintiff for seven (7) years. The 7th Defendant adds that the orders have created a management stalemate within the Company by suspending the exit of former directors from office while preventing duly elected and appointed directors who appear on the current C-12 from assuming office. In addition, the 7th Defendant urges that the persons who swore the verifying affidavit on behalf of the Plaintiff are not its directors as they were lawfully removed from office pursuant to the elections conducted on 13th April, 2019; as such, the suit is incompetent, fatally defective and an abuse of the court process. 11. The 6th and 9th Defendants only filed submissions in support of the application, and the same are summarised in the succeeding paragraphs. 12. The Plaintiff opposes the application through its replying affidavit sworn by Walter Kigera Waireri on 4th May, 2026, urging that there is no nexus between the orders of Lady Justice Okwany handed down on 29th April, 2019, and the directions given by Lady Justice Grace Nzioka on 30th July, 2019. It is averred that the interlocutory orders by Lady Justice Grace Nzioka flow from the directions for consolidation of this suit with the High Court Miscellaneous Application Number 226 of 2019. Further, that the Defendants' intended appeal to the Court of Appeal was unsuccessful as they were denied leave to appeal out of time. In any event, the Plaintiff contends that allegations of fraud were made herein for the first time in June 2019 and seven years down the line, no evidence of a complaint to the police has been adduced by the Applicants. 13. The Plaintiff also contends that the matter is part heard, the Plaintiff's case was closed, and consequently the application is misconceived and intended to frustrate, defeat and delay the hearing and final determination of this suit on merit. Relying on a resolution claimed to have been passed by the Plaintiff’s directors, the deponent also argues that the suit was instituted and the advocate on record appointed with the authority of the Plaintiff. The Plaintiff also challenges the holding of the Annual General Meeting as they urge that same would be in contravention of the status quo in place and would have no effect. 14. In reply to the Plaintiff’s replying affidavit, the 8th Defendant/Applicant filed a supplementary affidavit sworn on 11th May, 2026. He reargues its averments in its supporting affidavit, further averring that the deponent of the Plaintiff’s reply alleges to be a director of the Plaintiff company but has not tendered any evidence in support. He also argues that the board resolution relied on concerns the change of the advocates representing the Plaintiff and not the institution of the suit and therefore of no relevance. Further, that the complaint of fraud was raised in court on 27th July, 2019, was uncontroverted and therefore true. 15. The 8th and 12th Defendants (Applicants) filed their joint submissions dated 19th May, 2026, and the 8th Defendant’s separate submissions dated 27th May, 2026, addressing this Court on two issues. On whether the status quo orders were fraudulently obtained, they submit that as the consent was allegedly entered in the presence of a deceased advocate, the said orders could not stand and were for setting aside. On whether the suit is incurably defective, the Applicants contend that the suit was instituted by persons without authority to act on behalf of the Plaintiff company and further, the effluxion of time and the operations of Section 275A (1) of the Companies Act render the suit moot. This position is supported by the 6th and 9th Defendants vide their submissions dated 25th May, 2025, the 3rd Defendant through their submissions dated 25th May, 2026, as well as the supplementary submissions dated 29th May, 2026, and the 15th Defendant vide their submissions dated 27th May, 2026. 16. The Plaintiff’s submissions are dated 26th May, 2026, to the effect that the suit was filed with proper authority and the instructions to file and appoint the advocates were sanctioned by the directors legally in office. It is also submitted that the directors currently transacting the business of the Plaintiff are in office courtesy of the orders of 30th July, 2019, by Hon Lady Justice Grace Nzioka and not the orders of Lady Justice Okwany of 29th April, 2019, which expired on 30th July, 2019, when the interlocutory orders herein were granted. Therefore, the Plaintiff submits that the orders of 30th July, 2019, were not an extension of the orders of 29th April, 2019. 17. It is imperative to note that the 1st, 2nd, 5th, 10th, 11th, 13th to 14th Defendants have not filed responses or submissions in support or opposition of the instant application. However, when the application came up for hearing, the 10th and 13th Defendants supported the motion. It was also indicated that the 5th Defendant was deceased. ***Analysis and Determination*** 1. I have carefully considered the pleadings, evidence, oral and written submissions made by the rival parties in this matter and find that only two issues crystallize for determination: whether the status quo orders were fraudulently obtained and should be set aside; and whether the suit is incurably defective. **Whether the status quo orders should be set aside on grounds of fraud** 1. On one hand, the Applicants and those supporting the application contend that the status quo orders issued by Lady Justice Grace Nzioka on 30th July, 2019, flowed from or were an extension of the status quo orders by Lady Justice Okwany issued on 29th April, 2019. They further urge that Lady Justice Okwany's orders arose from a consent allegedly recorded in the presence of one Howard Njoroge Mburu, who is said to have died nearly thirteen years earlier and, in any event, lacked instructions to represent the 5th and the other Defendants. On that basis, they contend that the orders of 29th April, 2019, were fraudulently obtained and could not lawfully underpin the status quo orders issued on 30th July, 2019. 2. On the other hand, the Plaintiff contends that there is no nexus between the orders by Lady Justice Okwany and Lady Justice Grace Nzioka. It buttresses that the orders of 30th July, 2019, were not an extension of the orders of 29th April, 2019, but accrue from the consolidation of this suit with the High Court Miscellaneous Application Number 226 of 2019. 3. It is trite that despite the traditional adage that ‘fraud unravels all’, a litigant seeking to set aside an order of the court on grounds of fraud must do more than merely produce evidence of fraudulent conduct by its opponent, to have the judgment, ruling or orders set aside. It must satisfy a court that: the successful party (or someone for whom it must take responsibility) committed conscious and deliberate dishonesty; the dishonest conduct was material to the impugned decision; and that there is new evidence before the court. 4. Before applying this test, I must first determine whether the status quo orders by Lady Justice Grace Nzioka on 30th July, 2019, flowed from, or were an extension of the status quo orders issued by Lady Justice Okwany on 29th April, 2019, so as to be affected by alleged fraud relied upon by the Applicants and the supporters of the application before me. 5. To ascertain the correct position, I turn to the record. It shows that the orders issued by Lady Justice Okwany dated 29th April, 2019, in HCC No. E096 of 2019 were made at a mention for directions. The record further shows that the parties recorded the following consent: 6. ***THAT the status quo prevailing as at today be maintained…*** 7. The Orders by Lady Justice Grace Nzioka dated 30th July, 2019, in HCC No. E096 of 2019 were made during the mention for directions. At that sitting, the court first ordered the consolidation of HCC No. 229 of 2019 with HCC No. E096 of 2019 and thereafter issued directions on the application dated 17th April, 2019, filed in HCC No. 229 of 2019. Upon hearing Mr. Onyango for the Applicants (therein), Mr. Ayora for the Co. Applicants, Mr. Musyoka and Ms. Koki for the Respondents in E096 of 2019 and Mr. Musyoka for Ms. Koki, Ms. Nduta for the 4th and 15th Respondents and Mr. Kamau for the Plaintiffs, the court issued the following orders: ***“10. THAT in the meantime, status quo on the ground being that the directors in the office remain in the office and the ones indicated on the CR12 form as directors remain as such.*** ***11. THAT the parties are at liberty to apply in case of any intervening factors.”*** 1. Further, the proceedings of 23rd July, 2019, show that Lady Justice Grace Nzioka was aware of the dispute regarding the subsistence and effects of the status quo orders, as reflected below: ***“It does appear that the parties cannot agree on the way forward, especially in relation to the status quo to be maintained. It has also transpired that the parties herein are involved in the matter Misc. 226 of 2019. An order has been made on the matter that it be consolidated with this matter. …”*** 1. A reading of the foregoing excerpts shows that, in issuing the conservatory/status quo orders on 30th July, 2019, Lady Justice Grace Nzioka neither referred to nor relied on the earlier orders of Lady Justice Okwany. Instead, those orders were made in the exercise of the court’s discretion, based on the pleadings and submissions before it at the time. Accordingly, there is no nexus between the orders issued by Lady Justice Grace Nzioka on 30th July, 2019, and those issued by Lady Justice Okwany on 29th April, 2019. The contention that the latter orders, having allegedly emanated from a fraudulent consent, tainted the former is therefore without merit and is rejected. Consequently, I find that the Applicants have failed to establish any basis for setting aside the conservatory orders issued by Lady Justice Grace Nzioka on 30th July, 2019, on grounds of fraud. 2. However, even if I were to admit the contention that the orders issued by Lady Justice Nzioka had a nexus with the orders issued by Lady Justice Okwany, the Applicants have not directly challenged the latter. The crux of the challenge is on the orders by Lady Justice Nzioka to which I have focused on. From the record, the said orders by Lady Justice Okwany were issued by consent with the record indicating the presence of counsel. The Applicants have not invited the setting aside of the consent orders or invoked the applicable threshold. **Whether the suit is incurably defective** 1. On this issue, the Applicants contend that the suit was commenced without the authority of the Plaintiff company, particularly without a resolution authorising the institution of the suit. The Plaintiff submits that the suit was instituted with due authority from the Plaintiff company, and the instructions to prosecute the suit are contained in the resolution of the board of directors dated 8th June 2019, *annexed as WKW1* of the Plaintiff's replying affidavit. I note that the 3rd Defendant disputes the existence of such resolution. 2. The Board Resolution relied on by the Plaintiff is headed ‘Resolution Embakasi Ranching Company Limited’ and is referenced as being an extract of the meeting of the Board of Embakasi Ranching Company Limited convened at the registered office on the 10th day of June 2019. It was resolved as follows: 3. ***THAT the firm of M/S NGATA KAMAU & CO. ADVOCATES be and are hereby authorized to take over from the law firm of AYORA MAGATI & CO. ADVOCATES, the suit known as HCCOMM CASE NO. E096 OF 2019 EMBAKASI RANCHING COMPANY LIMITED -VS- JAMES NJOROGE & OTHERS.*** 4. ***THAT WALTER KIGERA WAIRERI be and is hereby authorized to execute documents or any Affidavits concerning the case and also give testimony on behalf of EMBAKASI RANCHING COMPANY LIMITED*** 5. In my view, these two resolutions, when read as a whole, constitute clear corporate authority in respect of the suit. The first resolution expressly authorizes the change of advocates in relation to a specifically identified suit which is already instituted in the name of the Plaintiff company. Such authorization necessarily presupposes the company's adoption and approval of the proceedings. Equally, the second resolution authorizes a named officer of the company to execute pleadings and testify on behalf of the company in that very suit. 6. Although the resolution does not contain the specific express words ‘the company authorizes the institution of the suit’, the law does not require company resolutions to be in a prescribed form. What is required is that the resolution, viewed objectively and in its entirety, evidences the company's decision to authorize legal proceedings or to adopt and ratify them. The substance of the resolution is therefore of greater significance than the particular language employed. I also note that the 3rd Defendant only disputes the existence of the resolution, but has not adduced convincing reasons why this court should hold the same as untruthful. 7. Accordingly, I find that the Board Resolution dated 10th June, 2019, amounts to a valid corporate resolution authorizing the suit on behalf of the Plaintiff company. At the very least, it constitutes an unequivocal ratification and adoption of the proceedings by the Plaintiff's Board of Directors and authorizes the continued prosecution of the suit through the appointed advocates and designated company representative. The Applicants’ objection on the ground that the suit lacks corporate authorization is therefore unmeritorious. Moreover, at this juncture, the Court is not invited to consider the composition of the board at the time of the resolution. 8. In conclusion, the application dated 27th March, 2026, is dismissed for lack of merit, with costs in the main cause. This Court is cognizant that the main suit is part-heard and has been in Court since 2019. In the interest of justice, the Defendants’ case shall be heard on a priority basis. 9. It is so ordered. ***Delivered, Dated and Signed virtually this 6th day of August, 2026*** **RHODA RUTTO** **JUDGE** **Court Assistant: Wabwire**