[2017] KEHC 9608 (KLR)
Given that all directors of the 1st Interested Party are parties to the dispute, none can be considered impartial to chair the meeting. The court found that appointing a neutral third party, Willis Odhiambo, who is not a party to the proceedings and whose impartiality was not challenged, would ensure fairness and...
Source-derived case information.
- Citation
- [2017] KEHC 9608 (KLR)
- Parties
- Plaintiff: Erastus Karanja Gakuya; Plaintiff: Peter Mbogo Kagira; Defendant: John Kamau Mwangi; Defendant: James Kinuthia Muchai; Defendant: Erustaus Muiruri Gichuru; Defendant: Jacob Gitonga Kaghai; Interested Party: Makomboki Tea Factory Co. Limited; Interested Party: KTDA Management Services Limited
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Law Courts)
- Jurisdiction
- Kenya
- Case Number
- Civil Case 188 of 2017
- Procedural Posture
- Civil Application / Ruling on Interim Orders
- Outcome
- Application partially allowed.
- Judges
- BT Jaden
- Legal Topics
- Interim Injunctions, Board Meetings, Corporate Governance, Directorship Disputes
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Erastus Karanja Gakuya
Plaintiff
Peter Mbogo Kagira
Plaintiff
John Kamau Mwangi
Defendant
James Kinuthia Muchai
Defendant
Erustaus Muiruri Gichuru
Defendant
Jacob Gitonga Kaghai
Defendant
Makomboki Tea Factory Co. Limited
Interested Party
KTDA Management Services Limited
Interested Party
Procedural Posture
Civil Application / Ruling on Interim Orders
Legal Issues
- 1 Whether the Board of Directors of the 1st Interested Party should be allowed to convene and determine the suitability of the 1st Defendant to contest for directorship.
- 2 Whether the elections and AGM of the 1st Interested Party should be stayed pending resolution of the dispute on candidature.
- 3 Who should chair the meeting of the 1st Interested Party given the parties' involvement in the dispute.
Ratio Decidendi
Given that all directors of the 1st Interested Party are parties to the dispute, none can be considered impartial to chair the meeting. The court found that appointing a neutral third party, Willis Odhiambo, who is not a party to the proceedings and whose impartiality was not challenged, would ensure fairness and proper conduct of the meeting. The court thus ordered that the meeting proceed as scheduled with Willis Odhiambo as chair, ensuring the integrity of the process and upholding the principles of natural justice.
Court Disposition
Application partially allowed.
Orders
- The meeting scheduled for 15th November 2017 to proceed as planned.
- Willis Odhiambo to chair the meeting as a neutral party.
Full Case Text
Judgment text and source record
23 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT NAIROBI
CIVIL DIVISION
HIGH COURT CIVIL CASE NO. 188 OF 2017
ERASTUS KARANJA GAKUYA.................................................1ST PLAINTIFF
PETER MBOGO KAGIRA .........................................................2ND PLAINTIFF
VERSUS
JOHN KAMAU MWANGI.......................................................1ST DEFENDANT
JAMES KINUTHIA MUCHAI.................................................2ND DEFENDANT
ERUSTAUS MUIRURI GICHURU.........................................3RD DEFENDANT
JACOB GITONGA KAGHAI ................................................ 4TH DEFENDANT
AND
MAKOMBOKI TEA FACTORY CO. LIMITED ......1ST INTERESTED PARTY
KTDA MANAGEMENT SERVICES LIMITED ......2ND INTERESTED PARTY
RULING
1. The application dated 6th November, 2017 was certified urgent on 7th November, 2017. The application was served and counsels for the respective parties heard in respect of prayer 2 and 3 which seek the following interim orders:
“1. Spent
2. That the Board of Directors of the 1st Interested Party be allowed to convene and conduct a meeting of the Board for purposes of discussing and determining the suitability of the 1st Defendant to contest for the Directorship of the 1st Interested Party.
3. That pending hearing and determination of this application, the elections for directorship of the Interested Party scheduled for 7th November 2017 and the Interested Party’s Annual General Meeting scheduled for 15th November, 2017 be stayed until the dispute on the candidature and suitability of the 1st Plaintiff is deliberated upon by the Board and determined.”
2. The counsels for the respective parties were in agreement that the meeting scheduled for the 15th November, 2017 do proceed as planned. The bone of contention relates to who should chair the said meeting. Upon considering the submissions by the counsels, it is abundantly clear that the directors of the subject Tea Factory are parties herein either as Plaintiffs, Defendants or Interested Parties. Although the dispute herein touches on the office of the chairman and vice chairman of Board of Directors of the Tea Factory, any of the protagonists herein may not be seen as an impartial chair of the meeting. It is not in dispute that one Willis Odhiambo who has been proposed by the Plaintiffs and the 2nd Interested Party as a neutral party who can chair the meeting is not a party herein. No material has been placed before the court that reflects otherwise. Consequently, this court orders that the meeting do proceed with the said Willis Odhiambo as the chair. Costs in cause.
Date, signed and delivered at Nairobi this 13th day of Nov., 2017
B. THURANIRA JADEN
JUDGE